Mark Drakeford to make cuts to Welsh public services over inflation and public sector pay

Mark Drakeford said Welsh public services must make cuts. Credit: PA

First Minister Mark Drakeford has described the financial difficulty his government finds itself in as the 'toughest since devolution'.

He is asking his ministers to find cuts as record levels of inflation and public sector pay is putting "significant pressures" on his government's budget.

But the conservatives say the welsh government is making its problems worse by spending millions on “vanity projects”.

In a written statement to Members of the Senedd, Mr Drakeford blamed the UK government for not providing extra cash off the back of promises to fund pay.

He said their financial position after the UK Spring Budget in March, was up to £900m lower in real terms than when that budget was set by the UK Government at the time of the last spending review in 2021.

Adding: "This is the toughest financial situation we have faced since devolution."

UK Government officials point out that it is is providing the Welsh Government with over 20% more funding per person than equivalent UK government spending in England.

Members of Mr Drakeford's cabinet will be meeting throughout the summer to mitigate these budgetary pressures, which he said includes protecting frontline public services and targeting support towards those at greatest need.

A further update will be provided to the Senedd once this work has been completed.

Speaking to ITV News Wales at the Eisteddfod, Mr Drakeford said he made the budget announcement "earlier than we've ever done it before."

He explained: "Before the first quater of the financial year was out we were already seeing the impact of inflation and of budget being held down, it's why we're taking action early in the financial year so that the impact of what we will have to do, and we will have to make some very difficult decisions, that we can manage them in the best possible way."

He added: "Every department of the Welsh Government is part of this exercise. We won't know until the exercise is over whether the specific actions will fall, but every single part of the Welsh Government is part of the work that will go on during the month of August to identify where we may be able to take action now to make sure that at the end of the year, we don't over spend because all that does is push that problem into the next year.

"It's already looking as though it's going to be very challenging."

The Welsh government recently faced criticism for cutting free school meals help over the holidays.

In response to the announcement, Welsh Conservative Leader, Andrew RT Davies MS said: “Only back in March the Labour Government, and their co-operation agreement partners in Plaid Cymru, sent back £150m to the UK treasury that they failed to spend. Now they’re saying they don’t have enough money, you couldn’t make it up.

“Labour continue to make their own problems worse by pushing their extreme ideology and vanity projects, such as costly default 20mph speed limits, and sending more politicians to Cardiff Bay. This money should be spent on our vital public services.”

Also commenting, Welsh Conservative Shadow Finance Minister, Peter Fox MS said: “As part of the budget preparations, Welsh Conservatives put forward a clear plan to make sure the Labour Government focuses on the people's priorities; sorting the Welsh NHS waiting lists, ending the housing crisis and giving our young people the best start in life.

“Mark Drakeford's call is too little, too late. In 2019, the independent auditor general said that despite the Labour Government having £1.20 for every £1 spent on the NHS and education on England, only £1.05 actually reaches the front line here. This is all whilst Labour continues to be the only Government in the UK to have ever cut an NHS budget on two separate occasions. All available funding must be spent on these essential areas, not top sliced for pet projects.”

A UK Government spokesperson said: “The Welsh Government is currently receiving the largest funding settlement in the history of devolution. We are providing a record £18 billion per year settlement, which is still increasing in real terms over the 2021 Spending Review period.

“The best way we can help families and support growth across Wales is to have low inflation which is why we’re sticking to our plan to halve it this year – something which the Bank of England forecast only last week that we are on track to do.”

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