BBC BLOGS - Betsan's Blog
« Previous | Main | Next »

Oh crumbs.

Betsan Powys | 12:15 UK time, Monday, 21 June 2010

The storm clouds are gathering ahead of tomorrow's Budget - surely the most heavily trailed in history. The softening up exercise, started before the election and intensified afterwards has continued over the weekend.

But if the message of pain still hasn't come across, this morning's Financial Times has done some analysis of the impact of cuts in benefits and public sector spending across the UK.

West Wales is singled out as an area heavily dependent on the public sector and the paper warns the "existing regional distribution of public money makes it extremely difficult to avoid the cuts being concentrated in poorer areas." The FT warns that a 20 per cent cut in sectors dominated by the public services, the size of the local economy in West Wales would fall by 3.3 per cent. That's a serious hit.

So what can we expect in terms of the raw figures? Based on the projections from various think tanks and analysts, the kind of annual cash reductions in departmental spending that George Osborne is going to have to announce tomorrow are eye watering - something of the order of £16bn next year, £18bn in 2012-13, £18bn in 2013-14 and £4bn in 2014-15.

Taking into account that not all of this will be subject to Barnett consequentials (the decision to ring fence the English health budget is clearly highly significant on that front) then based on the hit the Welsh budget took from the first round of in-year cuts, the kind of potential spending reductions the Assembly Government could see, in a near-worst case scenario, are in the region of £530m next year, £590m in 2012-13, £590m in 2013-14 and £130m in 2014-15.

Some caveats there, clearly but if the Assembly Government's internal predictions are anything at all like these, then it would explain why ministers are taking their time over whether to defer the £187m in-year cuts to next year or not.


Don't expect any knee-jerk reactions on Tuesday from Welsh ministers but the Cabinet will meet in a rare Wednesday morning session at around half past eight, after which we may gain a little more information about just how bad they think things are going to get. The final figures won't come until the Comprehensive Spending Review is published in the autumn.

Talk about an in-tray for the new Assembly Government finance director, Michael Hearty, who'll take up the reins in August. His predecessors' work over the last decade has been all about slicing up a growing cake. His will be about divvying out the crumbs.

Spare him a thought on your summer holiday - and prepare for a grim, cold autumn.


or register to comment.

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.