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

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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.

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.

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.”

 

Community

Cilgerran Church in Wales school petition to be heard

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A PETITION opposing proposed changes for a north Pembrokeshire school is to be heard by councillors later this week.

At last May’s meeting, Pembrokeshire County Council considered a report of the School Modernisation Working Group which outlined the findings of a review of education provision in the Preseli area.

A later July meeting backed a general consultation to discontinue Cilgerran Church in Wales Voluntary Controlled School, and to establish it as a 3-11 community school.

“In particular, the review considered the extent of surplus school places in the area, set against a significant decline in the pupil population,” the council in its consultation has said.

The consultation closed on January 30.

Hundreds have opposed the proposed changes, with a petition, on the council’s own website opposing the changes recently closing after gaining 391 signatures.

Any petition of more than 100 signatures triggers a debate at one of the council’s scrutiny committees, in the case of Cilgerran that debate taking place at Pembrokeshire County Council’s February 5 schools and learning overview and scrutiny committee.

The Cilgerran e-petition, created by Louise Williams, raised concerns including the school could become part of a federation, a loss of permanent head teacher on site, a shared head teacher would have to oversee several schools, loss of funding control and the ability to maintain the school’s current healthy and stable funding, and a loss of commitment to the church, in turn could impact on the school’s and pupils values, beliefs and cultural beliefs.   

It said: “Ysgol Cilgerran VC school has strong links with the Church community in Cilgerran and we believe this will have a negative impact on the children who attend the school, the community of Cilgerran and the links between the two.
“We are proud of our school ethos and values which are strengthened by our links with the church. The school has close and strong relationships with our Church in Wales federation governors one of which is also our safeguarding governor.

“Our Church Federation governors work closely with the school and are regular visitors to the school and the children. They provide vital support and guidance to the school and have a positive impact on the Children’s education. We believe these links will be weakened by this proposal to remove our VC status and we believe this is an un-necessary action.”

The proposals for Cilgerran are part of a wide range of potential education changes in the county.

Two petitions, opposing the potential closures of Manorbier and Ysgol Clydau schools, were recently heard at full council and a further petition opposing the potential closure of Stepaside School has recently been launched, which has generated enough support to be heard at a future council meeting.

 

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Crime

Welsh Lib Dems urge ministers to rethink rates relief for struggling pubs and cafés

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Calls grow for Welsh Government to match support offered to English venues

THE WELSH LIBERAL DEMOCRATS have urged the Welsh Government to review its business rates policy, warning that scaling back support for pubs and hospitality risks further closures across towns and villages.

Party leader Jane Dodds, who represents Mid and West Wales in the Senedd Cymru, said ministers should act quickly to protect local venues after additional support for pubs and music venues was announced for England by the UK Government.

The measures announced by the Chancellor do not automatically apply in Wales, leaving uncertainty over whether similar help will be introduced here.

Hospitality businesses across Pembrokeshire and Carmarthenshire have already reported rising energy bills, higher wage costs and reduced footfall since the pandemic. From April, current business rates relief is expected to be reduced, a move the Liberal Democrats say could place Welsh firms at a disadvantage compared with competitors over the border.

Dodds said that pubs, cafés and restaurants form “the heart of our communities” and warned that withdrawing relief now would be “a serious mistake”.

She told the Senedd that support “cannot stop at pubs alone” and should extend to the wider hospitality sector, including restaurants and family venues that rely heavily on seasonal trade and tourism.

“When questioned, the First Minister said she needed to examine the details of the English package before committing to anything similar for Wales,” Dodds said. “Without urgent action, we risk losing viable, well-loved businesses that communities simply cannot afford to lose.”

The party is also calling for UK-wide action, including a temporary reduction in VAT for hospitality and tourism, funded by a windfall tax on large banks.

However, Welsh Government sources have previously argued that decisions on rates relief must be balanced against pressures on public finances, with ministers required to prioritise health, education and other frontline services within a fixed budget. They have said any additional support would need to be affordable and targeted.

Industry bodies have echoed concerns about the challenges facing the sector. Trade groups say many independent pubs and cafés continue to operate on tight margins, particularly in rural areas where they serve as community hubs as well as businesses.

Local operators say clarity is now key, with decisions on staffing, stock and opening hours often planned months in advance.

With the next financial year approaching, hospitality owners will be watching closely to see whether Wales mirrors England’s support – or leaves businesses to absorb the extra costs alone.

 

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international news

Mandelson quits Labour over Epstein controversy

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Former cabinet minister says stepping down is ‘in best interests of the party’ as questions raised over historic payments

LORD MANDLESON has resigned his membership of the Labour Party, saying he does not want to cause “further embarrassment” following renewed controversy over his past links to convicted sex offender Jeffrey Epstein.

The former cabinet minister and one-time UK ambassador to the United States confirmed his decision in a letter to Labour’s general secretary after fresh documents released by the US Department of Justice appeared to reference him in connection with Epstein’s finances.

The files suggest that three payments of $25,000 — totalling $75,000, about £55,000 at today’s exchange rates — were allegedly made to Peter Mandelson in 2003 and 2004.

Lord Mandelson said he had “no record or recollection” of the transactions and believes the allegations may be false, but intends to investigate the matter himself.

In his resignation letter, he wrote that he felt “regretful and sorry” to be linked again to what he described as the “understandable furore” surrounding Epstein.

He added that stepping down from party membership was the responsible course of action while he reviewed the claims.

“I do not wish to cause further embarrassment to the Labour Party,” he said. “I have dedicated my life to the values and success of the party and believe I am acting in its best interests.”

Ambassador role ended

Lord Mandelson had been appointed the UK’s ambassador to Washington by Prime Minister Keir Starmer in December 2024.

However, he was removed from the post last year after earlier revelations about his past friendship and contact with Epstein, including emails showing communication after the financier’s 2008 conviction.

The latest release of files has also included photographs said to show Lord Mandelson alongside an unidentified woman. He said he could not place the location or circumstances of the images.

There is no suggestion that appearing in the documents or photographs indicates criminal wrongdoing.

‘Deep regret’

Earlier this weekend, Lord Mandelson reiterated his regret for ever having known Epstein and apologised “unequivocally” to the women and girls who suffered abuse.

“I want to repeat my apology to the women and girls whose voices should have been heard long before now,” he said.

Epstein died in prison in 2019 while awaiting trial on sex trafficking charges, but investigations into his network of associates continue to generate political fallout on both sides of the Atlantic.

Labour has not yet issued a detailed statement beyond confirming it had received Lord Mandelson’s resignation.

 

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