Written Statement - Increasing Investment in Infrastructure in Wales

Investment in public infrastructure is vital for two reasons.  First, 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.  And second, it is essential to delivery of the modern, high quality public services that people in Wales deserve and expect.

That is why the Welsh Government is committed to maximising investment in public infrastructure in Wales over the next few years.  The Minister for Finance and Leader of the House set out our approach in her Oral Statement on 22 November.  In the last week, we have detailed over £140m of new investment – in support for business growth, in schools and hospitals, in transport networks and Next Generation Broadband.  We have also set out plans to boost local government borrowing over the next few years which would provide between £100m and £170m to support highway improvements across Wales.  Further investments to stimulate the economy and support public services will be announced in the next few days. 

These actions demonstrate our commitment.  But in order to increase investment in Wales, we also need to influence the UK Government.  This is partly because some infrastructure developments in Wales are reserved – particularly rail and energy.  But also because the UK Government sets the fiscal envelope we must manage within and makes the rules for the financial system we operate in.

The Welsh Government is very actively making the case for Wales to the UK Government in all of these areas.  We are taking every opportunity to press our view with the UK Government that their deficit reduction plan goes too far, too fast and that fiscal policy should be relaxed in order to boost investment and stimulate the economy. 

I met the Prime Minister and have written twice in recent weeks to press for increased investment in vital road and rail infrastructure in Wales.  The Minister for Finance and Leader of the House also met Lord Sassoon, the Treasury Minister responsible for infrastructure, and the Chief Secretary to seek to influence the direction of the UK Government’s Infrastructure Plan, which will be published next week. Talks are also ongoing at official level about the scope for Welsh Ministers to exercise their borrowing powers – ahead of the outcome of the Silk Commission – to increase investment, and the review of PFI announced by the Chancellor last week.

I will not be providing a running commentary on this work.  But it is important to make clear that the Welsh Government is working very actively to boost investment in public infrastructure in Wales at this critical time.