As you know, Finance Minister Jane Hutt (Lab, Vale
of Glamorgan) unveiled the draft Welsh budget for 2014-15 to the
National Assembly on Tuesday. All the relevant figures and details
can be found here, but it's worth giving the overall picture compared to the supplementary budget for 2013-14 (total expenditure, including annually managed expenditure) based off the budget tables (pdf).
| Department | Draft Budget 2014-15 | Change from 2013-14 Supplementary Budget plans (total spending) |
|---|---|---|
| Health & Social Services | £6,545million | +£136million |
| Local Government | £4,613million | -£95.9million |
| Education & Skills | £1,987million | -£46.6million |
| Economy, Science & Transport | £977.2million | +£37.1million |
| Housing & Regeneration | £464.6million | +£92.4million |
| Natural Resources & Food | £418.6million | +£23.2million |
| Central Administration | £349.7million | -£731k |
| Communities & Tackling Poverty | £212.7million | +£375k |
| Culture & Sport | £139.9million | -£1.1million |
The Good News
 |
| The clear winner is the Welsh NHS, with other areas - like transport - receiving extra capital spending boosts. (Pic : BBC Wales) |
It's easier to make out
the red numbers in the budget than the black, but there are clear winners, particularly in terms of capital spending (one-off investments). Revenue budgets (operating budgets) across all areas except health don't make as nice reading.
There's an extra £225million in revenue and capital funding for delivery of NHS services, and the total cumulative extra funding is said to be around £570million over the next three years.
Local libraries received a £3.7million capital boost. There's also a £35million capital boost for programmes to mitigate climate change and tackle fuel poverty, an extra £7.5million towards flood defences, while post-16 learner support received a £30.9million capital funding boost too.
An extra £13million of capital funding has been made available for sustainable travel schemes - perhaps in response to the Active Travel Act - alongside an extra £30.7million for road and rail schemes and £8.2million for trunk roads. However, there've been cuts of around £19million to transport revenue budgets.
In a joint statement on Tuesday, the Welsh Government announced a £100million agreement with Plaid Cymru and Welsh Liberal Democrats, the specifics of which include :
There's an extra £225million in revenue and capital funding for delivery of NHS services, and the total cumulative extra funding is said to be around £570million over the next three years.
Local libraries received a £3.7million capital boost. There's also a £35million capital boost for programmes to mitigate climate change and tackle fuel poverty, an extra £7.5million towards flood defences, while post-16 learner support received a £30.9million capital funding boost too.
An extra £13million of capital funding has been made available for sustainable travel schemes - perhaps in response to the Active Travel Act - alongside an extra £30.7million for road and rail schemes and £8.2million for trunk roads. However, there've been cuts of around £19million to transport revenue budgets.
In a joint statement on Tuesday, the Welsh Government announced a £100million agreement with Plaid Cymru and Welsh Liberal Democrats, the specifics of which include :
- The Pupil Deprivation Grant has been increased by £35million (to £918 per pupil).
- The creation of a £50million Intermediate Care Fund to increase the number of patients being treated in the community instead of hospitals.
- £5.5million has been pledged to mitigate against cuts to the Supporting People Programme (supported housing for vulnerable adults), the budget being cut by a lesser £2.2million to £134.4million for 2014-15.
- An additional £9.5million for robotic cancer treatment (Da Vinci) and telemedicine in north and south west Wales.
Jane Hutt also announced £617.5million in general
capital spending priorities over the next three years on Wednesday,
including :
- £62million towards the proposed South Wales Metro.
- A combined £97million towards A465 duelling, Brynglas tunnels improvements and A55 improvements.
- £170million towards shared equity schemes and other housing projects.
- An extra £82million for Finance Wales.
- £38million towards Phase 2 of the Noah's Ark Children's Hospital, Cardiff.
- £90million towards Arbed energy efficiency and flood defences.
The Bad News
 |
| Everyone knows local councils took a big hit, but we shouldn't overlook the scale of cuts made to post-16 education. (Pic : ITV Wales) |
The
widely-expected deep cuts to local government have arrived, and will
make grim reading for local authority finance departments, making it
even harder to explain away tax-friendly pension schemes and taxpayer-funded legal bills.
Local government support funding has been cut by £127.9million alone, with total cuts to local government services said to hit the £460million mark over the next three years – an average of £20.9million per council, though many will fare worse than that, few better.
The WLGA are - unsurprisingly - not pleased, describing the cuts as potentially "casting local public services as the poor relation of the Welsh public sector" and criticising the increased spending on the NHS. Cardiff Council's Cllr. Russell Goodway goes as far as to say some local authorities "could go bust", suggesting that two unnamed local authorities are in serious financial trouble.
The Western Mail report that the WLGA's Chief Executive told the Assembly's Communities, Local Government and Equalities Committee earlier today that local authorities should be able to absorb the cuts over the next few years, but if austerity drags on for much longer, then councils may struggle to provide services, warning that Russell Goodway's harbinger of doom statements were "fair comments."
It should be pointed out that while there are big spending boosts to health, that's offset by a £168.2million cut to targeted NHS services. Substance misuse and children's social services have had their revenue budgets frozen. Mental health policies and legislation have seen a £3.7million cut, while adult social services have seen a £36.1million cut.
A total of £77.6million of cuts have been made across education, in particular post-16 (-£49.1million) and universities (-£20million) offset mainly by the Pupil Deprivation Grant. There's another £7.2million of cuts to skilled workforce schemes too, in addition to £27.2million of cuts to programmes to boost education participation and reduce inequalities.
A total of £3.26million of cuts have been make to supported housing, including homelessness, offset somewhat by the Intermediate Care Fund and the smaller than planned cuts to the Supporting People Programme.
Arts Council for Wales funding and sport activities funds have been cut by £2.2million and £1.2million respectively. Science and innovation have taken a £1.7million hit (offset by a 200%+ increase in capital funding for science in the 2013-14 budget) while Rural Development Plan programmes have seen a £18.1million cut to revenue budgets.
Despite being in the midst of welfare reforms from Westminster, the Communities & Tackling Poverty budget has effectively been frozen, seeing £3.6million in revenue cuts and a £4million extra capital funds. That's unlikely to achieve anything significant.
The Assembly and Welsh Government face up to their own own cuts, with £13.7million in savings made to general running costs.
Winner - NHS. Loser - Everything else.
Local government support funding has been cut by £127.9million alone, with total cuts to local government services said to hit the £460million mark over the next three years – an average of £20.9million per council, though many will fare worse than that, few better.
The WLGA are - unsurprisingly - not pleased, describing the cuts as potentially "casting local public services as the poor relation of the Welsh public sector" and criticising the increased spending on the NHS. Cardiff Council's Cllr. Russell Goodway goes as far as to say some local authorities "could go bust", suggesting that two unnamed local authorities are in serious financial trouble.
The Western Mail report that the WLGA's Chief Executive told the Assembly's Communities, Local Government and Equalities Committee earlier today that local authorities should be able to absorb the cuts over the next few years, but if austerity drags on for much longer, then councils may struggle to provide services, warning that Russell Goodway's harbinger of doom statements were "fair comments."
It should be pointed out that while there are big spending boosts to health, that's offset by a £168.2million cut to targeted NHS services. Substance misuse and children's social services have had their revenue budgets frozen. Mental health policies and legislation have seen a £3.7million cut, while adult social services have seen a £36.1million cut.
A total of £77.6million of cuts have been made across education, in particular post-16 (-£49.1million) and universities (-£20million) offset mainly by the Pupil Deprivation Grant. There's another £7.2million of cuts to skilled workforce schemes too, in addition to £27.2million of cuts to programmes to boost education participation and reduce inequalities.
A total of £3.26million of cuts have been make to supported housing, including homelessness, offset somewhat by the Intermediate Care Fund and the smaller than planned cuts to the Supporting People Programme.
Arts Council for Wales funding and sport activities funds have been cut by £2.2million and £1.2million respectively. Science and innovation have taken a £1.7million hit (offset by a 200%+ increase in capital funding for science in the 2013-14 budget) while Rural Development Plan programmes have seen a £18.1million cut to revenue budgets.
Despite being in the midst of welfare reforms from Westminster, the Communities & Tackling Poverty budget has effectively been frozen, seeing £3.6million in revenue cuts and a £4million extra capital funds. That's unlikely to achieve anything significant.
The Assembly and Welsh Government face up to their own own cuts, with £13.7million in savings made to general running costs.
Winner - NHS. Loser - Everything else.
 |
| Plaid and the Lib Dems managed to get valuable and practical things from their negotiations, but it's small beans in the wider budget context. (Pic : ITV Wales) |
There are loads of different methods for working out how good/bad the figures are, but my sub-heading seems to be the general consensus reached by everyone who glanced over said figures.
This is likely to be the last big splurge on the NHS until the block grant starts to rise again (unlikely this side of 2020). Although I'm sure Welsh Labour love splashing the cash on health, and the Welsh NHS will continue to deliver complex services, it's in danger of becoming a poorly-managed fiscal black hole. Something has to change or I think even the Welsh Government will start to lose patience with LHBs. I covered one minor measure earlier this week.
The local government cuts were no surprise, but I was shocked at the depth of the cuts to education. It looks as though a sizable chunk of post-16 and university funds have been sacrificed for the Pupil Deprivation Grant. I remain sceptical as to whether that actually works because of how it's being spent, not the principle of the fund itself. Schools certainly win, FE colleges and universities lose.
It seems the economy department has been hit too, but via a lot of smaller revenue cuts offset by capital funding boosts. You've also got to question what the point of the Communities and Tackling Poverty department is without policing in its portfolio, as it seems to be Social Services+1.
In political terms, the good news for the Welsh Government is that, obviously, passing the budget will be a formality without any long, drawn-out process as last year or the year before. Plaid and the Lib Dems will abstain on the formal budget motion whenever it's presented to the Assembly over the next few weeks.
As to whether the two parties got a good deal, I'd say it's reasonable, but far from brilliant when you take all of the numbers into consideration. Many things, like the Intermediate Care Fund, you would've expected the Welsh Government to have considered anyway. You suspect Leanne Wood and Kirsty Williams simply gave them a nudge.
On the other hand, although you would expect it, the Welsh Conservatives are left twiddling their thumbs. While their Westminster colleagues dilly dally over fiscal devolution, you would think that the Welsh branch would be pushing for tax powers ASAP to create a narrative for themselves.
Their response so far has been limp and predictable, with Shadow Finance Minister, Paul Davies (Con, Preseli Pembs.), saying that Plaid and the Lib Dems had propped up a "tired and lazy Labour government" and that only the Welsh Conservatives would protect the NHS blah, blah, blah etc.
One of their major bone of contentions – cuts to the Welsh NHS – has been blown out of the water this year, while the other opposition parties have managed to get tens of millions of pounds in agreements (some pretty significant, like the deprivation grant and expansion of apprenticeships) out of Welsh Labour over three budgets now.
The clear benefits of a lefty consensus, you could say.
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