15 October 2004
Health and education are the big winners at the expense of local government in the Welsh Assembly government's draft budget, provoking warnings of council tax hikes next year.
Finance Minister Sue Essex outlined a three-year package on October 11, increasing the administration's total budget from £11.8bn in the current financial year to £14.3bn in 2007/08.
The Welsh health service budget will rise from £4.58bn in 2004/05 to £4.9bn next year, £5.22bn in 2006/07, and £5.52bn in 2007/08, an increase of just over 20%. Education will fare even better, shooting up by 25% from £1.23bn in 2004/05 to £1.54bn in 2007/08.
But Welsh councils will have to make do with much more modest increases. The local government budget will rise from £3.34bn this year to £3.77bn in 2007/08, a total increase of just under 13%.
Alex Aldridge, leader of the Welsh Local Government Association, said it was a tough settlement that would leave 'significant shortfalls' in funding and pile pressure on frontline services.
'We will seek to ensure that services are maintained to current levels despite these difficult circumstances,' he said. 'While councils will seek to keep council tax to minimum levels, it would be ill-advised at this early stage to speculate on what these will be.'
Jenny Randerson, finance spokeswoman for the Liberal Democrats, predicted another year of inflation-busting council tax rises in Wales. 'What rise there is in the grants to local authorities will be more than taken up by rises in the wages bill.'
Essex made clear in her budget statement that the Assembly government's top priority is health. The administration has come in for sustained criticism over the NHS in Wales, where waiting times are substantially longer than elsewhere.
'This is a government that cares for its people and this budget is about making sure our priorities are demonstrated in our expenditure,' Essex said.
But the shadow finance minister, Plaid Cymru's Dai Lloyd, said the proposed health budget was 'poor' compared with the planned 29% rise in English spending over the same period. 'Patients on waiting lists in Wales will have to wait longer.'