Written Statement: Budget Agreement

The Welsh Government and Plaid Cymru have reached a budget agreement which secures almost £300m of additional investment in Wales’ public services in 2026-27.

The agreement will secure the passage of the Final Budget 2026-27 in January 2026, avoiding the potential of no budget being passed at all and the consequences that would flow from that.

There are three elements to the agreement:

• Additional funding for local government in 2026-27 – an extra £112.8m, which provides an overall 4.5% increase to the local government settlement. All councils will receive increases above 4%.
   
• Additional funding for the health and social care budget – an extra £180m, which, taken with the funding in the Draft Budget, is equivalent to a 3.6% increase in 2026-27.
   
• £120m of capital funding will be available to the next government after the Senedd election to allocate.

The agreement will be reflected in the Final Budget – together with other allocations to be made by the Welsh Government, which do not form part of the agreement – which is published on 20 January 2026.