, Finance Committee
Welsh Government Draft Budget 2025-26: Evidence session 8
I remember devising, when I was the finance Minister last time, the capital hierarchy that we continue to use, and the capital hierarchy is simply, Sam, driven by this: that we should always use the cheapest form of capital first. So, we use the money we get…
, Finance Committee
Welsh Government Draft Budget 2025-26: Evidence session 8
Well, Chair, I really think that is a question for the Cabinet Secretary for health rather than for me. The way that I try to do this job is that I try to manage the Welsh Government's finances in the round. I try to maximise the resources available to my…
, Finance Committee
Welsh Government Draft Budget 2025-26: Evidence session 8
Chair, there's a 40 per cent increase in the capital budget available to the NHS next year in this budget. Some of that is earmarked for inescapable expenditures on IFRS [correction: on IFRS 16 lease costs] and so on, but even when you take that out, there is…
, Finance Committee
Welsh Government Draft Budget 2025-26: Evidence session 8
Well, Chair, I think my starting point would be that I agree that issues of performance and productivity are very important to us. It's a more complicated, as usual, question than it looks on the surface. When I first came to work in the Assembly, as it was…
, Finance Committee
Welsh Government Draft Budget 2025-26: Evidence session 8
The spending review that we talked about earlier is an opportunity to do a bit of that work on a more sustained basis across the budget, rather than it being done, as I say, when there’s a new piece of funding coming up and not necessarily with the depth…
, Finance Committee
Welsh Government Draft Budget 2025-26: Evidence session 8
I think the fairest answer to your question would be that we do it to varying extents. Actually, I think the local government funding formula is one of the better examples, because that is always under review. There is always work going on on different…
, Finance Committee
Welsh Government Draft Budget 2025-26: Evidence session 8
Yes, okay. Well, that is a bit more understandable and I can see how some of the money that is jointly determined in the RPBs and so on, how that might be an argument there. So, I’m very happy to have that discussion with them. I am myself interested—I’m not…
, Finance Committee
Welsh Government Draft Budget 2025-26: Evidence session 8
Well, Chair, listening to John Griffiths's question, I'm probably not surprised to hear the NHS confederation say that, because that is a closer reflection of the way in which funding in the health field is currently constructed. I think I am considerably…
, Finance Committee
Welsh Government Draft Budget 2025-26: Evidence session 8
Well, Chair, I think there are a number of ways in which it does that, and, of course, I've read all those things too, that the state of the economy may be such that future settlements will be less generous than the current one. The Chancellor did say…
, Finance Committee
Welsh Government Draft Budget 2025-26: Evidence session 8
Even there, Chair, I think the evidence is contradictory. As I say, I'm not dismissing the argument that the higher residential rate [correction: the higher rate for additional properties] might have an inhibiting effect on people in the buy-to-let market…
, Finance Committee
Welsh Government Draft Budget 2025-26: Evidence session 8
I'm much more with Mike Hedges in this argument than I probably would be with the IFS. I'm not dismissing the point they make; these things do have an impact. I don't think, myself, it's a determinative impact, and other points—Mike's point about the price of…
, Finance Committee
Welsh Government Draft Budget 2025-26: Evidence session 8
Yes, please.
, Finance Committee
Welsh Government Draft Budget 2025-26: Evidence session 8
Well, I think my first reaction is that it's a rather curious point to make in a budget where we're not doing what the Institute for Fiscal Studies complains about, because we're not increasing land transaction tax for 80 per cent of transactions in Wales…
, Finance Committee
Welsh Government Draft Budget 2025-26: Evidence session 8
Well, Chair, I thank John Griffiths for that question, because I think it points to part of the contemporary landscape that has been underappreciated in some ways. The successful way in which the Senedd has discharged the fiscal responsibilities that came our…
, Finance Committee
Welsh Government Draft Budget 2025-26: Evidence session 8
My colleagues deal with the Treasury day by day much more than me. My own impression is that the culture in the Treasury is very entrenched and that you need very determined political direction in order to shift some of that thinking. I don’t think it’s an…
, Finance Committee
Welsh Government Draft Budget 2025-26: Evidence session 8
Well, they have made it to the ears of the Treasury, because I have raised it directly, the First Minister has raised it directly. There is a UK Labour manifesto recognition that the fiscal framework is out of date and needs to be updated. I certainly myself…
, Finance Committee
Welsh Government Draft Budget 2025-26: Evidence session 8
I do understand that and, as you say, it's complicated because local authorities will have made different decisions. If you've retained more services in-house and those workers are covered by the Chancellor's definition, then you will get assistance with…
, Finance Committee
Welsh Government Draft Budget 2025-26: Evidence session 8
Well, it’s a different sort of unfairness, Chair, isn’t it? The unfairness we were talking about a moment ago is where there is money provided for public service employers within the ONS definition, which fully covers their costs in one part of the United…
, Finance Committee
Welsh Government Draft Budget 2025-26: Evidence session 8
Well, I would regard it as fundamentally unfair. The Chancellor’s guarantee was that the cost for public sector employers will be covered in full. I do not think it can be fair that that applies to one part of the United Kingdom and not another. And the risk…
, Finance Committee
Welsh Government Draft Budget 2025-26: Evidence session 8
Well, the answer to the first part of the question, Chair, is that we don't have any further certainty. We have what the Chancellor has said about that there will be help for public sector employers using the Office for National Statistics definition of what…
, Finance Committee
Welsh Government Draft Budget 2025-26: Evidence session 8
Well, we continue to use the work of the previous commissioner, which we did jointly with the finance committee some time ago, in trying to get a finer grain sense of what we mean by 'prevention'. So, you'll recall, Chair, that there was a four-layered sense…
, Finance Committee
Welsh Government Draft Budget 2025-26: Evidence session 8
I'll probably ask Emma to help, because she's been actually trying to do this. Because even with this one-year budget that we have now for next year, we have tried to draw on some of the information, particularly the information that is provided through the…
, Finance Committee
Welsh Government Draft Budget 2025-26: Evidence session 8
Absolutely. The last time we were able to do this was the last time I was the finance Minister, so it's a long time ago. But we did have a period in which we were able to offer our public service partners a three-year horizon: certainty for year 1; indicative…
, Finance Committee
Welsh Government Draft Budget 2025-26: Evidence session 8
Well, I think they do, because I think hand-to-mouth budgeting, annual budgeting, is not a comfortable experience for any of our colleagues. The Chair asked me about that process, so I'll just tell you this one bit, because I think it does help to answer a…
, Finance Committee
Welsh Government Draft Budget 2025-26: Evidence session 8
Thank you, Chair. The process is under way. I discussed with the First Minister earlier this week the next phase, which will involve all my Cabinet colleagues in a more fundamental look at the way the budget is currently dispersed, the pressures and ambitions…
