Wales’ Final Budget for 2024 to 2025 has been published this week [Tuesday 27th February], as persistently high inflation continues to erode public finances and difficult choices are made to protect core services.
This Final Budget updates the Draft Budget proposals which were published in December. Those proposals had to take into consideration the most difficult financial situation faced since devolution, with the impact of persistently high inflation making the budget worth £1.3bn less in real terms than when it was set in 2021.
Speaking at a press conference today, Finance Minister Rebecca Evans, said:
“Our budget proposals for 2024 to 25 have been designed to protect the core services we all rely on, as far as possible.
“We have restructured our spending plans to focus funding toward frontline NHS services; to the local government settlement, to protect funding for schools, and to maintain BPS payments for farmers next year.
“Even though we will be spending more in these core areas, our public services face a very difficult year ahead as they manage the twin pressures of increased demand and costs.”
The Minister continued:
“Typically, we do not make many changes between Draft and Final Budget, but this time we are making more changes than usual. That is because in the last couple of weeks the UK Government has finally given us further details about the funding consequentials we will receive as a result of decisions it has made to increase spending in devolved areas in England during this financial year.
“This information has come through very late in the year. At £231m, the additional revenue represents around two-thirds of our reserve capacity.
“If we had had this information when we were managing our difficult in-year position we could have made some different choices this year, and avoided making some of the more difficult decisions. However, it does mean that we can make almost £190m of extra allocations in the Final Budget for next year.”
The extra allocations are focused on those areas where pressures are most severe, or where reductions would not have been made had the UK Government been more forthcoming with the funding information.
The Final Budget allocates:
- £14.4m for local government to help it meet pressures in social care and schools. We are also reversing cuts made to the social care workforce grant and to the children and communities grant.
- £10m to strengthen apprenticeship and employability programmes, ensuring help for steel workers if Tata proceeds with their plans to close the blast furnaces at Port Talbot.
- £40m of new capital funding to support the NHS.
- £30m for Holyhead Breakwater.
- £20m to fund to help small and medium-sized businesses future-proof their businesses.
- A number of Financial Transactions capital allocations, including up to £20m to progress housing proposals, continuing to support additional social housing to help tackle homelessness, and the associated indirect costs including poorer health, employment and educational outcomes.
The Minister also spoke about the need for greater budget flexibilities, which are already available to Scotland. This greater flexibility would ensure that Wales had the tools and the autonomy to use its money in the best possible way, better fitting the needs and priorities of the people who live and work here.
The Final Budget will be debated in the Senedd on Tuesday 5th March.
