:00:08. > :00:13.Tonight: Welsh councils under a huge financial pressure with more
:00:14. > :00:19.budget cuts on the way. The challenges facing the Welsh Rugby
:00:19. > :00:26.Ian -- regions to capture the hearts and souls of rugby fans. And
:00:26. > :00:36.changing the face of the UK and how the debate on Scottish independence
:00:36. > :00:38.
:00:38. > :00:41.Good evening and welcome to the Wales Report. This week we're in
:00:41. > :00:46.Llanelli, my home town, as part of our series of special programmes
:00:46. > :00:49.coming from locations all across Wales. And, tonight, there are
:00:49. > :00:52.stark warnings over the future provision of many of our essential
:00:52. > :00:56.services provided by councils in Wales as local authorities face
:00:56. > :00:59.larger than expected budget cuts. Next week, the Chancellor is set to
:00:59. > :01:08.unveil the Government's spending plans for 2015 and 2016 with Wales
:01:08. > :01:12.bracing itself for more bad news. So, how are those with the job of
:01:12. > :01:22.delivering our services preparing? Helen Callaghan has been finding
:01:22. > :01:23.
:01:23. > :01:30.Over the next few years, it seems the deep cuts we keep being warned
:01:30. > :01:36.about are coming across Wales. Here and elsewhere, those who provide
:01:36. > :01:40.council services will be put crate -- paying particular attention to
:01:40. > :01:48.what the Chancellor does in the comprehensive spending review and
:01:48. > :01:54.watching to see where the axe falls. What the chance Loat cuts will down
:01:54. > :02:01.the line have an impact on all our frontline services because George
:02:01. > :02:08.Osborne's comprehensive spending review largely determines the total
:02:08. > :02:13.amount of block grant money the Welsh government ends up with. So,
:02:13. > :02:22.Wales's 22 local authorities have been warned to brace themselves for
:02:22. > :02:25.at a painful financial future. One councillor, the leader of
:02:25. > :02:32.Carmarthenshire County Council, is preparing for the worst. At the
:02:32. > :02:37.moment, we are really worried. I cannot remember any time in 35
:02:37. > :02:42.years the pressure that elected members are under now. We were
:02:42. > :02:47.planning to at least look at 5 million cutbacks again this year.
:02:47. > :02:53.It looks like it might possibly be 10 million or more. If the cuts are
:02:53. > :02:57.planned, some services will completely disappear. It is the
:02:57. > :03:02.front line services - leisure, parks and all these things people
:03:02. > :03:07.rely on. They are services which will suffer even more. The biggest
:03:07. > :03:12.chunk of any local authority's budget goes on education and no one
:03:12. > :03:17.wants to cut that. Councils will be under a huge amount of pressure
:03:17. > :03:22.from teaching unions and others to make sure there is enough money to
:03:22. > :03:29.drive up standards. We are worried because we don't want to see more
:03:29. > :03:37.cuts to end -- education. We are still under span -- underspending.
:03:37. > :03:44.But the budgets are protected. that is true but we have correctly
:03:44. > :03:49.underspent over the last decade and now we are seeing a funding gap of
:03:49. > :03:54.over �600 and that is there. A but most of the Welsh Government's cash
:03:54. > :04:02.is spent on the health service and many say costs in this sector will
:04:02. > :04:06.only go one way, up. It will be very challenging. It is the third
:04:06. > :04:11.year we have had a flat cash settlement so in real terms it has
:04:11. > :04:15.been a reduction. Our health boards have come in on budget but it will
:04:15. > :04:21.be a big ask to do the same again this year and continued to deal
:04:21. > :04:25.with the continuing demand of an ageing population. So, ever-growing
:04:25. > :04:30.demands and shrinking budgets will require different ways of working
:04:30. > :04:36.in future and all public service providers are looking at creative
:04:36. > :04:40.ways to keep facilities and project going. For schools, teaching unions
:04:40. > :04:45.and experts believe the fewer educational authorities may well
:04:45. > :04:50.help to raise standards and be a more efficient use of resources.
:04:50. > :04:55.There are things we need to look at how we spend money and 22 local-
:04:55. > :04:59.authority is doing things in their own ways is not the best way. The
:04:59. > :05:05.review we saw on Tuesday will help in that regard but we have to look
:05:05. > :05:08.at how we get the money to the front line. In the Welsh Health
:05:08. > :05:12.Service they are already restructured and there are now
:05:12. > :05:17.seven health boards. They think they can work even more efficiently
:05:17. > :05:24.by collaborating more with councils. The big change will be working
:05:24. > :05:28.collaboratively. We have very good relationships in our area with
:05:28. > :05:32.different councils so it is forgetting about the organisational
:05:32. > :05:38.boundaries and focusing on the needs of the patient or the users.
:05:38. > :05:43.Is that the way forward in the future? It has to be. In a way, we
:05:43. > :05:48.have nowhere else to go. The business as normal is no longer
:05:48. > :05:52.feasible. We have to change. Councils across Wales are also
:05:52. > :05:57.being urged by the Welsh government to work more closely together to
:05:57. > :06:02.improve the delivery of services with limited funds. When you have
:06:02. > :06:09.to work different league to cope with that kick the cuts? Yes, we
:06:09. > :06:14.will have to work more closely with other authorities. Everything needs
:06:14. > :06:20.to be looked at and what savings we can do within the system, these
:06:20. > :06:26.things will have to happen. councils tried to counteract any
:06:26. > :06:31.future caps, stand by for working together becoming the norm,
:06:31. > :06:36.possible restructuring and rises in council tax. Even if all of that
:06:36. > :06:42.comes our way, many accept there is no getting away from it. Services
:06:42. > :06:50.and maybe jobs will be lost under losses will be keenly felt in all
:06:51. > :06:59.Joining me now is the leader of the Welsh Conservatives in the Assembly,
:06:59. > :07:04.Andrew RT Davies and Local Government consultant Jeff Jones.
:07:04. > :07:09.Good to have you with us, gentlemen. Someone said to me the other day
:07:09. > :07:13.there was a tidal wave of cuts coming towards us. Is that true?
:07:13. > :07:18.Whether it be that budget or the public spending review, there is
:07:18. > :07:22.always speculation. But we know the economy is healing and there are
:07:23. > :07:28.more jobs than they have ever been and ultimately this structural
:07:28. > :07:37.deficit has been cut. We need to go further on some of the measures but
:07:37. > :07:41.we do not know the facts yet. two is a bit open. He has given a
:07:41. > :07:47.politician's answer is that his party is doing fantastic things but
:07:47. > :07:52.the reality is the IFS. After 2015 there will be even bigger cuts. The
:07:52. > :07:57.assembly does not raise money so if the UK government cuts the grant,
:07:57. > :08:02.the assembly has to pass those cuts on. The assembly can make a
:08:02. > :08:06.decision way to make big cuts but you cannot cut the National Health
:08:06. > :08:10.Service and education is a key element in the revival of Wales say
:08:10. > :08:15.something will go. It will be issues like local government and
:08:15. > :08:19.that has warned this week we are heading for a tough time. Andrew is
:08:19. > :08:25.like a top man on the beach thinking the tidal wave will not
:08:25. > :08:32.hit him into it is on hot -- on top of him. That is a load of cobblers.
:08:32. > :08:37.I appreciate getting value for money. My own local council in
:08:37. > :08:44.Cardiff has advertised for 11 new director positions at �100,000. Is
:08:44. > :08:50.that what people pay their council tax for? A lot of councils show
:08:50. > :08:55.there is an inability to work collaboratively. We have had a
:08:56. > :09:01.debacle over senior pay in one Council. I appreciate there is an
:09:01. > :09:06.element of the budget for salaries but it shows a wider mentality of
:09:06. > :09:12.Silo is thinking instead of working collaboratively. Plenty can be done
:09:12. > :09:21.and if they can't do it, I will point it out to them. We have a few
:09:21. > :09:27.practical examples then. From your experience, these spending
:09:27. > :09:32.adjustments or changes coming in, what practical effect will it have
:09:32. > :09:35.and where will local-authority is looked to save money? We saw the
:09:35. > :09:40.report this week and the education minister will insist that money
:09:40. > :09:46.goes to schools, quite rightly, to improve children's education. It is
:09:46. > :09:52.difficult. Social services are demand led say you cannot Cup does.
:09:52. > :09:57.What can you cut? The environment? The man you see picking up papers
:09:57. > :10:01.might not be there in two years and roads will not be repaired and you
:10:01. > :10:04.local libraries. Nobody can disagree with working
:10:04. > :10:08.collaboratively but it was fascinating this week that a
:10:08. > :10:16.Conservative MP pointed out that in Westminster there are 20
:10:17. > :10:20.departments of state, in Seiden, 12 and in the USA, 15 -- in Sweden.
:10:20. > :10:25.Why isn't he suggesting restart a market-making departments in the
:10:25. > :10:30.assembly. Conservatives believe in small government and they should be
:10:30. > :10:35.shouting it from the rooftops but they are afraid of losing votes.
:10:35. > :10:39.That is a valid debate, but crucially, what about the number of
:10:39. > :10:45.local authorities in Wales which seems to be a mismatch. How does
:10:45. > :10:48.that fit into the picture of the spending patterns? We need to see
:10:48. > :10:54.greater collaboration with local authorities and making sure they
:10:54. > :11:00.deliver for local authorities. of them? We have to look at a whole
:11:00. > :11:03.range of governance in Wales and better consultation. What am saying
:11:03. > :11:08.is that we need a model of government that delivers for the
:11:08. > :11:13.people of Wales rather than delivering for the bureaucrats.
:11:13. > :11:18.What model are you proposing? means a smaller type of local
:11:18. > :11:22.government but I am not an expert on it. You have no idea how many
:11:22. > :11:27.there should be? It has to be determined by the people who want
:11:27. > :11:31.local government delivering for them and in our manifesto we will
:11:32. > :11:36.put that forward. We will propose that and in 2016 we will put it to
:11:36. > :11:40.the people of Wales and it will be up to them to vote. Thanks for
:11:40. > :11:43.coming in. The Scarlets rugby region will soon be launching a new
:11:43. > :11:47.heritage trail here at Parc Y Scarlets. Supported by Heritage
:11:47. > :11:56.Lottery Fund money, it will tell people about the massive part rugby
:11:56. > :12:00.has played in the history and culture of the area. And one of the
:12:00. > :12:10.greatest memories will be the day in 1972 when Llanelli beat the All
:12:10. > :12:15.
:12:15. > :12:19.Some of us were lucky enough to be there. And, yes, I was there.
:12:19. > :12:23.Unforgettable moments. But in the modern game, are the Welsh rugby
:12:23. > :12:29.regions as important to the culture and story of their area as the
:12:29. > :12:31.clubs before them? And just how big a challenge is it to run a
:12:31. > :12:34.successful sporting business in such difficult economic times?
:12:34. > :12:43.Joining me now is Mark Davies, the Scarlets' chief executive -
:12:43. > :12:48.formerly a senior executive at Honda Europe. Great to be here. It
:12:48. > :12:54.is several years since the move happened. How would you describe it
:12:54. > :13:00.as a business and a club? As a business, it is a challenge because,
:13:00. > :13:05.to put it starkly, the Scarlets play out their 16 days of the year
:13:06. > :13:13.so the key for us, therefore, is how to use that overhead to
:13:13. > :13:17.generate revenues throughout six -- 365 days of the year to ensure we
:13:17. > :13:24.contribute to our performance on the field. Let us talk about the
:13:24. > :13:28.relationship with the WI. If it works, things are Rosie but if not
:13:28. > :13:34.it is difficult. What is it about the relationship that works today
:13:34. > :13:39.and what needs a bit of mending? guess the first thing is it is a
:13:39. > :13:47.working relationship and it is a working relationship with five
:13:47. > :13:57.parties. They are five separate entities. That will always have
:13:57. > :14:10.
:14:10. > :14:17.some element of disagreement. different sites. If it takes time,
:14:18. > :14:23.it takes time. Do you think people are fully sympathetic and are you
:14:23. > :14:31.getting the support you need to thrive as a business? Were a stage
:14:31. > :14:38.where the WRU understand and accept the dynamics of the regional as Mrs
:14:38. > :14:45.as a result of the work put in by the PwC on the report that they
:14:45. > :14:50.provided. That is a good start point. There is no debate now about
:14:50. > :14:57.what those numbers are. There is no debate about the effort that has
:14:57. > :15:02.gone end in all four regions to improve that model. To improve the
:15:02. > :15:06.cost basis of the business, to the engage with the premiership clubs,
:15:06. > :15:14.the semiprofessional clubs, to engage with the clubs through the
:15:14. > :15:19.develop and pathways. I think there is an understanding of what the
:15:19. > :15:23.business platform is now and that is the start point to see OK, that
:15:23. > :15:31.might not make any of us comfortable, but it is what it is.
:15:31. > :15:33.Let's try to move forward from there to find better solutions.
:15:33. > :15:39.confident are you that the relationship with the WRU is
:15:40. > :15:46.confident enough to allow you to make that progress? I think I have
:15:46. > :15:56.to be confident of the relationship because there is nowhere else to go.
:15:56. > :15:56.
:15:56. > :16:03.We are absolutely in to rely on it so in that context we are partners.
:16:03. > :16:07.We probably need to learn to be bitter partners on both sides a lot
:16:07. > :16:11.of the time. Actually there is a belief and understanding on both
:16:11. > :16:17.sides know that we have to work together better than we have done in
:16:17. > :16:25.the past. Whatever structure be put in place to do that, that remains
:16:26. > :16:30.the answer. When does that struck me to be in place? Yesterday would be
:16:30. > :16:35.good. It is still a discussion and debate that we are having. We have
:16:35. > :16:39.been having that discussion and debate for some time as you know and
:16:39. > :16:47.we keep hitting little articles along the way but we are not giving
:16:47. > :16:53.up. It is too important, too important for Welsh rugby. I cannot
:16:53. > :16:59.give you a timescale, I wish I could. People will be watching
:16:59. > :17:05.wondering if you are talking about months. I am talking about months. I
:17:05. > :17:10.would like to be talking about weeks but realistically it will be months.
:17:10. > :17:17.Now given the excellent news from us truly yesterday, hopefully that will
:17:17. > :17:22.carry on in the weeks ahead. The are seeing are building up of the debate
:17:22. > :17:25.on Scottish independence. That future settlement of the
:17:25. > :17:32.Constitution in the UK will of course affect that season wheels
:17:32. > :17:42.whatever happens. Some people think that the logic of this is a new
:17:42. > :17:53.
:17:53. > :17:57.federal subject for the United Kingdom. When it comes to the
:17:57. > :18:01.newsletter written British constitution they there is nothing
:18:02. > :18:08.new under the sun. Federal home rule under which each UK nation would
:18:08. > :18:12.have its own parliament to deal with peculiar fears while returning
:18:12. > :18:19.members to the supreme Parliament in London to dispose of imperial
:18:19. > :18:24.concerns. Today, K at the Scottish parliament in Edinburgh and the rash
:18:24. > :18:34.similar ceremonies in Cardiff and Belfast, the peculiar fears of
:18:34. > :18:34.
:18:34. > :18:37.Scotland, Wales and Northern Ireland are discussed. It certainly could
:18:37. > :18:44.not be called federal, quiet I federal perhaps but not a formal
:18:44. > :18:47.federation in the manner of Canada, the US or Germany and Switzerland. I
:18:47. > :18:52.find this cutie is because I have long believed the federal United
:18:52. > :18:58.Kingdom is the obvious solution to the constitutional flocks in which
:18:58. > :19:02.the nations and regions currently find themselves. Public opinion in
:19:02. > :19:09.Scotland and increasingly in England concurs, favouring upon me rather
:19:09. > :19:12.than full independence. It would need stitching together. It would
:19:12. > :19:16.build on existing constitutional architecture such as the Scottish
:19:16. > :19:21.parliament here at Holyrood. It would also kill several birds with
:19:21. > :19:25.one stone addressing the deficit of England and rebalancing the UK
:19:25. > :19:32.centre of gravity while we constituting the house of lords to
:19:32. > :19:36.provide a balance. Federalism remains that the a word in British
:19:36. > :19:46.politics, ignored by the mainstream media and regarded as an almost
:19:46. > :19:50.
:19:50. > :19:55.alien concept by most UK politicians. A policy review was led
:19:55. > :20:05.by summing S Campbell. I spoke to Willie Rennie about the policy of
:20:05. > :20:11.
:20:11. > :20:15.federalism. What would a federal Scotland and UK mean? Our proposals
:20:15. > :20:20.might act as a trigger for other parts of the UK in the regions of
:20:20. > :20:30.England and in Wales. It can mature the debate in Wales about more
:20:30. > :20:34.powers. That is a really good thing. That is a good step in the right
:20:34. > :20:38.direction. I think it is an unstoppable force. You will get
:20:38. > :20:42.Wales demanding more as they get more. You might do something
:20:42. > :20:49.different from what is happening in Scotland but that is the great thing
:20:49. > :20:57.about the United Kingdom, you have got variety. This senior Scottish
:20:57. > :21:03.Tory believes there is Scottish Conservative case for a federal UK.
:21:03. > :21:09.The question is what do you do about England? You cannot have a federal
:21:09. > :21:14.system where one component part has 85 cent of the population and the
:21:14. > :21:20.overwhelming majority of the wealth. Until there is desire within parts
:21:20. > :21:25.of England for greater demolition it is interesting to ask how federalism
:21:25. > :21:30.will work. Boris Johnson in London is calling for greater powers in
:21:30. > :21:36.London, perhaps that debate could stand up just a little. Even if
:21:36. > :21:41.people in the North of England voted for regional assemblies a few years
:21:42. > :21:46.ago I think growing interest in the counterbalance that the power of
:21:46. > :21:52.wealth is in England. If we get England talking about this it is the
:21:52. > :22:00.way to get it more on the agenda. And we do get Wales parity with the
:22:00. > :22:10.Scottish Parliament? If the people of Wales are interested in doing
:22:10. > :22:10.
:22:10. > :22:16.that it is almost an unanswerable case. I think I US style or German
:22:16. > :22:26.style federalism would not work in Britain. Another structure might.
:22:26. > :22:26.
:22:27. > :22:31.There will not be a neat solution to it. There is a halfway house.
:22:31. > :22:38.Keller point is that some form of federalism is also the logical
:22:38. > :22:44.conclusion of the SNP and Plaid Cymru vision of what independence
:22:44. > :22:48.means no with services sheared and sovereignty ruled. True independents
:22:48. > :22:55.such as that envisaged by 19th-century Nationalists will
:22:55. > :23:01.longer exist. Only federalism can deal with the complex nuances of the
:23:01. > :23:10.current debate. England might not want to be broken up into smaller
:23:10. > :23:16.units. Vested interests in the house of lords might block reform. For
:23:16. > :23:21.Unionists they badly need a constitutional vision for the whole
:23:21. > :23:31.UK and federal home rule first visit more than a century ago is in need
:23:31. > :23:35.
:23:35. > :23:45.of a comprehensive the boot. With me now is the Labour key and the cheer
:23:45. > :23:46.
:23:46. > :23:50.of Plaid Cymru. What is federalism mean? What is your definition?
:23:51. > :23:55.need to look at where we are now. We cannot just start with a blank sheet
:23:55. > :23:59.because that is not what we have got. I think April in Wales have
:23:59. > :24:07.there own views about how they think things should be done here. --
:24:07. > :24:13.people in Wales. Other countries have federalism models were you
:24:13. > :24:20.having the same powers devolved for every single state. That is not
:24:20. > :24:25.necessarily where we are starting from, it is quite the opposite.
:24:25. > :24:32.England would be such a large power within any federation that it simply
:24:32. > :24:36.would not work. You cannot have a federation unless you having that
:24:36. > :24:40.they the same things dealt with by the Federated parts and exactly the
:24:40. > :24:45.same things dealt with at the centre. The allowed issues we will
:24:45. > :24:49.have to look at in the next few years as this moves forward,
:24:50. > :24:55.particularly in the context of the referendum in Scotland and which
:24:55. > :25:01.ever way that goes will change these islands forever. It cannot be right
:25:01. > :25:11.for Welsh and Scottish MPs to carry on legislating on issues in
:25:11. > :25:14.
:25:14. > :25:18.England. There could be in altering of the balance in the UK, what then
:25:18. > :25:21.happens to the notion of Wales and this structure? Does it just get
:25:21. > :25:28.altered on even more to England or would you like to see something else
:25:28. > :25:33.in those circumstances? One of the things that will arise as the
:25:33. > :25:38.situation of England as well. Whether in or out it is always an
:25:38. > :25:41.imbalance with England because it is the larger part. People are asking
:25:41. > :25:48.are there some forms of devolution that we the appropriate in England
:25:48. > :25:51.as well? We have seen an attempt in the north-east a few years ago which
:25:51. > :25:58.fail on its face because people did not want additional layer is of
:25:58. > :26:01.government. There is no appetite for that now. If you look at how London
:26:01. > :26:06.has urged perhaps there could be an affinity with something like a
:26:06. > :26:12.citystate. Perhaps there is an affinity with wanting services
:26:12. > :26:18.delivered more locally and in different ways. The federal pattern
:26:18. > :26:23.or the independent future, I was intrigued to see your colleagues the
:26:23. > :26:33.other day seeing independence in your view had never been a project
:26:33. > :26:35.
:26:35. > :26:44.anyway. His perspectives are always interesting on these things. He was
:26:44. > :26:48.seeing it is the federal pattern. For me, a federal model leaves the
:26:48. > :26:53.voice of Wales in the hands of a federal UK which basically means
:26:53. > :26:57.that boys will always be the voice of England and not Wales. In
:26:57. > :27:01.negotiations with the European Union things have happened that were good
:27:01. > :27:05.for the English economy over the years but not so good for Wales. The
:27:06. > :27:13.key part will be what it will deliver for people. We have one of
:27:13. > :27:17.the worst economies after 700 years of being part of this nation state.
:27:17. > :27:22.People are poor and suffering, we need to negotiate directly with our
:27:23. > :27:29.European neighbours and that is the problem for me and my party with
:27:29. > :27:35.federalism. And what is your punch right now? What are your colleagues
:27:35. > :27:38.telling you in Scotland? He lives a year to go and lots can change.
:27:39. > :27:44.People are asking how it will affect them economically. People are
:27:44. > :27:52.worried about Scotland going independent and possibly leaving is
:27:52. > :27:58.their link. They are worried about what will happen at the end of the
:27:58. > :28:08.day when people go into the ballot box. The money that will go into the
:28:08. > :28:09.
:28:09. > :28:14.pocket is what influences how the will vote. The problem for the no
:28:14. > :28:22.campaign in Scotland is that it is all negative, it is all about fear
:28:22. > :28:26.and what might go wrong. The yes campaign about the positive. I think
:28:26. > :28:30.it is everything to play for. Our colleagues in the SNP are very
:28:30. > :28:34.confident. You do not get politicians like Alex Salmond
:28:34. > :28:38.putting forward referendums that they think they are going to lose.
:28:38. > :28:46.My concern is how do we make sure the voice of Wales does not get
:28:46. > :28:52.lost. There is a big job for journalists and the media to make
:28:52. > :28:59.sure that does not happen. That is it for this week. Next we'll will be
:28:59. > :29:02.in the Senned in Cardiff B. In two weeks time I will be talking to the