Peter Black gives insight into how the latest Welsh budget deal has been negotiated.
The summer of 2014 was a particularly busy one. In addition to the usual constituency and regional based activities I was also engaged in a series of meetings with the Finance Minister and her officials in an effort to get a budget deal for the Welsh Liberal Democrats.
The history of these deals has been chequered during this fourth Assembly. Labour do not have a majority so they need the support of at least one other party to get their budget through. They will not deal with the Conservatives so that just leaves two other possible partners.
At first, the Labour Government had it made. They negotiated with both the Welsh Liberal Democrats and Plaid Cymru, and played one off against the other. In their first budget, they struck a deal with the Welsh Lib Dems and as a result, the pupil deprivation grant was born. In the second they did a deal with Plaid Cymru, who secured a two year investment in apprenticeships.
By the time of the third budget, I had had enough of being played and of Labour being let off the hook. I proposed to Plaid Cymru that we work together so as to give Labour Ministers no other options. I also suggested that we should not settle for less than £100 million being spent on the key priorities of both parties and that we do the deal before the draft budget has been published so as to avoid having to unpick other spending plans.
And so in 2013 I spent a very productive summer in meetings alongside Plaid Cymru’s Jocelyn Davies, talking to the Finance Minister and with respective party leaders setting out our stall and fighting for important investment in key policy areas. The result was a significant increase in the Pupil Deprivation Grant and the creation of a £50 million Intermediate Care Fund to stimulate closer working between health and social services.
In 2014, Plaid Cymru decided that they did not wish to repeat this exercise, thus leaving the field open to the Welsh Liberal Democrats. Once more the Labour Government had nobody else they could talk to. Nevertheless, we had to be conscious of the difficult financial position and ensure that we were not unreasonable in our demands. We also wanted to make sure that we would not be associated with any particularly difficult issues.
Thus when halfway through the talks we were approached by the training sector to say that apprenticeship funding was likely to be cut, we had to adjust our stance to try and salvage this money. We also wanted to avoid signing up to the controversial extension of the M4 around Newport, which we were opposed to.
Finally, we were keen to avoid going through this process in the run-up to an Assembly election and so was happy to consider a two-year deal, which would provide some stability for the Welsh Government, whilst also ensuring the longevity of our deal up to and beyond those elections.
As a result we agreed to a two year deal, worth £223m, to allow the Welsh Government’s budget to pass in exchange for the implementation of Welsh Liberal Democrat policies. This meant that we would abstain on the budget, as we still could not support everything in it, including the substantial cut in local council funding. Our support was for our policies not the budget as a whole.
The deal meant that the Welsh Liberal Democrats secured:
an increase in the Pupil Premium (aka Pupil Deprivation Grant): in 2016/17 each school will receive £1,150 for every pupil eligible to receive free schools;
the extension of the Pupil Premium to include under 5s, worth £300 per pupil on free school meals;
a Young Persons’ Bus Pass for 16-18 year olds worth nearly £15m;
funding for around 5,000 new apprenticeships;
£95m capital investment in infrastructure that will provide a strong boost to jobs and the economy;
an agreement that no construction of the M4 relief road will start before the next Assembly elections alongside a detailed Environmental Impact Study;
Extra childcare investment for further education students in Wales who are parents, investing in a pilot scheme promoted by the National Union of Students.
Of course this deal meant that our influence on any unexpected issues arising in this year’s budget was limited. So we had to resort to conventional political pressure tactics to head-off threats to key programmes.
So over the last few months we have been pressing for more money for social services, further investment in the Intermediate Care Fund negotiated by us two years ago, and for supporting people funding to be protected. All of that was delivered in the draft budget, as was a much improved settlement for local government, albeit there will still be cuts to that funding.
How this process works itself out for budgets in the next Assembly has to be seen, but for now I believe we have demonstrated that, despite being the smallest party, we have through effective negotiation and partnership working, been capable of hitting above our weight and getting many of our policies put into effect.
One thought on “A budget cast in partnership”
Cheap deal. A PDG which Labour has made its own; infrastructure spending which was already in the transport plan; worthless deal on the M4; and peanuts elsewhere.
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