Jane Hutt, Minister for Finance and Government Business
On Tuesday, I published our ‘Priorities for Wales’ Draft Budget 2015-16 and announced a capital investment package totalling over £100m to support delivery of our Welsh Infrastructure Investment Plan priorities. Investing in infrastructure continues to be a key component of our response to the difficult financial times. It reflects our continuing focus on boosting growth and supporting jobs.
Since the UK Government’s Spending Review in 2010, our capital budget has faced considerable constraint. By 2015-16, the amount we have available for capital investment will be 30% lower than it was at its peak in 2009-10. The UK Government has also placed increased restrictions on how we use the funding. In 2015-16, 14% of our capital budget is ear-marked for financial transactions which can only be used for making loans and equity investments and will have to be repaid to the Exchequer.
Despite the cuts we have seen to our capital budget, we have remain focused on maximising the opportunities and benefits that infrastructure investment in Wales provides, not only to supporting our priority of boosting growth and jobs but also in terms of delivering wider benefits. Through the Wales Infrastructure Investment Plan we have taken every opportunity available to invest in our priority areas which has helped to deliver new affordable homes, new health facilities, new schools and provide an important boost to the Welsh economy.
Capital investment in housing is a priority for the Welsh Government. This week’s announcement of an additional £37m over this year and next for housing will have a direct impact on our aim to deliver better quality and more affordable housing by helping social landlords buy sites and bring disused properties back into use. We know that investment in housing has wider impacts as I saw first hand on my recent Budget Tour across Wales. This additional funding will have a positive impact on tackling poverty, through increased employment and training opportunities,. By providing a warm home and a place to study, this investment will contribute to improving educational achievement of pupils. This investment is central to our preventative approach by investing today to avoid problems tomorrow.
The additional funding for housing this week means that since 2012, through the use of innovative finance and additional capital allocations, we have directly boosted investment in housing by almost £600m across a range of Welsh housing initiatives, worth over £1.5bn to the Welsh economy.
As part of the two year Budget Agreement with the Welsh Liberal Democrats, I have also allocated an additional £40m of traditional capital in 2015-16 to support our priority of improving transport networks across Wales. This investment includes £30m to accelerate delivery of the Eastern Bay Link Road in Cardiff and £10m to support key transport connectivity in North Wales.
Taking all of these investments together, this additional £100m funding will support the delivery of schemes with a total value in excess of £1bn and support the creation or retention of around 1,400 jobs. It also means that investments through our Wales Infrastructure Investment Plan will now generate around £3.5bn of additional investment for the Welsh economy and public services.
Details of the £100m package are set out in Annex 1.