Millions of pounds worth of cuts to public services in Wales have been outlined in a bid to prop up the NHS and public transport.
The Welsh Government’s finance minister, Rebecca Evans, warned of “extraordinary” financial pressures ahead due to a £900 million shortfall in the budget. She told the Senedd the pressures are due to the triple impact of inflation, more than a decade of austerity and the ongoing fallout from Brexit.
The budgets for education and Welsh language, climate change, finance and local government, economy, rural affairs and social justice all face cuts.
Ms Evans said: “The UK Government’s economic mismanagement, including the disastrous mini budget, have combined to place the Welsh budget under unprecedented pressure.”
However, opposition parties raised concerns about the Welsh Government’s spending on ‘pet projects’ and Wales’ health boards failing to break even.
Ms Evans warned the NHS in Wales is facing the toughest financial pressures in recent history due to rising costs as well as demand for planned and emergency care.
She announced an additional £425m for the NHS but warned that health boards will still need to make difficult decisions this year, and next, to balance their budgets.
She told the Siambr that the revenue support grant (RSG) for councils has been protected and Transport for Wales (TfW) will get an extra £125m.
Ms Evans outlined how spending has been reprioritised with day-to-day revenue spending and capital expenditure for long-term investments in assets such as roads revised as follows:
- Health and social services: +£425m revenue, capital unchanged
- Education and Welsh language: -£74m revenue, -£40m capital
- Climate change: +£82m revenue, -£37m capital
- Finance and local government: -£28m revenue (excluding RSG), -£8m capital
- Economy: -£28m revenue, -£36m capital\
- Rural affairs: -£17m, revenue, -£20m capital
- Social justice: -£7m revenue, -£4m capital
- Welsh Government running costs: -£27m (revenue)
‘Pet projects’
Peter Fox – the Conservatives’ shadow finance minister – argued that the financial position is a result of short-sighted decision-making and poor management.
He said the budget is the largest ever at nearly £25bn, with next year’s projected at £26bn, and he criticised the Welsh Government for “taking its eye off the ball while focusing on pet projects that have syphoned millions away from core services”.
“I’m disappointed, but not surprised that the Welsh Government is looking to again blame the UK Government,” he said.
“The decision to implement the default 20mph limit is a perfect example – a £33m price tag with a cost of £4.5m to the Welsh economy demonstrates well what I’m saying.”
The Conservative MS for Monmouth said the NHS should not be at breaking point because Wales receives 20% more to spend per person on health than in England.
Peredur Owen Griffiths, for Plaid Cymru, welcomed the additional NHS funding but he raised concerns about six of the seven health boards failing to break even in the past three years, in violation of their statutory duties.
He asked: “Can we assume that, by adding to this shortfall, we shouldn’t expect them to break even anytime soon, and, as a consequence, targeted intervention is going to be a long-term feature of the Welsh Government’s health agenda?”
The finance committee chair also questioned the £125m for TfW, asking: “Is this an admission the service is not performing as it should be and becoming a bit of a money pit?”
Lib Dem Jane Dodds welcomed the decision to protect council funding, particularly children’s services, as well as the commitment to the basic income pilot for care leavers.
She raised concerns about the resilience of the Welsh Government, in light of ministers drawing on more than £100m from reserves.