Finance Secretary unveils a Budget to build a better Wales

3 Oct 2018 11:44 AM

Finance Secretary Mark Drakeford yesterday reveiled a draft Budget to sustain the fabric of Welsh life and build a better Wales.

This will be the first Budget to include revenues raised from Welsh rates of income tax as Wales gains the partial power to set and vary income tax for the first time.

The partial devolution of income tax from 6 April 2019 is the next step in Wales’ devolution journey and follows the successful introduction of the first Welsh taxes in almost 800 years – land transaction tax and landfill disposals tax – in April 2018.

The outline draft Budget 2019-20 has been developed against the backdrop of continued austerity and the shadow cast by the ongoing uncertainty associated with Brexit.

Professor Drakeford yesterday said:

“The Welsh Government has done – and will continue to do – everything it can to protect frontline services from the worst impacts of austerity. And this draft Budget is no exception.

“This has been my most difficult budget to date. With less money, more demand and inflation growing we have worked hard to squeeze every penny we can for those services that matter the most to people.”

The outline draft Budget 2019-20 builds on plans published last year and reflects the second year of the two-year budget agreement between the Welsh Government and Plaid Cymru.

The Welsh Government’s revenue plans include: 

Local authorities were facing a reduction in funding of £43 million in 2019-20. The Welsh Government has worked hard to reduce this by improving the amount of funding it provides directly to local authorities through the revenue support grant. It has also been able to restore funding to a number of grants and make a number of other funding decisions, which local government will benefit directly from, which add up to £84 million.

In May, the Welsh Government announced £266 million of new capital investments alongside the publication of the Welsh Infrastructure Investment Plan mid-point review. The outline draft Budget builds on those capital announcements and includes:  

Finance Secretary Mark Drakeford added:

“As we move through these uncertain times we remain committed to doing everything we can to help our public services meet the very real challenges they face today, while acting now to improve prospects for the future. This budget uses every source available to us to build a better Wales.”

The Welsh Government will not propose any changes to the rates and bands for land transaction tax in the outline draft Budget, however landfill disposal tax rates will rise in line with inflation, as announced last year.

The Finance Secretary yesterday announced that he intends to consult on plans to exempt care leavers under 25 from paying council tax in Wales.

He will also consult on proposals to put those private hospitals and independent schools, which have charitable status and are exempt from paying non-domestic rates, on an equal footing with NHS hospitals and state-funded schools, which are eligible for non-domestic rates.

The Welsh Government yesterday published a one-year revenue budget for 2019-20 and capital plans for the next 2 years – 2019-20 and 2020-21.

The outline draft Budget is the first stage of the Budget, which sets out where Wales’ funding comes from and how it is allocated to the main spending departments. The detailed departmental spending plans will be published on 23 October, in line with the new budget process introduced by the National Assembly last year.