Welsh Government draft budget published against backdrop of rising prices and pressure on public services

The Welsh Government has published its draft budget today against a backdrop of rising prices for households, mounting pressure on public services and an expected prolonged recession.

Minister for Finance Rebecca Evans said that while the spending plans will help protect public services and the most vulnerable, she described it as “one of the hardest since the start of devolution.”

The budget builds on spending plans set out in the three-year budget published last year along with additional funding which came through the Autumn Statement.

Wales is receiving an extra £1.2bn of funding over the next two years on top of what had already been allocated.

Welsh Tories say the money should be spent on tackling the NHS waiting lists.

Where is the money going?

• £165m is being allocated for NHS Wales to “help protect frontline services.”

• £70 million is being provided to implement the real living wage uplift – to £10.90 an hour – in the social care sector.

• Business rate support worth more than £460m over the next two financial years was announced on Monday.

• £227m is being provided to local government to help safeguard the services delivered by councils – including schools.
• Funding to support Wales’ ongoing humanitarian response to the war in Ukraine and the thousands of people who have sought safety in Wales – £40m will be allocated in 2023-24 and £20m in 2024-25.
• £18.8m for the Discretionary Assistance Fund, which provides lifeline emergency cash payments to people facing financial hardship.

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

Low funded Flintshire

Flintshire Council will be waiting eagerly to see how the £227m provided to local government will be divided up across the 22 Welsh local authorities.

Between 2008 and 2020 Flintshire had the funding it receives from government reduced.

Over the past fourteen years, Flintshire has cut back on its spending by £100M, whilst continuing to protect schools and social care.

“As one of the lowest funded councils per head of population in Wales – ranked 20 out of 22 councils – Flintshire was particularly exposed to the effects of this period of austerity.” The council said.

Flintshire Council funding comes from three core areas, 67% from the Welsh Government, 28% from Council Tax, and 5% from the fees it charges for some services such as planning fees and garden waste charges.

Prior to today’s draft budget, Flintshire was looking at a gap for 2023/24 of around £32m.

Any council budget shortfall invariably means reducing services and jobs and a Council Tax hike for local residents.

Education

The Welsh Government is providing 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.” The government has said.

Announcing the Draft Budget for 2023-24, the Minister for Finance and Local Government Rebecca Evans said it has been “one of the hardest since the start of devolution.”

She 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 says the 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.”