1. What the Spending Review and Draft Welsh Budget mean for public services and benefits in Wales : joint presentation from Wales Public Services 2025 and Bevan Foundation.

2. Government Expenditure categories
Departmental Expenditure Limits (DEL)
- Resource DEL – day to day operating expenditure by public services, grants etc
- Capital DEL – Construction, infrastructure
Annually Managed Expenditure (AME)
Resource AME - Demand-led expenditure such as pensions, benefits, debt interest
Capital AME

3. Resource Del Real UK 1 three budgets this year!
2 Promised real cuts in now virtually elimated
3 But later increases also reduced
4 Now no real cuts in and around 1% a year until
5 Real increase in

4. Sources Deficit Reduction 2015-16 to 2019-20

7. Departmental Expenditure Limit (Resource) cash £000
Net Change %
Health and Social Services
6,486,592
244,646
3.8%
6,731,238
Local Government
3,432,187
,784
-2.6%
3,344,403
Communities and Tackling Poverty
336,614
,022
-0.9%
333,592
Economy, Science and Transport
612,974
,341
-4.1%
587,633
Education and Skills
1,579,609
1,201
0.1%
1,580,810
Natural Resources
294,083
,323
-5.6%
277,760
Central Services and Admin
292,783
7,594
2.6%
300,377
Total WG MEG Allocations
13,034,842
120,971
0.9%
13,155,813

8. NHS England spending review figures
Total DEL (£ million cash)
101.3
106.8
110.2
112.7
115.8
Real terms growth rate
1.6%
3.6%
1.3%
0.4%
0.7%

10. Welsh Government funding for Local Government
WAO – fell 10% real terms
WLGA – aggregate external finance fell 16% real terms
OBR – significant drop to
Welsh Draft Budget – aggregate external finance cut 1.4%

11. Real Terms changes in local authority service spending (2014-15 prices), aggregate, £ thousands
Education
£2,833,476
Social
£1,575,413
Other
£1,702,898
Education
£2,630,069
Social
£1,563,977
Other
£1,320,513

12. Council Tax Trends

13. Welsh Police Funding

14. Third Sector Shift to commissioning not grants for services providers
84% local authority income now service payments, especially social services, young people, education – protected areas
Most relevant grant lines in draft Welsh budget cash flat
Social housing role in Wales unchanged – implications of housing benefit changes?

15. Pay Bill
1% cap on pay rises
National Insurance – pensions cost
National Living Wage
Public Sector Employment Wales 6%ish fall between

16. Some Key Messages
Reports of demise of Austerity exaggerated – 4 more years
Growing Wales-England divergence
Continued pressure on public service innovation and change
Continued push down to the community
Concerns about impact on low income families and vulnerable unchanged

17. The Spending Review and the Welsh Budget: Wales Public Services 2025
The Spending Review & Changes to Benefits: the u-turn that wasn’t Victoria Winckler
Thank you for invitation to speak – appreciate opportunity to share our work and also grateful for support from Shelter over the years.
Going to do three things:
A tiny bit about the Bevan Foundation
Key points from our Wales in 2020 report – economy, society, environment & politics
Some issues and questions that flow from that – for you and others
The Spending Review and the Welsh Budget: Wales Public Services 2025
10th December 2015

18. Context Benefits underpin social fabric of Wales:
651,900 get state pension.
619,885 children receive child benefit.
237,000 working-age adults get out of work benefits.
164,000 families in-work get benefits.
£10.7 billion in 2014/15

19. CSR - what’s changed? Cancelled: Tax Credits (while they still exist):
cut in income threshold
increase in earnings taper
Staying from Summer Budget:
Tax Credits:
two child limit
abolition of family element
benefit cap
main benefits frozen
ESA-WRAG cut to JSA rate
Changes to Housing Benefit
Cuts to income threshold and increase in earnings taper still apply to Universal Credit

20. Effect of Tax Credit Change
Short term: Pain eased for poorest Long term: Marginal - poorest still hit hard

21. Impact on Wales Summer 2015 Budget forecast still stands:
Macro - loss of £600m to 2019/20
Micro - average £459 per household = 2% income
Distribution – highly uneven impact ...
Source: James Browne (2015) The Impact of the UK Government's Tax, Welfare and Minimum Wage Reforms in Wales, IFS.

22. By income decile

23. By household type .…

24. Implications & questions
Significant increase in hardship and poverty.
Is there sufficient and appropriate action proposed to reduce poverty?
Likely increased demand for public services esp. child & family.
has the Welsh budget got the balance right?
Growing social divisions – age, family type.
can pensioner freebies be justified?

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26. Reshaping the State?

27. Further information can be found at: