News
Huge £100m boost for public services in new budget agreement
THE WELSH GOVERNMENT has unveiled a budget agreement securing over £100 million in additional funding for public services, with key investments directed at childcare, social care, local councils, transport, and the environment. The deal, reached with Jane Dodds MS, Leader of the Welsh Liberal Democrats, aims to bolster essential services, particularly in rural areas, and address pressing social and infrastructure concerns.
Key investments in the Final Budget 2025-26
The budget agreement, published on February 20 in the Senedd, details major funding allocations, including:
Support for early years education and childcare
- An additional £30 million has been allocated to expand the Flying Start programme, providing free childcare for two-year-olds across Wales.
- The hourly funding rate for childcare providers will rise from the previously proposed £6 per hour to £6.40 per hour, helping to support sustainability in the sector.
- The move follows concerns raised by the National Day Nurseries Association (NDNA) Cymru, which found that 89% of nurseries surveyed believed the previous rate was insufficient to cover rising operational costs.
NDNA Cymru Chief Executive Purnima Tanuku CBE welcomed the increase, saying: “This new deal is a step in the right direction and shows that the Welsh Government is committed to supporting providers who deliver vital early years places.”
Social care and hospital discharges
- £30 million will be allocated to social care services, aiming to reduce delayed hospital discharges and provide greater support within local communities. The funding is expected to alleviate pressures on the NHS by preventing unnecessary hospital admissions and improving community care services.
Local government and community investment
- A guaranteed 3.8% funding floor for all local authorities, costing £8.24 million, will benefit nine councils: Monmouthshire, Powys, Gwynedd, Vale of Glamorgan, Flintshire, Pembrokeshire, Ynys Môn, Ceredigion, and Conwy.
- £5 million has been set aside to enhance playgrounds and play facilities for children across Wales.
- £5 million will support leisure centres in becoming more energy efficient, addressing rising energy costs and sustainability concerns.
Transport and infrastructure upgrades
- A £15 million pilot scheme will allow young people aged 21 and under to pay just £1 per single bus fare to encourage greater public transport use and affordability.
- Extra funding will contribute to a £120 million local authority road and pavement repair scheme, tackling maintenance issues on Wales’ road network.
- Funding has also been secured to restore the fifth train service on the Heart of Wales line.
- £500,000 in capital funding will be allocated to improve toilet facilities along major roads across Wales.
Environmental and rural development measures
- £5 million will be used to combat water pollution in rivers and coastal areas.
- An extra £10 million has been allocated to support rural investment schemes, benefitting agricultural and environmental projects across Wales.
- A commitment has also been made to move towards a ban on greyhound racing in Wales, addressing concerns over animal welfare.
Additional community and cultural investments
The budget agreement also includes funding for feasibility studies to support several community projects, including:
- The development of the Wyeside Arts Centre in Builth Wells.
- The North Powys Wellbeing Campus in Newtown.
- Safety measures at the Pont y Bat junction on the A470.
- The refurbishment of Brynamman Lido.
Government and opposition responses
Cabinet Secretary for Finance Mark Drakeford praised the agreement, saying: “This demonstrates what can be achieved when the Welsh Government and Members of the Senedd work together constructively on areas where we have common ground. The additional investment will make a real difference to communities across Wales, particularly in rural areas.”
Jane Dodds MS, Leader of the Welsh Liberal Democrats, also welcomed the agreement, highlighting the benefits for families and local services. She stated: “I’m delighted we have secured the funds needed to deliver my party’s key priorities, including improving social care, increasing quality childcare, tackling water pollution, improving roads and public transport, and protecting vital council-run services.”
While the additional funding has been widely welcomed, some sectors argue that the increases may still fall short of covering rising costs. Early years providers stress that while the increase to £6.40 per hour is a positive move, further long-term investment is needed to ensure sustainability.
Similarly, concerns remain regarding ongoing pressures on the NHS and social care, as well as the state of Welsh roads, which have been in need of substantial repairs for years.
The Welsh Government maintains that this budget provides a strong foundation to address these challenges while working within financial constraints. However, it remains to be seen whether these measures will be enough to meet the growing demands of public services across Wales.
The Final Budget 2025-26 will now be debated in the Senedd before being officially passed into law.
Business
First Minister criticised after ‘Netflix’ comment on struggling high streets
Government announces 15% support package but campaigners say costs still crushing hospitality
PUBS, cafés and restaurants across Wales will receive extra business rates relief — but ministers are facing criticism after comments suggesting people staying home watching Netflix are partly to blame for struggling high streets.
The Welsh Government has announced a 15% business rates discount for around 4,400 hospitality businesses in 2026-27, backed by up to £8 million in funding.
Announcing the package, Welsh Government Finance Secretary Mark Drakeford said: “Pubs, restaurants, cafés, bars, and live music venues are at the heart of communities across Wales. We know they are facing real pressures, from rising costs to changing consumer habits.
“This additional support will help around 4,400 businesses as they adapt to these challenges.”
The announcement came hours after Eluned Morgan suggested in Senedd discussions that changing lifestyles — including more time spent at home on streaming services — were contributing to falling footfall in town centres.
The remarks prompted political backlash.
Leader of the Welsh Liberal Democrats, Jane Dodds, said: “People are not willingly choosing Netflix over the high street. They are being forced indoors because prices keep rising and wages are not.
“Blaming people for staying at home is an insult to business owners who are working longer hours just to survive.”
Industry groups say the problem runs deeper than consumer behaviour.
The Campaign for Real Ale (CAMRA) welcomed the discount but warned it would not prevent closures.
Chris Charters, CAMRA Wales director, said: “15% off for a year is only the start. It won’t fix the unfair business rates system our pubs are being crushed by.
“Welsh publicans need a permanent solution, or doors will continue to close.”
Across Pembrokeshire, traders have repeatedly told The Herald that rising energy bills, wage pressures and rates — rather than a lack of willingness to go out — are keeping customers away.
Several town centres have seen growing numbers of empty units over the past year, with independent shops and hospitality venues reporting reduced footfall outside the main tourist season.
While ministers say the relief balances support with tight public finances, business groups are calling for wider and longer-term reform.
Further debate on rates changes is expected later this year.

Local Government
Pension divestment debate triggered but council date still unconfirmed
Gaza-linked petition passes 500 signatures threshold as Pembrokeshire meeting awaited
A PETITION calling for Pembrokeshire’s public sector pension fund to divest from companies linked to Israel has passed the signature threshold required to trigger a formal council debate – but no meeting date has yet been confirmed.
The e-petition, hosted through Pembrokeshire County Council’s own system, urges the authority to press the Dyfed Pension Fund to withdraw investments from firms alleged to be “complicit with Israel’s genocide of Gaza”.
Under the council’s petitions scheme, any submission receiving more than 500 signatures must be considered by councillors at a future full council meeting.
However, at the time of publication, the item does not yet appear on the council’s online agendas and minutes portal and no specific date has been scheduled for debate.
Agendas are typically published around a week before meetings take place.
Supporters of the proposal say the move is about ethical investing and ensuring public money is not linked to conflict or alleged human rights abuses.
One campaign supporter said: “Residents don’t want their pensions invested in companies that profit from war. Councils already take ethical positions on fossil fuels and arms manufacturing – this is the same principle.”
But others argue that foreign policy issues fall outside local government’s remit and warn the move could affect pension performance.
Sharon Ross, a freelance writer who contacted The Herald ahead of the debate, said councillors should focus on local services instead.
She said: “Local issues where councillors can make a real difference – roads, schools, GP access and business support – risk being pushed aside for international politics.
“Divesting from an entire country could reduce diversification and potentially lower returns for pension holders without achieving meaningful change overseas.”
Local government pension schemes operate under fiduciary duties requiring investments to prioritise members’ financial interests. Previous legal guidance to councils across the UK has stressed that decisions must be based primarily on financial considerations.
The Herald has asked the council to confirm when the petition will be scheduled, what proportion of the pension fund might be affected, and what financial or legal advice members will receive.
Residents can monitor the authority’s “Agenda, Minutes and Decisions” webpage for the publication of the next Full Council agenda, where the item is expected to appear once formally listed.
Further updates will follow when a date is confirmed.
Crime
Shoplifting down in Wales on paper – but local retailers say reality feels different
Police figures show recorded thefts falling locally, while shopkeepers and former offender describe ‘daily’ losses and low reporting rates
POLICE statistics suggest shoplifting is falling across Wales – but retailers in Pembrokeshire have told The Herald the problem remains persistent, under-reported and, in some cases, worse than ever.
Figures from the Office for National Statistics show a 10% decrease in police-recorded shoplifting across Wales in the year to September. In the Dyfed-Powys Police area, which covers Pembrokeshire, recorded offences fell by 20%.
The numbers were welcomed this week by retail union Usdaw, which said the drop offered “hope” that government action on retail crime was starting to have an effect.
However, several local traders said the official figures do not reflect what they are seeing on the ground.
One Milford Haven shopkeeper, who asked not to be named, told The Herald: “We don’t always report it now. You’d spend half your day on the phone. Sometimes it’s easier just to write it off. But it’s happening all the time.”
Another said theft had become “a daily nuisance”, adding that repeat offenders often returned within days.

Under-reporting concerns
The gap between statistics and experience may be explained by the way crimes are recorded.
Police figures only count incidents that are reported and logged. Retailers say many low-value thefts go unreported due to time pressures, lack of confidence that action will follow, and the administrative burden of statements and CCTV downloads.
Usdaw’s own survey of nearly 9,500 shop workers found that more than three-quarters had experienced verbal abuse, while over half had been threatened – with many incidents linked to theft.
Former offender speaks out
The Herald also spoke to a man from Milford Haven who was recently released from prison after serving time for repeated theft offences.
He said he had spent more than two years funding a drug habit by shoplifting across Pembrokeshire and in Cardiff.
According to his account, it was possible to steal goods worth up to £1,000 a day and sell them on, and he was “rarely stopped”.
“Most of the time you just walk out,” he claimed. “Even if staff catch you, they don’t always call police. It’s not worth their time.”
He said he had been detained around 50 times during what he described as hundreds of incidents, but only about ten led to police involvement and just four resulted in court.
While his experience is anecdotal, it echoes the frustrations voiced by local businesses who believe many thefts never make it into official statistics.
Government crackdown
The issue has also been raised in Parliament.
Pembrokeshire MP Henry Tufnell has previously said he has spoken to local shop owners about the impact of retail crime and has welcomed government measures aimed at strengthening enforcement.
Labour has pledged tougher action on shoplifting, including ending the widely criticised £200 threshold that many retailers felt led to low-value thefts being deprioritised, alongside promises of more visible neighbourhood policing.
Retailers say any extra support would be welcome – but many believe rebuilding confidence that crimes will be taken seriously is key.
As one trader put it: “The stats might say it’s down. But if you’re running a small shop and losing stock every week, it doesn’t feel like it.”
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