Welsh Budget 2016-17

It's the most wonderful time of the year : numbers, graphs and spin galore.

(Pic : Welsh Government)

The budget process for 2016-17 has been delayed by a few months due to George Osborne's personal definition of "autumn", but a draft Welsh budget – the last of the Fourth Assembly – was tabled yesterday by Finance Minister, Jane Hutt (Lab, Vale of Glamorgan).

A vote on the final budget will take place before the Fourth Assembly is dissolved, probably next March. Due to the two-year budget deal agreed in 2014 between Labour and the Lib Dems – worth up to £233million – that's a formality.

The whole budget process could be changed for the Fifth Assembly following a report by the Finance Committee earlier this year (pdf) and in light of forthcoming devolution of borrowing and tax-varying powers.

If the Committee's recommended changes come into effect, the budget process in Wales will begin to resemble Westminster, with an autumn statement issued outlining a draft budget, followed by line-by-line budget and tax plans (approved by the Assembly) in the spring/summer.

The Details

(Click to enlarge)

As I say every year, there are various ways to present these figures. I use the Total Managed Expenditure (TME) figures – which includes absolutely everything the Welsh Government spends, like year-on-year and one-off funding as well as capital budgets. I also compare the draft budget to the Supplementary Budget from last June (pdf) to provide a more accurate assessment of spending changes over the year as a whole.

There's a useful overview of the facts and figures from the Assembly's Members Research Service here. The important stuff is, as always, included in the line-by-line budget tables (pdf).

The Winners

Despite gobbling up close to half of all devolved spending, the NHS and social care are set to receive
yet another big cash injection. There's good news for propsective home-buyers and schools too.
(Pic : Wales Online)

The NHS....again. There's an extra £260million allocated towards core services, though this is actually lower than previous plans. There's also an extra £33.4million in capital funding towards delivery. Most NHS allocations are frozen with few significant cuts.

It's mainly good news for education too. There's a bit of relief for post-16 education/FE colleges with a £5million boost to budgets and an extra £10million for student support. An extra £2.9million will go towards development of the new school curriculum. The pupil deprivation grant has also been boosted by £7.2million. An extra £21.9million has been made available for capital projects in education.

Within the local government department, there's a £1.1million boost to Academi and an extra £1million for fire and rescue services in revenue and capital funding.

There's a £60.8million capital funding boost for housing and regeneration projects, with the vast bulk of that going towards increasing affordable and market housing.

Active travel and youth concessionary fairs will see a combined extra £5.8million. There's also an extra £27.4million in capital funding for new road and rail schemes.

News from natural resources is mixed (as you'll see further down), but there are significant capital funding boosts for flood defences, energy efficiency and waste management totalling £25.6million.

The central administration budget has been more re-arranged than seriously cut, with money largely shifted from revenue to capital, primarily because of the "invest-to-save" scheme.

The Losers

Local government is set to be hit hard yet again, while there's bad news for
Welsh universities and the environment as well.
(Pic : Wales Online)

Local government....again. They've been hit with a £114.9million cut to their funding support, which is more than last year, but not as bad as 2014-15. The overall settlement has "only" been cut by £57million, as announced today by Public Services Minister, Leighton Andrews (Lab, Rhonnda) - which is described as "better than expected". It'll almost certainly prompt serious grumbling from the WLGA. Elsewhere, the local government improvement budget has been slashed from £32.6million in 2015-16 to just £460,000 this year – presumably because of forthcoming reorganisation.

In terms of education, universities have also taken a sizable hit, with the budget cut by £41.4million. Welsh language services will also see a £1.7million cut, though there's a modest £82,000 boost for Welsh language education services.

Apart from housing, there's little joy for the Communities & Tackling Poverty department. Third Sector grants have been cut by £680,000, homelessness prevention programmes have been cut by £584,000 and there's a £1.25million cut to its programmes for children and families.

Despite the extra cash to front line NHS services, there's a £363,000 cut to hospice services. The Older People's Commissioner has also had their budget cut by £170,000.

Entrepreneurship programmes have had their revenue funding cut by £6.1million. There's also a £6million cut to trunk road operations – offset by a £20.6million boost in capital funds - and a £1.5million cut to IT infrastructure spending. There's also a £1.5million cut to heritage budgets and a £1.4million cut to sport.

There's a £7.8million cut to climate change programmes, which is all the more concerning this week, including a £2.4million cut to flood strategies. There's also been a £3.6million cut to the agriculture and food budget, with £500,000 of that coming from a cut to food and drink promotion. By the looks of things Natural Resources Wales is in line for a £6.9million cut.

The HS2 Issue

Will Wales see any extra cash as a result of HS2 - no, but yes.
(Pic : Click on Wales)

• See also : AMs Mock UK's Dodgy Barnett; Will HS2 benefit Wales?

If we do miss out because of that, not devolving railways fully when there was an opportunity to do so in 2005 could work out to be one of the costliest mistakes in modern Welsh history. - See more at: http://www.oggybloggyogwr.com/2013/11/will-high-speed-2-benefit-wales.html#sthash.4hPeVPFc.dpuf

If we do miss out because of that, not devolving railways fully when there was an opportunity to do so in 2005 could work out to be one of the costliest mistakes in modern Welsh history. - See more at: http://www.oggybloggyogwr.com/2013/11/will-high-speed-2-benefit-wales.html#sthash.4hPeVPFc.dpuf

If we do miss out because of that, not devolving railways fully when there was an opportunity to do so in 2005 could work out to be one of the costliest mistakes in modern Welsh history. - See more at: http://www.oggybloggyogwr.com/2013/11/will-high-speed-2-benefit-wales.html#sthash.4hPeVPFc.dpuf

07/11/2013 : "If we do miss out (on Barnett consequentials)....not devolving railways fully when there was an opportunity to do so in 2005 could turn out to be one of the costliest mistakes in modern Welsh history."

This is separate from the budget, but it's worth looking at.

As you might've heard (more from National Left & Blog Menai), there's been a war of words between Labour and Plaid Cymru over the amount of money Wales is set to receive as a result of England's High Speed 2 (HS2) project.

Rail infrastructure is devolved to Scotland and Northern Ireland, so when it comes to major rail infrastructure projects they receive top-up funding proportionate to their UK population share – known as a Barnett consequential. In Wales this would've been potentially worth up to £4billion (~5% of HS2's estimated £80billion budget).

Rail infrastructure isn't devolved to Wales, therefore Wales is ineligible to receive Barnett consequentials even when big rail projects like HS2 would largely benefit England-only.

However, Wales would be eligible for a proportionate amount of any increase of the UK Department of Transport's budget as a result of HS2. The Welsh Government say that through this Wales would receive an extra £755million over the next five years.

Confused? In essence, they're both right.

Plaid Cymru are correct to say the Welsh Government have failed to stand up for Wales to ensure we get the same levels of top-up cash Scotland and Northern Ireland are due directly as a result of HS2.

Equally, the Welsh Government are within their rights to refute any accusation that Wales would receive nothing as a result of HS2. We're just getting the money as an indirect result of the project.

If both parties hadn't spun things in the manner they they did (inevitable as we enter an election year), it's likely both parties could've found something to agree on.

Politics : Sometimes it makes life more difficult....