The state that we are in part two – is Wales failing?

Brian Roper

In the previous article I addressed the four key dimensions of the Welsh Government budget, I now turn to the remaining components to which I have attached a lower weight but which will, I feel, become more prominent, particularly the following one.

1. Climate Change (Total revenue funding – £948 million-Total capital funding – £1.7 billion).

This is an area in which the best of intentions collides with the cost of living and investment of resources and political capital are required, the 20 mph debacle, although not introduced as a climate measure, illustrates the risks.

The Adapting to Climate Change, Progress in Wales, Climate Change Committee report in September 2023 summarises the position as follows:

“There is a clear need for a more effective response to climate change in Wales.

February 2020 brought devastating flooding to Wales with record rainfall levels and successive storms, and in 2022, Wales recorded its highest temperature of 37.1°C at Harwarden Airport, Flintshire. Continued climate changes will bring hotter and drier summers and warmer and wetter winters alongside rising sea levels. These changes will bring risks across Wales’s ecosystems, infrastructure, communities and economy.

Climate Conscious Wales

The most recent Climate Change Risk Assessment identified 61 risks and opportunities from climate change to Wales, with around half requiring urgent action by the next adaptation plan to reduce future risks…Prosperity for All: A Climate Conscious Wales (PfACCW our assessment [is]:

PfACCW provides a good coverage of required research and potential actions across priority climate risk areas. The current national adaptation plan focuses on building a knowledge base and increasing understanding of climate risks in central government. It is accompanied by a monitoring and evaluation framework which aims to set out indicators relevant to the action areas.

There is insufficient progress in delivery and implementation of adaptation and monitoring is limited. We were unable to evaluate progress on delivery for more than half the adaptation outcomes. Across almost all areas, even where there is some good planning in place, monitoring and evaluation are limited or showing insufficient progress towards desired outcomes.

There are some positive examples of good plans in place, although this is not consistent across sectors. There is credible or partial planning for about a third of climate resilience outcomes. However, the variable score reflects a lack of clarity in responsibilities for responding to climate risks across the public sector.

The next national adaptation plan for Wales must go further to drive delivery across the public sector and more widely…there is a need for greater clarity on risk owners and where responsibility for delivering adaptation action sits. The plan should also be accompanied by a strengthened monitoring and evaluation framework to enable assessment of progress against managing climate risks and delivering adaptation outcomes.

Net Zero

Welsh Government should embed adaptation into its plans for Net Zero, future well-being and increasing biodiversity. Without consideration of climate risks, these other societal goals will not be achieved. The next adaptation plan, as well as plans for other government objectives should recognise the overlaps, maximising co-benefits and minimising negative impacts where possible.”

Across the UK concern is growing around the performance of water companies, “In 2022 Dŵr Cymru achieved a 2-star overall company rating, which means the ‘company requires improvement’. It is disappointing to see Dŵr Cymru’s performance has dropped further from their 4-star ‘industry leading’ rating achieved in 2020 and 3-star ‘good company’ rating in 2021” (Natural Resources Wales, Annual environmental performance report for Dŵr Cymru Welsh Water 2022).

Hardly a ringing endorsement for a country so attached to landscape and stewardship of the environment. But the untold story also needs telling.

In a world where the view now is that the polluter should pay we have to recognise that the legacy of the first Industrial revolution was wealth for some and environmental immiseration for all and that the Welsh carbon debt from coal extraction and iron and copper making is incalculable. Fortunately, no one seems to have made the calculation, the burden upon an independent Wales would be crippling.

I assess performance in this area as 2/10.

2. Rural Affairs (Total revenue funding – £399 million-Total capital funding – £37 million).

This is a small budget but a politically sensitive one given increased concern over food security and quality, the mitigation of climate change and the geography of Welsh language usage.

The Brexit “Dividend” is still in play and the Sustainable Farming Scheme remains central with an attempt to protect rural areas.

Those with a stake in this industry, CLA Cymru, Farmers’ Union of Wales (FUW), NFU Cymru, National Trust Cymru, RSPB Cymru, Wales YFC, Tenant Farmers’ Association and the Welsh Organic Forum petitioned as follows:

“During a period of unprecedented change, we are grateful to Welsh Government for the commitment it has shown to farming and our environment through maintaining levels of funding for the Basic Payment Scheme and the Glastir Scheme in recent years.

We are deeply concerned, however, that rural Wales now faces a loss of £37.5m resulting from the in-year review of budgets confirmed in October 2023, a cut of 7.9% to a budget that has not seen an increase for a decade or more. This at a time when farmers and land managers are being asked to deliver far more for society than at any time previously in an extremely challenging economic landscape.

As farming and environmental organisations, we are clear that any further cuts to the Departmental Rural Affairs Budget, and within that the funding allocated for the delivery of support that provides stability to rural businesses, alongside measures that underpin environmental delivery, will seriously threaten and undermine our rural communities and our ability to meet our shared aspiration to be global leaders in the production of climate and nature friendly food.”

Given the historical opacity of agricultural subsidisation it is difficult to assess performance on this area but given the coalition above I assess performance in this area as 6/10.

3. Social Justice (Total revenue funding – £142 million-Total capital funding – £18 million).

The commentary accompanying the draft budget states that “As the cost-of-living crisis deepens, we have prioritised funding where we can, to support people in the greatest need. We have provided additional funding to the Discretionary Assistance Fund, which provides emergency cash payments to people. We also continue to support our radical Basic Income pilot and other programmes which celebrate diversity and recognise Wales’ rich voices and communities.”

The Discretionary Assistance Fund (DAF) offers two types of grant. Individual Assistance Payments (IAPs) help people live independently in their home or a property that they are moving into. Emergency Assistance Payments (EAPs) help pay for essential costs, such as food, gas, electricity, clothing or emergency travel.

Descriptive analysis of the scheme states that:

“During the year 2022-23, 97% of DAF awards were EAP and the remaining 3% were IAP.

The Discretionary Assistance Fund (DAF) appears not to have been reviewed since 2015.

A commentary concerning the Welsh government universal basic income (UBI) project notes that “It will not be continued after the initial pilot ends in 2025 because of the cost. The trial involved paying monthly payments of £1,600 each to a group of 635 care leavers. The scheme, which began in 2022, was offered to all young people leaving the care system at the age of 18.

The scheme has yet to be fully evaluated, but initial feedback has been positive. And given the success of many similar projects around the world, there is a good chance it will have significantly improved the wellbeing of the participants, who are a particularly vulnerable group” (Universal basic income: Wales is set to end its experiment – why we think that’s a mistake. The Conversation, December 6, 2023).

Whilst, no doubt, offering welcome support to their recipients the lack of comprehensive and recent evaluation of these schemes renders them inapplicable to performance evaluation and this budget has therefore been excluded from further aggregate analysis.

4. Central Services and Administration (Total revenue funding – £331 million- Total capital funding – £10 million).

The budget commentary notes that “Funding to the Central Services and Administration budget pays for Welsh Government staff, IT and for the running of Welsh Government buildings. Like all other public services, this budget faces significant pressures from inflation and high energy costs. We are making some additional funding available to enable the Welsh Government to meet its commitments to work openly and transparently with the UK Covid-19 Inquiry to ensure decisions made during the pandemic are properly scrutinised.”

All organisations incur overhead costs.

Whether in the case of Wales these can be seen as representing value for money (VFM) depends upon the valuation of the benefits as well as the costs and upon consideration of efficiency and equity.

Pending further analysis, it is not proposed to include an analysis of VFM in this case at this time and this expenditure component is therefore excluded from the performance metric.

Having regard to the analysis above and the application of the specified metrics

I believe that a balanced analysis of the performance of Welsh Government would suggest that, at 46%, it is failing.

It is, at least, failing to realise Wales’ potential and to offer hope in very troubled times.

It is also coming close in certain areas to failing in the discharge of its fundamental duties and we do not know at the time of writing what the findings of the Wales module of the UK COVID enquiry will be.

It is of great concern that the £6.3bn (a third of the total budget) annual public procurement spend should elicit the observation that “Welsh Government has failed to show clear, joined up leadership on the role of procurement in delivering Wales’ well-being goals (and public bodies’ well-being objectives) (Future Generations Report,2020).

If Wales were to achieve statehood it would also have to assume responsibility in steady state for defence, border control and immigration and wider law and order, foreign affairs, central banking and currency issues amongst many other issues and it would also need to be able to withstand the disengagement trauma which would, almost certainly, be entailed.

On the basis of a 25 year experience of devolution the omens are not good.