Jane Hutt, Minister for Finance and Government Business
The Chancellor of the Exchequer has today made an Autumn Statement on the outlook for the UK economy and the UK Government’s tax and spending plans. This Written Statement sets out the implications for Wales.
We welcome the additional net allocations of £113.2 million revenue and £8.8 million capital into the Welsh Governments baseline for 2015-16. This allocation goes some way towards redressing the damage that the deep cuts in public service provision has done to people in Wales and across the UK, but our budget is still 9% less now than it was in 2010-11.
For Wales the Autumn Statement means that in 2014-15 the total revenue increase will be £1.3 million revenue. In 2015-16 the total revenue increase will be £113.2 million, and the total capital increase will be £8.8 million of which £2.3 million is for Financial Transactions. These reflect our Barnett consequentials of UK Goverment decisions, but the Welsh Government has discretion over how we spend resources in line with our priorities.
I am announcing this afternoon that the Welsh Government will be allocating the £70 million health revenue consequential to the Welsh NHS.
Yesterday, I published the Welsh Government’s Final Budget proposals for 2015-16. These were shaped by our priorities and reflected the tough decisions that we had to make. Our budget focus on growth and jobs has made a real impact on the Welsh economy, especially for young people. The sustained budget reductions that we have had to manage coupled with rising demand have placed pressure on our public services. In our Budget we sought to relieve this pressure with our growing focus on health and continued protection for schools budgets. The additional investment of £225 million we announced to the Welsh NHS in this Draft Budget, together with the additional £200 million in 2014-15 and the further £70 million announced today, will support the Welsh NHS to undertake the reform and the step change needed to secure the long-term sustainability of the health service in Wales. We do not underestimate the challenges facing the NHS in Wales, challenges which are replicated across the Western World and reflected in the UK Government’s announcement today.
I believe that investing in health and schools will ensure that we are protecting the services that really matter to the people of Wales and that support the vulnerable.
This is the first Autumn Statement for many years that has increased investment in public services, and I am glad that the UK Government is replicating the approach already embedded in the Welsh Government’s budget strategy. We will be reflecting on how we respond to today’s announcement to maximise the benefits for the Welsh economy and the people of Wales.
The small additional capital allocation that is part of this Autumn Statement will do little to redress the reduction made to the Welsh Government Capital baseline by the UK Government since 2009-10. Despite this reduction, we have continued to focus on maximising the opportunities and benefits that Welsh infrastructure investments provide to support growth and jobs. Since its launch in 2012, through a mix of additional capital allocations and innovative finance schemes, the Wales Infrastructure Investment Plan (WIIP) has generated additional investment worth over £3.5 billion for the Welsh economy.
I welcome the recent UK Government announcement that it will start closer discussions with Tidal Lagoon Power Ltd to establish whether a potential tidal lagoon project at Swansea Bay is affordable and value for money for UK consumers. We recognise that the Swansea Bay tidal lagoon project has the potential to support economic growth and jobs. That is why, subject to due diligence, we are providing £1.25 million financial transactions funding in 2014-15 as a commercial loan to support the development.
There are important steps towards the devolution of tax to Wales. I am pleased that the Autumn Statement confirms we have secured a fair deal on Non Domestic Rates and the first Tax forecasts for Wales are an important next step in our preparations for devolution of tax powers for Wales. I look forward to working with the UK Government in preparing the way for a St David’s day announcement about fairer funding. Whilst there is positive news in the Autumn Statement, much work is still to be done to deliver a fair and sustainable funding settlement for Wales.