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Budget 22-23

Budget to build stronger, fairer, greener Wales

Cyllideb i greu Cymru gryfach, decach a gwyrddach

Welsh Government Finance Minister Rebecca Evans has today announced a three year budget to “support the Wales of today and shape the Wales of tomorrow.”

Supporting the Programme for Government, funding public services, responding to the climate and nature emergency, and building a fairer Wales are measures at the heart of the budget.

Over the next three years the Welsh NHS will be supported to provide effective, high quality and sustainable healthcare, and help in its ongoing response to and recovery from the pandemic, with an additional £1.3bn in direct funding.

Local authorities will receive close to an additional £0.75bn providing funding to schools, social care and other vital services. In 2022-23 more than £250m will be provided for social services, including £180m within the local government settlement, direct investment of £45m and £50m of additional social care capital.

Wales’ response to the climate and nature emergency will be supported with targeted, green investment of an additional £160m revenue and a total capital investment of £1.8bn. It includes funding to support the Programme for Government commitment to a national forest as well as biodiversity, active travel, the circular economy, renewable energy, flooding, and decarbonising housing. £1.6bn capital will be invested in providing good quality housing, including £1bn for social housing and £375m for building safety.

The budget will also tackle inequality and invest in future generations through an additional £320m to continue a long-term programme of learning and education reform. This includes an additional £30million for childcare and early years provision; £40million for Flying Start and Families First; £90million for free school meals; £64.5million for wider schools and curriculum reform; and £63.5million investment in post 16 provision. On top of this, £900m capital funding will improve the quality of school buildings through the 21st century schools programme.

Future generations will also benefit from an additional £61m in the Welsh Government’s Young Person’s Guarantee and employability support, apprenticeship provision, and to expand Personal Learning Accounts.

Rebecca Evans, Minister for Finance and Local Government, said:

“This budget will support the Wales of today and shape the Wales of tomorrow. It will support our public services to be stronger, put Wales further down the path to being a net zero nation, and create a fairer nation with equality at its heart.

“We are still operating in a difficult financial context, with our budget nearly £3bn lower than if it had increased in line with the economy since 2010-11. Revenue funding is increasing by less than half a per cent in real terms between 2022-23 and 2024-25, and overall capital funding is falling in cash terms in each year of the Spending Review period – 11% lower in real terms in 2024-25 than the current year.

“The UK Government’s Spending Review did not deliver for Wales and this budget is delivered in that context. While there are tough choices ahead, we have been able to provide funding that will allow Wales to rise to the challenges we face, grounded in the distinctively Welsh values of environmental, social and economic justice.

“Where the Spending Review was silent on the climate and nature emergency, we are taking action. Where the Spending Review did not support coal tip safety, we are stepping up. And where the Spending Review failed to address regional inequality, we are investing in every part of Wales and making meaningful investment in tackling inequality.

“This is a budget to kickstart delivery of our ambitious and bold Programme for Government and I am proud to publish it, providing the foundations for recovery and moving us towards a stronger, fairer, greener Wales.”

Additional economic support will be available for businesses with those in retail, leisure and hospitality receiving 50% non-domestic rates relief for 2022-23. This £116m package of funding, combined with existing permanent relief schemes, will ensure that over 85,000 properties are supported in 2022-23. The funding includes £20m on top of the consequential funding received from the UK Government, and follows the Welsh Government providing business rate support above and beyond the offer from the UK Government in this financial year. A further £35m has been confirmed to freeze the non-domestic rates multiplier for 2022-23, ensuring there will be no increase in the amount of rates businesses are paying.

The Welsh Government has also provided funding to support coal tip safety and support their remediation, reclamation and repurposing, with an additional £4.5m and total capital investment of £44.4m. It follows the UK Government’s decision not to provide funding of its own in October’s Spending Review.

The budget contains funding to support commitments in the Co-operation Agreement signed between the Welsh Government and Plaid Cymru, and will deliver the commitments in the updated Programme for Government.

Notes to editors

The Welsh Government budget will be available here: /

Revenue funding refers to ‘baseline changes’, with funding relative to previous years recognising temporary Covid funding that was provided by the UK Government in 2021-22 has impacted these comparisons. Capital funding refers to a ‘zero base’. Where investment is in capital it has been indicated as such.

The £750m additional investment in local government is through the Aggregated External Finance to local authorities which is a combination of the Revenue Support Grant, providing funding to schools, social care and the other vital services delivered by local authorities and the redistribution of Non-Domestic Rates.

The Welsh Government’s new Wales Infrastructure Investment Strategy (WIIS) is also being published alongside the budget, setting a 10-year vision for the outcomes that infrastructure should enable, with a clear focus on ensuring that our investments support a zero carbon economy. Underpinning the WIIS a is a three-year Infrastructure Finance Plan, aligned to the draft Budget, setting out over £8.1bn of capital investment that will deliver the strategic outcomes established in the WIIS.

The spending priorities set out in this draft Budget are supported in part through Welsh Government devolved and partially devolved Welsh taxes. Taken together, these taxes will contribute around £2.9bn to the Welsh Government budget in 2022-23, rising to £3.2bn in 2024-25. Tax policies also provide an opportunity to deliver the Government’s wider policy priorities in pursuit of a stronger, fairer, greener Wales. In particular alongside the Draft Budget, the Welsh Government is launching a consultation on local variation to Land Transaction Tax for second homes and short-term holiday lets.