Whilst we were reassured that the Cabinet Secretary is working with his Scottish counterpart to learn from what's happened in Scotland, and although we recognise that the fiscal framework provides protection for us in the first year, this work needs to be done correctly and done well, or there will be serious implications for us in Wales from not getting this right. 

Last year, the OBR told the committee that the timing of the Welsh budget in relation to the UK autumn statement is 'challenging'. Well, the OBR will now be formally forecasting Welsh tax revenue, and the committee recognises the benefit of this being undertaken by the OBR, but we remain slightly concerned. We believe it is vital that taxpayer identification and forecasting is undertaken thoroughly for Wales, and we have recommended that the Welsh Government ensures that all work undertaken by the OBR and HMRC is given the same priority as the work they undertake in a UK context.

Last year, the Finance Committee scrutinised tax forecasts, and made recommendations in relation to the provision of Welsh specific data. We received evidence again this year raising this issue. Whilst the committee recognises that there are resource implications to creating additional data, we believe that, as time passes, improved Welsh specific data is crucial to informing both Welsh tax policy decision making and Welsh tax forecasting. 

When considering this draft budget and the prioritisations given, the committee were mindful that this budget, as we've already heard in the opening statement, has been produced in the context of 10 years of constrained public finances, with evident pressure from an ever-demanding health service. However, the committee also recognises the impact of the continual prioritisation of the health main expenditure group—the MEG—over other portfolios. The Future Generations Commissioner for Wales suggested that additional allocations to health should only be made with the proviso that they are for preventative activities, and that funding is spent in partnership with other stakeholders. The committee does believe that there is merit in this suggestion, and we have recommended that the Welsh Government give this consideration.

The future generations commissioner gave evidence on the links in the draft budget with the Well-being of Future Generations (Wales) Act 2015. The commissioner felt that progress was being made, but that there is still change needed to ensure that the Act is embedded in the culture of the Welsh Government. We have recommended that the Welsh Government should engage as fully as possible with the commissioner to create this cultural change that we want to see, and the cultural change that the Cabinet Secretary referred to earlier on.

Stakeholder feedback and repeated concerns voiced by Assembly committees about the quality of impact assessments led to a new cross-cutting approach to this year’s budget scrutiny. The Finance Committee, the Children, Young People and Education Committee and the Equality, Local Government and Communities Committee met jointly during this budget round to scrutinise the Welsh Government's approach to assessing the impact of its budget on children, on future generations and on equalities. The three committees have agreed to consider the evidence gathered in this specific session, and to report jointly in the new year, with a view to influencing, hopefully, future budgets.

This year, the work of budget scrutiny was set against a long-awaited definition of preventative spend, as we heard earlier, and we heard that this definition was created in partnership with stakeholders. However, we didn’t see extensive evidence that allocations were being considered in light of the definition, and it appears that spending decisions are too often being made in isolation.

The committee does believe that effective preventative spending requires an integrated approach, and time will be required to embed prevention into the budget process. We accept that. We also recognise that the definition of preventative spend will be updated in light of experience, and the committee looks forward to seeing improvements in how the budget allocations link up with the definition of preventative spend in future budgets.

The committee heard positive evidence with regard to the economic action plan. However, evidence also identified that it was difficult to identify spending on specific areas within the budget tables and that it’s difficult to align policies within the budget. The committee believes that the budget should be more explicit, ensuring increased transparency to enable stakeholders to track investments in the economic action plan to the budget tables. The committee would also like to see further consideration being given to how tackling regional inequality across Wales can be prioritised in decision making in relation to infrastructure investment.

The Cabinet Secretary announced that the consequential from the UK business rates relief scheme would be used for the Welsh rate relief scheme. And we’ve heard a few additional details on that this afternoon and we look forward to having greater detail in due course.

The continued uncertainty around Brexit meant, of course, that it was difficult to effectively scrutinise specific plans by the Welsh Government to respond to Brexit. The evidence we did receive showed concern not just on funding plans, but with regard to wider issues, such as healthcare arrangements and economic stability. We hope that these issues will be considered by the Welsh Government. The Cabinet Secretary said that flexibility was needed to respond to Brexit and the committee supported this approach. However, we would also be keen to see details as to how the Welsh Government responds to Brexit in the first supplementary budget next year, of course.

This year, the committee benefited from the expert advice of Dr Ed Poole from the Wales Governance Centre. Interestingly, Dr Poole also gave evidence to the committee on the draft budget. This is a rather unusual dual role, but for me this shows that we need to broaden the availability of finance experts across Wales. As fiscal devolution progresses, we need to ensure that we have a civic society that is fully willing and able to engage in that process.

To conclude, I would like to thank everyone who contributed to all stages of the scrutiny process: committee members of course, the research team, the clerking team, and also those who attended the stakeholder event or provided formal evidence. We are extremely grateful for the work of all of our stakeholders in helping us to shape our findings, and I look forward to seeing or hearing the Government’s formal response to our report. Thank you.