6 hours Ago By Dylan Davies
The Welsh Government’s proposed Budget for the next financial year is a plan riddled with ‘empty words’, says the Senedd’s Finance Committee. Monday's report is calling for urgent changes to be made to the Draft Budget as the current proposals ‘lack focus and clarity’. The spending plans will be debated in the Senedd tomorrow, 4 February, where politicians will also vote on the 2025-26 Budget for the first time.
One of the major areas of concern for the Committee is the impact of increases in employer National Insurance Contributions on organisations in Wales. Homelessness charity Llamau stated that the increase will cost it an additional £500,000 next year and Marie Curie also explained it was facing an extra £260,000 bill in Wales alone. A number of bodies warned the Committee that they faced a ‘cliff-edge scenario’ if additional support is not provided.
The committee also heard that Wales could be disproportionately affected by the National Insurance increases as the changes have a bigger effect on lower paid workers and Wales tends to have more workers on low wages compared to the UK average. The report calls on the Welsh Government to publicise the funding they will receive from the Treasury to lessen the impact of the increase and also to commit to pass this money on to local authorities. The National Insurance rise is not only brought up as a concern by the Finance Committee but is also highlighted by five other Senedd committees as a worry for organisations in their sectors.
“These (National Insurance Contribution) costs and its compounding nature is likely to have a devastating impact on both the third and social care sector” The Welsh Government’s financial settlement for 2025-26 was hailed by the UK Chancellor of the Exchequer as the “largest real terms funding increase since devolution”. It promised “optimism” and a “brighter future”, very different from the language of austerity in previous years. But the Committee finds that the Welsh Government’s spending proposals doesn’t match this rhetoric - and in many areas they are nothing more than ‘empty words’.
The Committee also heard evidence that the cost of living crisis has not gone away and it is now entrenched in the daily lives of many across Wales. Instead of moving away from providing support to people struggling to make ends meet, the Welsh Government should prioritise it, according to the Committee. The Baby Bundle scheme, which supports families of young children under financial pressure by providing items such as baby clothes and changing mats, is an example of a programme which should be available across Wales, say the Committee, not just in selected areas.
“far from the cost-of-living crisis being over ...
we actually think it's getting more entrenched into the conditions that people face” Peredur Owen Griffiths, Chair of the Finance Committee, said, “Over the past few weeks, this Committee and several others have heard from experts that the Budget plans for this year will not provide adequate levels of support for critical services in Wales. “The National Insurance rise for employers was cited as a major worry by many organisations, like those who work in social care, with some saying that it might even lead to their closure. “We know that the cost of living challenges that many people face haven’t gone away and our message to the Welsh Government is clear: now is not the time to be cutting back on supporting vulnerable people.
“Today’s report outlines serious concerns about the proposed Budget and provides clear recommendations for the Welsh Government to consider. If the upcoming Budget is meant to signal a new start and a break from austerity, unfortunately there’s quite some work still to do.” Over the coming weeks, the Welsh Government will consider the Committee’s report on the Budget before a Final Budget Debate and vote in the Senedd on 4 March.
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