Economy 'top priority' for £15bn Welsh government budget

Finance Minister Jane Hutt said it would be a budget for jobs and growth

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The Welsh government said it would use its £15bn budget to help the economy when it revealed its spending plans for next year.

Finance Minister Jane Hutt set out what she said was a draft budget to stimulate growth and which protected funding for health.

The Conservatives said it "snubbed" the NHS and Liberal Democrats called for more funding for the poorest pupils.

Plaid Cymru called for money for to plug a cut in council tax benefits.

'Prosperity'

Ms Hutt said: "Our number one priority is to deliver a budget for growth and jobs which will create a more prosperous Wales, by encouraging economic growth and creating and sustaining jobs."

Health, social services and children remains the biggest department with a budget of more than £6.4bn.

Start Quote

In short, the budget should go further to ensure that children's achievement at school should reflect their ability not their background”

End Quote Kirsty Williams Welsh Lib Dem leader

But its biggest item of expenditure - revenue funding for NHS delivery - is reducing by £12.1m next year.

Officials say some £11m of that is money local health boards borrowed for a central fund which helps public services invest in more efficient practices and which is now being repaid. The rest has been moved within the health department's budget.

The capital funding announced includes £40m for the next stage of dualling the A465 Heads of the Valleys road between Brynmawr and Tredegar.

Budget at a glance

  • No cuts in universal benefits, including free primary school breakfasts and free prescriptions.
  • £40m to dual the A465 Heads of the Valleys road between Brynmawr and Tredegar and £25m for improvements to the Conwy Tunnel on the A55.
  • £30m for hospital buildings, including £18m for Morriston Hospital Swansea.
  • The health, social services and children department will receive £6.4bn next year - slightly more than previously expected.
  • The Welsh government is facing real-terms cuts in funding from the Treasury. Its says that by 2014/15 its capital budget - money for infrastructure and buildings - will be will be 55% what it was in 2009/10.
  • The draft budget contains next year's spending plans and outline plans for the following year - the end of the UK government's spending review period.

Morriston Hospital in Swansea will get £18m for redevelopment.

Ms Hutt attacked the UK government for cutting funding to Wales.

After allowing for inflation the Welsh government will have £300m less to spend in real terms next year.

The Welsh government does not have the power to borrow money or raise taxes, so must rely on an annual grant from the Treasury.

The budget was delivered "against the context of the most challenging economic and financial situation that we have found ourselves in since devolution", Ms Hutt said.

'Groundhog Day'

Welsh Tory finance spokesman Paul Davies said: "It's Groundhog Day for our National Health Service. Snubbed again and still facing the toughest funding settlement in the UK.

"Hospital downgrades and closures threaten communities the length and breadth of Wales as a result of Labour's record-breaking cuts."

Ms Hutt added that Welsh Labour was "steadfast" in a commitment to universal benefits, such as free prescriptions and free breakfasts at primary schools.

Critics have attacked them because they benefit rich and poor recipients alike.

With 30 of the assembly's 60 seats, Labour will need help from opposition benches to get its budget through the assembly.

Last year's budget was passed after a deal with the Lib Dems over extra funding for the least well-off pupils.

The latest spending plans maintains the funding which provides schools with an additional £450 for every child who receives free school dinners.

But Welsh Lib Dem leader Kirsty Williams said her party could not support it in its current form.

"In short, the budget should go further to ensure that children's achievement at school should reflect their ability not their background," she said.

Plaid said money should be found to cancel out a cut in council tax benefits.

The UK government is devolving responsibility for the benefit to the Welsh government under welfare changes.

Plaid leader Leanne Wood said: "Those who receive council tax benefit are struggling financially, which is why they get help."

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