In my last blog, I spoke about the need for the Welsh Government’s spending plans for 2022-23 to be driven by the needs of the people of Wales and for the recovery from the pandemic to be creative and ambitious. At that time the Welsh Government was waiting to find out its funding settlement from the UK Government. Now that the Welsh Government has published its Draft Budget for 2022-23, this blog provides an update on our scrutiny work and the process.
UK Budget and Spending Review
Over the last few years we have faced uncertainty and unprecedented circumstances from Brexit and the COVID-19 pandemic. This has led to delays in UK fiscal events and subsequent delays in the Welsh Government publishing its Draft Budget. In October 2021, the UK Government announced its Budget and Spending Review and returned to providing a multi-year settlement for the devolved governments.
As a Committee we are pleased that this has enabled the Welsh Government to set out a three-year budget which has provided funding certainty to the public sector.
How is the Welsh Government’s funding made up?
The Welsh Government Draft Budget for 2022-23 was published on 22 December 2022. Its funding is made up of the following:
- £17.7 billion from the UK Government (82%);
- £2.5 billion from the Welsh Rates of Income Tax (11%);
- £1 billion from Non-Domestic Rates (5%)
- £402 million from fully devolved taxes (Land Transaction tax £366 million and Land Disposal Tax £36 million) (2%)
This amounts to £21 billion which will be allocated to Welsh Government departments and the public sector from April this year.
Scrutiny process – consultation stage
The Committee’s role in scrutinising the Draft Budget is to consider the over-arching, strategic decision-making in funding allocations. The other Senedd Committees then consider the budget allocations relating to their remits/Ministers portfolios in more detail.
During the autumn term, the Finance Committee consulted with stakeholders and the general public seeking their expectations for the forthcoming budget and financial readiness for 2022-23.
We consulted before the Draft Budget was published given the very limited time available for stakeholders or individuals to raise areas of concern with us before we needed to publish our report. In addition, we held focus groups with interested stakeholders and the general public with the aim of gaining qualitative information about the experiences of participants and deepening the Committee’s understanding of the issues affecting the people of Wales.
Scrutiny process – evidence from the Minister for Finance and Local Government and key stakeholders
A number of evidence sessions with key stakeholders took place in December and January 2022. We were limited on time this year given the delay to the Draft Budget being published. We took evidence from the Minister for Finance and Local Government as well as panels of witnesses with relevant expertise in areas such as taxation, business, health and local government. We covered the funding available to the Welsh Government through taxes and borrowing and considered some of the major areas of funding including health, local government, supporting businesses, climate change and the impact of the pandemic.
The Business Committee of the Senedd gave a deadline for all Committees to report on the Draft Budget by 4 February 2022 which will be published on our web page. I will shortly be writing about the outcome of our report and next steps.
Financial scrutiny is more important than ever, with massive public spending to deal with recovery from the pandemic and huge pressures ahead for Wales. All of the information we received through the consultation, engagement work and evidence sessions has informed our scrutiny work and helped us to ensure that the Welsh Government’s spending plans are driven by the needs of the people of Wales. I would like to thank everyone that has contributed to this work.