An extra £1.5bn to strengthen public services, support small
businesses and drive economic growth is at the heart of the Welsh
Government's Draft Budget 2025-26.
All government departments will receive increases in revenue and
capital funding, marking a significant contrast from previous
budgetary constraints.
Capital spending plans will exceed £3bn for the first time at the
Draft Budget stage, enabling substantial investments in the
school estate, NHS infrastructure, housing and public transport.
Cabinet Secretary for Finance Minister said:
“This is budget for a brighter future, delivering an extra £1.5bn
for our public services and priorities, helping to put Wales
firmly back on the path of growth after 14 difficult years. This
is in stark contrast to the last couple of years when we have
been forced to make some very difficult and painful decisions.
“This Draft Budget offers a real opportunity to start to rebuild
and reinvigorate our public services. It delivers increases to
all departments and a significant boost in capital funding,
meaning more investment in the very fabric of our nation – in our
school and NHS estate, in housing and in public infrastructure.
“This is good budget for Wales. But it will take time to reverse
the damage inflicted on Wales over 14 long years of neglect from
previous UK administrations.”
The Draft Budget demonstrates the Welsh Government's commitment
to invest in the areas which matter most to people – supporting
the NHS; in jobs and growth, providing opportunities for
families, and connecting communities.
It includes:
- More than £600m in extra revenue and capital funding for
health and social care, which will help the NHS continue to cut
the longest waiting times, improve mental health services, and
strengthen women's health services.
- Additional funding to repair and monitor coal tips on the
same day new legislation to improve disused coal tip safety is
introduced in the Senedd.
- £81m more capital funding to build more homes for social
rent, helping to reduce homelessness and ensure everyone in Wales
has a place to call home.
- More than £100m more for the education budget and a 4.3%
increase in the local government settlement, which will help fund
schools, social care and the other services we rely on.
- £181.6m to improve rail services, including transforming the
Core Valley Lines from a Victorian-era railway to a
state-of-the-art Metro network.
- £3.7 million to accelerate planning decisions and digitise
planning services.
- Two new funds to maintain Wales' road network – fixing
potholes and repairing defects.
To support Welsh businesses, the non-domestic rates multiplier
will be capped at 1% for 2025-26 and retail, leisure and
hospitality businesses will continue to receive 40% relief
towards their bills. In total £335m will be spent on non-domestic
rates support in 2025-26.
Welsh Rates of Income Tax will remain unchanged – Welsh income
taxpayers will continue to pay the same rates as people in
England and Northern Ireland.
But the Draft Budget does include a number of other tax measures,
which will raise funding to support businesses and public
services and help support Wales' ambitions to recycle more waste.
From 11 December 2024, the higher residential rates of Land
Transaction Tax applying to purchases of additional residential
properties will increase by 1%, raising an estimated additional
£7m in 2025-26. This change is broadly in line with changes made
to Stamp Duty Land Tax in England and Northern Ireland.
The standard rate of Landfill Disposal Tax will rise to £126 and
to £6.30 per tonne for the lower rate to help reduce the amount
of waste sent to landfill and encourage more recycling.
The Cabinet Secretary added:
"This budget shows the power of two governments, which share the
same values, working together.”
The Draft Budget will be scrutinised by Members of the Senedd
before a final vote in March 2025.
Notes to editors
The draft Budget 2025-26 was published at 1pm on 10 December
2024.
Increased investment - Allocations
by portfolios
Health, Social Care and Early
Years receives an additional £435m
revenue funding (3.8%) and
£175m of capital funding
(39.9%)
Housing and local government – receives an
additional £279.9m revenue funding
(5.4%) and £120m of capital
funding (11.2%)
Education – receives an additional
£83.6m revenue funding (4.9%)
and £28m of capital funding
(8.1%)
Transport – receives an additional
£69.6m revenue funding (12%)
and £51m of capital funding
(10.7%)
Climate Change and Rural Affairs– receives an
additional £36.35m revenue funding
(6.6%) and £71.95 of capital
funding (31%)
Economy, Energy & Planning – receives an
additional £19m revenue funding
(4.3%) and £121.5m of capital
funding (59.1%)
Social Justice – receives an additional
£6.8m revenue funding
(4.7%) and £3m
of capital funding (23%)
Every department will benefit from an increase in revenue of 3.5%
to 12%.
Further details available at https://www.gov.wales/draft-budget-2025-2026
