Oral - Comprehensive Spending Review

Yesterday, the Chancellor of the Exchequer published details of the outcome of the 2007 comprehensive spending review. The figures published yesterday by the Treasury show that the Welsh Assembly Government will receive an average real-terms increase in its departmental expenditure limit of 2.4 per cent per year in the CSR period 2008-09 to 2010-11. This compares to a 2.1 per cent growth in the total UK DEL, 1.8 per cent in Scotland and 1.7 per cent in Northern Ireland.

It is important that Assembly Members note that these increases are calculated on an adjusted 2007-08 baseline. These adjustments are technical and do not, in any way, affect our spending plans for 2007-08; they simply affect the baseline that rolls forward into 2008-09 and subsequent CSR years. Based on our previously published baseline, the average real-terms increase is 1.8 per cent per year, compared with 1.5 per cent increases in both Scotland and Northern Ireland. In cash terms, this equates to an increase of almost £2 billion in the Assembly Government DEL by 2010-11, a figure that is in line with our planning assumptions. This is significantly slower growth than we have enjoyed in recent years, but is not out of line with the long-term trend rate of growth in public spending.

I am continuing to have discussions with the Treasury about some aspects of our settlement. The challenge for the Assembly Government now will be to continue to deliver real and noticeable improvements in public services while spending is growing at a slower rate than we have seen over the last eight years; we share this challenge with the rest of the UK. The 'One Wales’ agreement clearly sets out the Assembly Government’s priorities for the next four years. Our ambition is to continue the transformation of Wales into a self-confident, prosperous, healthy nation and society that is fair to all.

Our key early priorities include: tackling child poverty, which includes implementing an extra children’s bond; continuing to improve access to healthcare, to reduce waiting times and to deliver significant improvements in the health of all the people of Wales; delivering radical reductions in class sizes for three to seven-year-olds; improving access to housing, by increasing the supply of affordable homes in particular; tackling climate change, increasing take-up of sustainable energy and improving recycling; enhancing regional and national transport; and stimulating enterprise and business growth to boost employment.

'One Wales’ is ambitious and radical, but is also realistic and deliverable within the funding that is available to us over the next few years. Despite the delay in the CSR outcome, the Government has been able to begin its budget planning process. A good deal of preliminary work has already been done to turn the commitments in 'One Wales’ into detailed plans. However, there are options around implementation and timing. As the First Minister has already made clear, not all commitments will be delivered in year 1, or even in year 2—this is a four-year programme. As we now know what level of resources is available over the next three years, we are able to finalise spending plans. Details of the Assembly Government’s spending plans for the period 2008-09 to 2010-11 will be published on 5 November.

In developing our plans to continue to improve public services and to deliver 'One Wales’, creativity and innovation will be essential. More of the same will not be good enough. It will be particularly important to continue to improve value for money and joint-working between different parts of the Assembly Government and between the Assembly Government and its delivery partners, while building on the work started by Sir Jeremy Beecham in the 'Making the Connections’ agenda.

As Minister, I have made it a priority to utilise all the resources available, which includes making the best use of European structural funds, maximising the value of our public assets, including Assembly Government resources, and attracting private sector investment. Our challenge is to build on the substantial progress that we have made and to continue to deliver significant improvements in Welsh public services.