The Welsh Government yesterday approved the budget for 2023/24, as Ministers passed what Ministers described as their toughest budget challenges since devolution.
Minister for Finance and Local Government Rebecca Evans said: “This is a budget in hard times, which will help to protect frontline public services as far as we can in the face of a perfect storm of financial pressures, while also providing some extra help to those most affected by the cost-of-living crisis and supporting our economy through the recession.
“Our approach is designed to maximise the impact of all our available resources. This means balancing the short-term needs associated with the ongoing cost-of-living crisis, with the continued need to make longer-term change and deliver on our Programme for Government ambitions for a stronger, fairer, greener Wales.
“This has been one of the toughest budgets since devolution. It is being delivered as the UK economy is once again in recession, following a decade of austerity, Brexit and the pandemic. Inflation is at a 40-year high and energy costs are soaring.
“Inflation has eroded the spending power of our budget but not our ambition. We have taken very difficult decisions to make sure all our resources are used to help support people, businesses and services through the tough year ahead.”
Despite inflation rendering the budget worth £1Bn less, funding plans include £40 million to support public transport and set Wales on its journey towards Net Zero by 2050, an extra £165 million for the Welsh NHS and £227 million for Welsh councils to help them safeguard schools and deliver the real living wage for social care workers. The education budget will also receive an additional £28 million and the Government also announced a support package for businesses worth £460 million over 2 years.
Lloyd Powell, head of ACCA Cymru/Wales, said: “The Welsh budget has been passed against an extremely difficult background of high inflation, especially rising energy costs, an economy facing a recession and business sector still working hard to recover from the significant impact of Covid-19.”
Commenting on the debate on the 2023-24 final Welsh Budget (published last week), Lloyd Powell, head of the accountancy body ACCA in Wales, said: “The budget is yet another reminder of the challenging outlook for public spending at a time of high inflation and while difficult decisions on spending had to be made, the reduction in the final allocation for supporting the economy is a concern in this time of continued pressure on business costs as well as on the spending power of consumers. We recognise the difficult decisions that the government has had to make in extremely challenging times and applaud the focus on protecting vital services.
“A debate will also take place in the Senedd to set the Welsh Rates of Income Tax (WRIT). The Welsh Government announced it does not intend to change Welsh rates of income tax for 2023-24. This means taxpayers living in both Wales and England will continue to pay the same amount of income tax. Many businesses will welcome the fact that Welsh rates of income tax remain unchanged, keeping income tax rates in line with those in England, although it does limit the Welsh Government’s ability to provide more support to individuals and business.
“A decrease in spending on education is also a concern, given the importance of investing in future skills to develop the Welsh economy in the short, medium and long term.
“An increase in spending on climate change is welcomed – supporting businesses, especially smaller businesses who need support and guidance to help them on their journey to net zero.”