The most significant impact has been the budget cuts that we have faced over the period. Our budget in 2015-16 is nearly 10% lower overall in real terms compared to 2010-11 which equates to more than £1.5bn removed from the Welsh public purse. This long period of sustained reductions has had an impact on all services – even those that we have been able to protect. In Wales, we have a strong track record in delivering our priorities: to boost our infrastructure, skills and supporting vulnerable people.
In parallel to reducing budgets, there is an increase in demand for our services with a rising population and people living longer. The choices we must make are not easy and get tougher with each additional cut, but we have been open with the people of Wales about the scale of the challenge. This was reflected in my Budget Tour Report, published last week, on meetings that I have held across Wales with front line staff.
We have been open about our priorities for Budgets that deliver against this backdrop. We have played our part in setting balanced budgets in accord with our priorities to boost the Welsh economy, support our Welsh NHS and schools, as well as tackling poverty and inequality. Those priorities are at the heart of the spending plans I have published today.
This year we have also published a Strategic Integrated Impact Assessment, an approach which has been informed by the Budget Advisory Group for Equality.
Our focus on preventative measures and early intervention has shaped our entire approach to this Budget. We are directing our resources to measures that help avoid problems occurring in the first case, interventions which will address pressures which impact on public services and actions to help support our ambitions for achieving a better quality of life for our own and future generations. Whilst this is without doubt the right thing to do, it is not easy – not least in times of reducing budgets. Although some preventative interventions, such as public health measures, can have immediate beneficial effects, the full impacts of others will be more long-term. But in these difficult financial times, it is more important than ever that we are investing for the long term and delivering sustainable Budget plans.
In line with this approach, we are providing over £20m in 2015-16 to support further investments through the Invest-to-Save Fund. I will be launching a new round of funding next week and will update Members in more detail then.
We are continuing with our planned expansion of the Flying Start programme. By giving children in Wales in our most disadvantaged communities the best possible start with early intervention to help them to fulfil their potential. The budgets for universal benefits, such as concessionary fares and free prescriptions will continue to meet need and entitlement. These are but two examples – reflecting the preventative focus that has shaped our whole Budget.
Llywydd, investing in our Health Service is a priority of this Welsh Government. That is what the people of Wales expect. That is why I am announcing today £425m, nearly half a billion pounds of extra funding, for the NHS in Wales over this year and next. This reflects our commitment to our health service in Wales and how vital we believe health spending is to the longer term health and wellbeing of the people of Wales. This additional funding responds directly and fully to the evidence provided by the Nuffield Trust. The message from Nuffield is clear – a sustainable NHS is within our grasp, provided we make the necessary improvements in productivity and service delivery on the back of the additional investment that I am announcing today.
The reality of a reducing budget is that we cannot fund all services at the level that we might like. We cannot continue with business as usual. We need to work with every part of our public services to adapt and we will support it to do so. Part of the extra funding will be used to support the NHS in making the changes it needs to make. I am confident that it can and will respond.
Local government has a vital role to play in delivering our objectives for Wales and it is for this reason that throughout this Spending Review period we have delivered settlements for local government that have avoided the draconian decisions faced by local authorities in England.
While I recognise that the budget for local government I am announcing today is challenging, I am allocating an additional £10m in recognition of the pressures faced by social services. This allocation has been informed by our impact assessment of the Budget. This highlights both the demand for social services and the important relationship between local government and the Health Service, to deliver more integrated health and social care. This investment is key to delivering a sustainable NHS for Wales and to protecting the longer term social care interests of the most vulnerable.
These Budget plans also continue our commitment to increasing schools’ budgets faster than the rate of growth of the Welsh budget as a whole. Budgets for schools over this Spending Review period will be nearly £106m higher than they would have been without our decisions. This is part of our commitment to investing in our young people’s futures.
Education accounts for a major proportion of local government’s spend and our commitment to increasing expenditure is an important element of our support for local government.
Llywydd, for the second year in a row, we have been able to reach agreement on our budget plans in advance of the publication of the Draft Budget This gives the Assembly the opportunity to scrutinise fully the measures as an integral part of our Budget plans. Scrutiny is an important stage in the Budget process which is why I welcomed the Finance Committee’s pre-Budget scrutiny session in July and why I continue to look at how we can further improve the budget process, reflecting on the views expressed by Committees wherever possible. This year, in response to the request by the Business Committee, we are also publishing our plans a week earlier than we normally would, in order to allow this important extra scrutiny time.
The agreement that we have reached with the Welsh Liberal Democrats reflects our shared commitment to investing in the future of our young people. For the first time ever, we have agreed a two year agreement which will deliver certainty and stability for the people of Wales and those who work in our public services. This approach ensures we maximise the benefits that we can achieve from the Pupil Deprivation Grant, directly tackling the link between educational attainment and poverty. Most importantly, this Budget Agreement provides sustainable plans for the remainder of this Administration and Assembly terms.
Under the agreement, the Pupil Deprivation Grant will rise from £918 to £1,050 per pupil in 2015-16 and then again to £1,150 in 2016-17. In line with our commitment to raising standards and equality of opportunity, we are also extending the PDG to under 5s.
We have also agreed to establish a new youth concessionary fare scheme for 16 and 17 year olds, to help them access work and training opportunities. This initiative, along with our pilot childcare scheme promoted by the NUS for further education students and the £10m mitigation of planned cuts to apprenticeships, will help to ensure that young people have the support they need to continue their education.
Effective use of capital resources continues to contribute to promoting growth and jobs. We have seen clear evidence that our interventions are making a difference and that the Welsh economy is showing signs of recovery. Today, we are announcing in our plans for 2015-16 an additional £12m of capital and £38m of financial transactions funding. This, together with the additional financial transactions funding of £11.2m I am announcing in-year, means that we are announcing nearly £60m of new investment over two years in line with our Wales Infrastructure Investment Plan investment priorities
Of this, £37m is being allocated to provide further investment in housing. We are expanding our Affordable Housing Land Scheme, our Houses into Homes scheme, our Home Improvement Loans and the Town Centre Loans Scheme. These schemes are making a difference to people and communities across Wales, improving the supply of much needed housing and providing an important stimulus to the economy.
As part of this investment, we are also allocating £2m towards our Gypsy and Traveller Sites Programme to improve the life and standard of living for Gypsy and Traveller residents throughout Wales. We are also investing £5 million in the first phase of the Green Growth Wales scheme which will accelerate projects to deliver green investment in Wales.
As part of our Budget Agreement with the Welsh Liberal Democrats, we are delivering £95m worth of capital investment in the Wales Infrastructure Investment Plan pipeline.
Llwydd, in these difficult times, we have again shown the difference that we can make. We are focused on delivering our priorities for Wales and have taken decisive action to ensure that our resources, constrained though they are, are allocated fairly and responsibly to meet the social and economic needs of Wales.
This is a Draft Budget for the public services we cherish and support in Wales - our Health Service, our schools. It is a Budget for the people of Wales who benefit from these services and will enhance and strengthen our communities and our economy.
Download: Draft Budget Proposals 2015 -2016
Download: Draft Budget Leaflet 2015-2016
Download: Narrative - English
