9th June 2020

Environment Coronavirus: £2.4bn spending details to be revealed by ministers

Environment Coronavirus: £2.4bn spending details to be revealed by ministers


environment Principality Stadium, CardiffImage copyright
Getty Images

Image caption

The Dragon’s Heart Hospital, at the Principality Stadium, one of the UK’s biggest field hospitals

The billions of public cash being spent by the Welsh Government on tackling the coronavirus pandemic have been revealed.

A total of £2.4bn is going on healthcare, businesses, councils, transport and other services.

Most – £1.6bn – is being used to support the economy.

Welsh Government Finance Minister Rebecca Evans said ministers should be able to be allowed to raise more cash through borrowing.

Most of the cash has come from £1.8bn in extra funding from the UK Treasury.

The additional funds mean the Welsh budget for 2020-21 is now 10% larger than it was in March.

Image caption

City and town centres have largely closed as a result of the coronavirus lockdown measures

Environment How is the money being spent?

The Welsh Government said it is spending £1.7bn, including £100m on infrastructure, on measures to support the economy and protect jobs.

That includes £500m on an economic resilience fund – providing financial support to companies.

But the bulk is being spent on business rate relief – a tax paid by firms for the premises they use. More than £1bn is being distributed by councils through the tax cuts, and associated grants.

To date councils have issued £625m in 50,700 business rates grants.

Image copyright
PA Media

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The Welsh Government is spending £100m on PPE

Environment £100m allocated on protective kit

Meanwhile £763m is being spent on health and public services, including

  • £166m for emergency field hospitals
  • £100m for personal protective equipment (PPE)
  • £91m on additional NHS staffing
  • £40m to pay every care worker a one-off £500 bonus.

The Welsh Government’s contact tracing programme – designed to help ease Wales out of lockdown – has been allocated £57m.

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A total of £40m is being spent keeping trains running

Environment Cash for councils

Meanwhile councils are being given £188m through a local authority hardship fund.

That includes

  • £40m to support extra costs from adult social care
  • £40m for free school meals
  • £78m to help councils with lost income
  • £7m for temporary morgues

Councils have claimed they face a deficit of £173m through a loss of income and increased costs.

Welsh Local Government Association finance spokesperson Antony Hunt warned there was a “risk that the disease will cast its long shadow over essential local services for years to come”.

“This budget is a good start, and that partnership approach will need to continue to address the financial impacts of this pandemic,” he added.

Image caption

Lockdown has been in place in Wales since March

Environment Transport and the voluntary sector

Some £40m is being allocated to ensure the continued operation and maintenance of train services.

A total of £24m is going to help the Welsh voluntary sector, while £15m is being spent on a direct food delivery scheme for people shielding.

The extra UK treasury cash comes as a result of new spending on public services in England due to coronavirus.

An additional £256m has been found from Welsh reserves, and £245m from repurposed European funding, according to the Welsh Government’s supplementary budget.

Rhun ap Iorwerth, Plaid Cymru’s finance spokesman said ministers needed to find a “new way of doing things” as “new priorities are emerging”,

“We should have had a taste of that willingness to innovate. It’s not there.”

Image caption

Rebecca Evans said she and her colleagues should be able to borrow more cash

Environment ‘Borrowing call’

Earlier, Wales’ Finance Minister Rebecca Evans urged UK ministers to allow the Welsh Government to borrow more money to help deal with pandemic.

Under current rules the Welsh Government is able to borrow £150m a year for infrastructure, up to a limit of £1bn, and £200m a year for day-to-day spending.

Speaking at the daily Welsh Government press briefing, Ms Evans said: “Our capacity and our ability to get money to the frontline has been constrained by the rigid financial rules imposed by the UK Government”.

The minister said the Welsh Government wanted “more flexibility to help us respond to the crisis”.

She said the UK Treasury should end “the arbitrary limits on our borrowing” and also remove “the limits on the amount we can draw down from our own reserves”.

Environment ‘Decades of debt’

Responding to the minister, a UK Government spokesperson said: “An unprecedented level of financial support for Wales – more than £2.2 billion extra – has been provided by the UK Government during the coronavirus pandemic and we continue to work more closely than ever with the Welsh Government.”

Ms Evans call for more borrowing was described as dangerous by Welsh Conservative finance spokesman Nick Ramsay.

He said a “bold and innovative” budget was required but what had been presented “lacked those qualities”.

“Yes, these are unprecedented times but the call for caps on borrowing to be removed could trap Wales and its people into decades of debt,” he said.

Brexit Party Senedd leader Mark Reckless said the supplementary budget “accentuates our concern that the continuing lockdown of Wales, as England reopens, will mean income tax will rise in Wales next year thanks to devolution”.

The additional spending outlined in today’s plans is eye-watering in its scale.

The Welsh Government will spend an additional £2.46bn this year, 10% more than was planned just a few short months ago.

The bulk of the money, £1.6bn, is going on a massive package of loans and business rate relief in an attempt to ensure that businesses and jobs survive the pandemic.

The health service too receives a huge spending boost of £763m with £100m being spent on PPE equipment alone and £166m on emergency field hospitals such as Llandudno’s Ysbyty Enfys and Cardiff’s Ysbyty Calon y Ddraig.

Such is the size of the crisis though that there are fears that the additional spending still isn’t enough and that even more money will have to be found to see Wales through.


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