This budget is the most difficult budget test for the Welsh Government since devolution. After years of rising budgets, the Government has for the first time had to grapple with cuts.
Of course it has known this for a long time. Well before the Comprehensive Spending review announcement, the Welsh Government were planning for cuts of 16.5 per cent over three years. The better than expected announcement by the UK government means that instead, they had to look for a budget reduction of 11.8 per cent over four years.
|This is the second in a series of commentaries we’re publishing on the Welsh budget. Tomorrow: Nick Ramsey, Conservative AM for Monmouth.|
Welsh Ministers have clearly enjoyed playing the victim card, comparing Wales’ settlement with that of Scotland and Northern Ireland. Comparisons with England or the regions of England have been noticeable by their absence. Why? Because they would show that Wales has not been singled out for cuts at all. In so far as Wales has had a poor deal, it is a deal dictated by the Barnett formula. Labour’s failure to reform Barnett in their 13 years in power has cost Wales dear, year in year out.
Whatever the arguments, what is undeniable is that all administrations at whatever level, are having to make savings. Will it be tough? Yes, but these decisions are necessary because of the appalling legacy of debt that the last Labour government burdened us all with. Just like a credit card bill, we needed to start clearing the debt or the interest would drive us further into debt.
So these are difficult times for individuals, families, businesses and for government. This budget is driven by the need to make savings with the key test that the cuts are made fairly, with minimum impact on frontline services. The Welsh Government needs to learn to do more with less, to be absolutely ruthless in cutting waste in government, in scrapping policies and investment that don’t deliver targeted results, and ensure each and every scheme delivers value for money for the taxpayer.
As families and businesses tighten their belts, the public expect their government to do the same. In this regard, I am encouraged that, at last, the Government seems to be looking for the savings in administration and central bureaucracy that the Welsh Liberal Democrats have long called for. The devil will be in the detail but this aspect of the budget is welcome. Even so, in some areas the steps being taken are far too tentative. One year after the Welsh Liberal Democrats proposed merging the numerous environmental quangos, the Labour-Plaid government is only now promising ‘a review of options’ aimed at saving taxpayers money in this area. Why are they so timid? Why haven’t they investigated these ways of making savings before?
The second over arching aim of the budget should have been to secure the economic recovery. Recent growth figures have been encouraging as has the recent modest fall in unemployment. This news suggests that a private sector led recovery can help avoid the threat of a double dip recession and the Welsh government should have been using this budget to encourage that. With the right support, Wales can come out of these tough times and build a stronger economy and a fairer society.
However, the economic recovery is still fragile. Indeed, Labour-Plaid representatives have been using every opportunity to talk down the Welsh economy and talk up the risk of a double dip recession. In these circumstances, it beggars belief that the economy and transport department that should be driving the Welsh economic recovery has faced some of the biggest cuts. Instead, this budget should have been aimed at improving skills and training, helping small and medium sized businesses and allowing higher education to have a greater influence in driving our economy forward.
Both the Tories and Labour-Plaid have already been arguing for weeks about the health service. Their policy is more similar than they let on. The Tories want to protect the NHS in real terms, Labour-Plaid in cash terms. What neither want to do is address why one fifth of the health budget is being misdirected and why the Welsh NHS spends more per head than England for worse outcomes. A budget that finds savings in the NHS bureaucracy and management can still be a budget that protects front line services.
Finally, the Labour-Plaid Government has consistently under funded our schools. Education spending in Wales is over £530 lower per pupil than in England and this is reflected in Wales’ poorer exam performance. We welcome the commitment to the roll out of the foundation phase but it is desperately disappointing that the government hasn’t taken the opportunity to close the funding gap at all levels, starting with children from the poorest backgrounds. Neither should we be fooled into thinking that this is an education budget when the government are paying for their school funding by cutting cash from universities and FE colleges.
The final budget will not be decided until January and the Welsh Liberal Democrats will be seeking to work cooperatively with the government to address these concerns.