Welsh Government reaches budget deal with Labour over £60m ALN funding

Nation.Cymru staff

The Welsh Government has reached an agreement with Welsh Labour to provide an extra £60 million for additional learning needs, paving the way for its supplementary budget to proceed.

The spending plans for 2026-27 will be laid before the Senedd today, with a debate scheduled for November 3.

The agreement follows months of disagreement over education funding, which saw Labour refuse to support the Plaid Cymru government’s previous supplementary budget in July.

The revised budget includes the package of investment first announced in June, covering the NHS, childcare and free school meals, alongside the additional ALN funding for this financial year.

First Minister Rhun ap Iorwerth said: “This agreement reflects what can be achieved when parties across the Senedd work together. It will unlock an extra £60m towards Additional Learning Needs in this financial year.

“It also allows us to bring forward a Supplementary Budget that continues our investment in the NHS, childcare and free school meals.”

Welsh Labour leader Ken Skates said: “We are pleased to have secured an additional £60 million for Additional Learning Needs this year.

“This money will make a huge difference to schools and colleges across Wales, and it is important that it now delivers for the children and young people who need it.”

He added: “This is a welcome first step towards better funding for schools and getting the best possible deal for children and young people across Wales.”

The earlier supplementary budget was defeated on July 14, with 49 MSs voting against the plans and 44 supporting them.

Labour had urged ministers to withdraw the budget and reach an agreement with school leaders’ unions before bringing it back to the chamber.

Dispute

The NAHT Cymru and ASCL Cymru unions were in dispute with the government over a 3.5% pay deal and what they described as an ongoing crisis in ALN funding.

Labour had called for £100 million of the government’s unallocated funding to be spent on ALN during the financial year.

Ahead of the July vote, Mr ap Iorwerth wrote to the party offering an additional £40 million that year and in each of the following two financial years.

The original £300 million supplementary budget included funding to reduce NHS waiting times and expand childcare. Ministers had also set aside £247 million in day-to-day spending that had not yet been allocated.

Finance Minister Elin Jones said after the defeat that she was “flabbergasted” by Labour’s position and accused the party of behaving as a “destructive opposition”.

Reform UK and the Conservatives also opposed the July plans. Reform said they failed to meet its demands, including cuts to overseas spending, while Conservative leader Darren Millar criticised ministers for bringing forward a budget without first securing sufficient support.

The vote was the first major setback for the Plaid administration following May’s election victory. Without a majority in the Senedd, the government needs opposition support to pass its budgets.

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