This supplementary budget shows an increase in allocations to Welsh Government departments of £1.2 billion. That's an increase from £19.7 billion to £20.9 billion. The allocations are mainly based on the Welsh Government’s continued response to the pandemic. The Minister told us this is a technical supplementary budget moving back in step with previous ways of budgeting. However, the three supplementary budgets in the last financial year provided detailed information. We recommend that future supplementary budgets provide more detail on how new allocations have been prioritised to ensure that transparency is maintained 

We were pleased to hear the Minister had continued to meet frequently with other Ministers to discuss funding requirements, taking a more centralised approach to budgeting. The Welsh Government is holding a significant level of unallocated fiscal resource in reserve. We understand the need for flexibility to deal with the response to the pandemic and note that the Minister does intend to make some significant allocations shortly. We look forward to considering them as part of the second supplementary budget.

The Minister said the UK Government’s funding guarantee last year was really helpful in providing some certainty for devolved administrations. However, we heard significant issues persist regarding how the UK Government communicates policies that result in consequentials for Wales. Communication between Westminster and Wales was an issue of concern for the previous Finance Committee. We intend to pursue closer working with other counterparts to collectively apply pressure on the UK Government to provide clarity on funding decisions. We also recommend the Welsh Government continues to press the UK Government to improve transparency in funding calculations and for more effective inter-governmental mechanisms and governance structures than those currently in place.

As has been the case throughout the pandemic, the Welsh Government has allocated significant funding to economic support. The largest allocation in the supplementary budget is £352.2 million to extend the retail, leisure and hospitality business rates relief. The committee welcomes that the full rate relief for businesses in Wales will apply for the remainder of the year, unlike in England.

Moving on to transport, the Welsh Government wrote off £42.6 million of the loan it had given Cardiff Airport. We heard that the previous Minister for the economy and transport had shown the write-off was the most cost-effective way of supporting the airport at that point. However, the Welsh Government used financial transaction capital funding for some of the loan it provided to the airport, and is required to pay back 80 per cent of the total financial transaction capital allocated by HM Treasury. We recommend that the Welsh Government provide information about the financial impact of its decision to write off part of the loan.

An additional £100 million has been allocated to supporting the recovery of the NHS. The Minister suggests that this funding would also support NHS organisations to respond to a potential third wave. We recommend that the Minister clarifies the purpose of the £100 million, including how the funding will be used, its intended outcomes and how the Welsh Government will monitor and report the impact it ends up having on NHS waiting lists.

Finally, the committee welcomes the financial support that has been made to local authorities through the local government hardship fund, which supports initiatives including free school meals, self-isolation payments and an enhancement for social care workers' sick pay. The Minister will be committing an additional £26 million for social care through the hardship fund. We request an update on the monitoring and effectiveness of the fund and further detail on the additional £26 million.