budget responsibility
Public Services

Why my New Year’s Resolution is budget responsibility

Monetary responsibility is not something that has been hardwired into our devolved government since 1999, and that’s certainly the case with some areas of our public services that have become used to spending what they have and expecting a bail out mid year writes Nick Ramsay MS.

There is a culture in Wales which has, over the past 22 years, not been built on monetary responsibility because until recently the Welsh Government hasn’t been able to raise a single penny that it spends. For a significant period of time we became used to increases in the grant to Wales with the NHS being the principal beneficiary, as regular as clockwork, until of course the financial chaos of which led to budget restraint.

Fast forward to now and for months the Welsh Government has been implementing a range of lockdown measures – everything from local authority wide lockdowns, to the nationwide lockdown that we’re living in now – all of which have had an enormous impact on the economy and our financial wellbeing. Now don’t get me wrong, we’re in the midst of a global pandemic and tough decisions need to be made – but the Welsh Government needs to take ownership of those decisions, instead of throwing shade at our colleagues across the border and asking for more and more money to justify their decisions. 

The bottom line in the past 10 years the budget has increased from £16 billion in 2010 to £20 billion in 2020. The Welsh Government accept that this is correct and the Finance Minister confirmed in her last statement to the Senedd chamber that this was true. Indeed, during the pandemic we have seen financial support from the UK Conservative Government on an eye watering scale.

Since the start of the pandemic, the UK Government has supported Wales with an extra £5.2 billion to fight Covid-19.

£5.2 billion over and above what the Welsh Government had in their own budget. This is a colossal sum of money and it’s not the only financial support that has come to Wales to back our business, jobs and prospects for recovery. The furlough support to keep people in wages and to reduce the financial pressures on businesses and the risk of unemployment rocketing has been huge. Along with the support to those who are self employed, we have seen the UK Government providing financial help to more than 50,000 Welsh businesses, and more than 80,000 people who are self-employed, totalling more than £1.2 billion in addition to the £5.2 billion extra for the Welsh Government.

Out of that £5 billon we know that the Welsh Government is sitting on at least £1.2 billion, and with the additional financial support being so generous they haven’t had to reprioritise their budget in a way that would have been needed, had the UK Government not been there with the Treasury chequebook. In fact Welsh Ministers have only reprioritised around 5% of their existing cash, and yet they are still demanding more money from the UK. 

All of this points to a significant challenge as this fifth Senedd thankfully draws to a close: how does the next Welsh Government lead the build out of the pandemic, with ideas and drive for an economy that is capable of revival and reform, and demonstrate that it can learn from its’ own response to the crisis? 

Many commentators have said that public bodies have learnt from their own experiences in taking decisions, re-prioritising work and budgets, showing creativity and pace in leading and delivering.

But what about the Welsh Government? 

What has it learnt and how will it become more accountable in the use of tax payers’ money and in how it performs to deliver what the public expect of them? 

The pandemic has shone a light, sometimes and rightly harshly, on the performance of Ministers in Cardiff Bay, in a way not seen before. If the new normal means we all have to work differently the same should apply to devolved governments too.

There is an urgent need for creativity in how public money is spent, not new taxes which will further cripple businesses and families. The focus has to be on our economy, resilient public services working together, and government setting a big ambition for the future, so that the darkness of 2020 can be eclipsed by the shining light of success.

Nick Ramsay is the Member of the Senedd for Monmouth and the Shadow Minister for Finance.

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