Welsh Government’s £26bn budget passes

Chris Haines, ICNN Senedd reporter

The Senedd signed off on the Welsh Government’s £26bn budget for the coming year after ministers struck a deal with the Liberal Democrats.

Senedd members voted 29-28 in favour of the final budget, with Welsh Lib Dem leader Jane Dodds abstaining after securing more than £100m worth of commitments from ministers.

Labour, which holds half the Senedd’s 60 seats, needed the support of at least one opposition member to pass spending plans for the 12 months from April.

The deal with Ms Dodds, the Lib Dems’ only Senedd member, included a promise to ban greyhound racing in Wales and allocate £15m for a pilot of £1 bus fares for under-22s.

The MP-turned-Senedd member secured £30m for childcare, £30m for social care, £10m for playgrounds and leisure centres, £10m for rural investment and £5m to address pollution.

‘Deep sense of responsibility’

Ministers also committed £8m to a “funding floor” to reduce variation across Wales’ 22 councils, with each set to receive a minimum increase of 3.8%.

Leading a debate on March 4, finance secretary Mark Drakeford said the 2025/26 budget provides an additional £1.6bn for public services.

The former first minister told the Senedd: “No party has ever had a majority since devolution began, so we have always had to craft a path to stability in Wales.”

Prof Drakeford added: “Those who send us here believe it is a strength to see different political parties working together and so do I. So, I’m grateful to Jane for putting the interests of the people of Wales above the daily clash of politics.”

Without the deal, ministers faced losing more than £4bn in the financial year from April.

Ms Dodds, who represents Mid and West Wales, said she felt a deep sense of responsibility to reach an agreement on the crucial budget.

‘Frittered away’

She told the Senedd: “If we don’t pass this budget, we risk losing billions for the people of Wales and I cannot in good conscience let that happen.”

But, explaining her decision to abstain, she said: “I cannot fully support a budget that falls short of delivering the investment and radical change Wales needs.”

Sam Rowlands, the Conservatives’ shadow finance secretary, was disappointed to see the sole Lib Dem “propping up” the Welsh Government through a “pretty weak” deal.

Darren Millar, leader of the Tory group, told the Senedd his party would vote against the budget to “bring to an end 26 years of a failing, tired, clapped-out Labour government”.

“Our money is being frittered away,” he said, criticising spending on nationalising Cardiff Airport, Transport for Wales, the 20mph default speed limit and more Senedd members.

‘Fire and fury’

Referring to Mr Millar missing a debate on the draft budget last month for a prayer breakfast in the US, Labour’s Alun Davies said: “We listened to the fire and fury from Darren Millar.

“He obviously learned more when he was in Washington than simply what Donald Trump enjoys for breakfast. And, of course, he talks about closing overseas offices – he’s the greatest travel agent we’ve had in this chamber.”

In recent years, Plaid Cymru helped the Welsh Government pass its budgets in return for 46 commitments but the party pulled out of the co-operation agreement last May.

Party leader Rhun ap Iorwerth criticised a “spurious argument” that by voting against the “flawed” budget, Plaid Cymru would be voting against individual spending decisions.

Heledd Fychan, the party’s shadow finance secretary, called for fairer funding for Wales, pointing out that resource funding sees the lowest real-term increase of all devolved nations.

She warned additional funding could be “swallowed up” by national insurance increases.

‘Stop digging’

Mark Drakeford accused Plaid Cymru of washing its hands, claiming he met Ms Fychan three times and not once did she set out the party’s demands to support the budget.

Mr ap Iorwerth said: “It’s very, very clear that we took a different approach to this budget from [the] Welsh Government: our demands were too great in this instance.”

Prof Drakeford replied: “The political cul-de-sac into which Plaid Cymru has backed itself … is a prime example of the Denis Healey first law of holes – if you’re in one: stop digging. But you’ve been digging as though there was no end in sight.”

The Senedd agreed to make no changes to Welsh rates of income tax in 2025/26, as has happened every year since Wales gained some powers to vary rates in April 2019.

Prof Drakeford said he would commission a review into more income tax powers, similar to Scotland where there is an additional band and rates that diverge from the rest of the UK.

Senedd members also approved the final £9.5bn settlement for councils as well as the Welsh Government’s £112m component of funding for police and crime commissioners.