First Minister says UK Government funding will help Wales tackle waiting times and support communities

THE FIRST MINISTER has welcomed a £1.6bn funding boost confirmed in the UK Chancellor’s Spring Statement – saying it will allow the Welsh Government to invest in health, education, and communities across the country.

In a measured response to the Chancellor Rachel Reeves’ economic update, First Minister Eluned Morgan acknowledged the difficult financial context but stressed that Wales stood ready to use the additional resources to deliver real improvements.

She said: “The Spring Statement confirms the £1.6bn boost to our funding for the next financial year and provides an additional £16m on top of that.

“Wales will benefit from a growing economy and interest rates that are going down.”

The statement comes after the UK Government outlined a package of spending plans aimed at restoring fiscal balance, including controversial cuts to disability benefits and warnings from the Office for Budget Responsibility about sluggish income growth and rising inflation in 2025.

Despite the uncertain national outlook, the First Minister said Wales remained focused on its priorities.

“Our commitments remain firm,” she said. “The confirmed boost to our funding from the UK Government for 2025-26 means the Welsh Government will strengthen our NHS, cut waiting times, support schools and help communities thrive – making real differences to people’s lives.”

She also confirmed that ministers in Cardiff Bay would now review the broader implications of the Spring Statement.

“We will now thoroughly assess the Spring Statement’s implications on our future spending plans,” she added.

The Welsh Government has already faced criticism over pressures on the health service and education, with local authorities calling for more support to deal with inflationary pressures and increasing demand.

While the funding uplift is welcome, public sector leaders are warning that tough choices still lie ahead, particularly given the impact of UK-wide welfare reforms and cost-of-living challenges facing Welsh households.

The Herald understands that ministers will meet next week to begin budget planning in light of the new figures.

To add some context, here is what Gus Williams, interim CEO at Chambers Wales South East, South West and Mid, said. He told The Pembrokeshire Herald: “As expected, there was not much in terms of new announcements in the Chancellor’s Spring Statement today. The OBR forecasts highlight economic concerns already familiar to most businesses in Wales. Inflation concerns have not yet disappeared and there are worries about business and consumer confidence.

“Infrastructure and housing falls within the remit of the Welsh Government and like the rest of the UK, Welsh businesses support the prioritisation of simplifying the planning system but are keen to see the proof of this with spades in the ground. The industrial strategy and increased defence spending we hope will have a positive impact in Wales where the manufacturing and defence industries have a significant presence. Infrastructure investments are proven to boost economic investment, and channelling more spending out of the civil service and directly into infrastructure and increasing the amount of funding available to Wales is also welcome, providing the right projects are chosen.

“It is difficult to see any significant improvement in confidence and investment driving economic growth without capital investment led by the government. The government remains bound by fiscal rules that I would argue ignore the economic impact of borrowing to fund capital investments. Part of the problem has been the lack of any robust return on investment analysis on government spending.

“Consumer confidence remains hamstrung by a two-tier economy. The success of healthcare, welfare, and employment reforms will hang on whether they manage to improve overall employment and wage growth; this will be a big test over the next 12 months. The government has been clear that this is how it expects to be judged in the long term.

“Business owners are facing significant headwinds, the full impact of which we are yet to see. The economy could break out of these headwinds but the government will need to lead the way – just cutting spending will not change much, reform needs to achieve change.

“Global trade remains the government’s other major challenge. At the moment the government is trying to balance its relationship with the US and EU and whether events will force them off the fence one way or another remains to be seen. With domestic demand static, growth may be dependent on how the global trade environment now evolves.”

From a business point of view, Lloyd Powell, head of ACCA Cymru/Wales, said: “This week’s announcements by the Chancellor are likely to be cautiously welcomed by Welsh businesses.

“Small businesses in particular will be pleased to have some breathing space on VAT, with the threshold increased slightly to £90,000. ACCA had called for this given the artificial brake on growth it represents for smaller businesses, combined with the knock-on impact to HMRC of dragging more businesses into this tax regime at a time when service levels are already at historically poor levels.  

“We welcome the commitment to further improvements to the R&D tax relief scheme, as well as plans to improve regulation in the tax advice market, to recognise the value of professional agents. 

“As well as the effects from the NI cut, VAT registration threshold increase, child benefit changes, alcohol and fuel duty freezes, the Chancellor announced that Wales will be allocated a ‘Barnett consequential’ of £170m. He also announced Levelling Up funding for Welsh projects – £10m for Venue Cymru and £5m for Newport. The Chancellor also announced a £160m deal for the UK government to purchase the site of the planned Wylfa nuclear site in North Wales. 

“The Chancellor announced the scrapping of the Furnished Holiday Lets scheme, which gives extra tax reliefs on properties being rented out to holidaymakers. There are more than 11,000 self-catering holiday lets in Wales, according to the Welsh Government’s latest list of properties paying non-domestic rates. 

“Whilst a welcome simplification to the tax system overall may boost the availability of rented accommodation locally, the removal of the short-term holiday let regime will be a blow for some. The Welsh Government has already introduced changes to make it harder for holiday lets to be exempt from council tax.”

Trussell Trust warns of rising hunger as 3.2 million face benefit losses

DISABLED people across Wales are facing what campaigners have called “brutal” and “terrifying” cuts to their benefits after the Chancellor’s Spring Statement revealed sweeping welfare changes that will leave millions worse off.

Rachel Reeves, delivering her first Spring Statement as Chancellor, claimed that the changes would help restore a £9.9bn surplus by 2029-30. However, the Department for Work and Pensions quietly published figures showing that 3.2 million families – both current and future claimants – will lose an average of £1,720 a year.

While Reeves defended the changes as part of a plan to grow the economy, critics say the cost is being passed to the most vulnerable – particularly disabled people who are already struggling to afford basic necessities.

In a statement to The Herald, Jo Harry, network lead for the Trussell Trust in Wales, said the cuts would push more people into poverty and hunger.

“These brutal cuts to already precarious incomes won’t help more disabled people find work, but they will risk forcing more people to skip meals and turn to food banks to get by,” she said.

“Disabled people are already three times more likely to face hunger, and over three quarters of people in receipt of Universal Credit and disability benefits are already struggling to afford the essentials like food. This will only get worse.”

‘Terrified’ by cuts

David, 46, who lives in Wales and has a painful bone disease, said he now relies on a Trussell Trust food bank and fears for his future.

“I am terrified now that the Chancellor has confirmed that my disability benefits will be cut,” he said.

“The bone tumours in my hips cause me pain every day and force me to use crutches. In cold weather, my symptoms worsen – but I already can’t afford to put the heating on.”

“Life costs more if you’re disabled. Things like specialist equipment and travel to healthcare appointments all add up. PIP – which the government is brutally cutting – is there to account for these extra costs. It is not a luxury.”

Warnings from experts

The British Medical Journal this week published a warning that cuts to disability benefits could lead to an increase in mental health problems, NHS pressures, and even deaths. In a previous wave of cuts between 2010 and 2013, over one million people had their benefits reassessed – resulting in an estimated 600 suicides.

Meanwhile, the Office for Budget Responsibility warned of a slowdown in living standards growth. Real household disposable income is forecast to grow by just 0.5% in 2027, with inflation expected to rebound to 3.7% in mid-2025.

Campaigners say the Chancellor could have chosen to tax extreme wealth instead of cutting benefits.

Caitlin Boswell from Tax Justice UK said: “Inequality is soaring and people are being left behind, struggling to make ends meet, while the very richest get richer. Choosing to make cut after cut to the poorest and most marginalised, while leaving the vast resource of the super rich untouched, is immoral and harmful.”

CAMPAIGNERS from across west Wales are planning to lobby a meeting of the Dyfed Pension Fund Committee at County Hall, Carmarthen, this morning (Wednesday Mar 26).

Groups from Carmarthenshire, Ceredigion and Pembrokeshire under the banner of Solidarity with Palestine say they will hand in petitions as part of their ongoing campaign calling on the fund to divest from companies they claim are complicit in Israel’s war on Gaza and military actions in the West Bank.

Research by the Palestine Solidarity Campaign (PSC), published in February, claims that Dyfed Pension Fund holds £235 million in investments in companies that “produce weapons and military technology used by Israel in its attacks on Palestinians; provide technology and equipment for Israel’s infrastructure of military occupation; or are active in illegal Israeli settlements based on stolen Palestinian land.”

Campaigners are calling on the committee to divest from all such companies.

The Herald understands that Solidarity with Palestine Pembrokeshire will be handing in a petition with more than 500 signatures, which was previously rejected by Pembrokeshire County Council.

Campaigners also cite a recent statement from UNICEF that said at least 200 children have been killed within four days of renewed Israeli bombing. According to them, hospitals in Gaza are so under-resourced that amputations and other emergency procedures are being carried out without anaesthetic or pain relief.

They say that since March 18, at least 673 people have been killed in Gaza, including 200 children.