Michael Trickey looks at what the General Election manifestos might mean for public spending and public services in Wales
As the campaign heats up and with the party manifestos expected to start appearing next week, election promises will multiply. At Wales Public Services 2025, we will be looking out for what the manifestos might mean for public spending and public services in Wales and providing a factual commentary (although not a view about the merits of proposals).
Here are some of the questions we will be asking.
What is being said about the deficit and austerity?
The Institute for Fiscal Studies estimates that an additional £15 billion of cuts or tax increases on top of current plans would be needed to eradicate the UK budget deficit by May 2022 (the end of the new Parliament).
The current UK Government plans imply a continuing cut in Welsh Government day-to-day spending on public services of 2.4% between 2017-18 and 2019-20, on top of an almost 10% real terms cut between 2010-11 and 2017-18.
Where do the parties stand on eradicating the deficit?
What about non-devolved spending, including pensions and working-age benefits?
Are there likely to be further cuts in Wales?
How might public spending in Wales be affected by Brexit?
The manifestos may not give us much detail about the approach of the parties to the wide-ranging ramifications of Brexit, but we will be looking for any signals on one particular aspect, namely their view of the implications for public finances. EU funds are a significant contributor to public spending in Wales, with regional development programmes, agricultural support and a range of other smaller EU schemes amounting to £500 – 600 million a year in total.
Where do the parties stand on the substitution of this funding and whether a reduction in UK payments to the EU will be recycled into domestic spending?
Are there proposals about where powers (as well as funding) which return from the EU will go and what sort of relationship will exist between the UK government and devolved administrations (eg in regional development, agriculture, higher education)?
Is there a long-term vision for the NHS and its funding?
Pressure on NHS budgets has been a big theme across the UK. NHS Wales is devolved but the Welsh Budget is heavily influenced by UK Government decisions on funding for NHS England. How the parties propose to address the future funding of the NHS will have direct implication for Wales.
The Health Foundation identified a funding gap in Wales of around £450 million between 2015-16 and 2019-20 (assuming if 1.5% efficiency savings). Despite real-terms NHS Wales budget increases in 2016-17 and 2017-18, closing the gap will require further new money.
Beyond 2020, studies suggest that NHS spending in Wales will need to increase by around 4% every year (about £250 million a year at current prices), assuming continuing efficiencies, to cope with growing numbers of older people, the development of new drugs and treatments and other costs. And funding is only one of the challenges ahead for the NHS.
What do the manifestos tell us about future funding for the NHS?
A lasting solution for social care for older people?
Adult social care has shot up the UK political agenda in 2017 and there is widespread pressure for a lasting solution to providing good quality care for an ageing population. The interface between policy on tax, benefits, personal finance, service charges and service policy means that whatever happens to social care in England will have significant implications for future devolved arrangements in Wales. This will be especially so if some of the ideas from Andrew Dilnot and others about social insurance and the ‘means test taper’ are taken on board.
The Welsh Government has been gradually putting more money into social care, but more will be needed by 2020 to restore the £129 million fall in spending per older person since 2009-10.
It is estimated that adult social care spending will need to nearly double in Wales over the next decade, which means an increase from £1.14 billion in 2015-16 (current prices) to just over £2 billion by 2030-31.
What picture for social care do the manifestos paint and what might it mean for social care in Wales?
And other issues including ….
How might policing in Wales change? What might the debate about the devolution of policing and commitments on UK funding (given that policing is funded through a mix of UK and Welsh Government grants as well as council tax payers) mean for the future?
What impact might UK policy have on social housing and housing supply? Although housing is largely devolved, it is still significantly affected by UK welfare reform, trends in the UK housing market and housing capital.
The parties need to be open with the public about their tax and spend policies and the choices ahead about the role of the state in providing public services. We will be exploring what the manifestos are saying about these and similar issues over the next 2 – 3 weeks.