Implications of party manifestos on public...

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Implications of party manifestos on public services

NATIONAL ASSEMBLY OF WALES ELECTIONS MAY 2016

NURIA ZOLLE

Research Associate

Wales Public Services 2025

About Wales Public Services 2025 Wales Public Services 2025 is an independent programme, hosted by Cardiff Business School, looking at the implications for public services in Wales of the profound fiscal, demographic, social and environmental pressures that they face over the next decade and beyond. The Programme is funded through a partnership between Cardiff University, Welsh Local Government Association, Welsh NHS Confederation, Wales Council for Voluntary Action, Community Housing Cymru and SOLACE (Wales).

Understanding the big picture for public services in Wales This is a briefing is for policy makers, public service leaders and managers on what the party manifestos for the May 2016 Assembly elections are telling us about the future direction of public finances and public services. It covers issues relevant to the scope of Wales Public Services 2025, an independent programme exploring the long-term financial and demand pressures facing public services in Wales and possible responses. Many of the party manifestos are substantial documents and the briefing is necessarily selective. We have picked out the areas that we think will have the biggest impact on public service delivery. The topics it covers are:

Fiscal policy

The NHS

Social care

Education

Housing

Local government It aims to draw out what the political parties are saying and place them in context. It does not offer a judgement on the policies and proposals. Not all manifestos cover all the issues we include, the briefing makes clear where this is the case.

Background

The election comes against the backdrop of the most difficult financial pressures public services in the UK and Wales have faced in recent times. Spending cuts are set to be deeper and last longer than originally planned. Meanwhile, demand for public services – especially the big areas of health and social care and education - is rising as a result of a growing population of older and younger people. At the same time, the Assembly is taking on new fiscal powers and responsibilities, which could, if income tax varying powers are devolved, finance up to a third of Assembly spending. The big challenge for the new Assembly will be how to reconcile these pressures and opportunities.

Where we are at in terms of public finances

In its November 2015 Spending Review, the UK Government set out its spending plans to 2019-20 with the goal of a surplus budget by the end. Government would fall to around 36 -37% GDP. The Spending Review showed the Welsh Government budget falling by around £500 million between 2015-16 and 2019-20 in real terms. This is on top of real terms cuts of £1.3 billion over the preceding period of austerity. The Wales Audit Office has calculated that in real terms, in 2014-15 prices, the Welsh Government’s budget will fall from £16.5 billion in 2010-11 to £14.7 billion in 2019-20.

Figure 1: Change in Welsh Government spending power 2010 to 2020

Source: Wales Audit Office

Since the November Spending Review, the outlook for public finances has deteriorated partly due to sluggish productivity growth linked to slow growth in wages in tax receipts. In his March 2016 budget, the Chancellor announced £3 billion more spending cuts or ‘efficiency savings’ across the UK public sector. He also announced changes to public sector pensions that essentially amount to a

spending cut in the order of £2 billion. Around £4 billion of planned cuts to disability benefits have been scrapped. Exactly what these new cuts mean for the Welsh Government’s future budget is not yet clear. But, given that the brunt of UK departmental spending cuts so far has fallen on day-to-day public service spending, the prospects are not encouraging. The most recent budget figures also showed that the period of austerity has been extended again. In November 2015, the Chancellor expected a rise in spending in 2020-21. That rise will not now happen. Given that the spending plans only go up to 2020-21, there is now no official end in sight to austerity.

Figure 2: OBR projections for public spending on services across UK

Fiscal policy A key question for political parties is how they would use the Assembly’s growing fiscal powers to address the challenges ahead for public services.

The settlement Several manifestos reference the need for ‘fair funding’ and draw attention to the need for a new UK/Wales fiscal framework – linked to a wider discussion about devolution of further functions and powers. This is against a background of continuing UK Government discussion about the content of the new Wales Bill.

Taxation The gradual development in devolved taxation powers has opened up a new front in the political debate. For the first time, Welsh parties’ manifestos now set out their policy positions on taxation as well as spending. The Welsh Government will be responsible for setting business rates, stamp duty and environmental taxes. The next Welsh Government may also take on income tax varying powers. Most parties have come up with an array of proposals to change taxes

Figure 3: Current position on Welsh taxes

Tax Taking effect from Current or estimated

net yield Reliefs 2014-15

Council tax £1.1 billion £0.2 billion

Business rates (NDR) 2015 £0.9 billion £3.5 million1

Land transaction tax (stamp duty)

2018 £165 million

Environmental taxes (landfill and aggregates)

2018 £77 million

Income tax No date. £2.4 billion

There is an implicit message in the manifestos that the tax powers are seen primarily as a tool for furthering social and economic policy, rather than a means for making good the real terms cuts through the Spending Review. None of the parties have explicit plans to raise taxes overall in order to spend more on public services. While nearly all manifestos include some commitment to a reduction in one or other set of tax reliefs or rates, the impact on the Welsh budget is not always spelt out. Only the Conservatives have specific plans to reduce the overall tax take during the next Assembly as part of their ‘low tax’ vision. UKIP’s manifesto does not make any proposals for varying taxation, other than a pledge to cut taxes for small breweries. The Greens make a small number of pledges on taxation to support research and development and tax sugar and waste. Plaid Cymru and Liberal Democrats also advocate devolution of APD as the current First Minister has often espoused.

1 2014-15 Stats Wales Local Government Revenue Outturn

Figure 4: Plans for taxation as described in manifestos

Tax Conservatives Plaid

Cymru Greens Labour UKIP Liberal

Democrats

Council tax Frozen for Assembly term

Reform to reduce burden on lower value properties

No specific plans in manifesto


Unspecific commitment to lower council tax

Reduce for people who improve energy efficiency of home

Business rates (NDR)

Cut business rates for all businesses with a rateable value to £12,000, and provide tapered support to £15,000

No rates for rateable value below £10,000 per Tapered support between £10,000 and £20,000. New start-ups will not pay business rates due for the first year of operation


Will deliver a tax cut for 70,000 small businesses. Detail not set out in manifesto

No specific plans.

Relief for businesses who occupy empty premises and remove plant and machinery from the rateable value of premises

Land transaction tax (stamp duty)

Scrap Stamp Duty for first time buyers on all properties up to the value of £250,000

Raise the threshold at which stamp duty is levied from £125,000 to £145,000





Environmental taxes (landfill and aggregates)


Use tax to achieve zero waste to landfill



No specific plans


Income tax Manifesto says would reduce income tax. Have said they will reduce basic by 2p and higher rate by 5p

New middle rate for middle earners.


Pledge not to increase income tax

No specific plans in manifesto. Would hold referendum on income tax

Would not increase and would aim to reduce basic rate once public spending grows

Income Tax Although the devolution of income tax varying powers is not settled, including the terms and timing, several manifestos make commitments. A key

precursor will be the question of a new fiscal agreement between the Welsh and UK Governments, as has happened with Scotland, which among other things addresses the issue of offsets between local tax revenues and the Welsh block allocated by the Chancellor. The commitments reflect a significant policy difference across the manifestos. Some parties have set out plans that involve changing income tax in Wales. Plaid Cymru will not increase income tax over the next Assembly but aims to introduce a new ‘middle’ rate which would be lower than the current higher rate of 40% rate. The overall intention is for its tax proposals to be ultimately fiscally neutral. The Conservatives aspire to reduce income tax for all bands: with a reported goal of reducing the basic rate by 2% and the higher rate by 5%. The Liberal Democrats have pledged not to increase income tax but intend to reduce the basic rate once public spending starts to rise. Labour’s manifesto pledges not to increase income tax over the life of the Assembly. UKIP has not set out any policy position on income tax in its manifesto but has subsequently clarified that it would reduce income tax after a referendum to determine whether the Assembly should have such powers. It is notable that the debate in Wales about taxation has a different tenor to that in Scotland. Labour, Liberal Democrats and the Greens in Scotland are proposing to increase income tax. The Conservatives in Scotland have decided not to change income tax. Given that Scotland already has considerably higher public spending per head of population than Wales and has lower levels of need, the different tax policies within parties seem to reflect real differences in the political landscape in the two countries.

Council Tax The parties have a spread of proposals for council tax. In response to real terms reductions in government grant (the WAO estimate is 10% 2010-15) and increased costs, council tax rates have been rising year-on-year, the average Band D rise in 2016-17 being 3.5%.

The Conservatives intend to introduce a five-year council tax freeze at a quoted cost of about £17 million. There has been a reference to an offsetting (or partially offsetting) grant to local authorities although not mentioned in the manifesto.

Plaid Cymru plans to reform local taxation to redistribute the burden of taxation from lower value properties to higher value properties as a precursor to replacing council tax and business rates with a ‘dual system of site value rating and local income tax’. Redistribution should generate savings in council tax benefit. There are complex issues about modelling the impact on ‘winners’ and ‘losers’.

UKIP pledges to support ‘lower council tax’.

The Liberal Democrats will offer a £100 discount to council tax payers who make their home more energy efficient.

The Greens and Labour have not set out a policy on council tax.

Business rates Proposals for business rates are the most extensive tax issue: including new indexation arrangements and the possibility of some local retention. The current Welsh Government scheme gives 100% relief up to a rateable value of £6,000 with tapering between £6001 and £12,000. Current relief is costed at £96 million. Most parties intend to increase business rates relief – often to encourage small businesses and start-ups.

The Conservatives plan to cut business rates for all businesses with a rateable value to £12,000, and provide tapered support to £15,000.

Labour’s manifesto says it will give a tax break to small business but is not specific as to which taxes nor at what level.

Under Plaid Cymru, firms with a rateable value of less than £10,000 per year will pay no business rates. They would introduce tapered relief for firms whose rateable value is between £10,000 and £20,000 and new start-ups would not pay business rates due for the first year of operation.

The Liberal Democrats would support manufacturing by establishing a relief fund for businesses who occupy empty premises and remove plant and machinery from the rateable value of premises.

Stamp Duty Some of the parties set out plans for reforms to stamp duty. Plaid Cymru intend to raise the threshold for stamp duty from £125,000 to £145,000. The Conservatives plan to remove stamp duty for all first time buyers of homes under £250,000. The Lib Dems do not plan changes to stamp duty, welcoming instead changes already made. Labour, UKIP and the Greens have not set out a policy position on stamp duty in their manifestos.

Financial Capital Expenditure The Welsh Government now has limited borrowing powers but has not been active in exploring new sources of finance. Plaid Cymru in advocating National Infrastructure Commission to pursue, among other things, action on capital financing.

Spending and savings

The Welsh Government spending plans currently extend until March 2017. An early task for a new administration will be to set out its financial plans for the following three years, until 2020, with difficult choices and trade-offs. While few parties’ manifestos directly reference austerity, there is an underlying acknowledgement that funding is tight and that plans to spend more need to be accompanied by plans to make savings elsewhere. There are some clues as to potential winners, rather fewer about losers. The manifestos include a range of commitments about the Living Wage or National Minimum Wage in the public sector. Pay restraint has been a key factor in reducing the impact of spending cuts so far and what happens to the future paybill will be crucial, recognising that a range of public sector bodies in Wales are already signed up to the Living Wage. The concerns about the impact are most often raised in relation to the care sector. The extent to which the parties have costed the pledges in their manifestos varies. Assessing the impact on the Welsh budget is also affected by issues of timing and phasing of new commitments. Most of the costed proposals reflect changes at the margin. Plaid Cymru has had the financial plans in its manifesto independently verified. The Liberal Democrats have set out the costs of new pledges and how it intends to fund them through savings. The Labour and Conservative manifestos set out the costs of some, but not all, of their pledges and have not set out clear costed savings plans. It is important to note that while we have considered whether the parties have costed their plans, we have not sought to test or verify those costings.

Figure 5: Plans for spending and savings as described in manifestos

Spending and saving plans

Plaid Cymru Around £1 billion new spending a year offset by around £1 billion savings.

Liberal Democrats £182 million new spending offset by £227 million savings.

Labour Full spend and savings plans not set out. Make £255 million of costed spending commitments in the manifesto as well as commitments where costs are not included. No costed savings.

Conservatives Full spend and savings plans not set out. Make £263 million of costed spending commitments in the manifesto as well as commitments where costs are not included. No costed savings.

UKIP Full spend and savings plans not set out. Make £107 million of costed spending commitments in the manifesto as well as commitments where costs are not included. Manifesto sets out £135 million of savings, including the climate change programme.

Greens No costed spending commitments or savings in manifesto.

Examples of savings varies considerably. The Liberal Democrats would seek 1.5% efficiency savings from budgets such as Local Government & Communities, and Economy, Science and Transport and cut regional educational consortia. Plaid Cymru would free up a £1 billion in the Welsh budget through, for example, winding up low performing programmes, changes to student support, a Budget Savings Commission, review of NHS efficiency, sharing back office functions and procurement savings. The Conservatives would cut government running costs by 20% and achieve savings, for example, in the student support and Communities First budgets. There are a number of commitments on efficiency but they do not always distinguish between efficiencies which are cash-releasing and actions which improve productivity but do not necessarily free money up. After five years of austerity many of the easier efficiency savings, through improved procurement, have probably already been banked. The challenge will be to deliver some of the big service remodelling and digital applications that have the potential to achieve significant cost benefits.

The NHS The performance of the health service in Wales has been a highly charged political issue and not surprisingly features prominently in party manifestos. The proposals cover a wide range of plans for improving quality and performance; the comments below cover only some aspects.

Governance

The future organisation of health services has been a traditional focus for political debate. This year, most of the parties emphasise reform of services but intend to retain the existing structure of 7 local health boards and 3 NHS Trusts. Fostering closer integration with social care is a common theme. The exception is Plaid Cymru, which plans far-reaching structural reform: integrating primary, community and adult social care through the proposed new regional arrangements for local government (see below). It would abolish the health boards and trusts and establish an Acute and Specialist Hospitals network run either directly by the Welsh Government or an independent board. UKIP plans to introduce elections for members of health boards. The Conservatives to have directly elected Health Commissioners for each board and an independent NHS Performance Unit. UKIP also intends to review the configuration with a view to reducing the number of stand-alone NHS bodies in Wales. The Liberal Democrats propose the abolition of Public Health Wales and the allocation of public health responsibilities to local government.

Reforming inspection arrangements are a common theme, for example putting the functions of Health Inspectorate Wales on an independent basis.

Finance

Perhaps the most challenging public service issue for the new Welsh Government will be resourcing the NHS, given that the health and social care together already comprise 48% planned Welsh Government expenditure. The 2013 Nuffield Trust report on NHS Wales pressures projected a funding gap of £2.5 billion by 2025-26 assuming that both the real terms current funding and the current rate of efficiency savings were maintained. On this basis, filling the gap would require a further 3.7% annual efficiency gains and/or funding increases above inflation. These projections are now being revisited and will take account of recent increases in NHS Wales funding and other developments. However, the long-term fundamentals may not change radically. Wales has already had the benefit, through Barnett, of the up-front 2016-17 increase in the funding for NHS England following the Spending Review. Given that the Welsh RDEL is projected to fall in real terms every year until 2019-20 (and maybe 2020-21), the future scope for increases in the NHS Wales budget is likely to be highly constrained unless there are significant offsetting cuts elsewhere in public services. This suggests that, as in England, responding to increases in numbers needing treatment, the severity of needs and developments in science will put pressure on NHS efficiency and productivity. The Conservatives have pledged to increase NHS expenditure in real terms each year. (2% inflation = £120 million). The Labour manifesto commits to ensuring that Wales spends more per head than England on health and social care combined. UKIP has said it intends to ‘support long-term investment in staff and resources’ in the NHS but its manifesto does not specify a figure. Plaid Cymru has not set out a specific NHS figure. The Liberal Democrats set out priorities for health spending on the basis of significant further Barnett consequentials. The Greens do not comment on overall funding levels for the NHS. On efficiency and productivity, Plaid Cymru says it expects the NHS to find around £300 million a year in efficiency savings – making the link to the Carter Review of acute care in England. The Conservatives would introduce a £100 million Health Transformation fund and a NHS task force to improve efficiency and make savings. The Liberal Democrats refer to a Commission to develop a long-term plan for health and social care.

Figure 6: Plans for NHS spending as set out in manifestos

NHS spending commitments

Plaid Cymru No specific commitment on overall level of spending on health.

Liberal Democrats

No specific commitment but reference to using funding as a result of extra NHS spend in England implies real terms protection.

Labour No specific commitment on overall NHS spending alone but does commit to Wales spending more per head on health and social care than England.

Conservatives Specific commitment to increase spending in real terms year-on-year.

UKIP Manifesto sets out general commitment to long-term investment.

Greens No specific commitment on overall level of spending on health spending.

In terms of service delivery, ‘opposition’ parties are critical of current performance in the NHS. All parties are planning to expand the number of staff working in the NHS. The precise numbers vary. Plaid Cymru and the Liberal Democrats have linked increased staffing to specific policy goals, such as reducing waiting times, more ward nurses, primary care improvements. UKIP emphasises plans to train more clinicians in Wales, rather than recruit from overseas. All of the parties make proposals to improve the profile and quality of cancer and mental health services.

Reconfiguration Reconfiguration of health services has been a hot issue in some previous elections but the parties are treading carefully this time on how to ensure that the NHS can enable clinicians need to carry out a high number of acute procedures safely and effectively. Plaid Cymru proposes to keep services local but build clinical expertise through care networks. Labour’s manifesto includes plans for integrated health and social services centres – alongside the transformation of the hospital estate. UKIP also emphasises keeping services local and plans to expand the number of cottage hospitals. The Liberal Democrats propose to set up an independent review on the structure of the NHS. The Conservatives oppose closure and rationalisation of hospital services. UKIP wants to hold a detailed ‘Keogh Style’ review of care across all parts of the NHS.

Social Care Paying for social care is a long-standing conundrum and all of the parties’ manifestos set out plans for social care for older people. Plaid Cymru plans to scrap the charges for non-residential care, in the next Assembly with a view to scrapping all charges for care homes by the end of a second Assembly term. The Conservatives pledge to introduce a £400 weekly cap on residential care and also to increase the amount of savings a person can have to £100,000 before they have to start paying for residential care. Labour plans to increase to £50,000 the amount of savings a person can have before paying for residential care. While they do not have specific policies on charging for social care, UKIP, the Liberal Democrats and the Greens (along with the other parties) emphasise the need to get social care and NHS services working together better. Figure 7: Plans for social care fees as described in manifestos

Social care fees

Plaid Cymru Free personal care for the elderly within the first 2 years of Government. No charges for those with a dementia diagnosis

Liberal Democrats

No specific commitment on care fees in manifesto.

Labour Double the savings/ capital threshold for residential care to £50,000.

Conservatives A £400 cap on weekly care costs and set a savings/capital threshold of £100k for residential care.

UKIP No specific commitment on care fees in manifesto other than maintaining existing cap.

Greens No specific commitment on care fees in manifesto.

Calculation of costs has to reflect increasing numbers of those using the services as well as changes in property prices and other factors. The 2014 LE Wales report projected that an increase in the capital threshold to £100,000 would result in an initial net additional public annual cost for residential care for older people of £30 million rising to £60 million by 2030.

Education

Pre-school

Several of the parties make commitments to extend free childcare provision. Currently, children aged three have 10 hours free provision, usually provided through nurseries in schools. Labour, Conservatives and Plaid Cymru intend to extend free childcare for three year olds to 30 hours. The time frame for Labour and Conservatives is unclear. Plaid promises to deliver 15 hours by 2017-18 and full 30 hours by the end of the Assembly. The Liberal Democrats focus on provision for under 3s, planning to introduce 10 hours of childcare for children aged between 9 months and 3 years. The Greens would offer free full-time childcare from birth to formal schooling. UKIP’s manifesto does not refer to childcare provision. The additional costs of a childcare offer for working families for 3 - 4 year olds was estimated recently in a PPIW report to range from £61 million to £97 million depending on number of weeks and take-up2. It represents a significant financial commitment.

Schools

As we said in our 2013 report, a rise in the birth rate means that demand for school and education is set to rise. With more young people making their way through the education system, the next Welsh Government will need to ensure that there are sufficient places and opportunities. The results of international comparisons like the PISA have shone a light on Wales’ performance in education compared to other developed countries. The parties’ plans for schools vary considerably. Plaid Cymru has focused on teachers, including improving their training, reforming arrangements for supply teachers and increasing some teachers’ pay by up-to 10 per cent. The Liberal Democrats have pledged to reduce school class sizes and increase the ‘pupil premium’. The Greens have pledged to reduce class sizes. Others are focusing on education standards with Labour ‘ring-fencing’ £100 million for improving school standards. UKIP plans to introduce grammar schools, with pupils tested at aged 11 and then streamed between academic and vocational schools.

2 2015, Public Policy Institute for Wales, Child Care Policy Options for Wales.

Against the context of the debate in England about academy schools and the role of LEAS, it is worth noting the Conservatives proposal to directly fund schools (giving greater control to teacher, parents and governors) and the Liberal Democrats proposal to give new powers and autonomy from local government to schools which ‘can demonstrate key values’.

Further Education

All of the parties’ manifestos, except UKIP, have committed to increasing the numbers of people taking up apprenticeships in Wales. The exact numbers vary between the parties. The parties intend that some or even all of the costs will be met through the additional money the Welsh Government will receive as a result of an increase in funding for apprenticeships in England. UKIP does not comment on apprenticeships but pledges to protect the Further Education budget in real terms over the Assembly term.

Higher Education

Many of the parties have focused on funding for higher education. All parties except Labour plan to substantially change the system for funding Welsh students. Labour intends to retain the current system of support for all Welsh pupils, regardless of where they study. Plaid Cymru and the Conservatives plan to reduce or remove the tuition fee subsidy that is currently provided to Welsh students. Plaid Cymru plans to remove the subsidy but pay off a certain amount of debt for graduates who complete their studies and then work in Wales. The Conservatives would remove the subsidy but provide some support, at a lower overall level of spend, for student living costs. The Liberal Democrats intend to keep the same level of spending but shift support from tuition fees to directly funding universities and supporting students with their living costs. Labour’s manifesto says it will ‘consider the recommendations of the Diamond Review’ and ‘put forward a better package than that on offer in England’. UKIP plans to end the tuition fee subsidies for Welsh students studying in England and replace it with a loan. UKIP aims to encourage students to study science, technology, engineering and maths by removing tuition fees from those subjects. The Greens propose to scrap tuition fees for students in Wales.

Housing Housing has risen sharply up the policy agenda across the UK with radical changes in England in social housing policy as well as action to increase housing supply.

Most of the Welsh parties make specific commitments to increase the number of affordable homes, mechanisms including increased capital grant funding and incentives for first-time buyers:

The Liberal Democrats: double the number created each year.

The Greens: 12,000 more affordable homes.

Plaid Cymru: 10,000 new affordable homes on top of existing plans.

UKIP: identify unused land that can be freed for developers to build affordable housing but not how many or when.

The Conservatives want to launch a housing building programme and ‘recognise the need to deliver 70,000 new homes’ but do not refer specifically to ‘affordable homes’.

Labour: 20,000 new affordable homes. No England-style fundamental changes in social housing policy are envisaged but there are adjustments.

Labour and Plaid Cymru have pledged to end the right to buy scheme where tenants can buy their council house.

The Conservatives would keep right to buy for council housing at full discount and offer RSLs the option of introducing Right-to-buy schemes where that would enable the delivery of individual housing schemes.

The Liberal Democrats would introduce new schemes to enable tenants to ‘rent-to-own’ their houses and also provide help for under 30s to rent their first properties in the form of loans to pay for the initial deposit.

UKIP would make having connections to a local area a greater priority in housing allocations.

The Greens would introduce right to rent legislation to strengthen tenants’ rights.

Local Government

There was much debate in the last Assembly about the structure and functions of local government. The last Welsh Government put forward plans for fewer, larger authorities and set out two maps, largely based on the old counties. However, this issue is not referenced in detail in Labour’s manifesto where it refers only to plans for ‘stronger, larger local authorities’.

The Liberal Democrats do not agree with the existing proposals and intend to ask the Boundaries Commission to draw up alternative plans based on ‘natural communities’. Their other governance proposals include;

The Single Transferable Vote for elections.

A Community Bill of Rights, empowering communities to take the initiative on local services and assets.

More powers to local authorities including public health and economic development.

UKIP has not set out specific plans, but intends that any reconfiguration would be bottom-up, rather than determined by the Welsh Government.

The Conservatives would only allow local government mergers with consent of local population following a referendum. Their other governance proposals include:

A community’ right to bid’ for local assets.

Development of public service mutuals.

Enabling local referenda on directly elected mayors (and other topics).

The most far-reaching proposal is Plaid Cymru’s plans to establish up to six Regional Combined Authorities comprised of existing unitary councils, that continue to exist, chaired by a directly elected executive mayor. They will have strategic powers in relation to education, primary & community health and social care, highways & transport, and economic development. This has to be seen in the context of wide changes to the organisation of national as well as local government in Wales and also the developments in Greater Manchester and elsewhere in the north of England. Other governance proposals include:

The Single Transferrable vote for elections and votes at 16.

About 150 Area Councils, below the unitary authority tier, among other things replacing the Communities First partnerships, with a particular remit on local regeneration and overseeing local schools governance and place-based services.

Proposals on local taxation have been considered above.

Conclusions The span of proposals in the manifestos is wide and there are genuine choices on offer. It could be said in general that ‘austerity’ is the elephant in the room. While there are some common themes in the proposals for taxation – such as on business rates, most parties are approaching the use of possible income tax powers cautiously. This may change in the next round of manifestos if by then the Assembly has begun to develop practical experience of setting and collecting revenues. While there are a range of ideas for generating more capital investment, it looks likely that the total resources available to finance day-to-day public services are unlikely to vary significantly from current plans following the Spending Review and the associated downward pressure on spending. The issue will be the extent to which new commitments are offset by cuts elsewhere in the budget.

The constant pressure for new money for the NHS is tacitly acknowledged in some of the manifestos but how far the parties recognise the sheer scale of change which many independent observers advocate is not clear. Savings through efficiency are clearly seen as a significant way of freeing up the budget and the need for greater efficiency and productivity is more prominent. How to incentivise efficiency, the extent to which efficiencies release cash (as against increasing productivity) and how that cash is reallocated is likely to become a live issue in the next Assembly. The link between capital investment and increased efficiency will surely need to feature. There are a number of references to social enterprises as a vehicle for delivering services, a more integrated approach to services around particular needs (such as services for older people) and a stronger role for local communities in shaping or taking on services. Much of this is with the grain of current thinking – there are not many proposals for fundamental change to the public service model, for example, in relation to the role of competition and the private sector. Service integration at scale remains a ‘holy grail’ but, not surprisingly, the manifestos do not provide a clear road map. The manifestos contain a range of proposals for change in the governance structures for public services, some far-reaching. The future of local government was unfinished business in the last Assembly but there is no overarching consensus about its shape – or functions. It will surely need early resolution. But from the users’ point of view change in public services on the ground may feel to be more gradual than dramatic, compared with now. The impact of many of the ideas would take time to change the way services look and feel from day-to-day. Perhaps that is just a reflection of how difficult change is.

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