After months of intensive cross-government work, the Welsh Government has developed a wise plan to respond to the extraordinary financial pressures facing public services.
The Welsh budget is under unprecedented pressure caused by a combination of record and persistent inflation, more than a decade of austerity and economic mismanagement by the UK government.
Speaking in the Senedd, the finance minister said the government’s priority was to protect essential services, jobs and people hardest hit by the current cost of living crisis, as she announced a package of changes to spending plans.
These changes will allow the Welsh Government to channel £425m of extra funding to support the Welsh NHS this year.
The Transport for Wales budget will increase by £125m this year to protect services for passengers and continue the transformation programme.
The local self-government grant (RSG) is also protected. This helps pay for schools, social care and many services that people rely on in their daily lives, such as recycling and waste collection and local libraries.
Each ministerial portfolio has been asked to contribute to meet the extraordinary financial pressures. Ministers have re-prioritized spending and activities as much as possible, rather than cutting programs as a whole.
As part of the package of changes, the Welsh Government will make available up to £100 million from annual reserves and Wales Reserve, and will ask the UK Treasury to shift some of the capital funding to revenue funding this financial year – a mechanism regularly used by the UK government to help in managing their budgets.
The package also includes the expectation that there will be consequential funding from the UK Government as a result of increased spending in devolved areas, most notably public sector pay.
Rebecca Evans, Minister for Finance and Local Government said:
“We have worked hard across government to put together a package of financial changes that protect Wales’ public services, the NHS and transport.
“We have taken difficult but prudent decisions which protect people and will help minimize, as far as possible, the impact of these extraordinary financial pressures on the vital services we all rely on.
“But I want to be clear that while we have been able to redirect additional funding to health and transport services, the NHS in particular is still facing some extremely difficult decisions as a result of the challenging financial situation.
“The combination of persistently high inflation, more than a decade of austerity and economic mismanagement by the UK government means that all public services are under huge pressure. Unfortunately, these are incredibly difficult times.”