'One of the Toughest Budgets Since Devolution'

Welsh Government's budget worth up to £1bn less next year

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Author: Claire PearsonPublished 13th Dec 2022
Last updated 13th Dec 2022

The Welsh Government has published its new Budget, which it says will help protect public services and the most vulnerable in the face of a “perfect storm of financial pressures”.

The Minister for Finance and Local Government Rebecca Evans said it has been one of the hardest budgets since the start of devolution.

This year’s Draft Budget builds on the spending plans set out in the three-year Budget published last year. Difficult decisions have been made to reprioritise funding from within Welsh Government budgets to maximise support for public services and for people and businesses most affected by the cost-of-living crisis and the recession.

The Draft Budget also allocates additional funding which came to Wales through the Autumn Statement.

An extra £165m is being allocated for NHS Wales to help protect frontline services.

An additional £227m is being provided to local government to help safeguard the services delivered by councils – including schools – as well as delivering the Real Living Wage in social care. This funding also contributes to the wider £460m two-year business support package, announced yesterday.

The Welsh Government will provide further support to education with an extra £28m for the education budget, to strengthen the further education sector, improve standards in schools, support children whose families are on lower incomes, and help children and young people with additional learning needs. The full £117m consequential from education spending in the Autumn Statement has been provided to local government to fund schools.

Funding is also being provided to support Wales’ ongoing humanitarian response to the war in Ukraine and the thousands of people who have sought safety and sanctuary in Wales – £40m will be allocated in 2023-24 and £20m in 2024-25.

The Draft Budget also provides an additional £18.8m for the Discretionary Assistance Fund, which provides lifeline emergency cash payments to people facing financial hardship.

And an additional £40m will support public transport, helping create a sustainable and greener transport system, which helps Wales on its journey towards Net Zero by 2050.

Rebecca Evans said: “This is a budget in hard times, which will help to protect frontline public services as far as we can in the face of a perfect storm of financial pressures, while also providing some extra help to those most affected by the cost-of-living crisis and supporting our economy through the recession.

“Our approach is designed to maximise the impact of all our available resources. This means balancing the short-term needs associated with the ongoing cost-of-living crisis, with the continued need to make longer-term change and deliver on our Programme for Government ambitions for a stronger, fairer, greener Wales.

“This has been one of the toughest budgets since devolution. It is being delivered as the UK economy is once again in recession, following a decade of austerity, Brexit and the pandemic. Inflation is at a 40-year high and energy costs are soaring.

“Inflation has eroded the spending power of our budget but not our ambition. We have taken very difficult decisions to make sure all our resources are used to help support people, businesses and services through the tough year ahead.”

The Welsh Government’s budget is worth up to £1bn less next year than when it was originally announced, and up to £3bn less over the three-year spending review period from 2022-23 to 2024-25.

As a result of the UK Government’s post-EU funding arrangements, Wales also has a £1.1bn shortfall in funding, compared to the EU structural and rural funds.

ROYAL COLLEGE OF NURSING

Helen Whyley, RCN Wales Director said: “The current challenges we are seeing in our healthcare service will not be improved without an investment in the workforce.

"It is deeply alarming that the Welsh Government has called this budget a ‘Budget that will prioritise the protection of frontline public services’ and yet it fails to address the nursing workforce.

"Patient safety is severely jeopardised when there are not enough nurses on shift and this fact has been ignored by the Welsh Government. There are 3,000 registered nurse vacancies in the NHS and low pay is fanning the flames of this workforce crisis. No aspect of healthcare can be delivered without nursing staff. Nurses are needed in neonatal units, surgery, community nursing, mental health, A&E and every place where patients are cared for.

"RCN strikes are inevitable in Wales because the Welsh Government is making it so. The Welsh Government have no intention of offering a resolution and the draft budget today only confirms that.

"Enough is enough. Without a workforce able and ready to deliver care, there is no service.

"Nursing staff must be paid fairly for the safety critical work they do. The draft budget today announced additional money for the health service. This must be used to give nursing staff a significant pay rise.”

PLAID CYMRU

Plaid Cymru Leader Adam Price said the draft budget was “further proof” that the current devolution settlement did not work for “the people of Wales”.

Mr Price called for “stronger” fiscal powers for Wales so that the Welsh Government could better protect people from the Tories’ “catastrophic mismanagement” of the UK economy – but added that the Welsh Government could use all levers at its disposal to “soften the blow” and support “vital public services”.

The Plaid Cymru Leader also welcomed the protection of funding for key commitments with the Co-Operation Agreement with the Welsh Government including Free School Meals for primary school children and the expansion of free childcare.

But he said: “Behind every painful statistic – prolonged real-term declines in wages, contractions in GDP, growing unemployment, the most sustained squeeze to living standards for centuries – are real people suffering. Families no longer able to afford to heat their homes or feed their children. Our health service at breaking point with patients waiting days at A&E and nurses forced to use foodbanks. Ordinary, hardworking people struggling to get by in the face of soaring prices and eye-watering interest rates.

“This is the brutal reality behind this draft budget and further proof that the current devolution deal does not work for the people of Wales. It is also a damning indictment of an out of touch and out of control Tory Government, whose catastrophic mismanagement of the UK economy has dragged Wales headlong into this crisis.

“Without stronger powers over our economy and without the ability to set Welsh-specific tax-bands that better reflect what our nation’s needs, Wales will always be dragged along by the whims of Westminster.

“While Wales’ powers are very limited, we are not completely powerless and there are levers available to the Welsh Government to at least soften the blow. Plaid Cymru members have raised on numerous occasions the tax-varying powers possessed by the Welsh Government in relation to income tax, and we will continue to make the case that they should be seriously considered within the context of future budgetary decisions. While we acknowledge the sensitivities involved in raising taxes, especially during a cost-of-living crisis, the Welsh Government should be prepared to take bold and radical steps to prop up our vital public services.

"Meanwhile, as part of the three-year budget underpinning the Co-operation Agreement, Plaid Cymru is glad that we have ensured that funding for vital interventions such as Free School Meals for primary school children and the expansion of free childcare have been protected.

“Plaid Cymru will continue to support the most vulnerable in our society, stand in solidarity with those on strike for better pay and work conditions; and continue to fight for a better future for our communities.

WELSH CONSERVATIVES

Welsh Conservative Shadow Finance Minister, Peter Fox MS said: “The Labour Government’s budget today represents a display of smoke and mirrors. While times are tough, the UK Conservative Government has provided £1.2bn in additional funding.

“There are serious questions to be asked about whether the money being spent in successive budgets is actually delivering what is expected, with results in health, education and the economy sorely lacking. What the people of Wales expect to see from the Labour Government is funding being used in a way that finally tackles the long-standing issues that we face in Wales, as well as responding to the issues that we currently endure.

“The Labour Government need to focus on delivery and securing positive outcomes for the people of Wales to reduce our record waiting lists in the NHS, improve our poor education results and unlocking the Welsh economy.”

A party spokesperson added: "£3 million is to be spent to ‘contribute’ to the UK Covid inquiry, £2.2 million is also set to be wasted on ongoing work regarding ‘Senedd reform’.

"Welsh Conservatives are arguing that these funds would be better spent giving answers and peace of mind to bereaved families here in Wales, with a Wales-specific Covid inquiry.

"£70 million has been allocated for a pay boost for those in the social care sector, a move welcomed by the Welsh Conservatives. However, this funding is included in the local government allocation, effectively inflating that figure."

WELSH LIBERAL DEMOCRATS

Welsh Liberal Democrat Leader Jane Dodds said: “We welcome today’s news on business rates. I also recognise the difficulties in setting this budget given the crisis in the economy caused by the Conservative’s failure to get a hold of the energy crisis and Liz Truss’ disastrous mini-budget.

“However, going forward I would like to see a greater focus on a number of key areas. While I am pleased about some of the progress made today on health and social care, I am concerned that what has been announced won’t go far enough to stem the tide of people leaving both professions and we have yet to see any breakdown on how this fund would be spent.

“Likewise, I cannot see any proposals in this budget that will make a significant dent in solving the crisis in NHS dentistry. Nor are there any detailed proposals for an emergency insulation programme, something that would not only help the environment, but would save the Welsh Government, local authorities and families money in the long run.

“I would also like to see more support for Local Government to ensure vital services they provide can continue."

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