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Plaid Cymru Fiscal Implications of Party Manifestos

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Plaid Cymru Fiscal Implications of Party Manifestos Digwyddiad Briffio Etholiadau’r Senedd 2021 Senedd Election Briefing 2021 27/04/2021 DR RACHEL MINTO, GUTO IFAN & CIAN SIÔN Canolfan Llywodraethiant Cymru, Prifysgol Caerdydd Wales Governance Centre, Cardiff University DAVID PHILLIPS Sefydliad Astudiaethau Cyllidol Institute for Fiscal Studies #Senedd21 Y rhagolwg ar gyfer cyllideb Cymru The outlook for the Welsh budget • Y cyd-destun cyllidol ers 2010 The fiscal context since 2010 • Y rhagolwg ar gyfer cyllideb Cymru i 2025−26 Outlook for the Welsh budget to 2025−26 • Pwysau gwariant i 2025−26 Spending pressures to 2025−26 • Newid i gynlluniau gwariant Llywodraeth y DG A change to UK government spending plans Real terms change in Welsh Government day-to-day (resource) funding, 2010-11 to 2021-22 (2010-11 = 100) 125 • Ac eithrio cyllid COVID-19, mae cyllideb Cymru bellach 120 wedi ad-ennill ei lefel 115 Day-to-day spending incl. COVID-19 funding 2010−11 mewn termau real. 110 105 • Excluding COVID-19 funding, Core day-to-day 100 11 = 100 spending the Welsh budget has now - 95 recovered its 2010−11 level 2010 in real terms. 90 85 80 75 Source: WFA analysis of HM Treasury (2020 and previous) PESA; Welsh Government (2021) budget documents. A fall in public sector output during 2020-21 temporarily raised forecast GDP deflator, which drives the real terms fall in ‘core’ resource funding in 2020-21. Real terms change in Welsh Government day-to-day (resource) funding, 2010-11 to 2021-22 (2010-11 = 100) 125 • Ond ar ôl ystyried y twf yn y boblogaeth, mae cyllideb 120 Cymru yn parhau 4% yn llai 115 Day-to-day spending incl. COVID-19 funding nag yn 2010−11. 110 105 • But having adjusted for Core day-to-day 100 11 = 100 spending population growth, the - Core day-to-day 95 Welsh budget remains 4% 2010 spending per person smaller than in 2010−11. 90 85 80 75 Source: WFA analysis of HM Treasury (2020 and previous) PESA; Welsh Government (2021) budget documents. A fall in public sector output during 2020-21 temporarily raised forecast GDP deflator, which drives the real terms fall in ‘core’ resource funding in 2020-21. Covid-19 related resource funding for the Welsh Government, 2020-21 and 2021-22 6,000 • Derbyniodd Llywodraeth Carried forward to Cymru £5.7 biliwn mewn 2021-22, £498m cyllid dydd-i-ddydd er 5,000 mwyn ymateb i COVID-19 yn 2020−21, ac mae £500m o’r 4,000 cyfanswm wedi’i gario i’r Covid-19 funding flwyddyn ariannol nesaf. 3,000 guarantee, £5,200m £ million • The Welsh Government 2,000 received £5.7 billion of COVID-19 resource funding 1,000 in 2020−21, of which, £500m has been carried forward Carried forward to 2021-22, £498m 0 into the next financial year. 2020-21 2021-22 Source: WFA analysis of Welsh Government (2020 and 2021) budget documents. Covid-19 related resource funding for the Welsh Government, 2020-21 and 2021-22 6,000 • Yn sgil cyhoeddiadau mwy Carried forward to diweddar, mae gan 2021-22, £498m Lywodraeth Cymru £2.5 5,000 biliwn mewn cyllid dydd-i- ddydd er mwyn ymateb i 4,000 COVID-19 yn 2021−22. Covid-19 funding 3,000 guarantee, £5,200m Consequentials from later • Subsequent announcements £ million announcements, £490m bring total COVID-19 2,000 March 2021 Budget, resource funding available £735m for the Welsh Government in 1,000 2020 Spending 2021−22 to £2.5 billion. Review, £766m Carried forward to 2021-22, £498m 0 2020-21 2021-22 Source: WFA analysis of Welsh Government (2020 and 2021) budget documents. Y rhagolwg ar gyfer cyllideb Cymru The outlook for the Welsh budget • Y cyd-destun cyllidol ers 2010 The fiscal context since 2010 • Y rhagolwg ar gyfer cyllideb Cymru i 2025−26 Outlook for the Welsh budget to 2025−26 • Pwysau gwariant i 2025−26 Spending pressures to 2025−26 • Newid i gynlluniau gwariant Llywodraeth y DG A change to UK government spending plans Projected funding for Welsh Government day-to-day spending, 2019-20 to 2025-26 (cash terms) 22,000 • Mewn termau nominal, mae cyllid craidd (ac eithrio 21,000 cyllid COVID-19) yn debyg o With Covid-19 funding gynyddu o £17.1 biliwn yn 20,000 2021−22 i £19.3 biliwn erbyn Core day-to-day spending (baseline 2025−26. 19,000 scenario) • In cash terms, core funding 18,000 (excluding COVID-19 funding) is set to increase £ million (nominal prices) 17,000 from £17.1 billion in 2021−22 to £19.3 billion by 2025−26. 16,000 15,000 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 Source: WFA analysis of Welsh Government (2021) budget documents; HM Treasury (2021) Budget 2021; OBR (March 2021) Economic & Fiscal Outlook. Projected funding for Welsh Government day-to-day spending, 2019-20 to 2025-26 (2020-21 prices) 22,000 • Disgwylir i gyllideb Cymru dyfu o 1.6% y flwyddyn ar 21,000 With COVID-19 gyfartaledd mewn termau funding 20,000 real rhwng 2019−20 a 2025−26. 19,000 Day-to day 21 prices) spending - 18,000 (baseline • The Welsh Budget is scenario) projected to grow by 1.6% a 17,000 year on average in real £ million £ million (2020 16,000 terms between 2019−20 and 2025−26. 15,000 4th Assembly 5th Assembly 6th Parliament 14,000 Source: WFA analysis of Welsh Government (2021) budget documents; HM Treasury (2021) Budget 2021; HM Treasury (2020 and previous) PESA; OBR (March 2021) Economic & Fiscal Outlook. A fall in public sector output during 2020-21 temporarily raised forecast GDP deflator, which drives the real terms fall in ‘core’ resource funding in 2020-21. Penderfyniadau gwario Llywodraeth Cymru Welsh Government spending decisions Gadewch i ni dybio fod… Let us assume that… • Llywodraeth Cymru yn defnyddio’r holl • Welsh Government uses projected arian canlyniadol a dderbynir yn sgil consequentials from NHS and Schools gwariant ar y GIG ac ysgolion yn Lloegr spending in England to fund equivalent er mwyn ariannu gwasanaethau services in Wales. cyfatebol yng Nghymru. • Gwariant dydd-i-ddydd ar bob maes • All other day-to-day spending grows in arall yn tyfu yn unllin â gweddill y line with the rest of the budget. gyllideb. Real terms change in Welsh Government spending by service area (baseline scenario) • Yn y senario hon, byddai 12% pob maes gwario yn gweld Real terms change from 2021-22 to 2025-26 10% twf mewn termau real rhwng 2021−22 a 2025−26. 8% 6% • In this scenario, each spending area would see 4% real terms growth between 2% 2021−22 and 2025−26. 0% -2% -4% NHS Total local Local Local Other local Other Welsh government government: government: government Government schools social services spending Source: Ifan, Guto (2021) Welsh Election 2021: Fiscal outlook and challenges for the next Welsh Government. Cardiff: Wales Fiscal Analysis. Real terms change in Welsh Government spending by service area (baseline scenario) • Ond mae’r rhagolwg ar gyfer 12% y flwyddyn nesaf yn fwy Real terms change from 2021-22 to 2025-26 10% heriol… Real terms change from 2021-22 to 2022-23 8% • But the outlook for next 6% year is more challenging… 4% 2% 0% -2% -4% NHS Total local Local Local Other local Other Welsh government government: government: government Government schools social services spending Source: Ifan, Guto (2021) Welsh Election 2021: Fiscal outlook and challenges for the next Welsh Government. Cardiff: Wales Fiscal Analysis. Y rhagolwg ar gyfer cyllideb Cymru The outlook for the Welsh budget • Y cyd-destun cyllidol ers 2010 The fiscal context since 2010 • Y rhagolwg ar gyfer cyllideb Cymru i 2025−26 Outlook for the Welsh budget to 2025−26 • Pwysau gwariant i 2025−26 Spending pressures to 2025−26 • Newid i gynlluniau gwariant Llywodraeth y DG A change to UK government spending plans Total projected NHS funding pressures, 2020−21 to 2025−26 • Bydd arian canlyniadol 2,500 Health-related iechyd yn debygol o fod yn consequentials ddigon i ariannu pwysau gwario craidd y GIG dros y 2,000 pedair blynedd nesaf… 1,500 • Health-related consequentials will likely be million £ 1,000 sufficient to fund Underlying pressures underlying pressures in the NHS over the next four 500 years… 0 2021-22 2022-23 2023-24 2024-25 2025-26 Source: Ifan, Guto (2021) The NHS and the Welsh Budget: Outlook and challenges for the next Welsh Government. Cardiff: Wales Fiscal Analysis. Total projected NHS funding pressures, 2020−21 to 2025−26 2,500 • ...ond yn debygol o fod yn New mental Health-related health demands annigonol i ariannu pwysau consequentials gwario ôl-COVID ar y GIG. Clearing backlog 2,000 Productivity Direct Covid-19 • …but will likely fall short of costs the amount required to 1,500 meet post-COVID pressures on the NHS. million £ 1,000 Underlying pressures 500 0 2021-22 2022-23 2023-24 2024-25 2025-26 Source: Ifan, Guto (2021) The NHS and the Welsh Budget: Outlook and challenges for the next Welsh Government. Cardiff: Wales Fiscal Analysis. Components of local government spending pressures from 2019−20 • Bydd angen i wariant awdurdodau lleol gynyddu o 3.4% y flwyddyn (termau nominal) i gwrdd â phwysau gwario dros y blynyddoedd nesaf. • Local authority spending will need to increase by 3.4% a year (cash terms) to meet spending pressures over the coming years. Source: Siôn, Cian (2021) Local government and the Welsh Budget: Outlook and challenges for the next Welsh Government. Cardiff: Wales Fiscal Analysis. Estimate of the local authority funding gap (4.5% Council Tax increase & NHS COVID-19 legacy costs are met from Welsh Government budget) • Heb gyllid ychwanegol i ddelio gyda phwysau ar y GIG, mae awdurdodau lleol yn wynebu bwlch ariannu posibl o £607m y flwyddyn nesaf.
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