So, we'll move on to item 6, which is the Government debate on the second supplementary budget for 2021-22. And I call on the Minister for Finance and Local Government to move the motion—Rebecca Evans.

Motion NDM7926 Lesley Griffiths

To propose that the Senedd, in accordance with Standing Order 20.30, approves the Second Supplementary Budget for the financial year 2021-22 laid in the Table Office on Tuesday, 15 February 2022.

Motion moved.

Diolch. This supplementary budget presents the Welsh Government's final spending plans for the current financial year. It increases the overall Welsh resources by over £1.1 billion, a further 4.4 per cent increase on the position set out in the first supplementary budget published in June 2021. In this budget, our fiscal spending plans have increased by a total of £2.409 billion. Over 150 individual allocations totalling almost £2 billion have been approved from the reserve to support departmental budgets and maximising expenditure. In response to the cost-of-living crisis, and to support those most in need, we have acted swiftly and used this supplementary budget to allocate £152 million to help people with crucial support in the face of the cost-of-living crisis and a further £25 million as a discretionary fund for local authorities to use their local knowledge to help households who may be struggling.

In addition, we have made significant allocations to fund a range of measures that not only support Wales's recovery from the pandemic, but also support the delivery of the programme for government commitments. These include: £70 million to support local authorities' capital programme costs; over £65 million for city and growth deals; £50 million provided to help schools carry out capital repairs and improvement work; and over £19 million to help meet the costs in dealing with the recovery from the impacts of the flooding in February 2020.

We have of course allocated support to continue our response to the pandemic and to mitigate its impact—£1.4 billion has been allocated in this budget. Since the start of the pandemic, we have allocated more than £8.4 billion. We have provided an additional £551 million for a package of measures to help the NHS not only with the costs of dealing with the pandemic and increasing capacity in our hospitals, but also to help move forward. We have allocated over £135 million to the local government hardship fund, as support for the additional costs and loss of income caused by the impact of the additional restrictions put in place as a result of the omicron variant. For the Welsh economy, we have allocated £125 million for a package of emergency support, and £14.75 million to support the running of another round of the cultural recovery fund. We have allocated £8 million revenue and £4 million capital to support a series of actions so that the majority of businesses and supply chain networks in the food and drink sector have enough resilience to survive.

We recognise the upheaval the pandemic has continued to have on learners, and we're supporting the education sector by allocating over £45 million to help manage its impacts, and £33 million for the continuation of the recruit, recover and raise standards programme, to support learner recovery and invest in resources to support the delivery of the new curriculum.

Restrictions put in place to mitigate the effects of the pandemic continue to have an impact on public transport use and passenger revenue. And we are allocating over £53 million to support rail services and £22 million for the bus industry.

Yet again, the UK Government's lack of clarity on funding decisions, this time concerning the support for the cost-of-living crisis, has huge implications for Wales, and we have had to significantly change our in-year assumptions. The continued lack of flexibility to manage spending over multiple financial years means we are once more at a disadvantage when planning and managing our budget as a consequence. 

I'd conclude by thanking the committee for its consideration of this budget and the publication of its report, and I will provide a detailed response in due course, but I am minded to accept all 11 of its recommendations. I ask Members to support the motion.

I call on the Chair of the Finance Committee, Peredur Owen Griffiths.

Thank you, Deputy Presiding Officer. I am pleased to speak in this debate today on behalf of the Finance Committee. Thank you to my fellow Members for their work on committee. The committee scrutinised the second supplementary budget on 2 March, and I thank the Minister for her attendance.

The committee welcomes the increase in allocations provided by this supplementary budget, as well as the steps taken by the Welsh Government to mitigate the impacts of the difficult economic challenges we are currently facing. The committee's report was laid before the Senedd yesterday, and, as we heard from the Minister just now, we made 11 recommendations.

I'd like to begin by supporting the Minister's efforts. The committee firmly believes that good budget management can only happen when the Welsh Government is given accurate information about the funding it receives from the Treasury. Sadly, this is a recurring problem, so we are disappointed that this issue continues and that no improvements have been made. We therefore share the Minister's views that further clarity is needed from the Treasury on the amount of funding received within financial years, as well as the timing of such transfers. However, the committee accepts that it's not enough to point the finger solely at the UK Government; the Welsh Government could do more in this area too. That is why the committee reiterates calls for the Welsh Government to publish its own calculations on in-year consequentials and transfers it expects to receive from the UK Government. This would ensure that any transfers of funding are calculated in the line with the agreed methodology, and is particularly important when different figures are being quoted by the Welsh and UK Governments, as has been the case recently. 

Effective budget management across financial years also requires flexibility. Previously, the Treasury has provided a full year for the Welsh Government to spend any funding received late in the financial year. The committee was therefore disappointed that this was not allowed this year, and supports calls for this to be provided as a matter of course, so that the Welsh Government can allocate budgets strategically without fear of funding being lost.

Turning to the specific issues, the Minister has, quite rightly, prioritised efforts to support those affected by the cost-of-living crisis through this supplementary budget. As Chair, I have previously emphasised in this Chamber that developing a 'no wrong door' policy is crucial, so that financial support reaches those that need it most. Members do not need reminding that households are finding it increasingly difficult to make ends meet, and that there will, sadly, be an increased demand for support over the next few months and years. The committee therefore calls on the Welsh Government to raise the profiles of grants and schemes designed to address the cost-of-living crisis, and reiterates its call for the development of an integrated system of support in response to the financial pressures many households are experiencing.

As we continue to recover from the pandemic, the committee very much welcomes the additional funding allocated to the health service through this supplementary budget. Although it was encouraging to hear from the Minister that this additional funding is already having an impact, particularly on waiting times, tangible details were scarce. We therefore recommend that the Welsh Government sets out its targets for reducing waiting times in its budget documentation from now on, including the outcomes and impacts expected from additional NHS funding.

In the midst of the pandemic, we must not forget that social care services continue to face unprecedented pressures, and that further measures are needed to acknowledge the great work of our social care workforce and take steps to make the profession more attractive. The committee welcomes the Welsh Government's efforts to reward care workers financially, however, we believe that more can be done to promote the financial support available to all carers, but particularly unpaid carers and those working in hospices.

On transport, the committee notes that bus and train services have been severely impacted by the loss of revenue caused by the pandemic and welcomes the additional funding allocated to support the continuation of these key services. However, the committee was not convinced that the additional £22 million allocated for bus services was sufficient, and asks the Minister to provide further information regarding how the amount was determined, as well as the objectives and expected outcomes for this funding.

Finally, the committee heard that the Welsh Government's staff budget will increase by £20 million on a recurrent basis from this year onwards. This represents a significant investment and, as a result, the committee asks for further details on how that money is being spent and whether any changes will be made to the Welsh Government's operating model as a result.

Dirprwy Lywydd, I am pleased to have been able to speak in today's debate on behalf of the Finance Committee. As mentioned at the beginning of this contribution, we are facing increasingly difficult economic times. Therefore, we urge the Minister to act upon our recommendations and ensure that the Welsh Government's priorities deliver for the people of Wales. Thank you very much.

Can I also thank the Minister for her statement today and the Chair of the Finance Committee for his reflections on the budget? The Welsh Conservative group will be abstaining on the motion before us. Of course, it amends the 2021-22 budget, which we have previously outlined our position on. 

Many of the allocations set out in this supplementary budget were made against the backdrop of our continued response against the COVID-19 pandemic and this is reflected in the substantial allocations made by Welsh Government—some additional £2.1 billion—compared to the original budget. However, I would make the point that this response is, for the large part, thanks to the substantial resources made available by the UK Government.

Deputy Llywydd, I think we have to ask ourselves: what have the Welsh Government allocations achieved? For example, over £550 million has been allocated to support the recovery of the health service, but with hundreds of thousands of people still waiting for treatment and appalling situations recorded of people waiting in ambulances for many hours, as pointed out earlier today by Paul Davies, and the terrible situation regarding dentistry, as raised by Alun Davies earlier, there really needs to be more detail about what this funding will achieve, with hard targets set to cut waiting times. Meanwhile, over £80 million has been allocated to addressing social care pressures, but we know that the sector is still struggling under the weight of demand, which is causing, obviously, bottlenecks in the wider health system. Again, Deputy Llywydd, I really want to push Ministers on delivery; it's all well and good allocating eye-catching sums to services, but it needs to deliver on its objectives.

Deputy Llywydd, there are a few allocations set out in the supplementary budget that I would like to briefly query the Minister on. The nationalisation of Transport for Wales continues to suck money away from other public services—a further £53 million has been allocated in this budget, on top of over £70 million announced in the first supplementary budget. How long does the Minister envisage that the Government will prop up Transport for Wales and when will Ministers publish a plan to put Transport for Wales back onto a sustainable footing so that it no longer needs public subsidies to keep it afloat?

There is, as the Chairman of the Finance Committee mentioned, a £20 million increase in the Welsh Government's staffing costs, which includes paying for 20 new senior civil servants. I reiterate the Finance Committee's argument that the cost of supporting these posts is significant. Therefore, will the Minister outline why these positions were needed and whether the outcomes of the new Permanent Secretary's review of the Welsh Government's operating model and overall efficiency and effectiveness will be made available to the Senedd for scrutiny?

Finally, £1.1 million has been allocated to COVID-19 inquiry preparatory work. What exactly has this funding been used for and would it not be better spending that money on a Wales-specific inquiry, as called for by the bereaved families across Wales? Diolch, Deputy Llywydd.

Of course, I'm eager to welcome any additional allocations in the supplementary budget, although I do share some of the concerns outlined by the previous speaker and the committee Chair, particularly in ensuring that we can demonstrate the value that those investments bring in terms of targets, or the impact that they have in the various areas where investment happens. But I just want to use my time, if I may, just to make two broader points on the supplementary budget, because this budget, for me, underlines how the restrictions on the ability of the Welsh Government to use additional allocations from consequential funding do have an impact on its ability to use that funding effectively.

We know that the UK Government's spring budget is about to be made. I assume that the Minister still hasn't been given any assurances as to this additional year to spend any consequential funding, and we know that the size of the Wales reserve restricts the flexibility available to the Welsh Government, and this simply highlights once again how the current regime and the budgetary arrangements between the two Governments militate against making the best use of consequential funding and militates against getting the best value for money from additional allocations such as these. And we need to remove those restrictions in order to make Welsh taxpayers' money work harder and to ensure that we do have the biggest impact possible from taxpayers' money.

I also want to reiterate the committee's point about transparency from both the Welsh Government and the UK Government. It's a regular charade, isn't it, from the UK Government primarily, when they announce additional funding, they're giving more money, but, as we know, they're also taking with the other hand very often. But this constant confusion that we're facing over whether money is new money or whether it is actually additional money or not, it leads to endless bickering between the Welsh Government and the UK Government. It's unedifying, and it really isn't a good look for either Government, to be honest. It confuses the public, it confuses us as politicians very often, and it needs to be addressed once and for all.

When I chaired the Finance Committee in the last Senedd, we tried to knock heads together on this, but to no avail, unfortunately, and I therefore want to underline my support to the current committee's calls for further clarity around these announcements—as I say, initially and primarily from the UK Government, but also the Welsh Government—where there is disagreement. Both need to show us their workings, so that we have real transparency and much better clarity on whether these consequentials and these allocations are actually additional or not.

First of all, can I thank the Minister for her statement and welcome the second supplementary budget? I just want to make two very brief points, both following on from things that have been said earlier. On 3 February, the UK Government announced measures to help with the cost of living in light of the rise in the energy price cap. This included £150 council tax rebate from April 2022 for households in England that are in council bands A to D. The UK Government announcement stated that the Welsh Government would receive £175 million in consequential funding as a result of this decision, noting that the devolved administration would be able to choose whether to spend this funding this year or next year. On 9 February, the First Minister stated that Wales would not receive any additional funding as a result of this decision. In response, the Chief Secretary to the Treasury reported this was not the case and that Welsh Government would receive £180 million of Barnett consequentials as a result of the council tax rebate.

Transparency is required on the amounts received from UK Government, including whether they relate to new money or not. The issues surrounding the consequential funding received by the Welsh Government in light of the council tax rebate announced in England is a very good case in point. What both the Welsh Government and the Westminster Government have in common is an unwillingness to show their calculations. Without calculations, it's not possible for the Finance Committee or Senedd to know who is correct. Whilst I will believe the Welsh Government, and others in here will believe the Westminster Government, no-one has the facts to support them. I'm sure I'm getting boring saying this to Welsh Government Ministers, as I was in my previous job to my students: 'Show your working; show how you reach these figures.'

I share the committee's disappointment that the Minister continues to face difficulties in obtaining timely and accurate information from the Treasury about changes to the Welsh Government budget, and a particular difficulty can be experienced by the Minister towards the end of the financial year. Despite over 20 years of devolution, the Treasury still appears to treat the devolved Government as another Westminster spending department, and I think there's an incredible lack of respect from the Treasury on this.

The second point I want to raise is related to the first. We don't get a Barnett consequential on HS2, because rail is not devolved, and that does not generate a consequential for the Welsh budget. If, however, it was treated as transport, we would get a consequential, because transport is partially devolved. This leads to my major concern: in-year movement of money between Government departments from, for example, non-devolved areas to areas that are devolved, e.g. foreign affairs to health, in order to balance the budget; how do we know we get what we should be getting? I understand the Welsh Government civil service believes the Treasury, who are reallocating money, ensures the devolved Governments get their correct share. Unfortunately, I am less trusting; I would like to see the figures—returning again to my, 'Show your workings.'

Finally, when money is written off, like the health board overspends in England from the English health budget, I'd like to see how that money got into the English health budget. Because what we actually had as a situation was that the English health budget was under huge pressure, they had all these overspends, and, all of a sudden, one year, when we didn't appear to have a very large increase, they seemed to have enough money given to them in order to write off several years' worth of overspends, and so I just want to see the workings. I'm not saying people are wrong, but I think there is a bit of opaqueness in this, and I think it would be of benefit to everybody, especially Members of the Senedd and Members of Parliament, to actually see the numbers, and then we could have a more informed debate.

It's a pleasure to take part in this short debate, and I'll keep my comments relatively succinct. Just to reiterate the fact that myself and the Welsh Conservative group will be abstaining on today's motion. The Chair of the Finance Committee and the Member for South Wales East mentioned that a key word is 'tangibility', and any budgetary decision that's made has to be felt on the front line of the sectors, and it's mentioned within the supplementary budget about NHS training and workforce, so would the Minister be able to answer what specific training is being offered to the NHS workforce? Because, quite often, there are many sectors in the health and social care professions that are dying to know the details, and I think the health boards deserve to know and get specific direction on where they're going to train up these workforces, because a lot of professionals do actually feel sometimes disillusioned with the lack of training, and often that can be a key part of career development and also to expand a professional's knowledge.

And also, Social Care Wales and CAFCASS funding, and what will this do to support healthy patient flow and discharge to social care settings in particular, because we often see cases of bedblocking, ambulance waiting times because the fact of the matter is that people being discharged from the other side of the sector can't actually be discharged to somewhere safe in the social care sector. So, what specifically will that funding do to support that issue?

Just finally, in supporting children, you've previously said that you've wanted to abolish the private childcare provision that makes up, actually, 80 per cent of the sector. So, does that fund towards children support that ideation of an ideological vendetta against the private childcare providers, or does that actually defy it, Minister? I'd like you to answer those specific questions when you're closing the debate later on. Thank you.

I'll be extremely brief. Minister, with the additional £100 million going into health boards to help with waiting-list times, can we have some assurances that that money will actually go to the front line to make sure we actually do tackle NHS waiting-list backlogs and it doesn't get absorbed in bureaucracy within health boards, where money actually normally does go? And I'd just like some assurances from you of how the finance department are going to make sure that money is spent in the best way. Diolch.

I call on the Minister to reply to the debate.

Diolch yn fawr, and thank you to everybody who's contributed in the debate this afternoon. I would agree with what colleagues have said in that good budget management can only happen when we get accurate information from the Treasury, and I know that was repeated by several Members in the conversation that we've had this afternoon. I would agree that it is the case that we must have greater transparency, and it's often the case that you have to wait until right at the very end of the financial year, in the supplementary estimates at the end of February, before you get the full picture, and that leaves you very little time then to really fully understand what your options are for the rest of the financial year. So, that can be difficult, especially when there are significant movements at the end of the end of the financial year that we haven't had sight of and haven't had the ability to plan for, and we've had those experiences in recent years. So, I appreciate and agree with that call to show your calculations, but it is only very late in the year that we're able to do that, in the sense that we would have an equation with parts missing from it. So, it's very difficult to provide that full picture until we get those transparency tables from HM Treasury, and then it's at that point, when we have all the information, that we're able to share all of that.

I am grateful for the support that we've had this afternoon in respect of flexibility. The Chair of the Finance Committee repeated the Finance Committee's support for our request to have a full calendar year to deal with late allocations, and that's something that we've had in recent years, but for some reason UK Government has stopped that from happening, and, again, that has serious implications, I think, for our ability to plan and to spend as well as we possibly can. The Finance Committee says that we should have that flexibility as a matter of course, and I absolutely agree with that. We do have a finance Ministers quadrilateral, or the new Finance Interministerial Standing Committee arrangement next week, and Wales is tabling a paper at that meeting that does relate specifically to the financial flexibilities that we require in order to properly manage our budget. So, I'll be very clear to reflect on the conversations that we've had this afternoon and contributions in respect of flexibilities, so that the Chief Secretary to the Treasury is aware that this is something that the Finance Committee in the Senedd is very supportive of as well.

In terms of some of the specific areas that were raised within the debate, there were several comments in respect of health, and this is an area where I agree again, I think, with all the challenge that has been brought forward by colleagues during the debate, in the sense that we can make allocations, but actually what really matters is what it delivers for people in Wales. So, you'll see the additional funding in respect of health—so, that's £411 million revenue to support national and local plans in relation to the pandemic. The funding is also there for NHS stabilisation following the pandemic, continued COVID tracing, vaccination costs, PPE and other COVID response work. So, that's a really important investment in the NHS. And then, there's also £100 million allocated for recovery measures, and that, of course, is in addition to the £100 million announced in the first supplementary budget, and that, again, will support the work of the NHS.

In respect of the capital allocation, the aim there is to improve patient flows, to improve ventilation and to tackle some of the waiting lists through the additional orthopaedic theatre, which will be at Neath Port Talbot, and a new ophthalmology day centre at Singleton. So, we'll be making those particular investments to improve the situation within the NHS and deal with some of those backlogs. We have had estimates of the number of people who would have been on the waiting list had we not had that additional investment. Things were delayed somewhat in respect of the omicron variant—that did pull things back a bit in terms of the progress that we were making—but I was able to share with the Finance Committee, in scrutiny, some examples of the ways in which we know the investment that we are making is working.

There was a lot of interest again in our investment in social care. We have a £42.7 million package for funding social care, helping to address some of the system pressures, and the specific areas where that will be invested are those areas that were identified by our care action committee as being the areas where we can make the most difference. That includes £20 million to fund support services for children; there's additional funding of £3.8 million to support early intervention and prevention, and that's been allocated to the third sector organisations; and £1 million to support unaccompanied asylum seekers, along with a range of other investments as well.

There was some interest again in the support that we're providing to public transport. The budget does provide an additional £53.1 million in respect of rail, and the reason why we've had to give so much additional funding to public transport, rail and bus, both in this supplementary budget and right through the course of the pandemic, is because of the impact that the pandemic had on the fare box. When we think back to the lockdown, that resulted in a drop in both bus and rail patronage of 95 per cent, and as the restrictions have eased, we have seen a slow recovery but we're still not back to previous figures. So, it is the case that those sectors do continue to need Welsh Government support.

So, I think I responded to a range of those issues that were brought forward this afternoon, but I do want to say and repeat that I will be accepting all of the Finance Committee's recommendations, and I will be providing a more detailed response to each of those recommendations in written form.

The proposal is to agree the motion. Does any Member object? [Objection.] There was an objection, so I will defer voting under this item until voting time.

Voting deferred until voting time.