Back budget or Wales could lose £1bn, FM warns

Wales could lose £1bn if opposition parties do not support Labour's budget this winter, the first minister has warned.

Eluned Morgan said there could be no pay rises for people in the public sector next year without their help.

Labour is in a minority in the Welsh Parliament and needs at least one other Senedd politician to support its spending plans to get them passed in a vote.

Morgan's government is looking for a deal and talks have taken place with Welsh Liberal Democrat leader Jane Dodds, but an agreement is yet to be struck.

Chancellor Rachel Reeves announced £1.7bn for Wales in her budget in October, including £774m for this year, and £930m the next.

To get next year's cash a new budget would need to be passed - if that proves impossible, under the law the amount of money available to Welsh public services, including the NHS, schools and councils, will be cut.

The Welsh government's draft budget for the next year is expected to be announced in December, with a crucial vote in early 2025.

Morgan's comments come as an extra £157m was announced for Welsh public services, including £1m to help arts groups in need.

The organisation's chairwoman said it would not make up for all of the funding lost this year when arts and culture organisations saw funding redirected to the NHS and trains.

Morgan said the Welsh government cabinet discussed the budget on Monday, but "we do need to reach out to others".

She added: "If we can't get our budget through, we will not see a billion pounds increase.

"That's the way the system works. So there are real questions for opposition parties for answer."

Morgan publicly invited Plaid Cymru to take part in budget talks in November. At the time, a Plaid source said that no discussions were taking place.

Unlike the Lib Dems and Plaid, Welsh Conservatives have never supported a budget in the past.

Peter Fox, Tory finance spokesman, has played down the chance this might happen now, saying it was not the job of the opposition to help.

The first minister's comments came as the Welsh government announced £157m in funding for the year, backed by the extra cash in the UK government budget.

It includes £21m for diagnostic equipment for the NHS "to help cut waiting lists" and £20m for school and college repairs.

An extra £1m will be given to the Arts Council of Wales, on top of a previous boost of £1.5m, as a resilience fund to help 60 organisations facing potential financial difficulty and protect jobs.

This does not cover the £3.5m cut from the council's budget at the start of the year.

Morgan said: "It broke our hearts to see those cuts last year, but we had to make difficult decisions and we had to prioritise the NHS."

She said the Welsh government had faced austerity cuts for 14 years from the previous UK government.

The Welsh National Orchestra cut back on performances due to funding cuts, while the Blackwood Miners' Institute has been under threat because of proposed cuts by Caerphilly council.

Chairwoman of the arts council, Maggie Russell, said: "Taking a 10.5% cut, was really tough.

"So no, it doesn't make up for all that money, but we really hope that it's the beginning of the sector being able to plan, and have a greater sense of financial stability going forward."