Wales politics

Spending Review, George Osborne and Wales

The small print has yet to arrive, but here's the first take on George Osborne's spending round and what it means for Wales.

The chancellor said the Welsh government "resource budget" will be cut in real terms by two per cent to £13.6bn in the financial year beginning April 2015. (Treasury figures suggest it's a freeze at £13.6bn, a 1.8 per cent cut in real terms). The capital budget will rise slightly from £1.4bn to £1.5bn, a real terms increase of 0.3 per cent.

Two per cent is below the average for Whitehall departments. This is because Mr Osborne has decided - as expected - to protect health and school spending in England. The NHS takes up a large chunk of Welsh government spending.

Fans of the M4 relief road project will have to wait a little longer to find out how it will be financed. Treasury Chief Secretary Danny Alexander said yesterday the scheme was tied up with the Silk commission's proposals to give Wales tax varying and borrowing powers. The UK government had promised to deliver its response by the end of spring but has missed its own deadline.

This is what Mr Osborne told MPs: "The Welsh resource budget will be £13.6bn and we will shortly publish our response to the Silk commission on further devolution of taxation and borrowing.

"When we do so we will be able to say more about the impressive plans to improve the M4 in South Wales that my hon friend from the Vale of Glamorgan and others have been campaigning for."

It's the third time the Treasury has "announced" the M4 relief road. Before long, we may find out who's going to pay for it - and how.

In other news, the Wales office - the office of the secretary of state for Wales - will have its running costs cut by 10 per cent.

I'll have more reaction later. Expect the Welsh government to dispute the figures. Political geeks and accountants should get their anoraks out for the traditional dispute about baselines and spending plans.

UPDATE: Ministers say there will be no cut in S4C's government funding, despite widespread fears that it would have to rely on the licence fee. It will be frozen at current levels. Welsh Secretary David Jones said: "Today's announcement further reinforces this Government's commitment to a strong and independent Welsh language TV service.

"S4C has, undeniably, made an enormous contribution towards the creative industries in Wales, and crucially, to promoting the Welsh language. Indeed, it is the only Welsh language channel in the world.

"The Chancellor has recognised the importance the people of Wales place upon S4C, and has secured its funding for 2015/16.

"I am confident that the future is bright for S4C, and that it has the stability and certainty that it needs to continue to go from strength to strength."

Culture Secretary Maria Miller said: "The fact that we have been able to ensure that S4C will receive no reductions to its Government funding is a very good result.

"S4C makes a tremendous contribution to the cultural and economic life of Wales and we are pleased to be able, even in tough economic times, to continue to support minority language broadcasting in Wales."

"Maintaining the current funding level will provide the channel with the certainty it needs to continue investing in, and producing, high-quality Welsh language programmes."