The Bottom Line. Full Stop.

Posted in Blog | Oct 23, 2012 | By: Alun Gruffudd

By now we are entering the final stages of the National Assembly deliberations over the Welsh Government’s budget for 2013-14.  The Minister of Finance, Jane Hutt presented her draft proposals on 2 October and we have seen full blown scrutiny and deliberations within individual scrutiny Committees, with the Finance Committee the last to put the Government under the spotlight this week, with a session (albeit a short one) with Jane Hutt herself.  To re-cap on the formal timescales that guide the democratic oversight by the Assembly, the Finance Committee must report on the draft budget by the 8 November 2012, which includes considerations and concerns fed through by the scrutiny Committees.  The Welsh Government may take the Finance Committee report into account before tabling the annual budget motion by the 27 November 2012.  A two hour debate on the floor of plenary is earmarked for the 13 of November. This will be around five weeks of opportunity for the opposition and civic society to make their case for change in spending plans. 

This year, the Welsh Government, having a “technical” majority in the Assembly will still find themselves in an environment of bean counting and will more than likely have to move a few deck-chairs on the £15bn pound titanic that is the overall pot in order to appease some opposition policy preferences – as happened with the pupil premium for last year’s budget.  But we cannot expect more than that. Let’s not forget the reality of the public spending squeeze factor, which by now is compounded into its third year of projections since the UK Government’s last spending review.  It will inevitably be the guiding factor and will force some pragmatism to the table. 

On top of this, the line of defence for the current Cabinet would be, as an example, along the following lines:

To the Tories they would say they are spending nearly 43% of the budget on health and social services and “protecting the NHS” in cash terms and more per head than England “– and don’t forget your own party’s welfare cuts”; we are investing in jobs for young people and giving pots of money to small businesses.  To Plaid Cymru they would say that they have bought some innovative solution to lever further borrowing for infrastructure projects, including the £170million local government borrowing initiative for highways improvements and the £90 million-plus initiative for the Welsh housing partnership to deliver 800 additional affordable homes in all parts of Wales; and to the Lib Dems they would say that they are increasing the pupil deprivation grant by £4.7 million to £36.8 million. 

In reality, we would suspect that the opposition parties are quietly tempering their expectations of any significant leverage given that the budget of £15 billion is managed within the context of cuts worth £2.1 billion in real terms by the UK Government since 2009-10 and a 45% cut in capital spending.  Deliberations over the departmental spending plans have so far reflected this undertone.  The Welsh Local Government Association have also welcomed the provisional local government settlement, which is seen as protecting education and social services in a difficult financial climate and which has been seen as “comparatively better settlement than England”.  

However, as this was labelled a budget for “Growth and Jobs” those areas where we may see some movement are most likely to be related to economic stimulus and perhaps more focused spending on areas such as youth unemployment and keeping the economy buoyant.  Every year with the budget there are always areas for negotiation or compromise, it all depends on what the Welsh Government sees as the right price to pay for that compromise, together with the fact that they already feel they’ve spread the money as fairly as they can against the bottom line.  

Alun Gruffudd is Director of Information at Positif Politics, Communications & Consulting