(Title Image: BBC Wales)
Spending & Borrowing Plans
Amongst the big winners are the Communities department (housing etc.) which has seen a big boost to capital and revenue budget – likely to go on housebuilding – while Health spending has largely held up as well. Both departments are the only ones to have seen a “real terms” (costings after inflation has been taken into account) increase in their budgets.
The line-by-line budget proposals won’t be released until October 24th, so we won’t get a better idea of who the winners and losers are until then.
The Welsh Government intend to borrow just under £375million over the next three financial years to support capital spending, including commitments towards building 20,000 new homes and a new rail station at Llanwern.
The full budget narrative is available here (pdf).
For the first time ever, a Welsh budget will include tax measures following the devolution of a certain number of them, some of which will start being collected by the Welsh Revenue Authority from April 2018 (income tax is due to be partially-devolved from 2019).
Firstly, Land Transaction Tax (formerly known as Stamp Duty). The threshold on which a homebuyer has to pay the tax has been raised from £125,000 to £150,000, while home sales with a value of over £400,000 will be liable to a higher rate of tax.
Secondly, Landfill Disposal Tax – which is broadly being kept in line with England, but with an additional punitive rate of £133.45 per tonne introduced for unauthorised disposals such as fly-tipping.
In total, the Welsh Government expects to raise £294million in 2018-19 from the two taxes.
Meanwhile, there were four proposals for new taxes including: a social care levy, a vacant land tax, a disposable plastics tax and a tourism tax. One of those four will go forward in order to receive a UK Government OK some time in 2018.
Labour & Plaid Cymru strike £210million two-year deal
A deal between Labour and Plaid Cymru was announced last Sunday, worth a total of £210million over two years – £50million of which will go towards continuing commitments from the previous budget deal. Some of the specifics include (pdf):
- Health – £40million towards (general) mental health; re-establishment of mental health services in Wales for new mothers; £14million to improve undergraduate medical training in north Wales.
- Economy & Infrastructure – £30million towards a new power station at Port Talbot steelworks; £15million towards improvements on the A487 and A470; £2million to scrap the Cleddau bridge tolls by 2020; £3million towards designing a third Menai crossing; £2million towards electric charging points.
- Culture – £10million investment in the Welsh language; £2million towards school music programmes; £5million towards the creation of a National Art Museum as well as a football museum located in north Wales.
- Social Justice – Reversal of planned £10million cuts to the Supporting People programme.
Although the budget still needs to be scrutinised by the Finance Committee and others, passing the final budget – usually tabled in December – is just a formality; though Plaid have hinted this may be the final deal between the two parties this term.