10. Debate: Priorities for 2022-23 Budget Preparations

Part of the debate – in the Senedd at 6:56 pm on 13 July 2021.

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Photo of Rebecca Evans Rebecca Evans Labour 6:56, 13 July 2021

Diolch, Llywydd. I'd like to thank all colleagues for what's been a really wide-ranging debate and thank you for the representations that you've been putting forward today. I do agree that, in future years, it would be excellent for this debate to be held by the Finance Committee. Clearly, for practical reasons, it wasn't possible this year, but I'm really heartened to hear that the committee will be undertaking an inquiry through the autumn. That will be very helpful in helping us determine the decisions that need to be made in terms of allocations. Again, it's really positive that the committee will be engaging with other policy committees to explore areas of joint interest and joint priorities. So, again, another excellent innovation, I think.

Whilst we continue to face extremely uncertain and challenging circumstances, we do welcome those new ideas and new proposals wherever they benefit Wales and our communities. We're a Government that is ready to take on innovative concepts regardless of which political party presents them. We can't escape and neither can we ignore the difficult decisions that we'll need to take. At the same time, we won't let this daunt our drive and our determination to deliver our commitments outlined in our ambitious programme for government, as mandated by the people of Wales. I am confident that we have the tools and the ideas to deliver against this ambitious agenda that we've set for ourselves. I'll use our preparations to explore all the levers at our disposal to maximise the impact of the funding available, whether this is through placing more value on social impacts and procurement contracts, or repayable finance models providing a more business-orientated focus to the programmes and projects that we support.

I'm grateful to colleagues for all of the comments. I won't respond in detail, because that's not the purpose of today's debate; today's debate really is about us listening and you having the chance to set out your priorities. But I do want to just share with you some of the things that I think I've heard from the discussion today. One is that we should have a really relentless focus on recovery, both in terms of individuals and tackling poverty, but also in terms of protecting and safeguarding our wonderful public services, including the NHS and, of course, local government, and working to ensure that those people who've been hardest hit by the pandemic aren't left behind in the recovery. The points made about the role of education and supporting struggling families are well heard there.

In terms of health and social care, I've heard that there is a keenness to support the workforce, support for carers and to promote health and wellness, and also a real focus on sustainable social services. In terms of housing, there's a keenness to address those issues relating to the market itself, to address the need to build more houses and tackle homelessness, with having that intensified focus on prevention. In terms of tackling climate change and biodiversity, there was a real passion for that, I think, across the Chamber this afternoon. And lots of comments in terms of how we can support the economy, whether it's growing the areas where we're developing real expertise here in Wales, such as the financial services sector, or supporting our rural economy, or noting and developing the important role that our music, culture and heritage sector has both in the economy, but also in terms of our culture and our social life. All of those points I think have been really well made this afternoon.

I do also want to say something very briefly about the resources available to the Welsh Government, because, of course, we need the funding to turn these aspirations into things that will have a difference and make a difference in people's lives here in Wales. I do want to talk about the impact that the UK Government's decision regarding the levelling-up fund will have on us here in Wales and our budget and what we're able to do. The European structural and investment funds are worth £375 million annually to Wales over seven years. Had we remained in the EU, Wales would have had a full year's financial allocation starting from January 2021 for new programmes, irrespective of ongoing payments from the EU budget for existing commitments made during the current round of EU programmes. In 2021-22, we estimate Wales will receive £30 million to £50 million from the levelling-up fund and the community renewal fund, noting that both of these, of course, are competitive, and this creates a huge cut to the Welsh Government's budget, making local councils compete for some of that money. And it's been sold to people in Wales as an investment in levelling up, but frankly, if the gap isn't filled, Wales will be further disadvantaged in addressing our economic challenges. 

The UK Government plans put at risk critical pan-Wales programmes which will be central to recovery, for example, Business Wales and the development bank, as well as key employability schemes such as the apprenticeships and traineeships that have been integrated into the economic landscape in Wales over many, many years. So, that is what is at risk here as well. 

And I do want to say something about the resources available in terms of farm and fisheries funding as well. We will only receive £400 million—. Sorry, excuse me, we will only receive £242 million in replacement funding for the common agricultural policy from the UK, leaving Wales £137 million short of the funding we expected to receive this year. And we completely disagree with the UK Government's suggestion that they have met their obligations to provide replacement funding for farmers and rural development through a combination of replacement funding from the spending review, and Wales's remaining EU funding of £95 million and £42 million pillar transfer. Had the UK Government provided a reasonable and multi-year financial settlement last year, then we would have been in a better place to consider the support for these arrangements. 

So, these are some of the real challenges that we're dealing with currently, and which will inevitably have a continuing impact on our budget in future years as well. 

So, I'd just like to say in closing, I do welcome the debate. I think it shows that we all have a part to play in ensuring that we work together to build that fairer, greener and more prosperous Wales. Thank you to all colleagues for their contributions.