This month’s Finance Committee report on the Welsh Government’s Third Supplementary Budget for 2020-21 reports that this allocates almost £1.3 billion additional fiscal resource and almost £837 million in capital - with the main increases in Economy and Transport, Housing and Local Government, and Education.
The backdrop is the £5.2 Billion provided by the UK Government to the Welsh Government to combat the COVID-19 pandemic in 2020.
The additional £650 million this financial year brings this to £5.85 billion - on top of £1.4 Billion increased Welsh Government funding for 2020/21 following increased spending on public services in England.
The UK Chancellor of the Exchequer, had already confirmed that the Welsh Government will have at least an additional £1.3 billion to spend in next year’s budget.
His Budget last week added a further £740 million of funding to the Welsh Government.
The Committee recommends that the Welsh Government continues to press the UK Government for clear, systematic changes to the funding process in relation to the structure of UK fiscal events.
Further, the Minister noted: “The Chief Secretary to the Treasury did allow a degree of flexibility in terms of carrying forward any consequentials generated through the operation of the Barnett formula over and above that £5.2 billion guaranteed funding that was previously confirmed on 23 December. So, the supplementary budget … details the £660 million that we'll be carrying over into next year, and that is because of the very late notification”.
However, she fails to acknowledge that the excuse constantly given by the Welsh Government for its slow responses to just about everything – the Covid 19 Pandemic – also applies to other Governments, and that, despite this, the UK Treasury worked closely with all three devolved Governments this financial year.
As the Chief Secretary to the Treasury stated in his 23rd February letter to the Finance Committee:
“Officials have had even more frequent engagement. A full breakdown of 2021-22 funding was provided at Spending Review 20” last November.
“We will also publish the next iteration of Block Grant Transparency later this year, which will again include a full and detailed breakdown of funding”.
In reality, therefore, the Minister “doeth protest too much” to justify carrying forward so much funding to spend at a later date.
As our report also states:
- reassurance is required from the Welsh Government that the funding provided to local authorities is taking full account of the differential impact of COVID-19 on local authority incomes.
And that although “The Committee recognises the role that the third sector plays in providing services that support health, social and local services - and this sector has also been impacted in terms of ability to raise revenue … the level of additional funding the sector is receiving is modest in comparison to the support given to the health service”.