Finance Minister warns of 'tough decisions' ahead of Welsh budget

People have been warned to prepare for "tough decisions" when the Welsh Government unveils its budget later.

Speaking ahead of Tuesday's announcement, Finance Minister Rebecca Evans said the budget is worth more than £1 billion less in real terms because of inflation.

Ms Evans said reduced finances had forced "quite radical reshaping of our plans towards those things we know matter most to people," such as the NHS.

Saying cuts will be "inevitable," she added: "I've asked every single one of my colleagues to look at making reductions within their portfolio."

The Finance Minister said: "There will be projects and schemes which we are not able to continue with or perhaps have to continue with over a longer period of time.

"So I think inevitably, because our money doesn't stretch as far as it had before, there will be some difficult choices."

The Welsh Government's budget is set by the UK Government in Westminster. Ministers in Cardiff Bay, though, have long complained they do not get enough money.

Ms Evans was critical it had not been given greater priority.

She said: "The UK Government had the opportunity to address some of this during the Autumn Statement.

"They could have provided more funding for public services, for health, for education, for schools, for social services but decided not to and that really is why we're having to make those tough decisions today."

The amount given to the Welsh Government has fallen in value since the UK Government spending review.

However, challenged on the idea the Welsh Government would have more money had it not spent as much on the controversial 20mph project, she said: "We focus our money where it matters most to people in Wales," adding a lower default speed limit was a "small spending area."

Ms Evans said: "The money for 20mph, for example, that was entirely capital money from within this year's budget . It won't affect future budgets."

It has long been anticipated inflation will have an impact on the budget. Cardiff University's Wales Fiscal analysis predicted an effective reduction of between £800 million and £1.4 billion in November despite the UK Government giving an extra £1.2 billion in the Autumn Statement.

It has also projected a reduction of £600 million in the next budget, for 2024-2025.

Talking on Sharp End last Monday, First Minister Mark Drakeford said: "Next year's budget is worth £1.3 billion less than when the Conservatives set it for Wales three years ago. If you have a budget that is shrinking to that extent you can't just manage it by tucking a bit here and weaving a bit there."

The first minister, who confirmed last week he will step down from the role in March, said: "There are more fundamental changes we are having to make, they will be difficult, they will impact on people's lives and impact on some services but at the root of it is our determination to protect those major public services.

He set the priorities as "the health service, local government, the things that reach into people's everyday lives and to protect those as much as we can in what is a very difficult context."

Ahead of the budget, the Welsh Conservatives criticised the Welsh Government's record on the NHS, education and employment.

Welsh Conservative Leader Andrew RT Davies MS said the budget will be "more of the same" and "hold no surprises."

He said: “We know that governments can solve the issues that matter most to people. A quick look across the border and you can see the UK Government successfully tackling the longest waits, with two year waits down to hundreds whilst thousands wait in Wales."

Mr Davies added: “A Welsh Conservative Government would right Labour’s wrongs. We’d reverse the real terms cuts to the Welsh NHS and Welsh schools, spending every penny the government receives for health on health. We’d prioritise areas that kickstart growth in the Welsh economy, getting people back into work."

Meanwhile, the Welsh Liberal Democrats urged more support for rural communities, calling for a "fairer deal" for people living outside of Wales' cities.

It is one of four priorities the party wants to see addressed.

The others involve investing in cutting NHS waiting times, "helping to tackle the schools funding crisis" and "investing in our economy by extending financial support for small businesses."

Welsh Liberal Democrats leader Jane Dodds said: "Our farmers play a vital role in the fight against climate change and are more than willing to play their part, if given the right resources."

She added: "We at the Welsh Liberal Democrats are calling for a fairer deal for our rural communities, one which allows us to ensure that public services are being properly funded."

Plaid Cymru Leader Rhun ap Iorwerth MS said: “Frontline services have reached a breaking point. Living standards have plummeted. And Wales is over a billion pounds worse off in real spending power. This is a direct result of the Tories trashing the economy and leaving hard-working people to pay the bill.

“The economic challenges facing our communities is made so much harder by the fact that the current funding deal Wales gets from London is unfair and makes it harder for us to protect and invest in our public services.

"Plaid Cymru calls on any government in power in Westminster – whether Labour or Tory, Sunak or Starmer - to commit to giving Wales a fairer funding settlement based on need and compensate for lost funding – including the £2bn Wales is still owed from HS2.

“But Plaid Cymru would also look to make the necessary changes to the way Labour in Wales has managed Welsh taxpayers’ money over the years. Their failure to get to grips with running the NHS or Transport for Wales means the little spending power we have is spent on plugging holes rather than fixing problems.

"Everything possible must be done in this budget to both protect and invest in our public services and to safeguard them in the long run."

The UK Government has been approached for comment.

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