The Treasury has confirmed that the Welsh Government's budget will fall by 4.5% in real terms as a result of the Chancellor's spending review. Modest cash increases in the revenue budget, which finances day-to-day expenditure will be more than cancelled out by inflation.
- 2015/16: £12.9 billion
- 2016/17: £13.0 billion
- 2017/18: £13.1 billion
- 2018/19: £13.2 billion
- 2019/20: £13.3 billion
However, there's better news for the Welsh Government's capital budget, which pays for new roads, schools and hospitals. That's going up by 4.7% -a cash increase from £1.5 billion to £1.7 billion by 2020. So the Chancellor's promise of a budget totalling £15 billion will be kept and he's also committed to keeping overall spending in devolved areas 15% higher in Wales than in England until the next Westminster election.
People will not be misled by this smoke and mirrors approach to public finance: this is the slowest recovery in living memory and family and national prosperity is being held back on a daily basis. Today’s Spending Review shows that the people of Wales will continue to suffer from the Chancellor’s failure to meet his own fiscal targets. He gives with one hand and takes away with the other.
Although today’s commitment towards a funding floor that will ensure that in future public spending in Wales is at 115 per cent of the England average is welcome this is unhelpfully restricted to this Parliament. We haven’t got fair funding yet and it is essential that there is an inter-government agreement on the way forward. The devil is very much in the detail as to how this will work in practice.
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