Member News
By Chris Franks AM - 18th November 2010
Plaid Cymru has helped delivered a budget that is right for the people and right for the country, says Chris Franks AM.
It would be disingenuous to say that setting the Welsh budget for 2010-2011 hasn’t been a challenge for our government. It was always expected that following several years of settlements that allowed ministers to plan, the current state of public finances would mean the end of such an arrangement.
These savage cuts handed down by the Coalition government in Westminster are the worst cuts in a generation – both deeper and longer than previously experienced by the Assembly. Of course, Conservatives and Lib Dems both here and in London, including Welsh Secretary Cheryl Gillan, have attempted to put a gloss on it, arguing that the revenue settlement isn’t that bad. But there’s no talking around the capital budget, which will be down by 41% from this year by 2015.
It is worth remembering that Wales went into this budget round from a disadvantaged position. Some of it is historic – the patently unfair Barnett formula that both the last government and this one have refused to reform. Some of it is more recent – the anomalous treatment of business rates which will cost Wales millions of pounds and see it lose out yet again to Scotland and Northern Ireland.
As such, it would be wrong to lay all this at the door of the present Westminster Government, just part of it. Labour’s lack of oversight when it was in Government, and lack of regulation of the banking and financial sector, has compounded the situation we face today. It should also be remembered that Labour planned to cut the Assembly Budget by £1.5bn by 2013-14 (according to a Wales Audit Office estimate), compared with the £1.8bn from the £15.1bn block that the Tories and the Lib Dems will take away over the coming four years.
However, in non-devolved areas, the Coalition has made matters worse for Wales, because cuts to welfare budgets will also greatly affect this country. But in spite of all that, Plaid Cymru has managed to help deliver a budget that makes the right interventions so that it is right for the people and right for the country. As such, it reflects Plaid’s values.
Much of the discussion leading into today’s announcement came from the Tories here trying to put the Welsh government on the block by challenging it to match the UK Government’s commitment to ring-fence health spending. It’s just as well they aren’t in charge here, because it would have led to a slashing of up to a quarter from all other budgets, with 24% going from classroom funding and services for the elderly. As it is, revenue spending on health will fall only slightly, as a consequence of inflation.
Similarly, spending on local government – so vital in delivering education and care – will fall by just 1.7% next year. In fact, revenue spending on all services will fall by a maximum of 2.2% for 2010-11. Civil service functions will see bigger cuts of up to 4.8%, however.
Capital spend has taken the biggest hit. A 12.6% reduction for health will affect the building of hospitals. Similarly, a 20.3% drop in the local government settlement will mean fewer new schools, while a 16.8% for economic development and transport will be absorbed mostly in road building, although this year we spent as much on sustainable transport – a real feat.
Flagship Assembly schemes such as the Foundation Phase, free bus passes for the elderly and free prescriptions for all will remain.
In protecting schools, skills and hospitals we are looking at safeguarding the nation’s health, education and ability to get through the recession. After the lack of financial regulation of the banks by the previous Labour UK government damaged the economy, and the way in which the Tories and Lib Dems have cut support for the public and private sectors, we want to put in place a positive message that Wales can and will move forward. This budget should achieve that.
Chris Franks AM is Plaid Cymru finance spokesperson.
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