Opinion
What happens if the Welsh Government can't pass its budget?
Mike Hedges - MS for Swansea East
The Welsh Government has published its draft budget, currently being scrutinised by Senedd committees, which show substantial increases in budgets for all the Welsh government funded public sector, but it needs to be passed by the Senedd in order to be enacted and the money distributed.
The decision to pass or not pass the budget is decided at a full meeting of the Senedd where all members except the Presiding Officer and Deputy Presiding officer vote.
The Government need a majority to pass the budget, failure to achieve a majority means that the budget does not pass. The current Senedd numbers are Labour 29, Conservatives 16, Plaid Cymru 12 including Rhys ap Owen and the Liberal Democrats 1.
The budget has been passed previously by the Welsh Government reaching agreement with Plaid Cymru or the Liberal Democrats to abstain in the vote which involved funding their pet projects such as in the case of Plaid Cymru the building of a second Llandeilo bypass.
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Serious
Both have said publicly they will not allow the budget to pass this year. The implications of the Budget not being approved by the Senedd, are serious for all the Welsh Government funded public services in Wales.
The Senedd’s agreement of the annual Budget Motion authorises the Welsh Government and bodies directly funded by the Welsh Consolidated Fund to spend resources as specified in the Motion during the fiscal year associated with that Budget.
It also sets the limits of income that may be retained by the Welsh Government and directly funded bodies, and the amount of cash each body can draw from the Welsh Consolidated Fund.
Supplementary Budget Motions are laid in the Senedd to amend these limits within a fiscal year. And the second supplementary budget is due to be published in February allocating currently unallocated funds but usually much of this expenditure will have been committed or spent by the Welsh Government.
What happens if a Budget Motion is not passed before 1 April of the upcoming fiscal year, Section 127 of the Government of Wales Act 2006 automatically takes effect.
This would give the Welsh Government and directly funded bodies authority to spend resources, retain income, and draw cash from the Welsh Consolidated Fund of up to 75% of the limits approved in the previous fiscal year.
If a Budget Motion still has not passed by the end of July, up to 95% of the previous fiscal year limits are deemed authorised. This means that the additional funding given to Wales in the Westminster budget would not be able to be spent.
Settlement
The first Supplementary Budget Motion of 2024-25, approved by the Senedd on 22 October 2024, contains the current authorised limits.
It is intended that these will be revised in the forthcoming second Supplementary Budget, which will be published next month. If the second supplementary Budget Motion is not approved by the Senedd, the limits from the first Supplementary Budget Motion continue to apply.
Local authorities and council tax budgets are based on figures expected from the Welsh Government as set out in the Draft Budget and provisional local government settlement.
What are the options remembering the Conservatives always vote against the Welsh government budget. Plaid Cymru get several hundred million pounds for their pet projects and abstain. This is not money for which there is no use or need but it allows the budget to be passed.
Agreement is made with Jane Dodds to abstain, but this will only work if all Labour members are able to be present.
If an agreement cannot be made, we either provide less money than this year or the solution, I prefer is to call an election rather than not use the additional money provided by Westminster.
Prior to an election the Senedd needs to agree minimum payments to publicly funded bodies and to then complete the budget after the election. The election will be based on the current constituencies and regions not on the new constituencies being produced for Senedd reform.
The incoming Government post-election will then be able to produce a new budget and put that to the Senedd if that fails then we cannot keep having elections so compromise with be necessary to pass a budget.
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