In a move to bolster Wales’ struggling health service, the Welsh government has unveiled plans that involve a reduction in business rate relief for pubs, shops, and restaurants. The relief, previously at 75%, will now be scaled back to 40% as part of a broader strategy that includes public spending cuts across various sectors.
While health spending sees an increase, other departments are slated for real terms cuts, with rural affairs facing particular challenges. Frontline services, notably the NHS and councils, are the focal points of ministerial priorities, resulting in a 10% reduction in funding for Arts and culture bodies and Sport Wales.
Concurrently, there are contemplations on potential measures such as museums introducing visitor charges, increased tuition fees, and fees for dental and social care. Cuts extend to police community support officers (PCSOs) and apprenticeships.
Even within the health department, sacrifices have been made to redirect funds towards frontline NHS services. Finance Minister Rebecca Evans acknowledged the difficulty of these decisions, emphasising the need to reshape spending plans to align with the services most crucial to the people of Wales.
The Institute for Fiscal Studies’ David Phillips recognised the budget’s clear emphasis on core NHS services, acknowledging the tough choices made across various sectors.
As part of Welsh Labour’s £21bn budget for the upcoming 12 months, starting April, the reduction in business rate relief is aimed at addressing fiscal challenges. The Welsh government clarified that the discount, initiated during the pandemic, was never intended as a perminent measure. In contrast, England maintains the 75% relief as business rates fall under the purview of the UK government.
Expressing concerns, the Welsh Independent Restaurant Collective cautioned that the adjustment could be detrimental to many independent businesses. Natalie Issacs of Bar 44 Group highlighted potential monthly increases of £500 to £1,000, putting Welsh businesses at a competitive disadvantage compared to those across the border.
This announcement follows earlier cuts made in October to support the NHS and Transport for Wales railway services. The Welsh government justified these actions, citing insufficient funds from the UK government to cover rising costs, particularly in health and education.
Critics, including the Conservatives, accused the government of allocating funds to what they termed “vanity projects,” while Plaid Cymru stressed the need to safeguard public services.
The budget release during the Senedd’s recess means scrutiny by politicians will occur in the new year, with members set to vote on the plans. Conservative Welsh Secretary David TC Davies countered claims of inadequate funding from Westminster, asserting that the Welsh government, despite receiving more money per head than England, delivers a lower standard of service in health and education.