Spending Review 2015 – What it means for Wales
There is no economic security, there is no national security and there is no opportunity, when you lose control of the public finances. It is only when you control spending, and live within your means, that you can build a country with security and opportunity at its heart.
This Spending Review clearly demonstrates the UK Governments commitment to Wales. It delivers economic security so Britain lives within its means, financial security for families in Wales, and national security for all.
Delivering on a commitment to a funding floor, increasing Wales’ capital expenditure and empowering the Welsh Assembly with income tax raising powers, Wales can now finally take its place alongside other mature legislatures by being accountable fiscally to the people it serves.
What does the Spending Review mean for Wales?
- The Welsh Government have been cushioned from the cuts that other Government Departments are facing. The Welsh Government Resource Budget is set to increase in cash terms from £12.9bn in 2015/15 to £13.3bn in 2019/20 – representing a 4.5% cut over the course of the Parliament.
- Capital Spending has increased significantly more for the Welsh Government than other devolved nations. Capital funding has increased by £900 million - a 16.9% rise - to support investment projects that matter to the Welsh economy. This is proportionately greater than Scotland and Northern Ireland (14% and 12% respectively).
- Delivering on the St David’s Day commitment, Wales will receive a “historic funding floor” to protect Welsh relative funding for the very first time. The Floor will be set in line with the Holtham Commissions “fair funding” at a rate of 115% of comparable English funding. This means for every £100 spend in England £115 is spent in Wales on devolved services.
- The need for a referendum on a Welsh Rate of Income Tax to be called has been removed. This gives the Welsh Government the power to raise a portion of the money that it spends to get on with the job of growing the Welsh economy whilst simultaneously making it more accountable to the people of Wales. This power for Wales to raise its own income comes alongside the future devolution of Stamp Duty Land Tax and Landfill Tax.
- The UK Government have reaffirmed that the Welsh Government will be able to borrow up to £500million for capital spending, starting in 2018, with early access to these borrowing powers to support the delivery of the M4 relief road.
- The government is working with the Cardiff Capital Region and the Welsh Government to support the delivery of an ambitious City Deal for Cardiff. The Chancellor has committed to support a new infrastructure fund for the Cardiff City Region delivering much needed connectivity and transport infrastructure for the region.
- The Welsh Government needs to match the ambition of the UK Government and move the debate onto the issues that matter. We want to see them use these new fiscal powers to grow the Welsh economy, improve public services and deliver improved productivity and greater growth.