Scrutiny of the Welsh Government’s Budget 2022-23 - Chair’s Blog

Published 10/03/2022   |   Last Updated 10/03/2022   |   Reading Time minutes

I recently wrote about the work of the Finance Committee in scrutinising the Welsh Government’s Draft Budget 2022-23. To re-cap: the Welsh Government published its Draft Budget in December 2021; the Finance Committee then spent 8 weeks scrutinising the proposals and hearing from expert witnesses and the Minister for Finance and Local Government, Rebecca Evans MS.

On 4 February, we published our report and made 41 recommendations to the Welsh Government.

Some of our recommendations asked the Welsh Government to consider further allocations being made in the Final Budget, whilst other recommendations were more strategic and longer-term in relation to how the Welsh Government priorities spending, presents its budget transparently and demonstrates that the views of stakeholders are listened to.

A Plenary debate was held on the Draft Budget on 8 February. At that time, the Welsh Government’s response to our report had not been received. During the debate, I welcomed the return to a multi-year funding settlement which means the Welsh Government has been able to provide public sector organisations with more financial certainty for the next three-years. The funding available to the Welsh Government (through the Welsh block grant from the UK Government) was better than expected this year which allowed the Welsh Government to increase budget allocations across all expenditure groups. This is much needed and puts solid foundations in place for future years.

Key findings from our report

The Welsh Government is facing significant challenges in responding to economic pressures, the effects of climate change and Brexit. This is all at a time when there is a worrying squeeze on household incomes. As a Committee, we are very concerned that poorer households, in particular, will bear the brunt of increases in inflation, driven by higher energy costs, planned tax rises and increasing consumer prices. We do recognise the Welsh Government’s efforts to address the cost of living crisis, in particular with its Discretionary Assistance Fund, aimed at helping with winter fuel bills, and its extension of free school meals.

Pandemic-related pressures also remain significant for health, local government and businesses. We welcome the Welsh Government’s view that addressing the backlog of treatments delayed by the pandemic is its “highest priority”. However, within the health and social care sector we heard about staff shortages and workforce issues, with staff suffering from burnout and COVID-19 absences. There are also longer-term challenges to deal with high staff vacancies, with many in the health and social care sector making alternative career choices, often with better pay.

We feel more should be done to help smaller businesses and retailers to recover from the pandemic, and that the Welsh Government should prioritises investment in digital infrastructure and skills, and help those businesses to develop an online presence, so they can compete against larger retailers.

With the climate and environmental agenda gathering momentum following the critical COP26 summit, the Committee welcomed the Welsh Government’s efforts to target investment at the climate and nature emergencies. However, we felt the level of new and additional funding identified within the Draft Budget may fall short of what’s required to deal with this huge task.

Final Budget Debate and the Welsh Government’s response to our report

This week, signals the conclusion of scrutiny of the Welsh Government’s Budget for the 2022-23 financial year which begins on 1 April. On Tuesday 8 March, a Plenary debate was held on the Final Budget 2022-23 and the Senedd voted to approve the budget.

Prior to the debate, the Committee received a Welsh Government response to the Committee’s recommendations.

I was pleased that the Minister had accepted or accepted in principle all but one of our 41 recommendations. Whilst this is a positive start to the Committee’s work there are areas in the Final Budget that fall short of our expectations, as our key findings, outlined above, demonstrates.

However, these are difficult times and the increased spending provided in this budget to help our most vulnerable is to be welcomed. Going forward there are clearly areas to work on to ensure that the Welsh Government’s budget works for the people of Wales. As a Finance Committee, we will take every opportunity to make sure that happens. As Chair a priority for me is engaging with people across Wales and listening to the views of stakeholders. I thank everyone who has contributed to this year’s budget cycle and I hope the level of engagement continues to grow in the future.

Get involved?

In the summer term, the Committee will begin its engagement work on the Welsh Government’s Draft Budget 2023-24. For more information about this or the work of the Finance Committee please see our web page and follow us on Twitter