COVID-19 continues to cause significant challenges, as we wait for Welsh Government to publish its draft budget for 2022-23.
Last year, we saw the Welsh Government holding significant unallocated reserves to provide some flexibility to deal with the response to the pandemic. We hope this year, when the draft budget for 2022-23 is published on 20 December, we will see a more detailed plan about how the money will be spent, focusing on improving public services and on boosting the economy.
The recovery from the pandemic needs to be creative and ambitious. That is why we, as the Senedd’s Finance Committee, have opened a consultation to seek as many views as possible to help us ensure that the Welsh Government’s spending plans are driven by the needs of the people of Wales.
Have your say
On behalf of all Senedd Committees, we are currently seeking information which will inform our scrutiny of the Welsh Government’s 2022-23 draft budget proposals.
You might wonder why we are consulting now rather than waiting until the draft Budget is published on 20 December. This is because there will be very limited time after this for stakeholders or individuals to raise areas of concern with us once the detail of the draft budget has been published.
We are interested in your expectations of the forthcoming budget, including financial readiness for 2022-23, as well as hearing your views on the impact of last year’s budget.
Your response now, ahead of the publication, will not prevent you from also providing information, evidence or suggesting areas for scrutiny after publication of the draft budget proposals.
We will also be running a series of focus groups with Welsh citizens over the autumn term and you can contact the clerking team for more information on how to get involved SeneddFinance@Senedd.Wales
You can find more details on the consultation and follow the progress of our inquiry on our webpage.
Following publication of the draft budget on 20 December, our work will progress to take evidence from relevant stakeholders and scrutinise the Welsh Government by putting questions to Ministers directly.
The evidence we receive through our consultation now will feed into this process and we will produce a report by 4 February making recommendations to the Welsh Government based on all the information we have gathered.
This will then inform the Senedd’s consideration of the annual Budget motion in Plenary on 8 February 2022, where Members will decide whether to approve the budget or not.
Challenges to the process
Over the past few years there has been uncertainty over the amount of funding coming to Wales due to factors such as Brexit and the pandemic. This has led to delays in the Welsh Government publishing its budget and has resulted in less time for scrutiny. We find ourselves in the same position again this year as the Welsh Government won’t have certainty of its funding until the UK Government Spending Review has concluded on 27 October 2021.
Whilst we appreciate there are timing challenges, it’s disappointing that the first draft Budget of this Senedd will be published on 20 December, during Christmas recess.
Financial scrutiny is more important than ever, with massive public spending to deal with recovery from the pandemic and huge pressures ahead for Wales. It’s therefore frustrating that our scrutiny time will again be shortened.
Nonetheless, the UK Government’s Spending Review will provide a multi-year settlement, setting budgets until 2025. This is encouraging as we’ll return to a three-year settlement, which we hope will help the Welsh Government to plan more effectively and provide long term funding certainty for the Welsh public sector.
This should also provide a clearer and more stable window for the Committee to scrutinise the Welsh Government’s budget proposals and increase opportunities for the people of Wales to engage with the Committee’s work and influence spending priorities.
The Finance Committee is a cross party committee and was established on 23 June 2021. Along with myself as Chair, the Committee is made up of Members from three political parties represented at the Senedd and includes Peter Fox, Mike Hedges and Rhianon Passmore.
Our Committee has a very important role in considering and reporting on the Welsh Government’s budget - approximately £20 billion a year. Most of this money comes through the Welsh block grant, linked to UK Government spending through the Barnett Formula. The rest is raised through Welsh taxes, including:
- Land Transaction Tax (residential and non-residential land and buildings transactions)
- Landfill Disposal Tax (disposal of waste to landfill)
- Welsh Rates of Income Tax (a proportion of income tax paid by taxpayers living in Wales).
Finally, the Welsh Government can borrow up to £1 billion from the UK Government for capital expenditure.