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Opinion

What happens if the Welsh Government can't pass its budget?

By Emily Price
Senedd Members in the Chamber - Image: Senedd Cymru

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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20 comments

Evan Aled Bayton

They should negotiate a budget acceptable to a majority who will pass it. This would involve behind the scenes negotiations before presenting it to the chamber. The role of the Parliament is to get things done.

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Rob Pountney

Disingenuous and threatening (again), being able to pass a budget (or not) is a confidence issue, as such the administration must fall and new elections called, this is just the latest attempt in a campaign of intimidation...

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hdavies15

Has this government ever had the confidence of the electorate ? Shuffling around moaning about lack of funds then come a change at Westminster and they change their tune. Bunch of lightweights clutching at straws. And the Opposition parties are no better.

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Mab Meirion

Senedd Pods: works every time...

Reply

In reply to Mab Meirion

Mab Meirion

World leaders visit Auschwitz...it does not bear thinking about, the clouds gather...

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Bill

The Welsh Cons are toast if an election happens now. For another year to try and turn their fortunes around they could surprise every and do a deal. What might they ask for? 🤔

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Ernie The Smallholder

The advantage of having an election now is it will be held using the current system of Proportional Representation by additional members, thus giving the people the opportunity to vote for their individual Senedd member by name FPTP and then additional party members by party lists. If the election produces a Plaid Cymru plus Liberal democrat majority then we can also change the electoral system to the more democratic Single Transferable Vote System for 2026, which is what should have been before labour removed the right of the electorate to choose their individual candidates.

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Bill

Perhaps the only Lib Dem will demand STV in return for supporting the budget.

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Brychan

The Plaid Cymru vision for publish spending in Wales is not 'pet projects' as this washed up MS claims. It's a complete rejection of Labours priorities. As Plaid Cymru is aiming to form the next government of Wales it's important to bin the Labour budget. This can involve a subsequent vote of no confidence in the First Minister and if a new one does not command the confidence of the chamber, the calling of a national election. Whilst Labour have had more leaders in Wales than Cardiff City have had managers, it's time to clip the wings of all Labour MSs and this is a prelude to them being thrown from office. Every farm, every valley and every town in Wales expects.

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John

Remember in 2011 when labour couldn't pass the budget. Plaid then negotiated funding for a science park to be built in Anglesey, which the the former Ynys Mon MS was appointed to as chief exec on a 6 figure salary. Crazy way to do politics

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Brychan

That's not true. The 2011 budget was a LibDem and Labour deal. Kirsty Williams and Carwyn Jones. Be remined that for every Reform fakey there's Cymro on hand to debunk.   https://www.bbc.co.uk/news/uk-wales-politics-15891842 Ieuan Wyn Jones did not become a director of the Menai Science Park until he left the Senedd in 2013 and was not conditional on anything. 

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John

Sorry it was the 2012 budget then. A lawyer in charge of a science park?! No, nothing funny about that

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Brian Coman

If the budget fails then we should tell the Welsh Labour Party representatives to get on their bikes. Oh I forgot ! not a single one of them ride to work (some live quite near) but prefer chauffeurs and their own cars, and that not Active Travel is it ?

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Steve George

Oh Mike, it is so good to have your wise and wholly unbiased explanation of what would happen! I'm sure your views have nothing to do with party political advantage! On the other hand, given that up to 95% of previous years' expenditure can carry on as before, all the budget provisions really do is provide a necessary concentration of minds so that a Government with no majority (like now) have time to bring forward alternative budget proposals that might be able to command a majority. Apart from the froth of political reporting most of us would notice no difference while alternative proposals were being formulated. Mike's 'solution' is an extraordinary general election. Notwithstanding that this would require a higher benchmark of a two thirds majority to bring about, how would this solve anything? There is no realistic scenario in which Labour wins an outright majority. So we would simply return to the status quo ante, with even less chance of getting an agreed budget through, barring a formal coalition. Of course, what Mike is really arguing for, but is too cowardly to make the case openly, is that the new election system to be used for the next scheduled Senedd election should be scrapped and an election held under the current system. This is for naked party political reasons as the Labour Party comes to realise that there is a genuine threat that it could lose power in Wales under the new election system. And the whole argument of course is based on the sand that, for the first time in history, the Lib Dems won't be open to whatever small bribes the Labour Government can provide. Here's what's really going to happen. The budget will pass because Jane Dodds will abstain or vote for it claiming some huge (but actually vanishingly small) victory for some of her rural constituents. She will of course be doing this, not out of any love of the politics of pork barrels, but because of the supposedly dire consequences if she doesn't act 'responsibly' by voting for it. I may be wrong, but we shall see.

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Simon

A bully boy approach and threats to what may occur if the budget isn’t past. The hubris! This article places before the reader why the “Welsh” Labour Party must have its budget voted down. It’s why all opposition parties must force an early election. Cymru needs a coalition/alliance of parties who push back at Westminster. A government standing up for the citizens of Wales. It is no good pretending that the settlement between London and Cardiff can perpetuate. Taxes, profits from companies operating in Wales, Crown Estate money, all of this must be collected and retained within our nation - Cymru. Wales needs a government of radical reform made up of people who think for the future, with ambition, and not in the frame of last century’s political and economic structures.

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mike hedges

I wish people would read the article before commenting. The point I was making is that if we do not pass the budget then we have an election. Personally I would prefer an election but that is not the view of the Labour party.

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Brychan

Well said Mike. Is the 'don't risk an election' the view of the Labour Party in Cardiff or the view of the Labour Party in London?

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Y Cymro

Welsh Labour's time in the spotlight is coming to an end. If the budget isn't passed for whatever reason will have to call an early Senedd election. FM Eluned Morgan has failed miserably to persuade UK Labour to give us our HS2 consequential, or challenged Rachael Reeves & WS Jo Stevens how can billions be found to fund Heathrow's third runway but there was no money in the pot to give Wales the billions owed that's rightfully ours? There's zero mention of powers requested by Welsh Labour such as policing , criminal & youth Justice pledged in numerous Senedd manifestos over the years. Even the simple right to create a bank holiday to celebrate Saint David's Day enjoyed by Scotland & NI they are silent on. No movement. Nothing? I assumed Welsh Labour promised to fight for Wales not bend over and touch their toes in submission. Those critics'are right. Labour fails Wales. It's nearly 25 years of devolution and we have squandered any opportunity to move forward as a country because they have an agenda. To limit Senedd power and national ambition, so creates apathy and indifference where most normal countries citizens would be lining the streets protesting for 1% of what injustices Wales has faced over the years under Westminster chokehold. Look at it this way. We are like a prisoner chained to a wall. One day the door is left open. We step outside into the fresh air only to be dragged kicking and screaming back to the start by those self-serving Labour & Conservative unionist prison guards who largely live in England, receive golden pensions , peerages for their loyal serving to the English state, where we in Wales languish on benefits in a perpetual state of poverty. I want better for Wales. So should you.

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Brychan

She lied about communication the need for HS2 consequential. That's a signed letter on Welsh Government headed notepaper. Not a slight mention while sipping latte with Jo on the pavement outside Ty Gwydyr in London. 

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Karen

They have just slashed the funding for apprenticeships throwing so many onto the scrap heap. Is it any wonder that Wales is the poverty struck nation when they cut funding for people to better themselves and better their employment. Definitely not people first just politicians.

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Senedd Pods: works every time...

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