The Senedd Finance Committee is calling out the Welsh Government for ‘lacking candour’ in its Draft Budget proposals for the next financial year.
The Committee’s report analysed the Welsh Government's proposed spending and taxation plans and concluded that explanations around where funding would be prioritised – and de-prioritised - were unclear.
Lack of clarity
The report found that the Welsh Government has failed to provide clear information on the impact of its budget. Whilst ‘A Budget for Hard Times’ suggests that difficult decisions have to be made, the lack of detail presented to the Committee meant that it is unclear where the spending axe will fall.
“What's been scaled back? What's been delayed? What's been shelved entirely?”
The Institute for Fiscal Studies giving evidence to the Finance Committee
The Welsh Government has powers to raise or lower income tax in Wales, but the Committee criticised the Finance Minister, Rebecca Evans MS, for refusing to look into the impact of varying the tax rates, which suggests that the Welsh Government had not seriously considered changing tax rates for the next financial year.
The high level of inflation affecting the UK economy was also seen as a reason for the lack of certainty in the Welsh Government’s proposals and the Committee noted how the poor relationship between the Welsh and UK governments has added to this budget uncertainty.
Peredur Owen Griffiths, Chair of the Finance Committee, said, “We understand that the funding decisions facing the Welsh Government are extraordinarily tough, but we were surprised and worried at the lack of candour in the Draft Budget. This is not the right way to deal with our Committee and the Senedd generally, and undermines legitimate democratic scrutiny.
“The Draft Budget’s lack of detail – exacerbated by inflation and poor communication between Welsh and UK governments – is worrying, and it was surprising to learn that the Finance Minister had not made a proper assessment of changing the tax rates which suggests that it was never a serious consideration.”
Both the Economy, Trade and Rural Affairs Committee and the Climate Change, Environment and Infrastructure Committee were also concerned with the lack of transparency from the Welsh Government.
The Economy Committee’s report noted that despite the Welsh Government stating there was less money on the table, there was a failure to set out the reduced number of businesses that they would be able to support.
The Climate Change Committee experienced delays receiving information from the Welsh Government which negatively affected their ability to scrutinise the Draft Budget. For several years, the Committee and its predecessor has expressed concerns about Natural Resources Wales’s (NRW) ability to effectively carry out its responsibilities due to a lack of funding and capacity.
The Welsh Government has finally acknowledged that there is a gap in NRW’s funding but has not set out how they intend to address this which has led to the Committee asking them to explain how and when the funding gap will be addressed.
More cost of living support
The Finance Committee urged the Welsh Government to look again at its proposed level of support for people’s living costs. Their report calls on the Welsh Government to fast-track the introduction of a Welsh Benefits Charter; a unified benefits system which would provide better support for people facing the rising cost of living.
They also recommended a range of measures to help people; such as the expansion of free childcare and increasing the value of the Educational Maintenance Allowance (EMA) to give more financial support to 16-19 year olds who want to continue learning – a grant which has not increased since the mid-2000s.
“If everything’s a priority, then nothing is a priority”
NHS Confederation giving evidence to the Finance Committee
The Children, Young People and Education Committee echoed these calls and urged the Welsh Government to commission an independent review to reconsider the threshold for receiving EMA. This should go hand-in-hand with guaranteeing the extension of school holiday free school meals up to, and including, the February 2024 half-term break. The Committee’s report also noted the general lack of clarity over how the budget will support children and young people; who are particularly vulnerable to the impacts of the cost of living crisis.
The Equality and Social Justice Committee criticised the Welsh Government for being insufficiently focused on long-term solutions to the cost-of living crisis and for failing to provide the thinking behind their funding decisions.
Pressures on public services
Analysing the potential budget cuts to the health and social care sector, the Finance Committee called the lack of clarity from the Welsh Government ‘worrying’ and warned that identifying spending priorities was pointless if it wasn’t accompanied by details of the areas that will receive less funding.
Pressures on the health and social care workforce was identified as an ongoing concern of the Committee. Efforts to address these issues were recognised, but the report urges the Welsh Government to explain how it plans to reduce the reliance on agency and locum staff.
The Local Government and Housing Committee’s report also expresses concerns about the recruitment and retention of staff in the sector with a key recommendation calling for the Welsh Government to assist local authorities in expanding graduate and apprenticeship schemes.
The Finance Committee welcomed the recent publication of the Welsh Government’s National Workforce Implementation Plan, and would like this extended across the Welsh public sector to provide long-term stability for all public services.
Peredur Owen Griffiths continued; “The cost of living is affecting everyone at the moment but, as always, the poorest in society are bearing the brunt. Support from the Welsh Government for childcare and boosting the Educational Maintenance Allowance for young learners will be crucial in alleviating these struggles and should be made a priority.”
“Solving workforce issues in the NHS and social care also needs to be looked at. Too much money is being wasted on agency and locum staff and the Welsh Government needs to make it clearer how it intends to alleviate staffing pressures, especially regarding recruitment and retention.
“The Welsh Government now has time to assess ours, and other Committees’ recommendations, and look again at its proposals before it presents its final Budget. Our report makes concrete recommendations and we urge the Welsh Government to listen constructively and respond with a Budget that better supports the people of Wales.”
The Health and Social Care Committee highlighted the six priorities that the Health Minister has given to health boards. Although health boards have been given guidance on what areas to focus on, they have not been given clear guidance about which areas Ministers consider would be “politically acceptable” for them to draw back from, and how the effects of this should be mitigated.
Funding for sports and cultural venues facing closure should also be a priority. According to the Culture, Communications, Welsh Language, Sport, and International Relations Committee, many venues that have long-term sustainable futures should be supported with Welsh Government funds to tide them over during the current crisis.
The Draft Budget will be debated in the Senedd on Tuesday, 7 February. A final Budget is presented by the Welsh Government on 28 February, which is subsequently debated in the Senedd on 7 March.
The Committees' responses in full are available to read here.