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Welsh Government Unveil Draft Welsh Budget

Cyllideb i Ddiogelu Iechyd a Swyddi, Adeiladu Dyfodol Gwyrddach a Chreu Newid ar Gyfer Cymru Fwy Cyfartal.

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Finance Minister Rebecca Evans has unveiled a draft Welsh Budget with plans to invest an extra £420m for health and social services, alongside funding to protect the economy, build a greener future and create change for a more equal Wales.

In the first Budget since the pandemic, the package delivers an extra £176m for local government to support schools, social care and local services that have been critical to our response to the pandemic. The package includes a £10m boost to the Social Care Grant, which now stands at £50m, in recognition of the significant impact the pandemic has had on the sector.

Investment in affordable and social housing will grow to £200m next year, stimulating jobs and training while providing 3,500 additional new homes. The Welsh Government’s mission to end homelessness will also be boosted by an extra £40m for the Housing Support Grant.

In a difficult financial year, social housing investment will be supported by a 1% increase in the higher residential rates of Land Transaction Tax. This will mean moderately higher taxes paid on the purchase of additional properties, such as second homes and buy to let investments, will support new social housing and jobs to help Wales recover.

A targeted tax reduction will also help businesses recovering from the worst of the pandemic. Most businesses purchasing non-residential properties costing less than £225,000 won’t pay any Land Transaction Tax, as the threshold is raised by 50%.

Together these changes will generate around £13m per annum for investment in social housing priorities.

To help build a greener future, an extra £40m will be provided for modern education infrastructure, including £5m for a net-zero schools pilot and a further £5m to develop Wales’ National Forest and invest in wider biodiversity. We will also continue to decarbonise transport, boosting the funding for active travel by £20m, and providing a total investment of £274.7m in rail and metro. A further £20m will also be dedicated to tackling fuel poverty and supporting renewable energy programmes.

Over £20m has been provided to support predicted growing student numbers across sixth form and Further Education as more people stay in post-compulsory education, investing in Wales’ future, and £9.4m will support crucial community and school mental health services.

As we drive forward change for a fairer and more equal society an additional £13.4m will be provided to support children and young people, including £8.3m to take forward our flagship curriculum reform alongside targeted support for the most vulnerable. We are investing more to help workers on low incomes upskill and retrain with a £5.4m boost to the free and flexible courses offered through Personal Learning Accounts.

The Welsh Government is also today providing an initial Covid response package of £77m to provide certainty where it is most needed, including ensuring essential schemes such as free school meals and contact tracing are extended next year.

Finance Minister Rebecca Evans said:

As we plan for our first steps beyond the pandemic, this Budget is designed to protect health and our economy, build a greener future and create change for a more prosperous, more equal, and a greener Wales.

Despite the most challenging circumstances we have ever faced as a Government, I am proud to announce a budget that delivers on our values and provides sound foundations for the next administration.

While like for like funding per person in Wales remains below 2010 levels, our priorities will steer a course for stability, protecting what matters most and creating the change that is essential to a good recovery.

Commenting on the publication of Welsh Government’s draft budget, Ben Francis, FSB Wales Policy Chair, said:

There are some welcome announcements in today’s draft budget.

Committing money to the regeneration of Wales’ town centres is a vital development, as is the money allocated to the Town Centres First scheme and the £3million set aside for Wales’ high streets. However, given the huge challenge that our towns and high streets face as a result of the pandemic, we must be realistic about the question of whether more money will be needed. We welcome the commitment to creating a future for towns which focuses on them as hubs for leisure, services and more, as well as for retail purposes.

Funding for foundational economy projects will also be important and we hope to see this benefit the SMEs that are at the heart of the foundational economy in communities across Wales.

We are pleased to see the scale of Welsh Government’s ambition for decarbonisation in schools and public transport but would ask that Welsh Government extend this ambition beyond the public sector and develop a plan for how they will support businesses to play their part, given the scale and urgency of the need to decarbonise.

FSB Wales would urge Welsh Government to look at how they outline their vision for how Wales can begin the economic recovery from Coronavirus. It has become increasingly the case that businesses will have to build back from an even worse position that many of us could have imagined earlier this year – particularly those that were relying on the run-up to Christmas to keep them viable. This must be addressed as a matter of urgency in the New Year.

Similarly, we know that Brexit in whatever form it takes will pose challenges for businesses in the new year – many of whom will have to adapt to potential new trading arrangements. There are both disadvantages and opportunities that will be offered to businesses in the New Year, and we would welcome action from Welsh Government to help businesses seize these opportunities.

Businesses have rarely been in a more precarious position than they find themselves at the end of 2020, and all and any efforts Welsh Government can take to help provide a strong economic landscape in which Welsh firms can rebuild will have a huge impact.

The Welsh Government’s draft Budget 2021-22 will be published here along with associated documents.

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