Financial Statement: Extra £425m to protect NHS - 'budget not adding up' says Plaid Cymru

The Welsh Government has been accused of "scrambling" to make cuts as a "desperation" move to try to protect spending on the NHS.

But the Finance Minister says that "frontline services" and "hard-hit households have been protected" as she and her colleagues have tried to make up a £900m shortfall "created by UK Government mismanagement".

She described how the Welsh Government revenue budget had increased by just 5% this year, against inflation running at 8% on average.

With "tough decisions" being made on prioritising funding, the minister explained how the cabinet had been "guided by a number of clear principals – in coming to the decisions that we have including protecting frontline services as best we can."

She added that the changes aim to "minimise the impact on people and the Welsh public services on which they rely – but also mitigate the extraordinary pressures on the budget".

Rebecca Evans announced an extra £425m for the NHS, saying “the NHS is facing the toughest financial pressures in recent history".

She said it was because of "the impacts of persistent high inflation on costs, including energy and medicines and pay-related pressures" and what she described as a "decade of under-funding of public services by a succession of UK Conservative Governments".

And added: "It (the NHS) is also all dealing with ongoing Covid pressures and rising demand in both planned and emergency care."

Today's extra funding will be used to help cover one of the health service's biggest costs, salaries - energy and medicine bills, which have increased too, over the past twelve months.

The minister added, health boards will still need to make "some extremely difficult decisions both this year and in the next financial year to balance their budgets".

Welsh Conservative Shadow Finance Minister, Peter Fox, MS has criticised the decision making behind today's announcement, accusing the Labour Government of "grossly mismanaging" its budget.

He continued: "For them to be scrambling to make cuts wherever possible shows the desperation they have found themselves in by spending frivolously on unneeded pet projects whilst Plaid Cymru have enabled them by backing every decision through their cooperation agreement.

“Labour continues to impose a real terms health budget cut, whilst spending £120 million on 36 more Senedd politicians, and blanket 20mph speed limits costing the Welsh economy up to £9bn.

 “It’s clear, Labour have the wrong priorities, whilst the Welsh Conservatives will continue to priorities the people’s priorities.”

The budget is "not adding up" according Plaid Cymru's spokesperson for Finance and Local Government, Peredur Owen Griffiths. The party is calling for Rebecca Evans to appear before the Finance Committee.

Mr Owen Griffiths has asked for clarity on what impact “adding to the NHS shortfall” will have on the NHS in Wales, and whether targeted intervention across Wales’ health boards is going to be “a long-term feature.”

He said: “Labour have been telling us since August that they’ve been working to address a £900m blackhole in their budget – which is almost 5% of the entire block grant for the current financial year. I’m sure many will be scratching their heads as to how they’ve been able to find an additional £550m now.

“There are vast discrepancies here between the level of initial allocated funding and the actual level of spending. This raises questions over how the figures were derived in the first place. It doesn't add up.

Today's financial shake up is not just isolated to Wales with the other devolved nations facing the same challenges. Budgets, says the Welsh Government, are just not keeping pace with the cost of delivering services 2023-24.

The climate change capital budget has also seen a reduction by by 37.7m and the Education budget has been cut by £40m.

Every public body keeps a pot of money for emergencies but the Welsh Government is limited in how much it can use of its reserves pot.

Finance Minister Rebecca Evans today said Welsh Government has asked HM Treasury for capital to revenue switch, a decision is pending. This happens frequently in Whitehall.

Today's decisions all affect spending in the current financial year only. The budget for 2024/25 will be set out on 19 December.

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