Mark Drakeford MS, Cabinet Secretary for Finance and Welsh Language
Today, the Chancellor presented the conclusion of the UK Spending Review 2025, outlining the UK Government’s plans to invest in the UK’s security, health and economy. This Statement provides an update to Members on the immediate implications for Wales.
The Chancellor set out plans to create and support jobs and prosperity; improve the UK’s financial position; and build on the foundations laid at the Autumn Budget last year.
The UK Government’s approach to boost funding for public services and infrastructure has been endorsed by the Organisation for Economic Cooperation and Development and the International Monetary Fund. The UK recorded the highest economic growth among G7 nations in the first quarter of the year.
The Spending Review sets resource budgets for the next three years to 2028-29 and capital budgets for the next four years to 2029-30. The Welsh Government will receive an additional £5bn in resource and capital funding over the spending review period, including an additional £1bn in 2026-27, £1.6bn in 2027-28 and £2.4bn in 2028-29. In addition, we will receive an extra £4m in the current financial year. All this means significantly more funding for the Welsh Government to support public services and investment in infrastructure than the previous UK Government had committed to over the previous spending review period.
I am pleased the UK Government has continued to match our investment in coal tips safety, providing an additional £118m over 3 years, on top of the £25m announced in the UK Budget last year. Taken together with the over £100m investment made by the Welsh Government to date, our joint UK and Welsh Government commitment to invest coal tips safety now stands at over £220m.
We welcome the UK Government’s commitment to invest £445m in rail in Wales. £350m will be provided over the spending review period, including £302m to begin to deliver the pipeline of rail enhancement priorities identified by the Wales Rail Board and £48m for enhancements to the Core Valley Lines. Wales will also receive £95m through the 10-year Infrastructure Strategy. This marks the start of the delivery of the Burns recommendations in North and South Wales in earnest, enabling projects to progress, including increasing capacity, infrastructure enhancements to enable more services and new stations and junction upgrades. Importantly, this begins to address the historical underfunding of rail investment in Wales.
We will now work with the UK Government to identify the details of the Spending Review before providing more information on the implications for Wales. We will then consider the implications for our budget, which will focus on Wales’s priorities and ensuring services continue to deliver for people and businesses across Wales. I will make an oral statement setting out our approach to the next Welsh Government Budget on 1 July.