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Mark Drakeford, Cabinet Secretary for Finance

First published:
25 October 2018
Last updated:

This was published under the 2016 to 2021 administration of the Welsh Government

As part of the 2015 St David’s Day Agreement, the UK Government said it would give the Welsh Government the powers to issue bonds for capital investment, in addition to the capital borrowing powers set out in the Government of Wales Act 2006.

Earlier this year, I wrote to the Secretary of State for Wales asking the UK Government to bring forward the necessary legislation to enable Welsh Ministers to issue bonds for capital investment expenditure.  

The UK Government has laid the Government of Wales Act 2006 (Variation of Borrowing Power) Order 2018 in the House of Commons. Subject to approval, it will come into force on 1 December 2018.

The power to issues bonds will provide the Welsh Government with the full suite of borrowing levers for the future, ensuring we can continue to invest in our ambitious infrastructure plans at a time when our capital budgets continue to fall.

In line with the principle underpinning our approach to capital, we will always exhaust the use of the least expensive forms of capital before using other sources of repayable capital.

Bonds – in common with other forms of borrowing – must be repaid and will have an impact on the amount of revenue the Welsh Government has to fund day-to-day services.

Our capital spending plans, set out in the draft Budget 2019-20, published earlier this month, are based on using £250m of capital borrowing over the two-year period 2019-20 and 2020-21. This level of borrowing will help us deliver the ambitious capital investment priorities set out in the Wales Infrastructure Investment Plan mid-point review.