Wide-ranging cuts to public services in areas from policing to flood risk management, culture and sport have been announced by the Labour-led Welsh government as it attempts to protect the NHS and support local councils.
Its draft budget, published on Tuesday, also includes plans to reduce business rate relief for pubs, restaurants and shops, which means many will be facing rises in bills from April.
In addition, the budget flags up the possibility of increases in the cost of NHS dental care, university tuition fees and home care for elderly people and says rail fares will have to rise.
The finance minister, Rebecca Evans, said the protection of the NHS and frontline local council services such as schools and social care was at the heart of the 2024-25 draft budget.
She said there would be an extra £450m for the NHS and the core local government settlement would increase by 3.1%, but said that even with these rises, health boards and councils faced a “very difficult” year.
The Welsh government said that as a result of high inflation, Wales’s overall budget was worth £1.3bn less in real terms than when it was set in 2021 and the settlement, which largely comes from the UK government in the form of a block grant, was insufficient to respond to the extreme pressures that public services, businesses and people were facing.
Evans said: “We have had to take some really difficult decisions to radically redesign our spending plans to focus funding on the services which matter most to the people of Wales. This is the toughest financial situation Wales has faced since the start of devolution. We have been presented with the most stark and painful budget choices in the devolution era.”
She said the government would be carefully examining whether charges for NHS dental care, tuition fees and domiciliary care needed to be raised but there would be a consultation on this if the government decided increases were required.
The biggest hits in the £23bn budget come in the rural affairs and climate change departments. The latter includes transport, housing and Natural Resources Wales.
The leader of the Lib Dems in Wales, Jane Dodds, said: “Huge parts of Wales are still being left behind with this budget, in particular rural Wales. We need more investment in our rural areas and more support for our farmers.”
Andrew RT Davies, the leader of the Welsh Conservatives, criticised the Welsh government for blaming Westminster for its problems. He said: “Labour ministers have run Wales for 24 years, failing to reform public services and deliver results for the people of Wales.” He claimed “pet projects” such as the wide-ranging 20mph speed limit were leading to cuts in areas such as rural affairs.
The Plaid Cymru leader, Rhun ap Iorwerth, said: “This budget is unsustainable and will have a serious long-term impact on hard-working people across Wales.
“Wales faces a double-whammy. On one hand, the funding deal we get from the UK government is unfair and inadequate. On the other hand, serious questions must also be asked of the way Labour spend public money.”
Cuts will also affect anti-smoking and obesity campaigns and plans to increase funding for mental health service have been shelved. The government has “reprioritised” £8.5m from flood risk management and water policy and says it will “carefully monitor the impacts to our flood risk management preparedness and response”.
It said it had taken the “difficult decision to reprioritise £16m of funding from within culture sport and tourism” and was also “reprioritising” £7.5m from the budget for police community support officers. It added: “Our policing partners will need to reshape their workforce.”
Business rate relief for pubs, shops and restaurants will be reduced from 75% to 40%. The Welsh government said the discount, which dates to the pandemic, was never intended to continue indefinitely.
