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Last Updated: Tuesday, 6 November 2007, 13:05 GMT
First coalition budget under fire
The coalition government says there is less money to go around

The first budget by the coalition Labour-Plaid Cymru Welsh Assembly Government has come under fire from the opposition and council leaders.

Finance Minister Andrew Davies has announced 3.64bn extra cash for public services over three years.

But opposition politicians said it was not enough and warned of cuts to key services and council tax rises.

Mr Davies said the assembly government had been funding local government in Wales generously for many years.

He promised an extra 1.2bn for health services over the next three years, with 120m for childcare and 155m on transport.

There will be a squeeze on a range of services, particularly those authorities in north Wales and rural Wales
Steve Thomas, WLGA

By 2011, public spending will be in excess of 16bn - it is already double the budget of the assembly government in 1999.

No announcement was made about extra funding for the Wales Millennium Centre (WMC), which is feared to be at risk of insolvency because of 13.5m worth of debts.

However, BBC Wales has identified an extra 4.1m in 2008, followed by another 5.8m in each of the following two years, which might be used towards the WMC's funding shortfall.

Meanwhile, the Queen has opened the new session of Parliament, which included new legislation giving the assembly government the power to make new laws.

This would include the power to introduce charges for the new M4 relief road and other trunk roads, legislation on inspection of pre-16 education and training, and draft laws on local development plans and the Welsh spatial plan.

Total budget around 14.8bn (2008-2009), 15.3bn (2009/10), 15.7bn (2010-2011)
Health spending rising from 5.69bn to 6.01bn over three years, an increase of 320m
Local government grant rising from 3.8bn to 3.99bn over three years, a 2.2% rise
120m spending for childcare
155m for transport
700,000 for free laptops for primary pupils 2009-2011

Monday's assembly government budget was the first since Labour and Plaid formed a coalition in Cardiff Bay after May's assembly election.

Several key pledges from the Plaid election manifesto would seem to have been deferred or changed as a result of the draft budget.

Over three years, there has been no money allocated for a scheme for free laptops for 11-year-olds in the first year.

However, 300,000 has been set aside for the second year, and 400,000 in the third year. There will be no extra help for pensioners with council tax in the first year, but 4m has been allocated in the next two years.

Affordable housing

Mr Davies told BBC Radio Wales that the commitments outlined in the One Wales document which formed the basis of the coalition deal were for a four-year programme of government.

He said: "We will deliver the programme over those four years and not everything will be delivered in year one, or two.

"In some cases it will be delivered in years three and four, but we've always made that very clear."

Mr Davies said a later announcement by Housing Minister Jane Davidson would be made on the pledge of 5,000 for first-time buyers, "targeted on those most in need."

This is part of spending on affordable housing of 30m.

They've got a less than inflationary increase, that'll mean cuts to core services, so basically as well there will be major council tax rises across Wales
Jenny Randerson AM, Liberal Democrat

The Welsh Local Government Association (WLGA) said its 2.2% rise did not meet inflationary costs and would result in severe cuts to services and jobs.

WLGA chief executive Steve Thomas said: "There will be a squeeze on a range of services, particularly those authorities in north Wales and rural Wales. "The way our financial formulas work, it will mean most of the cuts will fall on those authorities.

"It will hit social services badly and increase the funding gap between schools in England and Wales, which is already very large."

Liberal Democrat AM Jenny Randerson said it was an "impossible budget" for local government.

She said: "They've got a less than inflationary increase, that'll mean cuts to core services, so basically as well there will be major council tax rises across Wales."

But Mr Davies said that there were "significant resources" going into local authorities, and that it was "extremely premature to talk about any council tax capping.

Conservative Angela Burns said the budget was "extremely disappointing" and marked the end of the "assembly government's reckless eight-year spending spree".

She said the money allocated for health services was "just not enough".

Finance Minister Andrew Davies on the budget

Watch BBC Wales political editor Betsan Powys

Cutback fears over care deficits
06 Nov 06 |  South East Wales

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