2004 Spending Review

PN B2

12 July 2004

New spending plans for Wales

New spending plans for Wales, announced today, will provide for spending in Wales to grow by an average annual rate of over 4 per cent in real terms over the next three years. In 2007-08, public spending in Wales will be £2.5 billion higher than in 2004-05.

The National Assembly for Wales will make its own announcements in due course about its detailed spending plans to improve delivery of devolved public services in line with local priorities. There will be no increase in the costs of the Wales Office over the Spending Review period.

Details

In line with the objectives of the Government’s efficiency review, the Welsh Assembly Government will be able to release any efficiency savings it makes to strengthen further front line delivery in Wales. The Welsh Assembly Government is engaged in spending review efficiency and evaluation exercises as ambitious as those in England in reducing back office and related areas.
Initiatives announced today, including the Government’s 10-year science and innovation strategy and its proposals to tackle child poverty, will be taken forward in consultation with the Welsh Assembly Government
Wales will also benefit from spending programmes which are not devolved including the increases announced by the Chancellor for reducing crime and strengthening law and order.
The settlement also enables the Welsh Assembly Government to continue funding its Objective 1 programme in Wales, with around £555 million made available over the spending review period for structural funds.

The Secretary of State for Wales, Peter Hain, said today:

“I am delighted with the settlement for Wales which the Chancellor has announced today. It represents a continuing major boost to public services and prosperity in Wales. The Welsh Assembly Government will now translate this into the further improvements in public services and investment for Wales.
I particularly welcome the additional provision which the Chancellor has made for structural funds, which will enable the Welsh Assembly Government to drive forward the Objective 1 programme in Wales, and to implement it in full.
Today’s settlement demonstrates that devolution is working for Wales, and that Wales is benefiting from the Government’s sound management of the public finances and the economy, with our unemployment rate in the first quarter of 2004 below England’s.”

Notes for editors

The budgets for Wales have been set in resource terms consistent with those of UK departments. The increases have been determined on the basis of the Barnett formula, which ensures that Wales receives a population-based share of changes in comparable spending in England. The settlement also provides provision beyond the Barnett formula to cover the increase in EU Objective 1 structural funds receipts.
The devolved administrations’ budgets continue to be determined within the UK framework of public expenditure. Responsibility for UK public expenditure allocation remains with the Treasury. Once overall public expenditure budgets have been determined, the devolved administrations have freedom to make their own spending decisions within the overall totals on functions under their control in response to local priorities. The devolved administrations will make their own announcements in due course about their detailed spending plans.
The Wales Departmental Expenditure Limits for the next three years are £11.826 billion (plus £106 million for Objective 1), £12.768 billion and £13.564 billion. They represent a real terms average annual increase in provision over the next three years of over 4%.
For further details please contact the Wales Office Press Office on 020 7270 0565.

£ million	2004-05	2005-06	2006-07	2007-08
Wales
Resource Budget	10,275	11,044	11,927	12,622
Capital Budget	918	998	1,094	1,197
Total Departmental Expenditure Limit	10,985	11,826	12,768	13,564

NB: In addition there is £106 million for Objective 1 in 2004-05 and 2005-06.