'Difficult decisions' - this afternoon we'll find out what they are

The Welsh Government have long said "difficult decisions" will need to be made because of the impact inflation has had on their budget. Credit: PA Images

The Finance Minister will set out how the Welsh Government will revise its spending plans for the current financial year in the light of an expected £900m shortfall.

What's being announced today is about politics as much as finances. 

Welsh Government ministers have long complained that the UK Government underfunds Wales while at the same time UK Government ministers insist that Wales gets all the money it needs through historically-high budgets. 

Is Wales well-funded or underfunded?

Those arguments will continue. Today is about the specific impact of inflation and funding decisions on this current financial year (2023/24).

At the start of the summer Mark Drakeford said the Welsh Government budget would come in as worth £900m less than had been expected when it was first set out at the last UK Government Spending Review. 

He said it was "the toughest financial situation" the Welsh Government had ever faced and would require difficult decisions. Ministers, he said, would meet throughout the summer to alter their spending plans. 

Officials have combed through every line of every budget to see what can be done. You can expect the health budget to be protected at least but if that's all that happens, opposition politicians will be able to claim that amounts to a "real terms cut." 

Welsh Government ministers have long complained that the UK Government underfunds Wales. Credit: Credit: PA Images

The only way the Welsh Government can avoid those claims is actually to increase the health budget. And what about the education budget? Cutting that or not increasing it could also attract critical headlines. 

Other things that can be done is to slow down some projects, so for instance a regeneration scheme could take four years instead of three. 

Some budgets will have been underspent if for example, there's been less demand for a particular scheme than expected. That could add to the savings total.  

Perhaps the biggest pot of money could come from the use of reserves. Every public body keeps a pot of money for emergencies but the Welsh Government is limited in how much it can use of that pot. Will ministers have been able to persuade the UK Government, which sets the rules, to let it use more of its reserves? 

Difficult decisions have been made. Today we'll all find out what they are. 

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