Schools and hospitals likely to dominate Budget talks

Pierhead, Cardiff Bay
The Pierhead clock strikes three as the Budget is announced Photo: ITV Wales News

The Welsh Government likes to invest its annual Budget announcement with a certain sense of occasion and keep all details secret until the Finance Minister gets to her feet in the Senedd this afternoon as the Pierhead clock strikes three. But one crucial detail is already known because the Chancellor announced it in his Budget at Westminster. How much Jane Hutt has to spend next year.

Overall it's £14.6 billion for 2013/14, which in cash terms is exactly the same as 2012/13 and is a cut once inflation is taken into account. The Treasury forecasts that the Welsh Government's annual spending will go up by the odd £0.1 billion but there will have to be a corresponding cut in capital expenditure. So the first point to look for is how the First Minister's pledge to the Labour Party Conference is being met.

Our £15 billion Investment Plan for the next decade, will deliver new roads, schools, hospitals during these difficult times. It's a clear signal that despite a 42% cut in our capital budget by George Osborne, we are committed to investing in our future.

– First Minister Carwyn Jones AM

Carwyn Jones also outlined some spending commitments.

  • £25 million for investment in life sciences
  • £50 million for attracting top academics to Wales
  • £70 million to support business growth
  • £39 millon on resources for young people and social housing
  • £30 million for Skills Growth Wales to create 3,000 jobs over three years
  • £31 million to help business create 1,800 jobs and safeguard 1,600 jobs

It all mounts up. Last year there was a small windfall for the Finance Minister when Wales got its percentage of the money allocated for a council tax freeze in England. With no similar freeze in Wales, she was able to fund a Welsh version of the 'pupil premium'. That extra money paid into school budgets for each disadvantaged pupil was the price of reaching a deal on the Budget with the Liberal Democrats. The Welsh Government does not have a majority in the Senedd and the Budget is the one vote it cannot afford to lose.

The Liberal Democrats point to the pupil premium as one of their greatest achievements in coalition in Westminster and last week the Deputy Prime Minister Nick Clegg announced the next stage. It's a £500 'catch-up premium' paid to secondary schools for every pupil arriving from primary education below the expected standard in English or maths. A demand for something similar in Wales is likely to be the starting point in any negotiations between the Lib Dems and the government.

In theory, Labour ministers could try to strike a deal with Plaid Cymru or the Conservatives instead. Both parties have been highly critical of health service reorganisation, or hospital down-grading as they tend to describe it. Interestingly, Jane Hutt chose a hospital vist with the health minister, Lesley Griffiths, for her eve of Budget photo call. All the opposition parties can be expected to 'bank' any extra help for the NHS announced today. They will demand further concessions, preferably at the expense of one of Labour's pet projects, before the Welsh Government can be sure of securing Budget approval by Christmas.