9. Debate: The Second Supplementary Budget 2022-23

Part of the debate – in the Senedd at 5:43 pm on 14 March 2023.

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Photo of Rebecca Evans Rebecca Evans Labour 5:43, 14 March 2023

Thank you. I'm grateful to colleagues for their contributions in the debate today. Of course, the second supplementary budget is an important part of our budget process. Its approval will authorise the revised spending plans of the Welsh Government and those bodies directly funded from the Welsh consolidated fund, and, of course, it sets the limits against which our final outturn position will be compared.

I'm very grateful to the Finance Committee and to colleagues for their continued support for the Welsh Government's efforts to gain greater fiscal flexibilities, and those discussions are ongoing with the UK Government at the moment. We did have a small step forward, I think, in terms of the end of this financial year, but we're certainly nowhere near where we need to be.

To address Mike Hedges's particular point about the 2020-21 issue, just to confirm again to colleagues—I know that I've circulated a letter to colleagues on this point previously—that, as a devolved Government, we did operate within the DEL budgetary controls set by HM Treasury, and we should have been allowed a reasonable level of flexibility in relation to the individual revenue and capital controls. There were numerous discussions with the Chief Secretary to the Treasury of the time, asking them to allow that additional flexibility, bearing in mind, of course, that 2020-21 was an exceptional year in terms of there being a pandemic and the quite significant increase to the Welsh Government's budget as a result of that.

It is also worth, I think, putting on record once again that the total underspend in 2020-21 by all UK Government departments was £25 billion, and that represents almost 6 per cent of the total provision made available to those departments in that year. All underspends by UK departments were returned to HM Treasury, and the Department for Health and Social Care alone underspent by over 9 per cent, returning £18.6 billion to the Treasury. Our Barnett share of that would have been around £1 billion for Wales, so in contrast, our underspend represented only 1 per cent of the available resources, and as I said, it was well within our overall departmental expenditure limit anyway. And I really think that that just demonstrates the importance of those discussions going on regarding fiscal flexibilities, and the importance of this Senedd speaking with one voice in that regard.

I understand the points made by colleagues about the importance of certainty for partners. That's always something we intend to give as much as we possibly can, so we've done that through our three-year spending review process, which I think has given that level of certainty for the years going forward.

One of the Finance Committee's recommendations that I'll have to give more thought to is the one about giving more frequent updates on the levels of funding within reserves, because, of course, that changes all the time, almost by the nature of it, in terms of underspends emerging across departments, and by the time the information is published, it would be well out of date. So, I think that we'll have to give some further thought to that. But just reassuring colleagues that all of this is very tightly managed. I have meetings with the finance director and with officials on a monthly basis, and we get reports from right across Government. So, we are able to keep a very close watch on those figures, but I'm not sure how useful publishing it would be, bearing in mind that it is information that needs to be viewed on a very timely basis.

On the point about the additional funding for health, of course, this is in relation to the exceptional energy costs arising in 2022-23, and the COVID-19 measures that are ongoing in this financial year in respect of the health and social services main expenditure group. That's an important contribution that we're making to meeting those costs. So, I certainly won't be taking any lessons from the Conservatives on how we go about supporting our hard-working NHS staff. You'll see the quite extreme efforts that we've gone to to try and find funding to come to an arrangement with our health workers to ensure that they are paid appropriately. And those discussions, I know, are stalling across the border, and of course, you will see from what we're voting on today that we've taken down all of the funding that we were able to do so in this financial year to meet the costs of that. And I think that that is a really big and important step, but it just shows how far we are willing to go to support our NHS and education workers here in Wales.

In terms of Ukraine, I think that, again, important points were made in terms of trying to ensure that the UK Government provides the funding that is needed to support people coming from Ukraine. They've given no indication that there will be funding for people in their second and third years, in terms of the support that they're offered. There are many aspects with the support that is already offered, which are just not sufficient—for example, treating the family scheme differently to the Homes for Ukraine scheme in terms of the UK Government support in that space as well.

So, Welsh Government, as you'll see from the budget we're voting on today, is providing support well over and above the funding that we've received from UK Government, because we knew it was the right thing to do to provide that initial wraparound support, which was more generous than that which was available across the border. But it's been really important in terms of ensuring that people from Ukraine can avoid the perils of homelessness, and again, that's been something, I think, that has been quite contrasted with the experience across the border as well.

So, just to conclude, we have had to make difficult decisions this year to ensure that the funds available to us are directed to where they're needed most, and we are, of course, committed to supporting our public services, to providing resources for the humanitarian response to the war in Ukraine and delivering the Welsh Government's priorities. Diolch.