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.