The Senedd Finance Committee has serious concerns on whether the Welsh Government’s Draft Budget for the next financial year will protect frontline services.
Whilst the Welsh Government’s ‘A Budget to Protect the Services which Matter Most to You’ seeks to reassure people that frontline services are being kept safe, the Finance Committee says that on the evidence presented to them, this Budget will not accomplish that.
“'Can this protect services?' ... the answer is 'No, it can't.'”
Welsh Local Government Association
Will funding protect services?
The Committee’s report analyses the proposed spending and taxation plans and concludes that it is unlikely that the money given to local authorities and social care providers would be enough to keep services at an acceptable level.
The spending plans also propose giving more money to the NHS and Transport for Wales, but the Committee is concerned that there seems to be no plan in place to monitor the effect of this extra spending. This concern is a long-term issue for the Committee, but believes this to be even more important this year because of the current financial constraints.
A worry for the Committee is the proposed boost in spending for the NHS without the equivalent increase for the social care sector. The additional money is welcomed by the Committee, but the increasing demand on social care without more funding could create knock-on pressures for the NHS.
“… people have gone into a very, very difficult winter for households, especially low-income households, without the kind of support that was there in previous years, even though the circumstances are arguably tougher”
A disproportionate impact on the most vulnerable
The Welsh Government’s focus on frontline services seems to have come at the expense of long-term measures to reduce poverty, according to the Committee.
The Committee is unconvinced with the Welsh Government’s explanations on its decisions on free school meals and childcare.
Evidence to the Committee explained how extending free school meal eligibility in secondary schools for children whose parents receive Universal Credit would only be a relatively modest cost.
The Committee argues that providing a nutritional meal for secondary school pupils is an important part of tackling the long-term problems of poverty, and is calling on the Minister to look again at whether the scheme could be extended.
A £11m cut to childcare provision is also a cause for concern. The Welsh Government argues that this is because of a lack of demand for the existing scheme, but the Committee heard that the way that the scheme is designed and operated could be putting parents off accessing it.
The current offer of only 30 hours of free childcare means that those wishing to work full time are unable to fully benefit. The report is calling for the Welsh Government to assess the current scheme’s effectiveness and to ensure that the childcare system allows and encourages the full time employment of parents.
Chair of the Finance Committee, Peredur Owen Griffiths MS, said, “We recognise the difficult financial position faced by the Welsh Government, but we are concerned about their claims that this Budget will protect frontline services in Wales.
“Not only is this Budget unlikely to protect frontline services, we also don’t know how the Welsh Government intends to measure the effect of the additional money being allocated to the NHS and Transport for Wales.
“Decisions to not extend free school meals and to cut the spending on childcare is also cause for concern and something which will disproportionately impact the most vulnerable in Wales. We’re urging the Welsh Government to look again at these decisions.”
Concerns from across the Committees
Understanding the impact of a £646m funding gap for local authority care services over the next three years is a priority for the Health and Social Care Committee. Inflation, rising fees and increasing demand are placing a huge strain on the social care sector and the Committee is calling for the Welsh Government to monitor access to social care services to ensure that people who are eligible for support are not denied services because of budget pressures.
Targets to reduce outpatient waits to below 52 weeks and to eliminate the number of people waiting longer than two years to start treatment have been missed and there is been no indication of when the Minister expects these targets to be met. The Committee is urging the Welsh Government to set out when the NHS will meet these targets.
The Economy, Trade and Rural Affairs Committee is warning about the effects of the unforeseen, cumulative impacts of cuts to farming and business support. For a farmer who exports meat and sells to local hospitality businesses, they may be impacted by reductions in agricultural support, business support and export support for their international sales, as well as the reduction in hospitality support for their domestic sales.
Following Tata Steel’s announcement that it would start formal consultation on up to 2,800 job losses, and a spate of other high profile business closures over recent months, the Economy Committee is concerned about support for workers facing redundancy. The Committee is urging the Welsh Government to ensure redundancy support programmes have sufficient funds and are ready to scale up if necessary.
Both the Economy Committee and the Children, Young People and Education Committee are calling for the Welsh Government to monitor the impact of its spending decisions throughout the year. The Committee warned that in-year monitoring was crucial to assessing what is working and what needs to be re-prioritised.
The Committee is also concerned that local authorities will have to make cuts to education budgets to meet the costs of the teachers’ pay deal.
Both the Climate Change, Environment and Infrastructure Committee and the Culture, Communications, Welsh Language, Sport and International Relations Committee raised concerns about some of the evidence provided to it by the Welsh Government.
The Culture Committee did not have confidence in the information given to it from the First Minister, noting several discrepancies and it called for him to provide more detailed information and to attend oral evidence in future.
The Climate Change Committee was also disappointed to receive errors in the submission from the Welsh Government. The Committee went on to warn about the increased spending committed to Transport for Wales which is coming at the expense of spending on biodiversity, flood risk management and water, and waste.
The Committee is warning that the Welsh Government’s new Warm Homes Programme will likely decarbonise fewer homes than in previous years due to the budget allocation staying the same while the cost of low carbon technologies has increased.
The Local Government and Housing Committee is concerned by the unprecedented number of people currently living in temporary accommodation in Wales. With the Welsh Government not intending to increase the Housing Support Grant to keep pace with inflation, the Committee is warning that – unless the Welsh Government provides this additional funding - more people could be at risk of homelessness.
The Equality and Social Justice Committee expressed concern that funding for equality, inclusion and human rights faces some of the largest reductions of any spending area. Although the Committee is reassured that existing Welsh Government commitments will be met, they are worried that spending on the Child Poverty Strategy is to be scaled back. The Committee is calling on the Welsh Government to explain what this will mean and to publish details of the budget reduction.
Peredur Owen Griffiths MS, continued, “We’ve been very disappointed by the Welsh Government’s approach to the Draft Budget this year. There has been a lack of time to scrutinise the effects of some of the Welsh Government’s spending decisions on those most affected, including its announcement to cut business rates relief for hospitality, retail and leisure businesses. This has hampered our ability to engage with these industries to discover what this cut will mean to businesses across Wales.
“This is not just an issue for the Finance Committee. Many other Committees are just as concerned at the short time-frame given to the Senedd to analyse the plans and we’re urging the Welsh Government to reconsider next year’s approach for better democratic accountability.”