Opposition parties have criticised the UK and Welsh Labour Governments following an announcement from Welsh Labour’s Cabinet Secretary for Finance.
The increase in employer National Insurance contributions means: JUST ANOTHER LABOUR COCKUP
- A £257m extra cost to the Welsh public sector each year.
- The UK Government have provided £185m, leaving a shortfall of £72m.
- The Welsh Government is providing an extra £36m to help fund the gap.
- The total funding package is £220m, covering about 85% of increased costs for Welsh public services.
Finance Secretary Drakeford said:
We’re protecting our vital public services by using £36m from our reserves to help address the National Insurance shortfall left by UK Government.
The UK Government did provide funding, but this falls short of the actual costs faced by Welsh public services, creating a multi-million-pound gap every year.
We have stepped in to help as much as we can, but the Welsh Government cannot afford to cover the entire shortfall.
Drakeford should remember
Major Financial Losses:
£155.5 million was lost to Wales due to poor account management SeneddSenedd in 2020-21, which the UK Treasury rejected when the Welsh Government requested flexibility on spending rules.
Wales failed to spend £150m during Covid Welsh Government: Taxpayers ‘let down’ after Wales failed to spend £150m during Covid | ITV News Wales which the UK Government subsequently reclaimed.
£114 million was wasted on the M4 motorway project that was never built, leaving ongoing traffic congestion issues.
M4 Bypass Land Issues: The Welsh Government bought 29 houses in preparation for the M4 relief road, including two properties for £575,000 and £400,000 in April 2019, just two months before the scheme was scrapped Welsh Government bought houses on M4 relief road route just months before scheme scrapped. The total cost was £114 million for a project that was never built.
Circuit of Wales Racing Track: This was a particularly expensive failure. More than £9 million of public money was spent on the Circuit of Wales before the Welsh Government ended its involvement Welsh Government made ‘inexplicable decisions’ around Circuit of Wales, says National Assembly committee. Later, the Welsh Government wrote off £14.9 million owed by the developers Written statement: Managing Welsh Public Money – Write off of Monies owed to the Welsh Government by the Heads of the Valley Development Company (16 July 2020) | GOV.WALES in 2020, bringing the total loss to around £24 million.
Land Sold Cheaply: Seven publicly-owned sites across North Wales were sold off to private investors on the cheap, including farmland in Bangor, a retail park in Anglesey and Wrexham industrial estate, potentially costing taxpayers millions North Wales land was sold off on the cheap in deal that cost taxpayer millions – North Wales Live.
Lisvane Land Scandal: Land in Lisvane sold for £1.8million – worth £39million WG settles ‘scandalous’ land sale case – Herald.Wales. This represents a massive loss of over £37 million to Welsh taxpayers on a single land deal.
Other “Scandalous” Land Sales: The same investigation revealed an Abergele site purchased from RIFW for £100,000, without overage, and sold for £1.9million WG settles ‘scandalous’ land sale case – Herald.Wales – meaning taxpayers lost out on nearly £1.8 million in profit that should have come back to the public purse.
20mph Speed Limit Costs: The total direct financial cost of implementing the change is estimated at £32.5 million Gearing up for 20mph speed limits – Senedd Research. However, the Welsh Conservatives claim the economic impact is much higher, stating the Welsh Government’s own Explanatory Memorandum said it would cost the Welsh economy up to £8.9 billion Welsh Conservatives bring forward Welsh Parliament vote to scrap 20mph | The Welsh Conservative Party.
The policy has been hugely unpopular – the Petitions Committee recently considered the biggest petition in Senedd history which called on the Welsh Government to scrap the policy. It attracted a record breaking 469,571 signatures The latest on 20mph speed limits.
Just in Swansea alone, the cost of implementing the change is expected to be in the region of £3m Introduction of 20mph speed limit – Swansea, which gives you an idea of the scale across all Welsh councils.
UK LABOUR’S FUNDING FAILURES LEAVE WALES £70M SHORT
The Welsh Conservatives have criticised the UK and Welsh Labour Governments following an announcement from Labour’s Cabinet Secretary for Finance.
The Welsh Government has announced its decision to allocate an additional £36 million from the Welsh Government Reserve to help cover the shortfall caused by the UK Government’s failure to fully fund the increased employer National Insurance contributions (NICs) for devolved public sector employers.
Despite receiving £185 million from the UK Government, the total cost to devolved public sector employers in Wales is estimated at £257 million, leaving a funding gap of over £70 million. The Welsh Government has stated that this additional funding will mitigate the impact on public services, but concerns remain about how this decision will affect their ability to address other financial pressures throughout the year.
Commenting, Welsh Conservative Shadow Cabinet Secretary for Finance, Sam Rowlands MS, said:
“Before the general election Labour promised that two governments working at either side of the M4 would deliver for Wales. Instead, we see a party at war with itself, with a Welsh Labour Government seemingly powerless to influence their UK counterparts.
“If Labour hadn’t squandered hundreds of millions of pounds on vanity projects and inefficiencies, this funding gap would not pose such a substantial challenge. They must also explain how they will address other financial pressures later in the year after depleting reserves to plug this shortfall.
“This situation lays bare the UK Labour Government’s disregard for Wales and Welsh Labour’s ongoing failure to competently manage its own budget.”
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