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Wales budget: NHS and roads priorities for £15bn spend Wales budget: More NHS cash but council cuts expected
(about 9 hours later)
The NHS is the top priority in Wales' "bread and butter budget" with cash for road repairs to also be announced. Health spending will rise by 7%, but core funding for Welsh local councils is likely to be cut again under ministers' new spending plans.
Finance Secretary Mark Drakeford said the Welsh Government would spend about £15bn in 2019-20. Funding for local government will fall around 2%, despite some extra money for councils to spend on social care.
Councils have warned of job losses and cuts to core services as a result of a squeeze on their funding. Outlining his £18bn budget for 2019-20, Finance Secretary Mark Drakeford said there would be no changes to the tax on buying property or income tax.
Mr Drakeford said he recognised the strain they were under, but added: "Health is always the top priority for a Labour government here in Wales." But private schools and hospitals could face higher business rates.
Councils will get more money to help pay for road repairs after a severe winter and hot summer, but Mr Drakeford did not state how much. Thanks to extra funding from Westminster and cash from reserves, the total budget has grown slightly - around 1% above inflation compared to this year.
"It will be a bread and butter budget in which I will be focused on sustaining the fabric of Welsh life during a period of real difficulty," he told BBC Wales. Nevertheless, Mr Drakeford told AMs that the "dark clouds of Brexit", "unremitting pressure on budgets" and "rising demand for services" made this "the most difficult budget yet".
Tuesday's draft budget will outline how much each government department will receive. "With less money, more demand and inflation growing we have worked hard to squeeze every penny we can for those services that matter the most to people," he said.
A more detailed breakdown of spending increases and cuts will not be available until 23 October. A full breakdown of the budget and how it impacts services will not be available until 23 October. On Tuesday Mr Drakeford only released headline figures for each Welsh Government department.
In the ninth year of austerity and with the "looming shadow of Brexit over our economic future," Mr Drakeford said ministers had tried to "squeeze every penny we can out of our budget and then to align it with the things that matter the most with the lives of people in Wales". The delay means it is not possible to say how much of the health funding will go directly into the NHS.
This will be the final budget before Carwyn Jones stands down as first minister in December, with Mr Drakeford the favourite to succeed him. The WLGA, which represents Welsh local government, warned that council social care and education services would "increasingly bear the weight of funding reductions".
It is also the first budget in which the Welsh Government has the power to vary income tax. WLGA finance spokesman Anthony Hunt said: "The challenge facing councils to keep vital local services like schools and social care running cannot be overstated.
Labour has promised not to change the tax rates before the 2021 assembly election. "If austerity doesn't end soon, public services as we know them will be a thing of the past."
Since appointing independent AM Dafydd Elis-Thomas as a minister, the government now has a majority in the assembly and no longer needs a deal with another party to get its budget through the Senedd. Around 80% of the Welsh Government's funding comes directly from Westminster in a block grant.
Health accounts for about half of the Welsh Government's day-to-day spending on public services and Mr Drakeford said the NHS "matters most to people". For the first time next year, 12% of the budget will come from income taxes collected in Wales. The rest comes from business rates and other devolved taxes.
The Welsh Government will receive extra funding as a result of UK government promises to boost the NHS budget in England, but precise figures have not been published. A decade of austerity cuts by the UK government mean next year's budget will be 5% lower in real terms than it was 10 years earlier.
That could be affected by the chancellor's budget on 29 October. Analysis
By BBC Wales political editor Felicity Evans
The budget this year is more generous than last year in real terms.
That is partly because of some extra money from the UK Treasury coming to Wales, and partly because Mr Drakeford chose to deploy some of his reserves.
Health is the big winner, with an increase of more than five per cent, but the question of how much of that will find its way to the NHS is unclear.
While it looks today like core funding for councils has been cut in real terms, there are a variety of grants and another specific spending awards which will provide additional money.
The question of how much they'll get will be clearer next week. As a senior local government source told me: "This is the overture before the opera".
In his budget statement, Mr Drakeford said he would not change the bands and rates of land transaction tax - the successor to stamp duty.
He also confirmed - as expected - that there would no change to income tax.
The Welsh Government will acquire the power to vary income tax next April, but Labour has promised not to make any changes before 2021.
In other tax changes, Mr Drakeford announced a consultation on stopping private schools and hospitals claiming charitable business rate relief.
He will also consult on exempting care leavers from paying council tax until they are 25.