Welsh Government Budget 2014 - 2015: A budget of priorities

Set in the context of unprecedented cut to the Welsh block grant by the Tories and Lib Dems in Westminster, setting a Welsh budget was never going to be an easy task for Jane Hutt. The sad reality is that by 2015-16, Wales’ budget will be nearly £1.7billion lower in real terms than it was in 2010-11. 

After a first appraisal, there appears to be two major "winners", two major "losers", and everyone else taking their share of the pain.

Health has seen a substantial increase in expenditure, but the big question is will this stop the health boards from overspending?

The other big winner is schools and social justice, with an increase in the Pupil Deprivation Grant (PDG) and further support for (what I consider one of the great successes of the Welsh Government) the Flying Start initiative to help tackle inequalities and strengthen educational attainment.

Turning to the losers, and what they can do to ameliorate the situation.

Firstly further education; what I consider to be one of the great ironies is that colleges used to have a higher proportion of their budget from European social fund grants when all of Wales was under the “Objective 2” status in comparisons to the situation today, where funding is obtained for West Wales and the Valleys under the “Objective 1” status.

As a former FE lecturer myself, I would urge FE colleges to use any additional ESF money to meet the skills and training demands of  students living in the surrounding areas.

Then we have the next loser; local government. So what can local government Leaders do to make their budgets balance and what kind of options will they be considering?

·        To generate more income, the obvious option is to increase Council Tax and charges;

·        In terms of efficiencies, there could be a greater focus on maximising ICT services (including email and websites), along with neighbouring local authorities sharing back office admin functions and costs;

·        A rationalisation programme for public buildings? After all, if the authority isn’t using a building, there’s surely an argument for selling it off. Councils might also want to look at whether current public buildings are being used to their maximum potential and whether some could be used for multi-use purposes with other departments or third sector partners;      

·        Reduce debt using capital receipts to repay loans?

·       The big questions will be how to allocate their reduced budgets; do councils share out the reduction evenly between departments or do they vary the cuts and protect budgets, which means larger cuts in some areas?

·       Follow the example of English local authorities? In England, the mains causalities in balancing the books have been cuts or closures to libraries and leisure facilities;

·       Finally, will councils want to re-evaluate the number of functions and departments they presently have? Is there a need to duplicate some Welsh Government functions, such as tourism and economic development?

On a personal note, I wish all councillors the best of luck when deciding how to deal with their budgets over the next few years. What I will not do is publicly criticise the difficult decisions they will have to make as a result of Wales being dramatically short changed.  

The Welsh Government cannot shield all of our services from the effects of Cameron and Clegg’s austerity policies along with the implications it has on Wales; I will however commend Finance Minister Jane Hutt on putting forward a budget of priorities designed to make Wales a more prosperous, fairer and healthier place to live and work.