With exactly half the seats in the Assembly, Labour needs at least one of the other parties to support its budget or abstain.
Welsh families, businesses and politicians have been counting the cost of today's Budget, as they look to balance their own books.
Welsh MPs will debate the Budget and the Queen's Speech in the Welsh Grand Committee today.
Plaid Cymru leader Leanne Wood says the 'size of the budget deal' shows that her party and the Lib Dems have used their political power effectively.
Plaid/Lib Dem deal with Labour = £100m for intermediate care fund, doubling of pupil deprivation grant. Both parties will abstain on budget
Also in Plaid/Lib Dem deal with Labour: health technology and telemedicine fund, Supporting people programme.
The leaders of Plaid Cymru and the Welsh Liberal Democrats have announced they've secured investment equating to £100million in the Welsh Government's latest budget.
Leanne Wood AM and Kirsty Williams AM say the budget will include provision for:
- an Intermediate Care Fund
- doubling the Pupil Deprivation Grant
- a health technology and telemedicine fun
- the Supporting People Programme.
– Leanne Wood AM, Plaid Cymru leader
Plaid Cymru wanted to secure a deal to help people in the short term – a deal that will make a practical difference to people’s lives, now, today. This deal does that.
Plaid Cymru wants to break the link between poverty and attainment, so we are pleased to have been able to secure a deal whereby the Pupil Deprivation Grant has been extended. This will target funding directly at disadvantaged students. The Party of Wales wants this increased expenditure to have the most positive impact possible, which is why we also welcome the Welsh Government's review into its effectiveness.
Welsh Liberal Democrats were not elected to the Assembly to turn our backs on the desperate need to improve education funding in Wales. We may have a small group in the National Assembly, but our influence in these budget negotiations will have a big impact on children’s lives.
– Kirsty Williams AM, Welsh Liberal Democrat leader
We have also been able to agree a package that will help take the stress out of Labour’s failing NHS. Our hospitals are struggling under pressure and this fund will alleviate some of that stress by keeping patients out of our A&E, reduce unplanned admission and ensure timely from district general hospitals.
Joint working on the budget has delivered a strong and effective budget for the people of Wales.
On the day the Welsh Government publishes its draft budget, all the signs are that it has reached a deal with Plaid Cymru and the Liberal Democrats which will allow its spending plans to go ahead. I expect an announcement this morning.
Labour needs one or more of the opposition parties to support the budget or abstain because it doesn't have a majority of seats in the Senedd. Significantly, this year Plaid Cymru and the Lib Dems said they would only negotiate together rather than separately.
That tactic seems to have paid off because if a deal is about to be announced, that would be much earlier than in previous years. As for what the deal involves, political commentator and blogger Gareth Hughes reckons it's £100m extra for health and education.
The Welsh Government will set out its spending plans for the coming financial year when it publishes its Draft Budget later.
Ministers have warned that there will be tough decisions taken as a result of tighter funding settlements from the UK Government compared with previous years.
It is thought that spending on health will be prioritised but that will mean every other department could face reductions.
Local councils have already been warned to expect large cuts to the local government budget.
Labour doesn't have a majority of seats in the Senedd and so needs at least one other party to support or abstain its budget.
Over the summer, the Finance Minister Jane Hutt has been holding talks with Plaid Cymru and the Liberal Democrats who've pledged only to negotiate together.
Ahead of tomorrow's Draft Budget, a Labour AM says the Opposition Leader should say which spending he would cut. The Welsh Conservatives have repeatedly called for funding for the NHS in Wales to be protected in any spending plans.
But Labour's Mick Antoniw has challenged the Tory leader Andrew RT Davies to set out an alternative budget.
– Mick Antoniw AM, Labour
Time and time again, Andrew RT Davies moans and groans about the Welsh Labour Government’s spending priorities yet he has never come clean about what his party would do differently.
It’s time numerically-challenged Andrew RT Davies showed ambition and brought something to the table instead of bellowing nonsense from across the chamber.
The Welsh Government could face finding savings of up to 1 point 4 billion pounds over the next four years under Westminster's reduction plan.
That's according to the Institute of Fiscal Studies.
A spokesperson for the Welsh Government says it's developed a series of Welsh Budgets that reflect its priorities.
Campaigners opposed to fracking are writing to First Minister Carwyn Jones and Prime Minister David Cameron to highlight their worries after the Chancellor signalled his support for the industry in yesterday's Budget.
It is thought there is a substantial amount of gas under parts of South Wales, and many local people are concerned about the controversial way it is extracted.
Those representing oil and gas operators have welcomed George Osborne's comments.
Hannah Thomas has been listening to both sides of the argument.