The Budget that has been agreed is a Budget for Wales. It is a Budget for growth and jobs, which provides investment in the public services on which we all depend. It contains a series of measures which will support people, communities and the economy the length and breadth of Wales.
The Budget has been agreed against the backdrop of challenging economic and financial times - the Institute of Fiscal Studies has concluded that there has been no period like this in the last 60 years. We have all experienced difficult times at first hand and the Office for Budget Responsibility’s report published last week pointed to further challenges to come. According to that report, unemployment levels are expected to rise over and above the 9% we now face in Wales. Economic growth will be less than 1% this year and next – we are perilously close to a recession.
Through the good and the bad times our ambitions for Wales remain unchanged – we want to see economic growth, we want to improve the quality of life and wellbeing of everyone and we want to protect the vulnerable. These are the ambitions that informed our Budget for jobs and growth.
I have spoken previously about how we will continue to invest in public services – in health, local government, skills and education. These are services that are vital to navigating our way through the current challenges and laying the foundations for future growth.
We are also maintaining support for businesses, through direct support and through investing in capital infrastructure. Capital investment is vital in this serious economic downturn. It is vital to the economy – both in the short term, for the stimulus it provides, and in providing the long term conditions for growth. It is also essential to the delivery of modern, high quality public services that people in Wales deserve and expect.
Last month I outlined how almost £90million capital funding would be spent on projects over the next two years. We have allocated:
- £32m to education projects across Wales
- £16.6m to health and early years projects
- £11.7m to transport
- £10m to support the roll out of residential and business access to Next Generation Broadband
- £15m to increase the supply, choice and quality of our housing; and
- £2m to support projects to reduce flood and coastal erosion risk.
And on Monday, the Minister for Education & Schools announced a further major £1.4billion investment programme for our schools.
Putting more money into infrastructure investment is essential. But it is equally important that we are clear and transparent about how we turn our priorities into investment. Through our Wales Infrastructure Investment Plan we will make it clear what we are spending, where we are spending it and when we will be spending it. We are also exploring all opportunities to lever in additional resources – including helping local authorities & the housing sector to free up the resources to support additional borrowing and additional capital investment.
As a responsible Government, we are committed to equipping Wales to weather the current storm. Over recent weeks, that has meant working with Opposition Parties to see how we can improve our budget proposals and how we can ensure that there is an agreement around our plans with the support of the Welsh Liberal Democrats.
I was pleased to be able to include in the Final Budget a new grant – the Pupil Deprivation Grant – which will direct support to children that need it most. With the additional £20 million, we will be able to provide schools with £450 per child eligible for free school meals and I am pleased that 70,000 children across Wales will benefit as a result of this policy.
Our Budget was developed in the most difficult economic climate in the last 60 years. We have consistently said that the UK Government was cutting budgets too far & too fast. We believed that there was a middle ground, where we could reduce the national debt without stalling the economy.
It gives me no pleasure to draw the obvious conclusion from last week’s Autumn Statement - the Chancellor’s model of recovery via his deep deficit reduction plan, is not working. He presumed that there would be export-led growth, with private investment stepping in to provide the jobs as the public sector was cut back. This is not happening.
The UK Government is belatedly pursuing an approach that mirrors the interventionist measures we have been taking for some time – increased investment in early years, education and skills and especially using capital infrastructure to assist economic recovery. These are the measures that will support Wales to exit these difficult times.
The Budget that was agreed provides stability and opportunity for growth and jobs. This is what the people of Wales expect and deserve and this is what we have delivered.