Investing in public services: Wales spending plans

New resources for Wales over the next three years will allow the National Assembly to improve public services and target public expenditure to meet the needs and priorities of the people of Wales, the Chancellor Gordon Brown announced today. By 2003-04 spending will be £2 billion higher than 2000-01.

Additional resources over the next three years have been made available to invest in modern public services in Wales as part of the Spending Review 2000. The increases over 2000-01 provision are £0.7 billion in 2001-02, £1.4 billion in 2002-03 and £2 billion in 2003-04.

There is an extra allocation of £80 million for 2001-02, £90 million for 2002-03 and £102 million for 2003-04 to Wales to ensure funding of the European share of its Objective One needs with resources for match-funding provided for within the total spending settlement. The Government is also transferring management of the European Social Fund in Wales worth an additional £33 million in 2001-02, £58 million in 2002-03 and £58 million for 2003-04 to the National Assembly for Wales.

The National Assembly for Wales has freedom to make their own spending decisions within the overall totals on functions under their control in response to local priorities. The Assembly will make their own announcements in due course about their detailed spending plans.

Paul Murphy, Secretary of State for Wales said:

"This is an excellent settlement for Wales which has been announced by the Chancellor today. I wholeheartedly welcome it. It represents a major boost to public services in Wales which will help to make a real difference to the quality of life for the people of Wales.
"The settlement gives the Assembly the resources to deliver better services, and to increase prosperity, for all the people of Wales in partnership with the UK Government. The settlement also makes good the Government's commitment to Wales on Objective 1. It enables Wales to draw down its full Structural Funds entitlements, so that the Objective 1 programme in Wales can be a success."

The changes in the Assembly's budget in the spending review have been linked to changes in spending plans of United Kingdom Government departments by the Barnett formula. The formula gives Scotland, Wales and Northern Ireland a population-based share of planned changes in comparable spending in England.

Notes for editors

1. The Wales Departmental Expenditure Limits for the next three years represent increases over the 2000-01 limit of £0.7 billion for 2001-02, £1.4 billion for 2002-03 and £2 billion for 2003-04 and include increases announced in the Budget. They represent a 5.4 per cent real terms annual average increase in provision over the next three years.

2. The budgets have been set in resource terms consistent with those of UK departments.

3. The increases have been determined on the basis of the Barnett formula. The general principles for determining budgets were set out in the Statement of Funding Policy.

4. The Barnett formula ensures that Wales receives a population-based share of changes in comparable spending in England. The settlement also provides provision to cover in full the increase in EU Objective 1 structural funds receipts.

5. The devolved administrations' budgets continue to be determined within the United Kingdom framework of public expenditure control. Responsibility for United Kingdom public expenditure allocation remains with the Treasury. Once overall public expenditure budgets have been determined, the devolved administrations have freedom to make their own spending decisions within the overall totals on functions under their control in response to local priorities. The devolved administrations will make their own announcements in due course about their detailed spending plans.

6. For more details contact the Wales Office press office on 020 2047 5291.