First Minister warns Wales risks £1bn loss without budget support

The first minister has cautioned that Wales stands to lose £1bn should opposition parties withhold support for Labour’s budget during the upcoming winter. Eluned Morgan stated that public sector employees would not receive pay increases next year without this assistance. As Labour holds a minority in the Welsh Parliament, it requires the backing of at least one additional Senedd politician for its spending proposals to be approved in a vote. Morgan’s administration is seeking an agreement, and discussions have occurred with Welsh Liberal Democrat leader Jane Dodds, though a resolution has not yet been reached. Plaid Cymru commented: “It is Labour’s responsibility to develop, defend and deliver the budget.” Chancellor Rachel Reeves previously allocated £1.7bn for Wales in her October budget, comprising £774m for the current year and £930m for the subsequent year. Securing next year’s funding necessitates the passage of a new budget; should this not occur, the law dictates that the financial resources available to Welsh public services, encompassing the NHS, schools, and councils, will be reduced. The Welsh government’s preliminary budget for the upcoming year is anticipated to be unveiled in December, followed by a pivotal vote in early 2025. Morgan’s statements coincide with the announcement of an additional £157m designated for Welsh public services, which includes £1m allocated to assist arts organizations requiring support. The chairwoman of the organization indicated that this sum would not fully compensate for all the funding reductions experienced this year, a period when arts and culture bodies had their funding redirected towards the NHS and trains. Morgan reported that the Welsh government cabinet deliberated on the budget on Monday, but acknowledged that “we do need to reach out to others”. She further stated: “If we can’t get our budget through, we will not see a billion pounds increase.” She clarified, “That’s the way the system works. So there are real questions for opposition parties for answer.” Morgan extended a public invitation to Plaid Cymru to participate in budget discussions in November. Concurrently, a source from Plaid stated that no talks were underway. In contrast to the Liberal Democrats and Plaid, the Welsh Conservatives have historically not endorsed a budget. Peter Fox, the Tory finance spokesman, minimized the prospect of this occurring now, asserting that it is not the opposition’s responsibility to provide assistance. The first minister’s remarks were made as the Welsh government declared £157m in annual funding, which is supported by supplementary funds from the UK government budget. This allocation comprises £21m for diagnostic equipment for the NHS, intended “to help cut waiting lists,” and £20m designated for school and college repairs. An additional £1m will be provided to the Arts Council of Wales, augmenting a prior increase of £1.5m, to establish a resilience fund aimed at assisting 60 organizations confronting potential financial challenges and preserving employment. This amount does not offset the £3.5m reduction from the council’s budget implemented at the beginning of the year. Morgan commented: “It broke our hearts to see those cuts last year, but we had to make difficult decisions and we had to prioritise the NHS.” She stated that the Welsh government had experienced 14 years of austerity cuts imposed by the preceding UK government. The Welsh National Opera curtailed performances as a result of funding reductions, concurrently, the Blackwood Miners’ Institute has faced jeopardy due to proposed cuts from Caerphilly council. Maggie Russell, Chairwoman of the arts council, remarked: “Taking a 10.5% cut, was really tough. “So no, it doesn’t make up for all that money, but we really hope that it’s the beginning of the sector being able to plan, and have a greater sense of financial stability going forward.”