Wales will take as much of the 2010-11 budget cut imposed by the UK Government as it can this year after Ministers decided to minimise the amount carried over to next year’s budget. But they have resolved to protect the capital budget so that vital investment in education, housing, health and social care will continue.
Business and Budget Minister Jane Hutt announced the decision to Assembly Members in plenary today (Tuesday 13 July, 2010) and said:
“After very careful consideration, we have decided to take as much as we can of the 2010-11 budget reductions this year – without damaging frontline services, without taking money from our key priorities and without taking risks with the fragile economic recovery.”
The Minister said:
“I want to make it clear that we do not think the UK Government should be imposing these cuts on us. As the Holtham Commission has shown, Wales is already underfunded so these cuts hit Wales harder than the rest of the UK.
“Putting off these reductions to next year would not be the right thing to do. It would mean that the challenge for 2011-12 would be even greater. This is not in the best interests of Wales and not what the people of Wales would expect of us.”
But the Minister said:
“We will not be following the recent example of the UK Government in cancelling major capital projects because this would be damaging to jobs and services as well as economic recovery. The Welsh Assembly Government brought forward spending on major capital projects in the past 2 years to help the construction industry through the recession and believes that cutting such spending could jeopardise the recovery.
“We have made it clear that our priority is to protect and improve the public services that people rely on whilst continuing to lead Wales into economic recovery. Continuing capital investment is key to delivering this.
“We will be using our EYF (End of Year Flexibility) to cover the £49 million reduction we face in the capital programme. This means we can continue to deliver our ambitious programme of investment in our schools, hospitals, housing projects and other key areas.
“Such projects include a range of affordable housing, adapations to homes for people with disabilities, Extracare housing for older people, hostels for the homeless and women’s refuges. We have invested £587m on NHS capital developments and equipment over the past 2 years and the Health Minister will be making an announcement about further capital investment in the NHS in the coming weeks.
“We will also continue to invest in our 21st century schools programme and the Education Minister will be making a major funding announcement on capital projects which will ensure that schools can deliver a 21st century curriculum in modern facilities.”
The Minister added that solid progress is being made in identifying revenue savings. The Government will continue to look for further revenue savings opportunities over the coming months – but only where we can make reductions that do not lead to unacceptable consequences.
“We are committed to making these reductions in a way that does least damage to the economy, to jobs, to public services and to the most vulnerable,” the Minister said.
“We know that difficult choices and tough decisions have to be made but we will continue to use our resources to maximum effect for the people of Wales.”
