16. Debate: The First Supplementary Budget 2022-23

Part of the debate – in the Senedd at 6:37 pm on 12 July 2022.

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Photo of Rebecca Evans Rebecca Evans Labour 6:37, 12 July 2022

Thank you. As a number of colleagues have observed this afternoon, this supplementary budget really does take us back to what we used to know supplementary budgets as being before the pandemic, in the sense that there are very small movements, small allocations, and it's mostly technical in nature. So, much of what we've heard this afternoon and much of what I'll respond to doesn't relate specifically to the supplementary budget, but I think it is an important chance to get some of these important and pressing current issues on the record. A number of colleagues have referred to inflation and asked how this is impacting on the Welsh Government's plans and Rhianon Passmore outlined how our budget is now worth more than £600 million less than we anticipated when we formulated our spending plans in 2021. We're constantly assessing the wider macroeconomic trends and their impact on Wales, but, given that we have only recently agreed the multi-year spending plans to 2025, we're not proposing a fundamental review of these plans at this time, but what we are doing is better understanding the impact of inflation on those  plans, and I think that Mike Hedges is quite right in the sense that it will inevitably, I think, lead to some difficult decisions about how we profile some of our capital investments, particularly, but I know that colleagues will be considering that as we enter our next budget period, and we're doing lots of work on that over the course of the summer.

There were some questions about public sector pay, and, of course, it is an absolutely critical issue. The latest figures from the ONS suggest that public sector pay is rising around 1.5 per cent over a three-month period, 8 per cent in the private sector, and that's the largest gap that we've seen in terms of pay growth between the public and private sectors, and, inevitably, that's going to have an impact, I think, on service delivery when people are looking to the private sector for potential different employment. So, we absolutely need the UK Government to step in to this space and undertake to provide a decent pay uplift to people working in the public sector to recognise the work that they've been doing over recent years and to recognise the value of public services.

Several colleagues have referenced the funding that is within the supplementary budget for Ukraine and, as the committee has asked, that Welsh Government endeavours to press the UK Government for clarity on years 2 and 3. At the moment, we only have that clarity in terms of the first year of funding for people coming from Ukraine, and nothing at all on years two and three. And my concern is that the UK Government will just assume that, because people are eligible for support through benefits, they're eligible to work, that they won't need further support, and local government won't need further support to support those individuals. But I absolutely give that undertaking to continue to press these points with the UK Treasury—points that I've already made in regard to Ukraine with the CST at a recent finance Ministers' quadrilateral meeting. And also I was pressing the point that the family scheme needs to have equity with the Homes for Ukraine scheme, because there is a real disparity between those two schemes and the funding and support that the households who are providing kindly their homes for family or strangers to receive. So, that's another area that is of concern.

I completely agree with those colleagues who have outlined that devolved budgets shouldn't be spent on non-devolved areas. Of course we want to support Ukraine, but it's for the UK Government to act in these non-devolved areas. And I am worried that it sets a precedent, because the situation is going on longer than was perhaps anticipated, so it could be the UK Government comes to us again for this further funding. I can see my time is out. I could talk all day about the supplementary budget and the scrutiny, but I don't think I will, and I'll save colleagues that. But I will respond to all 12 of the recommendations from the Finance Committee.