Welsh Government Budget promises are ‘empty words’ – Senedd committee

The Welsh Government’s proposed Budget for the next financial year is a plan riddled with ‘empty words’, says a report by the Senedd’s Finance Committee.

The report published today (3 February) is calling for urgent changes to be made to the Draft Budget as the current proposals ‘lack focus and clarity’.

The government’s spending plans will be debated in the Senedd tomorrow (4 February) giving MSs the opportunity to vote on the 2025-26 Budget for the first time.

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National Insurance 

One of the major areas of concern for the Committee is the impact of increases in employer National Insurance Contributions on organisations in Wales following the UK Government’s budget in October last year.

According to the homelessness charity Llamau the hike will cost it an additional £500,000 next year. The Marie Curie cancer charity also projected a an extra £260,000 bill in Wales alone.

The Committee was told 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.

Today’s report urges 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.

Concern at the National Insurance rise is also highlighted by five other Senedd committees as a worry for organisations in their sectors.

The Welsh Government’s financial settlement for 2025-26 was hailed by the 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’.

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Cost of living crisis

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.

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.