Welsh budget will have ‘disproportionate impact on the most vulnerable’, committee warns

“Serious concerns” have been raised that the Welsh budget will have a “disproportionate impact on the most vulnerable in society”.

The cross-party Senedd finance committee, which helps scrutinise Wales’ government budget, has set out a series of objections against the draft plan for 2024-25, insisting there are “weaknesses in several key areas”

A report by the committee argues that the budget comes at the expense of long-term measures to reduce poverty; will lead to a “serious shortfall” for local authorities, which will impact the services they deliver; and hit the most vulnerable in society worst.

But the Labour-run government argues it is facing the most financially difficult time since devolution began.

While the budget includes extra cash for health and transport, including an extra £450 million for the NHS, it will also see cuts to a range of areas.

This includes business rate relief, brought in during the coronavirus pandemic for the retail, hospitality and leisure sectors, reduced from 75% to 40%, meaning higher bills. The rate in England will remain at 75%.

Ministers are also examining whether university tuition fees, dentistry costs and charges for care for the elderly in their own homes need to be raised.

Peredur Owen Griffiths MS (pictured), the chairman of the finance committee, said: “We recognise the difficult financial position faced by the Welsh Government, but we are concerned about their claims that this budget will protect frontline services in Wales.

“Not only is this budget unlikely to protect frontline services, we also don’t know how the Welsh Government intends to measure the effect of the additional money being allocated to the NHS and Transport for Wales.

“Decisions to not extend free school meals and to cut the spending on childcare is also cause for concern and something which will disproportionately impact the most vulnerable in Wales. We’re urging the Welsh Government to look again at these decisions.”

The Welsh government is expected to make an £11.2m cut to childcare provision, which is used to help provide free support for up to 30 hours a week.

The committee has argued the cut would significantly increase the financial pressure on households, particularly on women’s income.

The report said: “We are astonished that £11.2 million of funding for childcare is being reprioritised “based on the latest forecast for demand”.

“We are concerned that, rather than there being a fall in demand, the issue lies with how the support is being promoted and delivered.

“An increase in take-up will lead to the childcare budget being significantly underfunded and create additional pressures elsewhere in the budget, which is of great concern.”

The committee is made up of four members, one from Plaid Cymru, one Conservative, and two Labour.

A Welsh Government spokesperson said: “This is the starkest and most painful financial situation faced since the start of devolution.

“We have been clear going into our draft Budget preparations that, because our Budget is now worth £1.3bn less in real terms than when it was set in 2021, incredibly difficult decisions have had to be taken.

“We will take the next few weeks to consider the findings of this and other Scrutiny Committee reports before bringing publishing our final Budget on 27th February.”

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