Every single government department in Wales will get more money this year compared to last year. While Labour repeatedly spoke of a “brighter” future, there was criticism that the spending announced by Finance Minister Mark Drakeford doesn’t go far enough to make up for cuts, particularly sweeping cuts in the 2024-2025 budget. You can read how the budget was announced here.
Mr Drakeford published its spending plans for the next financial year today (Tuesday, December 10) and how it plans to distribute the £26bn spending Welsh Government is responsible for.
All departments including health, education and rural affairs, will receive increases in both revenue and capital funding with the Welsh Government pledging it will allow “substantial investments in the school estate, NHS infrastructure, housing and public transport”. Capital expenditures are typically one-time large costs, like building new schools or hospitals, while revenue is the ongoing operating expenses.
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The Welsh Government say this budget includes £1.5bn of extra funding compared to last year – that figure is different to the £1.7bn extra the UK Government said it was giving Wales in the budget in October because their figure included spending over two financial years. For the first time at this stage of the budget process, the Welsh Government say that capital spending is more than £3bn.
Here are the key points from the budget:
Huge boost for the NHS
Health got a huge capital boost of 40%, and revenue or just under 4%. However, there were questions whether that is enough to make a difference. The Welsh Government paperwork says it will help cut waiting lists, give money to mental health services and £3m to the recently announced women’s health plan.
Speaking to WalesOnline, Mr Drakeford said the money going into health would make a practical difference but he acknowledged some would go into the maintenance backlog of Wales’ ageing NHS estate.
“Undoubtedly there will be some of that money that will be needed to put right the neglect that absence of capital budgets has created over recent years. But it will be far more than that. It will be new equipment, new facilities, there will be new digital possibilities that will allow the health service to be more productive and efficient in the money that it’s already got.
“Because now we will have the wherewithal to do that. So yes, there will be some bits that will be fixing the roof because now we’re able to do that. But there will be new investments and will create the future of the health service and allow the revenue we have, the people we employ to do more, because now they’ve got the things that allow them to succeed.”
Coal tip funding
The UK Government announced in the budget it would give £25m into coal tip restoration, and the Welsh Government has confirmed all that money will go to coal tip restoration. That £25m is a fraction of what the Welsh Government need over the next decade though.
Today it was announced by the Deputy First Minister Huw Irranca-Davies more than £100m will be spent on coal tip safety this Senedd term. That is made up of the £65m already committed from 2021 to 2025, the £25m requested and received from the UK Government for 2025-26 as part of its autumn budget earlier this year, plus an additional £12m announced in the 2025-26 draft budget.
Transport received the biggest amount in terms of revenue
The Transport budget is up 12% in terms of revenue, that is an additional £70m resource and £51m capital being promised “to modernise our railway and deliver a better bus network, to fix our roads, and provide local choice on 20mph.”
The budget papers say the Welsh Government will use that to “invest in rail services in the areas which are the responsibility of the Welsh Government.” “Our priority is the completion of the transformational Core Valley Lines project from a Victorian coal line to a modern Metro system. The total allocation to the rail capital budget (including non-Core Valley Lines elements) is £181.6m.”
In terms of buses, where we expect a new bus law next year about offering linked up services and a new franchising model, £9m is being invested for the additional cost of services and demand-led concessionary fares scheme. However, Aaron Hill, Director of CPT Cymru, which speaks on behalf of operators, said: “This money may not be sufficient to sustain existing routes and services, let alone grow them.”
He said: “From the rising price of vehicle maintenance to an additional £3m in National Insurance contributions next year, Welsh bus operators are grappling with myriad cost increases that will ultimately drive higher fares or fewer services without more investment from government.
“CPT Cymru urges the Welsh Government to deliver on its commitment to improve the bus network by doubling today’s increase to £18m before the Final Budget next year. Failing to do this risks making the Welsh bus network less attractive and making it harder for people to get to work, to access education and healthcare, and to stay connected to their local communities.”
Arts funding up
Arts funding, which was so badly cut last year, is up 3.6%. However arts bodies have been quick to point out that even with some additional funding made available by Welsh Government this financial year, and that rise, it goes nowhere near making up the cuts they have endured.
Mark Drakeford responded to that criticism. In an interview with WalesOnline he said: “This is definitely a step in the right direction for the arts. It’s a start of that journey, not the end of it.”
No income tax rise
There will be no rise in Welsh income tax but there will be changes to the Landfill Disposals Tax, upping it to £126.15 per tonne – a rise of 22%. One percentage point is being added to Land Transaction Tax to raise an additional £7m.
Council tax ‘will still go up’
Wales’ 22 councils, which deliver a whole range of services, have seen their grant go up by 4.3%. There will be more detail on that in coming days. However, that rise will not, opposition politicians said, be enough to avoid councils having to put up council tax.
Plaid Cymru MS Peredur Owen Griffiths told the Senedd: “The figures announced today mean that there is still going to be a shortfall in the budgets of local authorities throughout Wales. This means that the axe will still be wielded on local services and local institutions. This also means that council tax will still have to rise at a time when many families are living from one pay packet to the next.”
Can they get it through?
Now the budget is public, Labour needs to secure support from at least one other MS in order for it to pass a Senedd vote, which takes place in March. The ruling party has 30 of the 60 seats in the Senedd and therefore needs support from politicians of a different colour. Negotiations about securing that crucial vote will now continue. Plaid Cymru started the day by saying it would not work with Labour. Finance spokesperson Heledd Fychan told BBC Radio Wales: “We want fair funding for Wales, we’ve been very clear this is the worst financial settlement for all the devolved nations, obviously welcoming more funding, but it doesn’t mean it’s adequate nor fair for Wales. Where is the £4bn that Labour used to agree with us is owed to Wales from the HS2 consequential? Why aren’t the Crown Estates being devolved here? Where is the fair funding formula to replace Barnett?”