Anybody would think that there was no real news. All the Welsh media has talked about for the last week has been the impact of the £6 billion of cuts announced today on Wales. This morning is no exception.
It is of course an important issue but we should not forget some key facts. Firstly, the claim that £6 billion equals £250 million off the Welsh block grant is pure speculation. That would only be the case if fully Barnetised areas of expenditure such as education, housing and health were cut. In fact the impact on Wales depends on where the cuts fall. And remember the Welsh Government have the choice to defer any cuts to next year.
If for example we were to downgrade some embassies then that would have no impact on the block grant. Similarly, if as it appears we have cut £836m from the Department of Business then there needs to be some careful study before we can say how that translates to Wales because not all of that expenditure is Barnetised. The coalition has said it will protect health and boost education spending. That must help to alleviate the impact on Wales.
Secondly, let us remember why these cuts are having to be made. It is because the economy is in such a mess and whose fault is that? Yes, we can blame the world markets but Labour’s incompetence in failing to regulate the banks and the City contributed to it. They spent like there was no tomorrow and entered into commitments in their last few months for schemes they could not afford. Somebody had to restabilise the economy.
The opposition’s complaints about these measures lack credibility because of their own record and because they are largely living in cloud cuckoo land. And yes, the Liberal Democrats did say we want to avoid cuts in this financial year but the reality of government and the fact that the crisis in Greece threatened to undermine confidence in our own economy if we did not act quickly left us with no choice.
The saving grace in all this is that David Laws appears to have dealt with this initial round of cuts with some skill. He has concentrated on cutting out waste and sought to avoid front line services. Inevitably, we will see some job losses and some diminution of services but given the mess we are in and the need to face up to the job at hand his compassionate approach to these cuts is much appreciated.
Update: The impact on Wales is estimated at £187m, a substantial amount of money leaving us with some big decisions to make. Now we need to see how much waste there is in the Welsh Government’s budget.
Further Update: UK Government package amounts to £6.243bn of savings in 2010/11. The resulting reduction to Wales ‘Departmental Expenditure Limit’ of £187m. This represents a reduction of 1.2% of the Wales DEL, less than the equivalent figures for Scotland and Northern Ireland (each 1.3%) and less than many Whitehall departments.
The option is given to the devolved administrations to defer some or all of the necessary savings into 2011/12. The UK Government is also making available to Wales additional Barnett consequentials of £24 million, reflecting for example, savings used by government departments on targeted measures to increase social housing, further education, apprenticeships and business rates. This means a net loss to Wales of £163m.
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I’m a little worried about the Home Office/Justice Ministry cuts. Do they relate solely to work on the NId database & consultancies, or will they affect the probation & prison services? Hopefully the details will be published.
Stop paying civil servant’s bonuses.
Stop spending money on consultants whose recommentations are used or acted upon.
Stop subsidising Ieuan Air.
Stop the Badger Cull
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Sly Earwig- the Welsh Liberal Democrats support the badger cull and the Tory-Lib Dem coalition deal is proposing badger culls in England!