Senedd supports £27bn spending plans amid uneasy compromise

Chris Haines, ICNN Senedd reporter

The Senedd has backed the Welsh Government’s “imperfect” £27bn draft budget following a late deal to prevent a “catastrophe” for public finances.

The 2026/27 spending plans passed with 24 in favour, 13 against and Plaid Cymru’s 13 members abstaining as part of a near-£300m deal with the Welsh Government. Ministers will unveil the final budget in the new year before a further crunch vote on January 27.

But scrutiny committees warned inflation based on “outdated” forecasts could see real-terms cuts, criticising a lack of preventative spending and “business as usual” funding for culture.

Leading scrutiny on December 16, Peredur Owen Griffiths, who chairs the Senedd’s finance committee, sounded the alarm about inflation figures underpinning the draft budget.

He warned that while health and councils would receive uplifts, these were based on forecasts from March that are already outdated.

Calling on ministers to publish an assessment of inflationary pressures alongside the final budget, he said: “Some areas face real-terms cuts unless funding increases.”

‘Firefighting’

The Plaid Cymru politician also urged the Welsh Government to develop a plan to close a “persistent productivity gap” compared with the UK average.

Peter Fox, the Conservative chair of the health committee, said the NHS initially faced a “historically low” uplift of only 0.5% in real terms before the deal was struck.

Mr Fox made a compelling case for extra funding for “vital” palliative and end-of-life care services as well as more money for respite care for unpaid carers.

While welcoming an extra £180m for health and social care, he warned of a system buckling under pressures in relation to waiting times, staffing and an ageing estate.

“It’s essential to balance these short-term demands with longer-term transformation,” he said, calling for assurances funding for prevention is not lost to immediate firefighting.

This sentiment was echoed by Delyth Jewell, the Plaid Cymru chair of the culture committee, who lamented that the arts sector faces another year of “more of the same” real-terms cuts.

‘Vulnerable’

She pointed out that spending on culture in Wales ranks among the lowest in Europe.

Llyr Gruffydd, chair of the climate change committee, raised concerns about infrastructure, pointing to the transport secretary’s admission that Wales has the UK’s oldest bus fleet.

Mr Gruffydd also criticised cuts to biodiversity, noting a 3.9% fall in day-to-day resource spending and an 8% reduction in longer-term capital funding amid a “nature emergency”.

Meanwhile, John Griffiths, who chairs the local government committee, welcomed a minimum 4% increase for councils but warned “frustrations continue” over the funding formula, which relies on data from the 1991 census.

He said: “We remain concerned that local authorities are still in a vulnerable position and continue to face the prospect of council tax rises, service cuts and job losses.”

His Labour colleague Buffy Williams, chair of the education committee, warned ministers failed to publish a specific children’s rights impact assessment for the 12th year in a row.

‘Good news’

Heledd Fychan, Plaid Cymru’s shadow finance secretary, defended her party’s decision to abstain, arguing rejecting the budget could have led to thousands of job losses, council tax rises of 22% and the “very real prospect of bankruptcy for some of our councils”.

“This was a budget that, if it was left unamended, would have proved catastrophic for Wales,” she said, dismissing suggestions Plaid Cymru was “propping up” Labour.

But her Conservative counterpart Sam Rowlands criticised the budget as a failure that “does nothing” to get Wales’ economy moving nor get to grips with long NHS waiting lists.

Reform UK’s Laura Anne Jones added that the “cosy arrangement” between Labour and “their little helpers” Plaid Cymru “smacks of a government that has run out of ideas.”

Closing the debate, finance secretary Mark Drakeford insisted the budget deal was “good news for Welsh citizens” because the “catastrophe” of a failed budget has been avoided.

“We have secured that more ambitious set of outcomes,” he said, pointing to the £180m extra for health and social care as well as a £112m for councils as part of the deal.