Budget fun

Income and Expenses	January	February	March	April	May	June	July	August	September	October	November	December
Previous month’s balance		£3,305	£6,610	£9,915	£13,220	£16,525	£21,830	£24,255	£27,560	£30,865	£34,170	£37,025
Available Cash	£7,000	£7,000	£7,000	£7,000	£7,000	£7,000	£7,000	£7,000	£7,000	£7,000	£7,000	£7,000
Additional income	£0	£0	£0	£0	£0	£2,000	£0	£0	£0	£0	£0	£3,000
Monthly expenses	£3,695	£3,695	£3,695	£3,695	£3,695	£3,695	£3,695	£3,695	£3,695	£3,695	£3,695	£3,695
Planned expenses	£0	£0	£0	£0	£0	£0	£880	£0	£0	£0	£450	£900
Savings	£3,305	£6,610	£9,915	£13,220	£16,525	£21,830	£24,255	£27,560	£30,865	£34,170	£37,025	£42,430

Preparing the household budget is never an easy task, there are some things that have to be met. Enough needs to be set aside for a roof over head, food and clothing and that’s only the basic needs taken care of. What about all the other expenditure? Not the easiest of tasks at the best of times, but to do it with less cash coming in is miserable. 

Imagine this when you have to manage a £14 billion budget, with little room for manoeuvre and members of the family screaming at you for more money for their favourite things. And oh yes, if they gang up on you they can stop you allocating cash for the things important to you. 

That’s the task the Welsh Government faces. To top it all, you’ve got to do it against the clock ticking towards a 6 December deadline. So what’s to do, as they say in the valleys?

Well, the Government has to reach an accommodation with at least one of the other parties and get them on side. It has to cut down on spending in an area it regards as important and shift the cash into an area earmarked by one of the opposition parties for attention. Not an easy task, but far from being impossible.

Despite the protests of the tightness of the budget, there is always slack. Indeed there is seldom a financial year that ends without an underspend. It is no coincidence that if you travel around Wales in February and March your progress will be impeded by temporary traffic lights. This because authorities desperately try to get cash spent before the year end for fear that will be taken back into the coffers of the Welsh Government. It doesn’t just happen in roads it happens in many other expenditure areas as well. 

So we can expect Jane Hutt, the Finance Minister, to have some scope for budget adjustments. There is also a little windfall of £38.9m that has come the Welsh Government’s courtesy of the Council tax freeze in England. The funding formula means Wales gets a percentage of that expenditure, to use anyway it wants to. Who knows there might be even more room for manoeuvre after Mr Osborne’s Autumn Statement on the 29 November. 

It all amounts to Jane Hutt’s cupboard not being completely bare. She may have some goodies to offer to one or more of the opposition parties. But which? 

The Conservatives want more money spent on the health budget. It is the biggest spending department but is taking the biggest hit of all with £102m being shaved off. It is unlikely that Labour politically could do a deal with the Conservatives and the money just ian’t there. Deal or no deal, in this case, no deal.

The Liberal Democrats are pitching for more money for schools and particularly more help for poorer pupils. Now it is quite possible to re-order priorities within the budget, but would Leighton Andrews allow any changes to his plans. It is difficult to see, despite Carwyn Jones cwching up to Kirsty Williams in the Chamber, yesterday.

No, my hunch is that the deal will be done with Plaid Cymru. Why should they have favour bestowed on them, you ask? Put simply, it’s the economy, stupid.  They want more help for it. Government just might accept that it's an area it could have done more about. Of late the government have scurried around trying to show that they’re upping their game to right the downward spiral that the Welsh economy finds itself in.

During the last few weeks they’ve re-announced their capital expenditure programme. Last week’s they had an economic summit, after which the Welsh government may have realized that they’ve got to raise their game in this area. 

The latest unemployment figures showing that there are now a 137000 people unemployed will add further to the pressure on them to do something for the economic portfolio.

The budget is the first challenge to Carwyn Jones’s government and yesterday’s defeat is a reminder that a government without a majority have to listen and learn. The next fortnight will test them and also the resolve of the opposition parties. But be in no doubt, a deal will be struck.