The Welsh Government has unveiled details of the £27bn draft budget as ministers face a significant political test to get the spending plans passed by the Senedd.
Finance secretary Mark Drakeford provided an update on the 2026/27 draft budget, which includes an extra £800 million, setting out line-by-line allocations for public services.
The ex-First Minister has brought forward a "roll-over" draft budget, broadly rising by about 2% in line with inflation, in an effort to cut a deal with opposition parties.
Last year's spending plans were narrowly agreed after ministers struck a deal with Jane Dodds, the Welsh Liberal Democrats leader and the party's sole Senedd member.
But, following Labour's defeat in the Caerphilly Senedd by-election last month, the Welsh Government needs the support of at least one other Senedd member this year.
Failure to pass the budget by April would result in spending plans automatically reverting to 75% of last year's – rising to 95% if still not agreed by July.
Prof Drakeford has warned such a scenario could cost Wales up to £7 billion, leading to thousands of job losses.
'My door is firmly open'
Ministers have been in talks with the Conservatives over a deal, with the Tories demanding the scrapping of land transaction tax on people's primary homes. Binning Wales' equivalent of stamp duty on property purchases would cost about £200m, experts estimate.
Plaid Cymru has helped ministers pass budgets in previous years, but a deal between the two collapsed last year and the party would be loath to lend its support with an election on the horizon.
The Welsh Government has left around £380 million unallocated in the draft budget but the actual wiggle room for political negotiations is thought to be far lower.
Prof Drakeford will step down at May's Senedd election, having been involved in every budget for a decade and been at the heart of Welsh politics for a quarter of a century.
In his foreword, the first minister-turned-finance secretary reiterated: "We have a shared responsibility, as a Senedd, to pass a budget for Wales. My door is firmly open to working with those who believe a more ambitious budget could be agreed."
'Funding floor'
The detailed draft budget - published on Monday - for the 12 months from April 2026, includes £800 million more than last year – with spending totalling £27.13 billion.
Under the plans, health and social care would receive an extra £259 million, bringing the total to £12.4 billion – more than 55% of the Welsh Government's resource budget.
The settlement for councils would rise by an average of 2.5%, with a "funding floor" to ensure no local authority receives less than a 2.3% increase. The draft local government settlement is expected to be published later this month.
The budget also includes £1.5m to extend the £1 bus fare pilot to cover five-to 15-year-olds.
But, according to budget documents, the Welsh Government will work with Transport for Wales to target £58m in "efficiency savings" on rail and bus spending.
The detailed draft budget sets out the amount of day-to-day revenue and longer-term capital funding available to other arm's-length bodies, including the Arts Council and Sport Wales.
'Disproportionate impact'
The Welsh Government has returned to a two-stage budget-setting process this year, with an outline published on October 14th followed by much of the finer detail today.
In previous years, the budget would be published in December, leaving less time for scrutiny.
Alongside the detailed draft budget, the Welsh Government published its £3.3bn 2026/27 infrastructure plan – with housing, health and transport topping the list of priorities.
The Welsh Government also published an impact assessment, admitting the budget as drafted could disproportionately impact disabled people, women and low-income families.
Chancellor Rachel Reeves will deliver the UK autumn budget, which will have implications for Wales, on November 26th. The final Welsh budget will then be published on January 20th, with a key debate and vote penciled in a week later.
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