A Budget to Protect the Most-Valued Services

There will be an extra £450m for the NHS and the core local government settlement will increase by 3.1%. But even with the additional funding, health boards and councils face a very difficult year ahead.

Speaking as she published the Welsh Government’s spending plans for 2024-25, the Finance Minister said that Welsh Ministers had faced the “most stark and painful budget choices for Wales in the devolution era” as they developed the draft Budget.

As a result of persistently high inflation, Wales’ overall budget is worth £1.3bn less in real terms than when it was set in 2021; and the settlement, which largely comes from the UK Government in the form of a block grant, is not sufficient enough to respond to the extreme pressures that public services, businesses and people are facing.

Finance Minister, Rebecca Evans, said:

“We have had to take some really difficult decisions to radically redesign our spending plans to focus funding on the services which matter most to the people of Wales.

“After 13 years of austerity, a botched Brexit deal, and the ongoing cost-of-living crisis, this is the toughest financial situation Wales has faced since the start of devolution. Our funding settlement, which comes largely from the UK Government, is not enough to reflect the extreme pressures Wales faces.

“We have been presented with the most stark and painful budget choices in the devolution era. We have reshaped departmental spending plans so that we can invest more in the NHS and protect core local government funding for schools, social care and the other services we rely on every day.

“While the UK Government has not provided Wales with a funding settlement that recognises the impact of inflation, we have made changes to our spending plans and targeted investment towards the public services we all value the most.”   

The additional funding for the NHS in 2024-25 comes on top of the additional £425m which was announced in October for the remainder of this financial year, and which was baselined into the budget for the future. This means that Health will receive more than a 4% increase for 2024-25, compared to less than 1% in England.

The core local government settlement, which along with local council tax, funds services including schools, social services and social care, bin collections and local leisure facilities, will also be protected, with a 3.1% increase.

The draft Budget has been reshaped in line with the Welsh Government’s principles and values, which include protecting core frontline services, wherever possible; delivering the greatest benefit to hardest hit households; and prioritising jobs wherever possible.

The Welsh Government will continue to provide support to people hardest hit by the cost-of-living crisis, including through the Council Tax Reduction Scheme and a £384m package of support for non-domestic ratepayers, which includes a fifth successive year of relief for retail leisure and hospitality businesses.

A new £20m Future Proofing Fund will be introduced in early 2024-25 for businesses.

The Finance Minister also said the government will be carefully examining whether charges for some services – such as NHS dental care, university tuition fees and domiciliary care – need to be raised to help raise extra funding for public services and higher education, in light of the current budget situation.