WALES could be left facing a funding shortfall of up to £65 million due to the way its budget is calculated, trade union UNISON warned on Thursday (Apr 3).

The union says a rise in employer national insurance contributions, set to take effect on Sunday (Apr 6), will see the UK Treasury cover the additional costs for public services in England—but not in Wales.

UNISON is calling on the UK government to “play fair” by reviewing how money is allocated to the devolved nations. It says the Barnett formula—used to distribute public funds—fails to account for the larger size of the public sector in Wales, leaving essential services exposed.

Jess Turner, UNISON Cymru/Wales secretary, said: “Our plea to the UK government is to treat Wales fairly. If public services in England are to be fully covered for the national insurance increase, then those in Wales must be too. That additional cash can only come from Westminster.

“The Treasury is effectively penalising Wales because of the comparatively larger size of its public service workforce.”

According to the union, the shortfall will place even more strain on services already under pressure after years of underfunding.

“Fifteen years of squeezing budgets has placed public services under intolerable strain,” said Ms Turner. “A shortfall of tens of millions of pounds will harm the quality of vital services and heap further pressure on the Welsh workforce, who are already being asked to do more with less.

“More broadly, it’s clear the way Wales is funded within the UK needs to be reviewed.”

Report highlights top concerns and calls for long-term vision

THE WELSH public want the government to prioritise improvements to the NHS, tackle the cost of living, and invest in infrastructure, according to Deloitte’s latest State of the State report.

The 2025 report, published in partnership with the independent think tank Reform, reflects the views of both public sector leaders and the people who use public services.

For the third consecutive year, the state of the NHS and the cost of living were the most pressing concerns for people in Wales, with both issues cited by 75% of those surveyed. Social care for the elderly and vulnerable adults followed, mentioned by 48%.

Jobs and the economy (47%) and affordable housing (43%) were also high on the public’s list of priorities. One of the most notable increases was in concern about infrastructure—roads, railways and broadband—with 42% calling for improvements, a rise of six percentage points on last year.

When asked about the biggest drivers of future growth, respondents in Wales chose improving the nation’s health (45%), boosting education and skills (44%), and increased investment in infrastructure (39%).

Despite these priorities, most people were pessimistic about the outlook. Some 75% expected the NHS to stay the same or get worse, while 74% said the same about infrastructure.

Council chief executives interviewed for the report stressed that government infrastructure spending would be key to future growth. Other public sector leaders highlighted progress in Welsh transport, crediting a clear vision and strong partnership working for recent successes.

The biggest challenge facing public services, according to respondents, was a lack of funding, with 66% citing it as a concern. A further 55% expressed fears about a loss of trust in public services.

While trust in the Welsh Government remains higher than in the UK, Scottish or Northern Irish governments, the public remain sceptical about delivery. Some 63% said they had low trust in its ability to deliver major projects on time and on budget, while 61% doubted it could deliver outcomes people want.

On the question of taxation, Welsh public opinion was divided. Some 31% supported higher taxes and public spending, while 37% preferred lower taxes and reduced spending. Nearly half (47%) said they expected higher taxes and spending regardless of their preference.

Deloitte’s interviews with senior public sector leaders revealed ambitious long-term goals, including frictionless digital interaction with government services, improved collaboration between agencies, place-based planning for integrated transport and healthcare, and a shift toward long-term, commercially aware decision-making.

Dave Tansley, Deloitte’s senior partner for the South West and Wales, said: “The State of the State 2025 report shows the Welsh public remain concerned about the cost of living and the NHS. But our survey also found heightened interest in infrastructure, more so than in other parts of the UK, suggesting the public recognises the importance of connectivity to economic growth.”

He added: “Infrastructure investment supports jobs, housing, roads and rail—but more importantly, it provides the platform for long-term economic resilience. With public finances under pressure and the 2026 Senedd election approaching, the next administration faces difficult choices and the chance to deliver transformational change.”

Ian Howse, Deloitte’s senior partner for Wales, said: “Public sector leaders want bold reform—services that are joined-up, citizen-focused and tech-driven. While the Welsh Government is addressing immediate pressures, our research points to the need for a long-term vision. Leaders report growing urgency to deliver ahead of the next election, especially on economic growth, which is a positive sign for the future.”

FAMILIES living on lower incomes in Wales are set to benefit from a new £1.5 million Welsh Government fund aimed at tackling child poverty.

Applications have opened for the Child Poverty Innovation and Supporting Communities Grant, which supports public and third sector organisations to work together to improve the lives of children in low-income households.

Previous rounds of funding have already helped reshape communities. In Rhondda Cynon Taf, the Trivallis housing association’s ‘Rise Strong’ project has seen families lead the way in designing local services based on their own needs.

In Cae Fardre, residents with no previous community space have created a thriving hub where families now take part in budget cooking classes and social activities. In Penrhys, the grant has supported the revival of the Penrhys Carnival, with families learning media, art, and costume-making skills and staging a fashion show using recycled materials.

Jen O’Hara Jakeway, Head of Community Involvement at Trivallis, said: “The funding has helped families come together to share ideas and find ways to build on their strengths to make a difference in their own communities. Being alongside them as they take the lead and drive that change has taught us so much about the potential in our communities.”

The Cabinet Secretary for Social Justice, Jane Hutt, said: “This funding puts resources directly where they make the greatest difference to families on lower incomes. We’re determined to do all we can to prevent people from going into poverty and help those who need support the most.

“Since 2022, we’ve invested nearly £5 billion in schemes which help people access their entitlements and help put money back into people’s pockets by boosting incomes and strengthening financial support. Our Child Poverty Strategy sets out actions to tackle poverty, including delivering more community-based opportunities for play, sports, youth activities and access to arts and culture for children and families.”

Organisations can apply for up to £25,000 for community projects or up to £125,000 for regional projects involving more than one local authority.

Applications close on Sunday (Apr 13). For details, visit: gov.wales.