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Welsh Government Draft Budget 2024-25: Summary

Dr Georgina Bensted
Dr Georgina Bensted

The Welsh Government has published its draft Budget for 2024-25. Set in a background of a £1.3bn gap in the Welsh Government’s spending plans, a budget review, pay disputes with front line services, and the identification of a £400m shortfall in local government accounts, it has been expected for some time that public services will need to be cut back to balance the books.

The Welsh Government’s overarching approach towards its £21bn revenue and £2.7bn of capital expenditure for the 2024-25 budget is therefore to be “prudent” while recognising that reprioritising funds is likely to result in negative consequences.

Some of the budget changes have impacted on the areas agreed between Plaid Cymru and Welsh Government in their Co-operation Agreement. Through discussion with Plaid Cymru, funding for projects which can be delivered on a smaller budget or an extended timeframe, has been reduced.

The Finance Minister also said the Government will be carefully examining whether charges for some services – such as NHS dental care, university tuition fees and domiciliary care – need to be raised to help raise extra funding for public services and higher education, in light of the current budget situation.

Devolved Taxes

  • There are no changes to Welsh Rates of Income Tax or Land Transaction Tax this year – both residential and non-residential.
  • The Welsh Government is capping increases to the Non-Domestic Rates Multiplier to 5% for 2024-25.   
  • Business rates relief for pubs, shops and restaurants will be reduced from 75% to 40%. 

Health and Social Services

  • An extra £730m for 2024-25 is provided for day-to-day health and social care spending, representing an 8.7% increase to the overall budget.
  • There is a 10% increase to the health service, with a 0.5% increase to social care.
  • The Substance Misuse Action Plan Fund stays almost the same as the previous year, at £47.4m, representing a real-terms cut when inflation is taken into account.
  • Although the Welsh Government is still ringfencing mental health spending, they can no longer increase funding by £15m in 2024-25, as was originally planned. The mental health central budget will also be reduced by a further £6m.
  • In social care, funding for Social Care Wales also remains static at £25.5m, the same as the 2023-24 budget, also representing a real-terms cut.
  • Both Care Inspectorate Wales and Healthcare Inspectorate Wales revenue funding within the Finance and Local Government Main Expenditure Group also remains the same.
  • Additionally, £11m from the Social Care Workforce Grant has been moved elsewhere in the Health and Social Care portfolio, with likely impacts on local authorities and social care partners.
  • The Supporting Children Main Expenditure Group also has reductions totalling nearly £20m in comparison to 2023-24, mainly made up of reductions to the Support for Childcare and Play line of £14.7m because of lack of take-up, as previously announced in October.

Local Government

  • Funding for the Local Government Settlement is maintained at 3.1%, with total annual core funding contribution of £5.7bn.
  • Welsh Government is also committing £1.3m to ensure that all authorities receive an increase in their funding of at least 2%.
  • Direct funding for schools has been prioritised with a 3.2% increase.

Education and Welsh Language

  • The 2024-25 Draft Budget sets an overall budget for £2.5bn for the Education and Welsh Language portfolio, with pre-announced changes reducing it to £112m less than its indicative budget in February 2023. This represents an overall reduction of 3.3% to the overall education and Welsh Language budget.
  • Most of these changes have been made through savings in demand-led services where take-up is lower than expected, such as the Universal Free Schools Meal Programme, and revisions to forecasts on take-up of the Childcare Offer for Wales.
  • In post-16 education, HEFCW and other funding is now being channelled through to the new Commission of Tertiary Education and Research ahead of its launch in April, with an overall budget of nearly £770m.
  • Post-16 provision sees a £12.9m removal, representing a 2% decrease. This is likely to have an impact on increasing the number of adults who are learning.
  • Higher education has £53.9m taken from student support grants. It’s intended that this won’t have a direct impact on the level of maintenance support provided to undergraduate students.
  • On Welsh language, £3.5m linked to Coleg Cymraeg Cenedlaethol and the National Centre for Learning Welsh is being moved, however, budgets will be maintained at 2023-24 levels to cause the least disruption to the Welsh language sector.  

Economy

  • Overall, the Economy portfolio’s revenue budget reduces by £43.5m from the 2024-25 indicative budget announced in February 2023. The total revenue now stands at £438.9m. 
  • In the draft Budget, the apprenticeships budget reduces by £5.2m to £138.6m for 2024-25, a 3.75% cut. The Economy Minister expects to achieve 110,000 apprenticeship starts, 15,000 short of the initial target of 125,000 apprenticeships.
  • £19m from funding for employability and skills budgets which enable delivery of key employability and skills activities, including Communities for Work + (CfW+), Jobs Growth Wales+ (JGW+) and ReAct+ have been repriositised.
  • Support for the culture and the arts drops by £10.5m, representing a 9% reduction in the budget. The Arts Council of Wales sees a £3.5m reduction in its revenue budget, approximately 10% of its overall budget and reducing from £33.9m to £30.4m in the Draft Budget.
  • Sport Wales also receives a reduction of nearly £2.5m, a near 10% reduction, reducing its budget from £23.4m in the indicative 2024-25 budget to £20.9m this month.

Climate Change, Housing and Transport

  • Targeted capital investments of £1.8bn in response to the climate emergency will be maintained.
  • Flood risk management and water management sees an £8.5m reduction, with £25m in funding moved to Natural Resources Wales. Welsh Government has maintained that they will carefully monitor the impacts to flood risk management.
  • Capital investment of £22m into flood and coastal risk, water and sewerage policy and legislation is moved to Natural Resources Wales.
  • Frontline services, including Housing Support Grant and Care and Repair services, have been protected.
  • Homelessness Prevention has increased marginally - £2m. The £166.7m Housing Support Grant has now been combined with the Homelessness Prevention line and remains the same.
  • Empty homes funding has been reprofiled, meaning that Welsh Government’s commitment to invest £50m over the course of the programme can be extended to 2025-26.
  • As announced previously, an additional £125m has been invested into rail travel, with an extra £110.7m being provided to Transport for Wales.

Social Justice

  • There is an overall reduction of £14m in the Social Justice Budget.
  • Funding for the Basic Income Pilot has increased by £3.5m and the Discretionary Assistance Fund is being maintained at £38.5m. Support for advice services has been protected at £11.6m, as has the Single Advice Fund.
  • The Violence Against Women, Domestic Abuse and Sexual Violence budget of £8m has been protected due to increased demand.
  • However, Equality, Inclusion and Human Rights budgets are to be reduced by £4.2m, and third sector infrastructure budgets see a reprioritisation of £1m.

Rural Affairs

  • There is an overall reduction of £50.6m to the rural affairs budget, nearly 13% of the overall budget of resource funding.
  • The majority of the cuts revolve around the Rural Economic and Sustainability Programme with a £40.3m reduction.
  • The Basic Payment Scheme remains at the same level (£238m) for 2024.
  • There are no changes to the budget for animal health and welfare activities. Management and delivery of TB eradication and other endemic diseases, which remains at £40.3m.

For a bird's eye view.
Am olwg oddi uchod.

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