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The Welsh government has allocated an additional £1.5bn to its £26bn budget for next year, with healthcare receiving hundreds of millions of pounds more to address record high waiting times. All sectors will receive a boost, with transport seeing the largest percentage increase. The move contrasts with the previous budget, which had cut every sector apart from health and transport. The boost will mainly benefit the NHS, which will receive a 4% hike in its budget, with day-to-day spending receiving £437m additional funding and buildings and other infrastructure receiving £175m.
Finance Secretary Mark Drakeford hailed the measure a “real opportunity” to “reinvigorate our public services”. However, Plaid Cymru characterized the plans as “unambitious” and “underwhelming.” The bulk of the increase comes from the UK government, which gave a cash boost to the Welsh government in response to Chancellor Rachel Reeves’ budget announcement in October. Welsh authorities anticipate additional funding to cover the cost for public sector employers, but not for private firms, including businesses that operate care homes.
There are no changes in income tax rates in Wales, meaning that they will remain the same as in England. The rates of land transaction tax paid by people buying homes will also remain the same unless they already own one or more properties. Those people will now pay a higher rate, which is going up by 1% point. Despite the sharp increase in funding this year, the budget underscores that “the outlook for public finances beyond 2026 looks challenging.” Experts at Cardiff University have warned that could mean more difficult decisions for public services ahead.
The Welsh government plans to extend £474m extra funding to day-to-day spending in the NHS. Additionally, the NHS will receive £175m for infrastructure, referred to as capital. Housing and local government will be allocated £279.9m and £120m, respectively, in capital. Transport will receive £69.6m and £51m extra funding for capital. Education (exclusive of schools) will receive £83.6m and £28m for capital. Social justice will see a £6.8m revenue finding and £3m for capital funding. Councils will receive an additional £235m, up 4.3%, while the Welsh government’s childcare offer will see an extra £20m expenditure. Arts and culture bodies and Sport Wales will get a £4.5m increase, but it may not make up for previous cuts.
A final vote on the budget is scheduled for March 2025 in the Senedd, and the Welsh government will require an opposition politician’s assistance to pass its proposals. A Plaid Cymru politician appeared to rule out a budget deal on Tuesday morning. Finance spokesperson Heledd Fychan stated that “Labour’s budget is underwhelming, unambitious, and falls woefully short of what’s needed to support Wales’ struggling public services.
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