Jane Hutt, Minister for Finance and Leader of the House
Today, I am announcing a capital investment package totalling £617.5m to support our Wales Infrastructure Investment Plan priorities. In developing our spending plans, we have kept our focus on the interventions we can make to support growth and create and maintain jobs. This is more important than ever in the current economic climate.
When the UK Government announced the Spending Round in June, our capital budget for 2015-16 was set for the first time and it will be 33% lower in real terms than in 2009-10.
The UK Government is placing increasing restrictions on how we use this budget. In 2015-16, around 12% of our capital budget will be ring-fenced for financial transactions. This means it can only be used for loans and equity investments and will have to be repaid to the Exchequer in due course.
The Welsh Government is taking every opportunity to invest in our infrastructure to help stimulate the economy. Accordingly, we will be making full use of our capital spending power despite the restriction.
The Wales Infrastructure Investment Plan is the key vehicle to deliver our strategic investment decisions. The £617.5m investment package I am announcing today to support our investment priorities includes £342.5m of additional capital funding and £275m of financial transactions funding. All of these allocations are set out in the table at Annex 1.
Since publication of the Wales Infrastructure Investment Plan last year, we have invested heavily in housing, transport and economic development to boost long-term growth and create or support jobs. This latest package will deliver real benefits for Wales, creating or supporting more than 11,000 jobs over the next two years.
For example, in the Draft Budget 2014-15 published yesterday on 8 October, we are investing an additional:
- £175.5m in improving transport networks and in flood defences to protect vital infrastructure including Phase 1 of a new scheme to create a South East Wales metro system through better bus and rail links.
- £170m in housing. This means that since 2012, we have generated more than £500m of additional investment in a range of housing initiatives including affordable, private rented and owner-occupied housing, delivering a huge boost to the construction industry when it has been most needed. Part of this investment includes funding for Help to Buy Cymru – a new shared equity scheme for Wales to help people to purchase new build homes and further funding for the Social Housing Grant to provide homes for those who have to move as a result of the UK Government’s reductions in Housing Benefit.
- £82m to support delivery of more efficient and economical public services to ensure that they are fit for the future and affordable in the long-term, including the second and final phase of the Noah’s Ark Children’s Hospital for Wales. In addition to the capital investment I am announcing, I am making available £19m of Invest to Save funding in 2014-15 to support public service organisations make the transition to more efficient and cost effective forms of service delivery.
- £54.5m to support the development of our Enterprise Zones, wider business activity and economic growth
- £70m to support the development of the Energy Industry in Wales and contribute to tackling poverty through investment in energy efficiency measures in Welsh homes.
Further allocations of £65.5m in 2013-14 will support these priorities.
I have also made additional capital allocations as a result of the budget agreement between the Welsh Labour Government, Plaid Cymru and the Welsh Liberal Democrats. These include £15m for an innovative new Intermediate Care Fund to support independent living for those who need health, housing and social care and an additional £9.5m for the Health Technology and Telemedicine Fund for the provision of robotic cancer treatment equipment and further investment in telemedicine.
We are continuing to develop a range of innovative finance initiatives and to explore options for alternative ways of maximising the use of our existing resources. Last month, the Housing and Regeneration Minister and I launched the new Housing Finance Grant , which in collaboration with 20 Registered Social Landlords (RSLs), will deliver over £130m of new investment in social housing across Wales and open up a completely new source of finance for RSLs. I will be making further announcements on funding to accelerate the 21st Century Schools Programme at the Final Budget. In addition, Velindre NHS Trust are looking at the development of a new Cancer Centre, with an estimated cost in the region of £200 million, to ensure Welsh NHS patients continue to receive the best care and cancer treatments. The Trust is working with its partners to identify innovative finance opportunities for attracting the capital investment which will increase Velindre’s reputation as a Centre of Excellence.
We will also take every opportunity to use European funding to maximise our investments in essential infrastructure that support growth and jobs across Wales. To support the new 2014-2020 European Structural Fund Programmes, I am making available match funding of £10.3m capital a year until 2020 for local regeneration schemes in line with the Vibrant and Viable Places Regeneration Programme.
The allocations I am announcing today mean that, since publication of the Wales Infrastructure Investment Plan, along with innovative finance initiatives and investment from our private sector partners we have committed £2bn of additional investment in the Welsh economy and public services.