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The details provided so far are limited and there are areas where clarification is needed. Nevertheless, the figures Treasury provided so far, indicate that the proposed cut to the Welsh budget is £187 million, although this is partly offset by £24 million in positive consequentials from additional spending in some areas. This is equivalent to around 1% of our total budget.
The Welsh Assembly Government has made it clear that we will be responsible partners in contributing to the reduction of the deficit over coming years. Wales will play its part in the difficult adjustments that need to be made.
But we have also made clear that if public expenditure is cut too early then we risk jeopardising the economic recovery. The deficit needs to be reduced – but only as quickly as it can without threatening the recovery and without incurring massive damage to public services.
Since the Assembly Government was established, we have maintained a focus on achieving efficient services to deliver for the people of Wales in the most effective way possible.
For some time we have flagged up the economic challenges we face, the prospects of reduced budgets and have made significant changes to ensure that we are structured to deliver more efficiently.
To give this work an added pan-public service dimension, we established early this year the Wales Efficiency and Innovation Board, which I chair. It is pleasing to see that the Chancellor announced yesterday that he is following our initiative and will be setting up a similar Group
The Board is driving a national programme to transform operational efficiency, catalyse innovation in the way that public services are designed and delivered, and promote collaboration. This will build on the Team Wales approach adopted by the Economic Summits which has helped Wales through the recession.
It is only through this sort of innovative, collaborative approach that we will be able to manage through the next few years without damaging the public services that so many in Wales rely on.
We have also led the way in other matters that the Chancellor is now extolling, for example, we merged our larger arms-length bodies – our ‘quangos’ – into the Welsh Assembly in recent years.
We have already made changes to ensure that we are using our offices across Wales in the most cost-effective way possible, by co-locating with partner organisations as appropriate.
And we have already taken firm action to limit civil service recruitment and bear down on all areas of administrative spend, including reducing consultancy, travel and allowance costs.
I am pleased to see that the UK Government is now following our lead on this. But these are savings we are already making in Wales and the scope for administrative savings in Wales is simply not the same as it is in England. This is something which the new UK Government has not taken into account when deciding the size of the cuts imposed on us.
If we are to protect services to the best of our ability over the next few years, whilst managing with less resources, then we need to undertake careful preparation and all parts of the Welsh public service must work together to shape our response.
Despite the cuts announced yesterday, the Assembly Government will not be rushing into knee jerk, unplanned reductions in budgets which could damage public services and threaten the recovery. In the current year, we are already managing a budget which is reducing in real terms. Taking out an additional 1% – six months after budgets were agreed by the Assembly and service delivery across Wales is well underway – without damaging services, would be very challenging.
The Chancellor has offered us the opportunity to defer some or all of the cuts until next year. But before we decide on our approach, we need further details from the Treasury. We need greater clarity in three areas.
First, we need to know the capital / revenue split of the cuts. Treasury have indicated it will be up to two weeks before they have enough information about where the cuts in England are being found to give us this split. Clearly knowing whether we need to make reductions in capital or revenue budgets is an important factor in determining our response.
Second, we need to secure the flexibility to transfer savings made this year into next year via end-year flexibility (EYF). If Treasury will guarantee access to EYF, that will help us plan more effectively.
Third, we need more information about the size of the budget reductions we are likely to see in the Autumn CSR. If the reductions we will be subject to next year turn out to be bigger than our current planning assumptions, deferring the £187m cuts to next year may not be helpful.
Also, we seem to have been given a consequential of cuts in the Olympics budget. As Members will be very well aware, Wales did not receive consequentials from the Olympics budget when it was established in the last CSR. Clearly we should not be subject to cuts from budgets we didn’t receive in the first place.
I will be having an initial discussion on these, and other issues, with the Chief Secretary later this week and having a more detailed meeting with him in London on the 9th of June to press our case.
The other key issue I will be raising with the Chief Secretary is fair funding for Wales.
The publication of the first report of the Holtham Commission in July 2009 followed by its unanimous acceptance in the Assembly last Autumn, provided clear evidence that Wales is already being underfunded by around £300 million annually, and that the relative underfunding is increasing over time.
Not only Gerry Holtham and his team but many other acknowledged experts have reported that the Barnett Formula is not fit-for-purpose. It is unfair to Wales and should be replaced with a new needs-based formula to ensure fairer funding. Reform of Barnett will take time. But my immediate concern is to ensure that Wales does not become further disadvantaged.
There are a number of smaller steps that the UK Government could take now to move towards fairer funding for Wales. So I will continue to press for immediate implementation of a floor to prevent Wales becoming even more under-funded than we currently are. I will also continue to press for the flexibilities, for example in the utilisation of EYF, we need to manage our finances effectively.
This Government is committed to taking a responsible approach to reducing the deficit over the coming years. Wales will play its part and consider the most responsible way to achieve this. Reductions in budgets need to be properly planned and managed and most clearly, action needs to be taken to deliver fair funding for Wales.
http://wales.gov.uk/newsroom/businessandeconomy/2010/100525spending/?lan...
Health and local government must work together better to address the financial squeeze
Speaking at the second Public Services Summit, Mrs Hart said that between £1.1 billion and £1.9 billion may have to be saved by the health service over the next five years because of the financial squeeze.
But she added that over the last four years NHS Wales has already saved around £850 million and the foundations were in place to deliver both greater savings and raise the quality of patient care at the same time.
Mrs Hart said:
“Last year alone NHS Wales achieved savings of over £200 million, through measures such as reducing the length of time patients stay in hospital and reducing unnecessary admissions.
“This year we have an unprecedented target of savings £435 million – about eight per cent of the NHS budget. That means we must move further and faster to deliver the extra savings required.”
Mrs Hart said the new NHS structure, with single health organisations delivering the full range of health services, meant the building blocks were in place for delivering more savings.
But the challenge of caring for a rapidly increasing elderly population in particular meant better joint working between the NHS and local government was crucial.
She said:
“The ageing population presents a range of challenges to which the health care system must respond. By 2031 people aged between 60 and 75 will have increased by a quarter and those over 75 will have increased by 75 per cent.
“The next fundamental stage is therefore a rebalancing of care so that more services are delivered in the community closer to people’s homes.
“We absolutely want to avoid people getting stuck in beds when they should never have been admitted in the first place, and we don’t want to see people discharged without proper recovery and then becoming significantly greater social care costs than they might otherwise have been.
“We therefore need to keep delayed transfers and continuing healthcare in our sights as measures of our effectiveness in serving the citizen first.
“Delayed transfers are terribly costly in simple human terms, but also in the pure financial sense. We estimate that delays are costing NHS Wales an average cost of £30 million a year – that’s £30 million of avoidable cost if we can improve connections between primary, community and secondary care.
“Savings of this size cannot be sustained without creating integrated services and strong partnerships – this can only be done if the NHS and local government in Wales work together to share the challenges and solutions.
“We must avoid the sort of cost shunting that might happen at the complex interfaces of our services.”
Mrs Hart pointed to examples of where joined-up services have already started to deliver, such as the integration of health and social care services in Carmarthenshire following the local authority and health board’s work on community services, where a single point of access for citizens, fully integrated assessments and integrated frontline teams are in place.
Mrs Hart also visited the Wrexham Frailty Fast Track Project yesterday which helps older and frail patients through the hospital care system as quickly as possible so they can return to their own home promptly.
Mrs Hart said that the emphasis will move from a target-based culture to one which places quality of care first:
“I believe that there is nothing more important than focusing on the citizen experience of our services – we sometimes worry too much about technical measures and miss how our people are actually treated by the services they receive. I am absolutely sure that if we focus hard on the citizen we can improve the efficiency of our services.
“We may have become too target driven, rather than listening to what citizens want and need. People and their families often have a view about the pace of treatment they wish to receive – and we should be alive to this.”
http://wales.gov.uk/newsroom/healthandsocialcare/2010/100702squeeze/;jsessionid=67lGMn2Ttqn6C8Hh3vjfzpZ2MJ1GvqJDR963wzb8w1QzfwHFm90r!603849836?lang=en&status=closed
NHS executives redeployed in Wales' health service reorganisation are having their salaries protected for up to 10 years, it has emerged.
South Wales Central AM Chris Franks, who wants a review, discovered 122 staff found new jobs in the revamp.
He said in the financial climate it was "impossible to justify" protecting £50,000-a-year executive pay.
The assembly government said the policy was to ensure the NHS kept "valuable knowledge, skills and experience".
The reorganisation last year saw the number of NHS trusts and local health boards in Wales, each with a board of directors, cut from 32 to seven local health boards and three NHS trusts.
More plans to reduce the number of councillors in Wales have been put forward to create what supporters say would be greater fairness for voters.
Boundary commissioners' final proposals for Anglesey, Denbighshire, Neath Port Talbot, Newport and draft plans for Bridgend would cut the total by 21.
The aim is that councillors represent roughly the same number of electors.
To read more http://www.bbc.co.uk/news/uk-wales-11187501
The interim managing director brought in to run a crisis-hit local authority is to stay on in the £270,000 a year job for the foreseeable future.
David Bowles was appointed head of Anglesey council last year, initially for 12 months.
The appointment followed an auditor general's report saying the council had "serious persistent problems".
The Welsh Assembly Government has now confirmed Mr Bowles will continue in the role.
To read more http://www.bbc.co.uk/news/uk-wales-north-east-wales-11181386
The Welsh NHS faces making £380m worth of cutbacks by April next year, with managers saying it is the biggest challenge they have faced in 20 years.
BBC
Wales research shows savings targets have been imposed on staff pay and changes made to hospital services to reduce costs this financial year.
More cuts may be necessary depending on the outcome of the UK Government's public spending review in October.
The assembly government said the review was "profoundly important for Wales".
Some health boards predict fundamental changes to reduce costs.
Some have already imposed "rigorous vacancy controls" and said there would be "fundamental service reconfiguration" in years to come.
One health board document warns that "tension will increase" between what patients will expect and what the NHS can provide.
The largest health organisation in Wales, Betsi Cadwaladr University Health Board has an annual budget of over one billion pounds, but faces a savings target of more than £70m in 2010-11.
"I wouldn't pretend that its easy, but there are opportunities." says vice-chair Dr Lyndon Miles.
To read more http://www.bbc.co.uk/news/uk-wales-11179926
Welsh local authorities are predicting a budget shortfall of £609m over the next three years as public finances are squeezed.
Figures obtained by BBC Wales show that authorities are planning for cuts of between 5% and 20% to their budgets.
Cuts for 2010/11 will be absorbed by the Welsh Assembly Government.
Steve Thomas, chief executive of the Welsh Local Government Association, said the figures were "conservative predictions".
Mr Thomas said the level of cuts was "frightening, but could be even worse yet." and he was concerned they could last a decade.
"You can't keep inflicting this level of pain over an extended period," he said.
Figures for Wales' 22 local authorities reveal that councils are planning for deep shortfalls between the budgets they will raise through council tax, the grants they receive from government and their expenditure on services.
To read more http://www.bbc.co.uk/news/uk-wales-11260029
Liberal Democrat leader and Deputy Prime Minister Nick Clegg urged people to keep spending cuts "in perspective" on a visit to the Welsh assembly.
He also said any future decision on whether his party should enter into coalition with Labour in the assembly would be made in Wales.
Mr Clegg was making his first visit to Wales since taking office.
He met First Minister Carwyn Jones and his deputy Ieuan Wyn Jones before Lib Dem and Conservative leaders.
Mr Clegg said the whole country had inherited a "black hole" in the public finances and that spending cuts are needed now to avoid "our children and grandchildren" paying off the interest on today's debts.
To read more http://www.bbc.co.uk/news/uk-wales-politics-11443431
Health and education spending in Wales is facing a real-terms cut of around 7 per cent in the next three years – while the nation's infrastructure spending is set to be slashed by 40 per cent, writes Alison Thomas.
The Welsh draft budget, unveiled by business and budget minister Jane Hutt yesterday, fulfilled the Labour-Plaid Cymru coalition's pledge for cash increases for schools and social services, plus protection for universal benefits such as free prescriptions and a free breakfast scheme in primary schools. Revenue funding for local government social services is set to rise by £24m by 2014, and schools funding by £7m.
But in real terms, spending on health and social services will fall by 6.3 per cent and the assembly government stresses that unavoidable cost increases, such as pay awards and inflation, will have to be funded from savings.
Local government revenue funding is set to fall by 7.1 per cent, and the economy and transport faces an 8.1 per cent cut, with a 9.6 per cent cut from the environment and housing. The Welsh government is also aiming to take an axe to administration, seeking a 17.7 per cent reduction in central services and administration costs over three years, and an 18.1 per cent reduction in its public services and performance budget – to be achieved largely by streamlining inspection regimes.
The deepest cuts are in capital spending, with the housing budget falling from £273m this year to £206m by 2013/14, and nearly £80m being taken from the NHS budget over the same period.
Spending on maintaining and improving the trunk road network is more than halved – from £75.3m to £32.7m.
Jane Hutt told Public Servant that the Welsh government was examining alternative funding ideas – such as a Welsh housing investment trust and housing bonds to keep spending going on social housing.
But she said the Westminster government's comprehensive spending review had been a "hammer blow" for Wales, with an overall £1.8bn reduction in funding, and capital spending taking the biggest hit.
"Wales was disadvantaged in the spending review – we got the worst settlement of all the devolved nations," Hutt said. "There was a Treasury commitment to recognise the needs of regions that are dependent on the public sector and where there is a high level of dependence on welfare benefits – and Wales comes into that category as well.
"We are very concerned about the cut in the capital budget because to support the growth of private sector and the Welsh economy we need to ensure the public sector is still able to invest in all-important programmes such as school building."
On these pages, you can read and download the draft budget documents, find out how the Welsh Assembly Government is funded and how the budget is shared out between different areas.You can also see what the Welsh Assembly Government and its partners are doing to develop new, more effective and more efficient ways of delivering public services.
The November Draft Budget is one of the important in the history of devolution. These are the most difficult and challenging times that the Welsh Assembly Government has faced in a decade.
In spite of the challenges, we have still been able to prepare a Draft Budget that is principled and fair. We are determined to:
- Protect frontline services and the vulnerable
- Promote fairness and equality
- Support the economic recovery and;
- Protect our communities.
We are committed to protecting those services that mean so much to us all: schools, skills, healthcare and universal benefits, like free prescriptions, concessionary fares, free swimming and free breakfasts and milk for primary schoolchildren.
We are looking to the task ahead as an opportunity to work with our partners in the public and private sectors in Wales, tackling our spending priorities through an open and collaborative approach. We will be capitalising on our ability as a small, smart nation to work across both sectors and organisations at pace.
Our Draft Budget is about building resilience – resilience in our economy and in our provision of the vital services on which people depend. We are resolved to support people, communities and public services throughout the difficult period that lies ahead.
Visit our Flickr channel for a slideshow of budget charts.
“We are all agreed that we need to reduce the deficit and reduce the national debt. Wales will play its part in this.
But making unplanned cuts in spending this year would be bad for Wales – bad for businesses in Wales, bad for jobs in Wales and bad for public services in Wales.
Since 1999, the Assembly Government budget has more than doubled. During that time, we have maintained a focus on achieving efficient and effective services and for the past 12 months have been preparing for tighter budgets in a structured and managed way.
It is vital that we build on the progress to date to drive greater efficiencies and savings in the years to come so that we can respond innovatively to the public spending squeeze. If we are to protect services to the best of our ability and manage with less, then we need to undertake careful preparation and work together to shape our response.
That is why we established the Efficiency and Innovation Board, which I chair and it is pleasing to see that the Chancellor has announced today that he is following our initiative, and will be setting up a similar Group
The Wales Efficiency & Innovation Board is driving a national programme to transform operational efficiency, catalyse innovation in the way that public services are designed and delivered, and promote collaboration. This will build on the Team Wales approach adopted by the Economic Summits which has helped Wales through the recession.
But the Assembly Government has always been clear that if public expenditure is cut too early then we risk jeopardising the economic recovery. The deficit needs to be reduced – but only as quickly as it can without threatening the recovery and without massive damage to public services.
We now know that the new UK Government are looking to cut the Welsh budget by £187m in 2010-11. There are some positive spending consequentials – £24m in total – which partly offset these cuts, but we will only have access to these resources if and when we make the cuts.
These cuts are being imposed despite the fact that – as the Holtham Commission has demonstrated – Wales is already being underfunded by some £300m annually. It would therefore be completely inappropriate for Wales to suffer large in-year cuts. Whatever the circumstances may be in England, our current underfunding means it is impossible to extract £187m from the budget this year without impacting on front line services. And we are already relatively efficient compared to Whitehall – for example Wales has already led the way again in the UK by scrapping the major Welsh quangos. So, the scope for administrative savings in Wales is simply not the same as it is in England.
If these cuts are imposed on us, the UK Government has offered the option to defer them until next year. But we still need greater clarity on the terms under which we might be able to defer any cuts. I have been, and will continue to be, pursuing this urgently with Treasury Ministers. In the meantime, we will not be taking knee jerk action now to cut budgets in Wales.
I am also pressing the Treasury to make progress towards fairer funding for Wales and for greater clarity about the Comprehensive Spending Review, which will set budgets for future years.
The Holtham commission has shown that the Barnett Formula is unfair to Wales and should be replaced with a new needs-based formula to ensure fairer funding.
The immediate concern is to ensure that Wales does not become further disadvantaged. Reform of Barnett will take time, but there are a number of smaller steps that the UK Government could take now to move towards fairer funding for Wales.
So I will continue to press for immediate implementation of a floor to prevent Wales becoming even more under-funded than we currently are, and for the flexibilities we need to manage our finances effectively.”
http://wales.gov.uk/newsroom/businessandeconomy/2010/100524spending/;jsessionid=4YpQL73LGJxsnnFQYYP1W1TB4VGq2v46MHs3t0K9pnJq7qxgV7CC!-1925435667?lang=en