Welsh Government draft budget to be revealed amid cost of living crisis
Financial plans will be announced this afternoon
The Welsh Government is to publish its draft budget following the UK Government's autumn statement and as pressure continues to mount on households and public services.
The budget, which will be announced on this afternoon, will set out funding allocations for the next two years.
It will include around £70 million a year to ensure social care workers continue to receive the £10.90 an hour real living wage from June 2023.
Business rates relief will also be increased from 50% to 75% to match the support recently introduced in England to provide "certainty" to businesses.
However, adjustments to the government's three-year plan set out last December are expected due to high levels of inflation and a possible recession.
Chancellor Jeremy Hunt announced last month that the Welsh Government was to receive £1.2 billion in extra funding as part of a package of measures to stabilise the economy.
The Welsh Government's budget is now understood to be worth around £3 billion less in real terms than when it was set after the October 2021 spending review.
Other pressures include the increasing cost of social care, homelessness provisions, and public transport which has become more costly due to there being lower demand.
The number of households in financial difficulty and therefore in need of emergency payments has also increased, the government said.
Wales Fiscal Analysis (WFA), a research body within Cardiff University's Wales Governance Centre, calculates potential losses due to inflation, even after additional funding, at more than £800 million in 2023-24 and £600 million in 2024-25.
The WFA has suggested that if the Welsh Government used devolved income tax powers to increase rates of income tax by 1p it could increase its budget by 1.4% next year and the year after.
Finance and local government minister Rebecca Evans said: "Despite the challenging economic and fiscal context, we remain fully committed to doing all we can to protect the frontline public services that people rely on.
"I am pleased to be able to maintain our commitment to social care workers, and I will be saying more about how we will protect public services when I announce the full details of the budget later today."