A budget process that’s fit for the future

Published 06/08/2020   |   Last Updated 01/12/2020   |   Reading Time minutes

​The Senedd's Finance Committee is calling for a new process for passing the annual Welsh budget to ensure simplicity, transparency and accountability.

At present the Welsh Government proposes a budget 'motion' and tax rates every year, however the Finance Committee is calling for a new legislative budget process that fully meets the needs of all and reflects the maturity of the Senedd, 20 years after the advent of devolution.

A new legislative budget process would mean the introduction into the Senedd of legislation every year that approves the Welsh Government's spending plans and the rates of taxation that people in Wales pay.

The Committee also believes that work by the Senedd and the Welsh Government to engage the public in scrutiny, both before and after the budget is laid, should be strengthened – public involvement in the process is essential.

The Committee heard evidence from experts in budget processes and looked at international best practice in budget scrutiny. The Committee met with key experts and colleagues in Scotland who have also been looking at this issue in detail.

Llyr Gruffydd MS, Chair of the Finance Committee said:

"We've come a long way since the start of devolution in 1999. With more powers for the Welsh Government and the Senedd and the power to set tax rates here in Wales it is important that the way we pass a budget reflects that.

"In any modern democracy it is key for a parliament to properly hold a government to account, especially on its spending plans and tax levels. These are decisions that affect people's lives every day and we want to make the process fit for the future, ensuring it is simple, transparent and that the government is truly accountable to Members of the Senedd and the people of Wales."

The Committee believes work should be undertaken by an independent group to take forward a legislative budget process, considering questions such as:

  • Whether an annual Budget or Finance Bill is better suited for the authorisation of Welsh spending plans and taxation;
  • How the Welsh Government's modelling and independent forecasting will be built into the process;
  • How and when amendments to a Bill will be made, whilst maintaining the Welsh Government's ability to control its own budget;
  • The impact on the Senedd's wider financial scrutiny, such as in-year scrutiny, draft budget and scrutiny of any budget legislation;
  • How to improve public engagement and pre-budget scrutiny of annual budgets and also medium term priorities and financial strategy;
  • Expectations on the Welsh Government to provide indicative multi-year budgets, particularly for local government and delivery partners.

The Committee is now calling for a joint approach between the Committee, the Welsh Government and stakeholders to look at this issue at the beginning of the next Senedd term.