Welsh Government draft budget to ensure social care workers receive real living wage
The Welsh Government is to publish its draft budget following the UK Government’s autumn statement and as pressure continues to mount on households and public services.
The budget, which will be announced on Tuesday afternoon, will set out funding allocations for the next two years.
It will include around £70 million a year to ensure social care workers continue to receive the £10.90 an hour real living wage from June 2023.
Business rates relief will also be increased from 50% to 75% to match the support recently introduced in England to provide “certainty” to businesses.
However, adjustments to the government’s three-year plan set out last December are expected due to high levels of inflation and a possible recession.
Chancellor Jeremy Hunt announced last month that the Welsh Government was to receive £1.2 billion in extra funding as part of a package of measures to stabilise the economy.
The Welsh Government’s budget is now understood to be worth around £3 billion less in real terms than when it was set after the October 2021 spending review.
Other pressures include the increasing cost of social care, homelessness provisions, and public transport which has become more costly due to there being lower demand.
The number of households in financial difficulty and therefore in need of emergency payments has also increased, the government said.
Wales Fiscal Analysis (WFA), a research body within Cardiff University’s Wales Governance Centre, calculates potential losses due to inflation, even after additional funding, at more than £800 million in 2023-24 and £600 million in 2024-25.
The WFA has suggested that if the Welsh Government used devolved income tax powers to increase rates of income tax by 1p it could increase its budget by 1.4% next year and the year after.
Finance and local government minister Rebecca Evans said: “Despite the challenging economic and fiscal context, we remain fully committed to doing all we can to protect the frontline public services that people rely on.
“I am pleased to be able to maintain our commitment to social care workers, and I will be saying more about how we will protect public services when I announce the full details of the budget later today.”
Social services minister Julie Morgan said the uplift would help staff “recruitment and retention”.
Tory shadow finance minister Peter Fox MS said the extra funding announced in the UK Government’s autumn statement should provide Labour with the opportunity to “fix the structural issues in Wales, from reducing Wales’s record waiting lists, to properly funding our education system, to unlocking the Welsh economy”.
“Labour may try to cry helplessness and pass the buck, but they possess the financial levers and have the decision-making powers,” he added.
The Tories said they welcomed the announcement on business rates but said help needed to be more focused on energy-intensive industries.
Plaid Cymru’s finance spokesperson Llyr Gruffydd MS said: “This is the devastating impact of Westminster’s economic crisis on our communities and yet more proof – if we needed it – that Westminster will never work for Wales.
“The fiscal powers we have to respond to this crisis may be limited – but that doesn’t mean we are powerless.
“That’s why the Welsh Government should explore how progressive use of tax varying powers could be used to protect public services, improve the pay offer for hardworking public sector workers, and help people suffering the most during this crisis.”
The Senedd will have until February 6 to scrutinise the Draft Budget 2023-24, and it will be debated in the Siambr on February 7, with the Welsh Government expected to publish its final budget by the end of the month.
Copyright (c) PA Media Ltd. 2022, All Rights Reserved. Picture (c) Daniel Leal-Olivas / PA.