Welsh Government budget passes after £60m ALN deal with Labour

Nation.Cymru staff

The Senedd has approved the Welsh Government’s supplementary budget, releasing additional funding for schools, childcare and the NHS after Labour backed a deal with Plaid Cymru ministers.

The motion passed by 54 votes to 39 on Tuesday evening, nearly four months after the minority government’s original spending plans were defeated.

Labour’s support followed an agreement to provide an extra £60 million for children and young people with additional learning needs (ALN) this financial year.

The budget also allows previously announced investment to proceed, including £100 million to reduce NHS waiting times, £55 million for childcare and £40 million for school repairs.

Finance Minister Elin Jones acknowledged the “constructive discussions” with Labour, BBC Wales reported.

“While there have been differing views on how best to respond there has been a broad recognition that these pressures are real and require action,” she said.

“That shared understanding has enabled agreement to be reached.”

Labour finance spokesperson Huw Thomas said negotiations had been more difficult than necessary, but argued his party had secured 50% more ALN funding this year than ministers offered before July’s defeat.

He urged the government to distribute the money quickly, saying: “Schools cannot afford lengthy delays and bureaucratic obstacles.”

Labour had sought £100 million for ALN this year. Before the July vote, ministers offered £40 million annually for three years.

The October agreement increased this year’s allocation to £60 million, with future funding left for subsequent budget negotiations.

Of that package, £44.8 million will go directly to schools, £11.2 million to local authorities, £2.5 million to further education and £1.5 million towards a sustainability plan.

Reform finance spokesperson Cai Parry Jones questioned Labour’s support while the NAHT teaching union remained in dispute with ministers and called for cuts to overseas spending.

Conservative Peter Fox said his party would oppose the plans, describing the budget as “business as usual wrapped in different colours”.

The agreement removes an immediate obstacle for the Plaid administration, which needs opposition votes to pass its budgets.

However, Wales Fiscal Analysis academics Ed Gareth Poole and Owain Cynfab previously described the ALN package as a “stopgap measure”, warning that wider public service pressures remained unresolved.

Their October analysis said the deal did not appear to settle school leaders’ dispute over pay and ALN funding.

Ministers now face negotiations over the 2027–28 budget, with rising costs placing further pressure on services and ambitions to expand childcare.