Drakeford warns of £7bn cuts if Welsh Government budget not passed

Mark Drakeford has thrown down the gauntlet to opposition parties, warning that failing to pass the Welsh budget would result in cuts of up to £7bn and thousands of job losses.

The finance secretary dangled an olive branch, with £380m on the table to find “common priorities” with other parties to get the Welsh Government’s £27bn draft budget over the line.

Labour needs the support of at least one opposition Senedd member – and likely two depending on the Caerphilly by-election result on October 23 – to pass its 2026/27 budget. Failure to agree a budget would result in public services in Wales facing sweeping cuts.

Prof Drakeford warned the Senedd: “The weeks ahead must culminate in the passing of a budget… every member here will have a part to play, every political party a responsibility.”

In the event of no deal, the former first minister added: “Instead of me coming forward with a budget that adds £800m into our public services, I would be coming forward with a budget that cuts everything this Senedd does by between £6bn and £7bn.”

The £7bn figure revealed by Prof Drakeford is higher then the £4bn previously estimated by Caerphilly Observer.

During a debate on October 14 on the outline spending plans for the 12 months from April, Sam Rowlands, the Tory shadow finance secretary, pointed to his party’s offer of talks.

‘Our door is open’

The Conservatives suggested their support would depend on ministers scrapping land transaction tax for people’s primary homes. Wales’ equivalent of stamp duty, which is levied on commercial and residential property purchases, is forecast to raise £401m next year.

At first minister’s questions earlier the same day – Eluned Morgan welcomed talks on a deal with the Tories, telling opposition leader Darren Millar: “I am very pleased that you’ve written to me today – this demonstrates grown up politics…. our door is open.”

Heledd Fychan, Plaid Cymru’s shadow finance secretary, expressed concerns about the impact on local government of passing the budget as drafted, warning of council tax increases of up to 20% and thousands of jobs lost to make up a shortfall.

Ms Fychan said: “The warnings have been clear, so there is a requirement on us to be mature in our approach to this debate in the coming months.”

Labour’s Mike Hedges warned of “catastrophic” consequences for the people of Wales if the budget is not passed, pointing out that Senedd politicians’ salaries could also be affected. He warned a planned 2-3% increase in the budget would result in a real-terms cut.

Jane Dodds, the leader of the Liberal Democrats in Wales and the party’s sole Senedd member, struck a deal with ministers worth about £100m to pass last year’s budget.

‘We must work together’

She told Senedd members: “I am prepared and willing to work with any party to find a constructive way forward with this budget as I did last year. We need to be ambitious.”

Prof Drakeford confirmed the draft budget does not include funding to further extend the retail, leisure and hospitality rates relief scheme. But he announced plans to cut business rates for “bricks-and-mortar” shops, with the details to follow in January’s final budget.

The finance secretary stressed the draft budget is the beginning of the process, not the end. Setting out what’s at stake, he told the Senedd: “These are people’s pay packets; they are the accounts of local businesses; the free school meals and teaching materials in our schools; the new trains on our railways and homes in our communities.

“They are the thousands of childcare placements which look after our children; the new roof on an art gallery; the prescriptions taken every day and the new life-saving medicines.”

The former first minister confirmed the Welsh Government would provide a “funding floor” in the draft budget, with the aim of ensuring no council receives less than a 2.3% increase.

In closing, he said: “We must work together to secure a final budget which can be passed…. It is our responsibility as elected members to secure the best possible budget for public services in Wales. To that end, I urge all members to engage with me in discussions over the coming weeks so this draft budget can lead to a final set of proposals which can be passed.”

Caerphilly’s by-election candidates for October 23

• Welsh Liberal Democrats – Steve Aicheler
• Gwlad – Anthony Cook
• Wales Green Party – Gareth Hughes
• Welsh Conservatives – Gareth Potter
• Reform UK – Llŷr Powell
• Roger Quilliam – UKIP
• Richard Tunnicliffe – Labour
• Lindsay Whittle – Plaid Cymru