Spending cuts loom if Drakeford budget falls in Senedd

https://www.bbc.com/news/articles/c397krk2g77o

Version 4 of 8.

Former first minister Mark Drakeford is the Welsh government's current finance secretary

Public services have been told to expect big cuts if Finance Secretary Mark Drakeford cannot convince political opponents to support the budget he starts publishing on Tuesday.

The Labour government cannot pass a budget alone because it does not have enough Senedd members to win crucial votes.

The Conservatives have offered to hold talks on a deal that would scrap a tax paid when buying a home.

Worth more than £27bn, the budget contains spending plans for services from hospitals to bin collections.

'Deal possible'

Welsh Conservatives leader Darren Millar said a budget agreement "may be possible" if the government considered scrapping Wales's version of stamp duty, called land transaction tax, for people buying their main home.

"We want to see changes to the Welsh government's budget and that's why we're saying if they are prepared to have that conversation about scrapping stamp duty then we are prepared to sit down with them and explore whether a deal might be possible," he told BBC Radio Wales Breakfast.

This budget will be inherited by the winner of next year's Senedd election.

Drakeford has said he does not want to tie the hands of the next Welsh government.

He has promised a budget designed to minimise political wrangling, but negotiations with other parties are inevitable.

The result of the Caerphilly by-election this month could make the political arithmetic even more challenging for Labour.

First Minister Eluned Morgan says she expects the budget that finally gets through the Senedd in the spring to be very different from Tuesday's first outline draft.

Minority government

Labour cannot win votes alone, having held exactly half of the seats of the Senedd prior to the death of Caerphilly's Hefin David.

The party has never won an outright majority in a Senedd election, so has almost always relied on other parties' help to pass budgets.

Last year, the two biggest opposition parties – the Conservatives and Plaid Cymru – voted against the budget.

Drakeford struck a deal with Liberal Democrat MS Jane Dodds to get the budget through.

But her single vote will not be enough if Labour loses the Caerphilly by-election.

'Mass redundancies'

On Tuesday, Drakeford will allot money for government departments for 2026-27.

A detailed breakdown, with spreadsheets showing funding for public services, will follow on 3 November.

Weeks of lobbying and scrutiny will follow - and in the meantime Chancellor Rachel Reeves will publish her budget. Most of the Welsh government's funding comes from her.

A vote on the final budget is due on 27 January.

If the budget does not pass by the start of the financial year in April the government is only allowed to spend 75% of last year's budget.

The first minister has warned that will require big cuts, leading to "mass redundancies" in the public sector.

The spending limit rises to 95% if a budget still has not been passed by the end of July.

A government can table a budget vote during the financial year, so it could try again after 1 April.

Labour's options

The Tories have been seen as unlikely budget partners for Labour, but Millar wrote to Morgan on Tuesday offering talks as a "responsible opposition".

Plaid Cymru has not closed the door on talking to the government, but the party's leader, Rhun ap Iorwerth, has said, "it's Labour's budget".

On Tuesday his finance spokesperson Heledd Fychan said Labour had "clearly run out of steam... they're not putting forward a budget that shows ambition for Wales".

A spokesperson for Dodds said she recognised what was at stake for public services.

"That means Jane is ready to listen and work with other parties, something that neither the Conservatives nor Plaid Cymru were willing to do in the last budget," they said.

Reform, which has one MS after the defection of Laura Ann Jones, said it would not support a budget that continues to fund the Nation of Sanctuary policy.

Full list of candidates

The full list of candidates for the Caerphilly by-election are:

Liberal Democrats: Steve Aicheler

Gwlad: Anthony Cook

Greens: Gareth Hughes

Conservatives: Gareth Potter

Reform: Llyr Powell

UKIP: Roger Quilliam

Labour: Richard Tunnicliffe

Plaid Cymru: Lindsay Whittle

You can find out more about the candidates here.

BBC Wales is holding a live debate for the candidates of the Caerphilly by-election on 15 October. Click below to apply to be in the audience.