The next item is a debate on the first supplementary budget 2019-20, and I call on the Minister for Finance to move the motion—Rebecca Evans.

Motion NDM7096 Rebecca Evans

To propose that the Assembly, in accordance with Standing Order 20.30, approves the First Supplementary Budget for the financial year 2019-20 laid in the Table Office and emailed to Assembly Members on Tuesday 18 June 2019.

Motion moved.

Diolch, Llywydd. I move the motion for the first supplementary budget. This is the first opportunity to amend budgetary plans for the current financial year, which were published and approved by the Assembly in January. 

The first supplementary budget is often quite narrow in scope, and this year is no exception. It regularises a number of allocations from our reserves and transfers between portfolios. It includes adjustments to the overall level of resources available to Wales, reflecting transfers and consequentials received from the UK Government, and it reflects changes in annually managed expenditure forecasts in line with the latest details provided to HM Treasury. It nevertheless represents an important part of the budget and scrutiny process. I’d like to take this opportunity to thank the Finance Committee for its consideration of this budget and I’ll respond to the Chair on the committee’s report in due course.

In-year supplementary budgets build on the plans set out in the draft and final budget. However, supplementary budgets have a greater focus on the pressures and opportunities that arise in-year. Not all will have arisen as a result of the Welsh Government's strategic objectives, but may be things that require interventions that impact on the budget. Indeed, by far the largest allocation made in the supplementary budget of £241 million relates to meeting the additional costs of public sector pension schemes. The costs arose as a result of decisions taken by the UK Government that placed additional financial pressure on our already under-pressure public services from April 2019. On 7 March, I announced that additional funding would be provided to public sector organisations affected by the change. Since then, the UK Government has confirmed the level of funding it will provide is less than the costs that public sector organisations in Wales will have to meet. I have written jointly with the other devolved administrations to the Chief Secretary to the Treasury expressing our deep concerns that the proposed funding does not meet the full costs associated with the self-imposed changes by the UK Government. This is unacceptable and undermines the statement of funding policy and the principles for allocating funding within the UK. 

This budget includes capital allocations of £85 million to provide confidence and certainty to businesses in Wales at a time when both are in short supply as a result of the UK Government's failure to put an end to Brexit uncertainty. It funds a range of projects that can be delivered quickly in-year, providing economic benefits that are aligned to our priorities, and can stimulate wider economic demand at a time when it's needed most. Fifty million pounds is to be invested in local government social housing programmes, delivering up to 650 homes across Wales, making a significant contribution to our key priority of increasing the supply of good-quality affordable housing across Wales. Twenty million pounds is allocated to support local authorities, with whom we will work closely to discuss the best use of funding to provide economic stimulus to the local areas. The remaining £15 million will support the economic action plan through the economic futures fund and the additional funding for transport.

£11.4 million is allocated for 2019-20 from the EU transition fund. Through the fund, the Welsh Government has supported interventions that add value and are in addition to UK Government's obligations, in line with our priorities identified in 'Securing Wales' Future', and will help us identify Welsh solutions to Welsh problems. The fund has been designed to help businesses, public and third sector organisations prepare for Brexit.

As a result of the changes in this supplementary budget, the revenue reserve stands at £178 million, with capital reserves at £100 million for general capital and £191 million for financial transaction capital. Over the coming months, I will, of course, carefully monitor our financial position and continue to explore with colleagues the case for in-year allocations from reserves. This will allow us to respond, where necessary, to possible further pressures on the budget and manage the carry forward of funding through the Wales reserve. Any further allocations from reserves this year will be reflected in the second supplementary budget.  

I'd like to thank the Finance Committee once again for their scrutiny of this supplementary budget, and ask Members to support it. 

Chair of the Finance Committee, Llyr Gruffydd. 

Thank you, Llywydd. I am pleased to speak in this debate today, on behalf, of course, of the Finance Committee. The committee had an opportunity to meet on 27 June to discuss the Welsh Government’s first supplementary budget for this year, 2019-20. We were delighted to be able to hold that evidence session in Aberystwyth, of course. I’m also pleased that the Minister was able to join us for that meeting, and I thank her very much for coming to that session with us in Aberystwyth.

Now, our main area of concern as a committee with regard to this supplementary budget is with the actions of the UK Government. The UK Government, of course, as we’ve heard, made a decision in relation to public sector pensions. However, they are not fully funding this decision in Wales. The statement of funding policy states that where a UK Government decision leads to additional costs and where other arrangements do not exist to adjust for such extra costs, then additional costs will be met by that Government.

It was clear to the committee that the statement of funding policy has not been correctly implemented in this instance, and as a committee we also will be writing to the UK Government to express our serious concerns about this issue. Whilst the Welsh Government, as we have heard, has agreed to make up the funding shortfall this year for public sector bodies in Wales, the committee, as you might imagine, is concerned that there is no confirmation of future funding, and we need urgent reassurance from the UK Government on this matter.

Another area of concern for us as a committee was the funding surrounding the M4 relief road. The Minister confirmed that the Government would borrow to increase spending capacity, but, as the M4 relief road would not be going ahead, the Minister could not confirm what the funds raised from borrowing would be used for. Members want to understand what projects will be funded that may require the Welsh Government to increase its spending capacity. In evidence, it was also not clear how the M4 commission would proceed. The Government has told us that the M4 commission will have ‘first call’ on funding that was due to be made available to the black route project, yet we also understood that the £20 million that had been allocated for a potential M4 relief road has now been placed in reserves. 

There is no detail in this supplementary budget as to how the next steps around the M4 will progress. The committee has therefore requested details on the funding the Welsh Government intends to provide for the M4 commission, and further details on the funding priorities within the Government’s 2019-20 capital programme—in light, of course, of the decision not to proceed with the M4 project, particularly with regard to how this has impacted its borrowing strategy.

Now, in this Chamber on 29 April, the Government declared a climate emergency. Yet, despite this declaration, this budget does not identify any change in priorities for the Government. We have seen no evidence as to how decision making has been informed by the emergency declaration. We have requested further information from the Government on how future budgets will be planned in the context of a climate emergency.

Finally, this supplementary budget is presented in the context, of course, of there still not being an agreed Brexit deal. On the day that the supplementary budget was laid, the Minister announced a capital investment package totalling £85 million, presented, of course, in the context of Brexit. And whilst we welcome this investment, of course, it's not clear how this funding meets the Welsh Government's priorities in terms of its Brexit strategy, and we have asked for additional information on this. This funding package, for example, allocates £20 million to local authorities, but it's unclear how this Government intends local authorities to utilise this funding, and we would welcome clarity on this, as we would welcome it on the other matters that I've raised. Thank you.

I'm also pleased to contribute to this afternoon's debate on the first supplementary budget, both as shadow Finance Minister on this side of the Chamber and also as a member of the Finance Committee. It will come as no surprise to the Minister that, as per the Welsh Conservative tradition, we will not be supporting this supplementary budget. On the basis that we did not support the original budget to which it's supplementary, we will be abstaining.

Now, as the Minister said, there are a number of technical changes and transfers and the like within this budget, which are to be expected. That said, there are a couple of issues of concern surrounding this budget, many of which have been touched on by the Chair of the Finance Committee. As Llyr Gruffydd has said, the committee was particularly concerned by the lack of clarity surrounding the budget, particularly in relation to the ambitions and funding for the M4 commission. We know that that £20 million allocated to the M4 black route has now transferred back, or transferred into reserves. But just how the commission will have the first call on that funding was less than clear. That money is apparently not ring-fenced. Perhaps the Minister can give us some answers to those questions. We didn't get all those answers that we would have liked during our evidence sessions.

Now, okay, the black route has bitten the dust, but surely there should be a much stronger financial framework at this point to give the commission a free hand in recommending the best solution of those left on the table, whether that be enhanced public transport, the metro or an engineering solution, such as new tunnels at Brynglas, carriageway realignment and the like or, indeed, more likely a combination of some of these options.

There's also the question surrounding the issue of borrowing. It's not just capital that is being used here or intended to be used. Borrowing is apparently going to continue at previous levels needed to fund the black route in the absence of the road and in the absence of any tangible projects in its place. So, perhaps the Minister can set the record straight there in terms of what her intentions are with that level of borrowing. The Finance Committee certainly didn't feel that we'd got to the bottom of it. How long will the commission will be in place? When will the next steps, which are talked about, be implemented? When will the financial arrangements be put in place for that? The people of south-east Wales are obviously looking to the Welsh Government now to provide a solution to the congestion on the M4.

In the meantime, it would have been nice to have seen some more work being done in the absence of that road scheme, looking at other possible congestion-relieving schemes in the south-east Wales area—my shopping list, as the First Minister once referred to it: a Chepstow bypass, potentially a new junction on the M48, the renewal of the road surface between Abergavenny and Raglan on the A40—. I've been through them many times before. But there are other possible schemes as well, which I know other Members have an interest in.

So, yes, we accept that many of these changes are technical and necessary, but I think there could have been a little bit more direction in this budget and pointing a way to the future. As for the other issues that have been dealt with and touched on by the supplementary budget report done by the Finance Committee, we broadly were supportive of the increase in the Public Services Ombudsman for Wales's budget for 2019-20, the Assembly Commission budget and the Auditor General for Wales—the increase in revenue.

As I said at the start of my contribution, the Welsh Conservatives will not be supporting this budget. We will be abstaining for the reasons I stated previously.

The Minister said that a supplementary budget usually is relatively narrow in scope, but I do think that there is more to be said about this supplementary budget than there is about most of the others. There are many external factors in terms of the actions of the UK Government and some of the actions or absence of action from the Welsh Government that do need to be addressed. In terms of the lack of action, the major political occurrence since the announcement of the budget itself is that this Assembly and the welsh Government have declared a climate emergency. I looked at the definition of ‘emergency’ in the Oxford English Dictionary:

'A serious, unexpected, and often dangerous situation requiring immediate action'.

I therefore would have expected and hoped to have seen that immediate action, given the declaration of a climate emergency, but that isn’t an opportunity that’s been taken by Government to date, and it is something that I deeply regret.

The First Minister has stated that environmental issues were a factor in the decision not to proceed with the black route proposals for the M4. I think that was coincidence more than an actual response to the declaration of a climate emergency. But what isn’t contained within the supplementary budget strikes me as being most interesting—and that’s true of my fellow members of the Finance Committee too. As a result of the decision not to proceed with the black route, perhaps there aren’t financial commitments that we would need to hear from the Welsh Government, but surely it’s reasonable at this point to expect to see, in the supplementary budget, a signal of how the Government will respond in terms of budgeting and what its approach will be to borrowing levels and the funding that will be required in due time to repay that borrowing. So, again, it’s what’s absent from the budget that’s most interesting.

In terms of Brexit, I welcome the £85 million that has been ring-fenced for Brexit preparations. As we heard from the Chair of the Finance Committee, I, too, am concerned that there is a lack of clarity as to what exactly the Government’s strategy is in spending those funds, although a number of headlines have been outlined. But, again, we must address what happens at a UK level at this point, and this threat of a ‘no deal’ Brexit is something that we do have to consider because it will have serious financial implications. Certainly, in future budgets and future supplementary budgets, we will certainly have to address this because of the hole we find ourselves in in terms of Brexit.

Another comment on the actions of the UK Government: we should be very concerned about the £36 million shortfall that has been identified in terms of public sector pensions. I am very concerned that this is setting a pattern, and I am very supportive and will be very supportive of any firm steps we see taken by the Welsh Government to respond, perhaps jointly with other devolved assemblies and parliaments, to ensure that this pattern isn’t established by the UK Government, which, to all intents and purposes, has treated our national Parliament as a Government department in Whitehall in this regard.

So, to conclude, we will abstain on this supplementary budget, and that reflects the fact that the supplementary budget is part of a two-year agreement. It is a Labour Government budget, and we will hold the Labour Government to account on that budget. But we do believe that, through our agreement and the additional funds for the foundational economy, for nursery education, for mental health, for the young farmers grant, for end-of-life care, for investment in the arts and heritage and in sport and tourism, and so on and so forth, that we have been able to make a difference on behalf of the people of Wales from the opposition benches here in the Assembly, and we look forward, naturally, to making a far greater difference in Government here.

I'm going to break the long run now. I'm going to be voting for the budget. This supplementary budget is set against continuing austerity and Brexit uncertainty. We know we should be receiving at least £800 million more a year than we are currently receiving, which is, coincidentally, approximately the size of this supplementary budget. But to the Conservatives at Westminster, austerity is not an economic policy but an ideology: a twin-track approach of cut and privatise.

We currently have a situation where Jeremy Corbyn has more in common in terms of policy with the immediate post-war Governments of Churchill, Eden and Macmillan than either Boris Johnson or Jeremy Hunt as the Westminster Conservatives are changing into the British version of the Republican Party.

Regarding this first supplementary budget on housing, I welcome that an extra £50 million has been allocated to support the delivery of up to 650 affordable homes, although £67,000 as the cost of each home would appear to me, at least, on the low side. But I welcome the following statement by the finance Minister at the Finance Committee—to quote:

'So, the funding for affordable housing will be allocated using the standard social housing grant formula, which means that every local authority will receive their share of the additional funding, and, again, this funding was determined to be a priority because there were projects that could be started in-year, and we would expect schemes from local authorities' programme'.

And specifically, the thing I was most pleased with—the response to the following question:

'Can local authorities use this money to build council houses?'

The finance Minister’s response was,

'Yes, and I would like them to.'

This is something that I am sure will be welcomed by local authorities and by all of us who believe that the current housing crisis can only be solved via the building of council houses.

Can I further welcome the passing on of the additional money for pensions received from Westminster into ministerial portfolios? I join everybody else in being concerned that it was £36 million less than we needed, and that does get me at least to partially understand the Government's reluctance to take over things from Westminster, where, unless the amount of money to run it and the amount of money needed is passed on, we are regularly shortchanged by Westminster over these.

But there was agreed, when Mark Drakeford was the finance Minister, an appeals procedure where, if we thought we'd been treated badly by the Treasury, there was an independent appeals procedure and not just going back to the Treasury and saying, 'We don't like it' and they'll say, 'Well, that's tough; that's where you are.' There's meant to be an independent appeals procedure, and I would hope that the Government would use that.

Teachers' pension support is really necessary. Without it, there'd have been a school crisis. With it, there are school problems; without it, there would've been a school crisis. But remember, the school year and the financial year are different and that the school year runs, as everybody knows, from September right the way through to the middle of July, and the financial year runs from April. So, there's a need for an indication from the Government they will continue to support this for the rest of the school year, otherwise there's going to be a problem with schools in terms of their budgets in-year. And I think a number of people here either have been, or are, governors and are well aware of the problems that can occur in-year if, in April, the money that was coming this year doesn't come through next year, and then, all of a sudden, you've got limited opportunity to start making savings in that year, and it does cause huge financial problems.

I am personally very disappointed at the failure to support the increase in pension contributions for non-teaching staff in schools. That's another cost that has fallen on schools, over which they've had no control. Sometimes you do think they employ more staff or the employer negotiates pay rises—'Well, you did it, you pay it.' But this is something over which they had no control whatsoever, and I'm disappointed the Welsh Government haven't been able to cover that because it's substantially less than the teachers' pay. It's fine to pay pension contributions from the employer, but £5,000, £10,000, £15,000 a school does make a lot of difference. So, I'm really concerned about that.

Can I just finally welcome the £20 million for local government capital? Local authorities can always spend capital. You've got twenty-first century schools, you've got capital maintenance, you've got roads. That money can always be used.

I can see no change to finance transaction capital in this supplementary budget. Can I ask that, at some stage, the Minister can report back on how it is being spent with a profile of expenditure and repayment, and an explanation of the underlying strategy for its use? We know what we can't use it for. We lack, perhaps, an understanding of what we are using it for.

And the future of electric cars and the increased use of renewables is dependent upon improvements in battery technology. Whoever masters improved battery technology in terms of size, length of time the charge is held, minimising loss of electrical energy to other forms such as heat, and the speed of recharge, will revolutionise the industry and, most importantly, create a new industry for our area. So, I hope that money spent on battery technology will work and we become the place where people go to to get batteries.

We will also be abstaining on the substance of this motion on the supplementary budget. However, can I compliment the Government on its much improved presentation of the supplementary budget? I recall three years ago, having recently been elected to the Assembly, the first supplementary budget that I encountered. I had hoped that my experience, in terms of looking at UK Government budgets or English local government budgets or private sector budgets of one sort or another, might stand me in good stead for the role of assessing and interrogating the supplementary budget, but it didn't to anything like the degree that I had hoped. And, given at the time, I was on the Finance Committee and chairing the climate change committee, the largest I think, or certainly the most controversial element of the budget was to implement much of the UKIP manifesto in the area of slashing climate change projects. A little of that money was then put back in the second supplementary budget, but it was substantial, and it wasn't immediately easy to interrogate what was happening. I am pleased to see that not just the main expenditure groups but the budget expenditure lines are now on the Welsh Government's website for people to interrogate in a coherent way.

Also, I think this is a very good document that we have associated with the budget. It is referred to on our system as a note, and I think elsewhere as document; in the annex it's described as an explanatory note, and I wonder if, in future, it could be headlined as that as well, so that we know what it is we're referring to and this can become a regular part of the process, because I did find it helpful in understanding what the various changes are within it.

The most exciting changes, in some way, for me, are the absence of changes on the revenue side, and I think it's actually quite significant, because we've had six months that have gone past since the final budget. And, other things being equal, one might have expected some variance in the forecasts for the Welsh rates of income tax, the land transaction tax and the land disposals tax, given the uncertainty around forecasting those. And I'm not sure whether the reason we haven't seen variance may be because we haven't got the processes fully set up that we're now seeing with the Office for Budgetary Responsibility that's going to be assisting Welsh Government in forecasting those, or whether, genuinely, they've been looked at in detail and everything is exactly as the finance Minister expected, but I do recall, between the draft budget for 2019-20 and that being finalised, there was a £40 million reduction in the forecast for what we were going to take from the Welsh rates of revenue tax, so, very significant. And, of course, in Scotland, they have this £1 billion black hole they're dealing with. So, how confident are we of those zero variances?

I see that we have saved £173,000 on the administration by HMRC of those two new taxes, and having served on the committee for both of those and looked at those numbers and thought that they were relatively generous to HMRC in terms of what the costing was going to be, my fear was that that money would just be spent by HMRC. So, the fact that they have found savings and have given them back to us is to be welcomed. We also have the £100,000 funding for the OBR, which I think will be well spent and we must keep that under careful review.

On the allocations from general capital reserves, we say at 3.10 of the document I showed that a total of £85 million has been allocated from capital reserves to provide additional investment in social housing and trunk road and motorway maintenance. Firstly, can I just ask, is it non-controversial to describe maintenance of roads as capital expenditure? Is there an argument that that should properly be considered revenue resource, or is it a well-worn assumption within our accounting that that's the way it should be treated?

Capital maintenance.

Thank you very much for that sedentary intervention.

We often seem to find it easier to fund things from capital budgets transferring to revenue than vice versa. I think we'd invest money well. Of that £85 million, though, only £5 million, when we read down, is actually going to the network operations BEL in respect of trunk road and motorway carriageway. So, as rightly observed, there is substantial funding for social housing, but despite being headlined within that £85 million there's only a very small proportion going to the extra funding for the trunk roads and motorway maintenance.

Finally from me, I just want to ask a bit more about the pensions. We have, within the health and social services MEG, a £46 million increase to cater for those UK Government changes to public service pension schemes. I read the letter, finance Minister, that you sent to the Chair of the Finance Committee around these and how the teaching support assistants weren't within this because that was local government, but that teachers were. So, I'm just still puzzled as to why the increase for education to fund this, if I've understood correctly, is only £0.5 million, whereas for the health service, it is £46 million. Thank you.

I only wish to make a short observation on this debate this afternoon. The committee, in its report, declares itself to be 'surprised' that the Welsh Government has not taken further actions to make a reality of its declaration of a climate emergency. It may well be, on this occasion, it would be unreasonable to expect the Welsh Government to have completely reworked the whole of its budget priorities in the last few weeks, but I do not believe it would have been unreasonable to have expected the Welsh Government to have recognised the importance of its own declarations. This is a declaration that the Welsh Government made itself, and it is therefore entirely reasonable that one would expect and anticipate the Welsh Government to ensure that its own priorities are reflected in its own budget. So, I believe that this is something that I hope the Welsh Government will continue to reflect upon, and I think it will be entirely reasonable when the Welsh Government comes back to this place with its next budget statement that it will be able to demonstrate very clearly how its own statements drive its own thinking, its own decision making and its own financial strategy, and I believe that the committee and others should be very clear about that.

The second item I wish to raise this afternoon, Presiding Officer, is that which has been raised by all Members, I believe, taking part in this debate, and that is over pensions. There has, of course, been a clear agreement in place between the Welsh and UK Governments for some time that the statement of funding principles is clear that any decision taken by the UK administration will be fully funded and agreement reached by and with the devolved administrations. This has clearly not been the case in this very clear example, where one of the building blocks of the settlement has not driven policy and not driven decision making by the UK Government. It is wholly disappointing and frankly unacceptable that so much time, energy and difficulty should be expended trying to resolve an issue that should never have arisen in the first place.

I see the First Minister is in his place for this debate, and perhaps it would be a good thing were he able to take this matter to the Prime Minister and be absolutely clear that if she wants to have a review of devolution, she needs to review devolution in its entirety and ensure that her Government delivers on her commitments, her statements and her policies. It is entirely unacceptable that the Welsh Government is placed in this position, and I hope, Presiding Officer, that this place can send a very clear signal to the UK Government that we expect all of these agreements to be delivered in full and in a timely manner.

The final substantive issue I wish to address in this contribution is about the M4. We've had a considerable debate over the M4 in this place over the past few weeks, and it has been made absolutely clear to all of us who have taken part in this debate that the Welsh Government has a clear commitment to ensure that there is a delivery of a resolution to the M4 in a timely manner. It is a matter of some disappointment and concern, therefore, that the Minister was not able to answer even the most basic questions on the budget available to the commission that is being established. Despite repeated questions on the matter, the Minister failed to give us a reassurance at all that there exists any budget at all for this work. Certainly, there was no budget that she was able to identify in front of the committee. Despite the reassurances that we've had from the First Minister that the commission will have the funding it requires to do its job, I believe that we are left unreassured on this matter and I believe that we do require the Government to move very, very quickly to demonstrate that it does have the funding in place to deliver on its commitments.

The final point I wish to make is this: we have, over the past few years, developed a way in which we've debated and discussed financial matters, however, I do not believe that we have moved far enough and quickly enough. Whilst some Members may be impressed by the paperwork, for me, it is important that we have a process in place that enables us to contribute to debate, deliberate on these matters and reach conclusions that inform the Government's decision making. I spoke in the business statement some weeks ago, asking the Government to provide an opportunity for us to have a full debate on its budget priorities prior to tabling the budget. The Government has decided not to accept that request and not to move forward with it. I do believe, therefore, that we do need to look hard at how supplementary budgets are tabled to ensure that we do have the opportunity to question the Minister, as a Parliament, fully before this matter goes to committee and before we're asked to vote on these matters. I hope that these are all issues that we will be able to address over the coming 12 months. Thank you.

The finance Minister to reply to the debate—Rebecca Evans.

Thank you, Llywydd. Whilst this first supplementary budget is relatively limited in nature, representing as it does—if you don't include the pensions money—just over 0.5 per cent of the Welsh Government's budget, it is nonetheless an important part of the budget process, allowing changes to be reported and scrutinised by the Assembly.

I'll turn first to the issue that was raised by most speakers, and that is the issue of the pensions and the £36 million funding gap that exists in terms of the money that was handed down from Westminster. As I mentioned in my written statement to colleagues, I have written to the Chief Secretary to the Treasury expressing deep concerns that the proposed funding doesn't meet the full costs associated with those changes. I did so in partnership with Scotland and with the Permanent Secretary of Northern Ireland. We were very clear that the transparency and engagement that there has been relating to this decision has in no way lived up to the statement of funding policy that has been agreed by the nations. Mike Hedges mentioned the appeals procedure that has been set out. Well, we were very clear in our letter that if a meeting wasn't forthcoming very quickly to discuss these issues with the Chief Secretary to the Treasury then we would jointly be seeking to use that appeals process to take this matter further forward. None of this lives up to the kind of relationship that we were promised that we would have with the UK Government in terms of funding and transparency. It's for that reason that I can't confirm future years' funding either for pensions, because that will be discussed as part of the comprehensive spending review.

Issues were raised around in-year monitoring of the devolved tax forecasts. The Welsh Government will be monitoring the in-year tax receipts information from the Welsh Revenue Authority to inform our developing view of the likely full-year position for 2019-20, and that forms part of our overall in-year financial management system. But, there is little information in-year available at this point to inform revised forecasts, and the situation will develop as the year progresses. The Office for Budget Responsibility will publish revised forecasts for 2019-20, both for devolved taxes and for the associated UK taxes in the autumn. The impact of these revisions on the tax revenues and block grant adjustment will then be taken into account, and you will see them reflected in the second supplementary budget later on.

The issue of the Scotland income tax black hole was also raised. Based on current forecasts, the Scottish Government budgets over the last few years have overstated the net position between devolved income tax revenues and the associated block grant adjustments. As a result, there will be reconciliation payments over the next few years. There was some interest in this during committee scrutiny, and I was able to say that we are in a different position to Scotland in the sense that we have different powers devolved to us in relation to income tax. So, we are less exposed in some ways, and also we have the Office for Budget Responsibility doing our forecasts, as they do across England. So, we shouldn't have that divergence in methodology that is involved in those forecasts. That said, I would not seek to overstate the situation because, clearly, we would want to keep a very close eye on it.

With regard to the M4, the situation is that £20 million was earmarked in reserves this year for the M4, should the decision have been made to make the orders, and that £20 million remains in reserves now to be deployed elsewhere, in terms of meeting our Government priorities. So, there are no additional allocations made in this supplementary budget for costs associated with future steps. However, current estimates are that, for the fast-track measures that the First Minister set out to alleviate congestion on the M4 around Newport, including additional traffic officers, increased live journey time information and a behaviour awareness campaign, the cost will be between £4 million and £5 million over the next two years. We'll be keeping this under review, allocating 2019-20 funding again at the second supplementary budget. I was very clear in committee that the First Minister has made it clear that the commission will have first call on the funding that had been previously earmarked for the M4. Clearly, the commission is about to start its work, so I couldn't be in the position in the first supplementary budget to allocate further funding, or to be clearer in terms of where the funding might be deployed in future in terms of meeting the recommendations of that commission.

There was a great deal of interest in the debate and also in committee scrutiny in terms of the Well-being of Future Generations (Wales) Act 2015, and how we are ensuring that that's very much embedded in our budget-setting process. Of course, the draft and final budgets set out our Government spending plans for 2019-20 and the first supplementary budget builds on those plans and the delivery of our commitments. I'll give you an example of the additional funding for the economy futures fund. One of the streams in that fund is specifically related to decarbonisation, and I know that the Minister has taken a close interest in that in terms of considering how he will deploy those funds. So, it is very much at the centre of our thinking. I've already met with the future generations commissioner in terms of how we improve our consideration of the well-being of future generations Act in our future budget setting, and we're working on developing a journey checker, which, again, I know is something that the Finance Committee has taken a strong interest in, and that work is ongoing. And I've taken an interest, again, in the commissioner's suggestions for additional funding that she would like to see deployed in 2020-21 and I look forward to meeting with her to discuss her proposals further and understanding where she would see those additional funds coming from across Government in terms of refocusing priorities and also understanding better what the carbon savings would be from each of the measures that are proposed. I look forward to continuing those discussions with her.

But, just to close, Llywydd, looking forward, the UK Government indicated previously that it would set budgets for three years through a comprehensive spending review. Our current revenue settlement doesn't extend beyond this year, although we do have a capital budget for next year. But what this supplementary budget does is put in place a firm foundation for the current year. The public finances and terms of our settlement from the UK Government remain uncertain and it could mean that there might be more difficult budgetary decisions lying ahead. Thank you.

The proposal is to agree the motion. Does any Member object? [Objection.] I will defer voting until voting time.

Voting deferred until voting time.

That brings us to voting time. Unless three Members wish for the bell to be rung, I will proceed directly to the vote.