Rebecca Evans MS, Minister for Finance and Trefnydd
Today I am publishing the Welsh Government’s draft Budget for 2021-22, setting out our capital plans for the next financial year. The single-year settlement provided through the Spending Review has prevented us from providing certainty on our future infrastructure plans. Therefore, I am making this statement to update Members on the work the Welsh Government is undertaking to develop our longer-term infrastructure investment plans.
As we approach the end of the current ten year Wales Infrastructure Investment Plan (WIIP) which we first published in 2012, we have reflected on how we can build on the current plan to shape a successor that aligns with the shared priorities and challenges that we and our partners within Wales now face. This includes how infrastructure needs to respond to the challenges of climate change and how we can harness the benefits of digital innovation to maximise the impacts of our future infrastructure investment.
I am therefore outlining today the principles that will shape development of the successor to the WIIP over the next 18 months.
In order to remain agile enough to adapt to changes in evidence bases, priorities and available funding over a proposed 10-year period, the emerging framework of the WIIP successor will be built around a set of outcomes. The Strategy will set out the way in which the focus of investment decisions will be on what infrastructure in Wales can do and what it can enable, as opposed to what it should be.
The Well-Being of Future Generations Act places an obligation on Ministers to “to do things in pursuit of the economic, social, environmental and cultural well-being of Wales”. Building our cross-governmental infrastructure ambitions around these four principles will ensure that our framework for decision-making will deliver the capital investment that is best for Wales and supports delivery of our Well-being Goals.
The National Infrastructure Commission for Wales (NICW) was established in 2018, to provide advice and recommendations to Welsh Ministers on the economic and environmental infrastructure needs of Wales over a five to thirty year period. We will develop a successor WIIP that takes into account future recommendations by NICW.
To support delivery, and taking into account the place based principles of the National Development Framework, the Strategy will be underpinned by a series of infrastructure finance plans. These will bring together delivery of our individual infrastructure strategies, to set out the key infrastructure programmes that Welsh Government will finance over a set period in order to deliver the outcomes set out in the Strategy.
At its heart will be our response to the climate emergency including our commitment to Net Zero and tackling the decline in biodiversity. We declared a climate emergency in April 2019. Last week we received further advice from the Climate Change Committee highlighting there is now a feasible and affordable path to Net Zero for Wales by 2050. We are considering the advice, and intend to bring regulations to the Senedd early next year. We will update Wales’ emissions reduction pathway, well ahead of the UN’s Climate Change Conference (COP26) in November 2021, where we will also be publishing our second Low Carbon Delivery Plan.
The successor to the WIIP will also set out our approach to financing infrastructure in Wales, and how we will deploy our capital levers to ensure the delivery of our strategic outcomes. We will consider how best to use our capital borrowing powers over the longer term, as recommended by the Senedd Finance Committee in their inquiry into the Welsh Government’s capital funding sources, published last year.
We will also set out how we plan to utilise innovative approaches to financing infrastructure. For example, our Mutual Investment Model is already delivering additional investment that would otherwise be unaffordable. The A465 dualling project begins construction shortly and will deliver a major infrastructure project with wide ranging benefits for the Heads of the Valleys region including jobs and apprenticeships. The Welsh Education Partnership Company (WEPCo) joint venture with the private sector has been established and will facilitate the design and delivery of up to £500m of additional investment in new educational facilities over the next seven years. The Finance Committee has recommended that the Mutual Investment Model should continue to be utilised for appropriate projects.
While we undertake these important preparations, we will provide certainty to the construction sector where we can. Alongside the 2021-22 final Budget, we will publish the latest iteration of the WIIP project pipeline update, setting out planned expenditure on current and future public and private sector infrastructure investments.