Welsh Government announces £27.5bn final budget

The Welsh Government has published its final budget for 2026-27, worth £27.5 billion, with significant funding increases secured through a Labour-Plaid Cymru agreement.

Key Budget Allocations:

The NHS will receive an additional £180 million, bringing the health and social care budget to £12.6 billion – representing more than 55% of the Welsh Government’s day-to-day spending. The budget will increase by 3.6% overall.

Local councils across Wales will benefit from £113 million in extra funding, ensuring a minimum 4.5% budget increase next year, with no individual council receiving less than 4%.

Additional Funding Announced:

The final budget includes £6 million for bus services in Wales, £10 million to invest in buses and depots, and an extra £2.8 million for rail services. Education will see £6 million for teacher pay increases in further education institutions and sixth forms, £4.2 million to support children with additional learning needs, and £20 million for school building improvements.

Other allocations include £2.6 million for tackling homelessness, £6 million for flooding, £3.5 million for the Sustainable Farming Scheme, and £2.5 million for the National Library for Wales.

A £116 million package will support businesses affected by changes to business rates coming into force in April, whilst £120 million of capital funding has been set aside for the next government to spend on major investment projects following the Senedd election on 7 May.

Political Response:

Finance Secretary Mark Drakeford said the budget “provides stability and certainty to public service” and was an example of “parties working together to secure the vital resources people, business and public services need for the year ahead”.

However, Welsh Conservative shadow finance secretary Sam Rowlands criticised the agreement, stating: “Plaid and Labour’s budget stitch-up is a bad deal for Wales.”

Darren Hughes, director of the Welsh NHS Confederation, said NHS leaders “broadly welcome the final budget during a difficult time for public finances” but noted it was “fairly ‘business as usual'” given the proximity to the election.

Universities Wales expressed disappointment, saying the budget “does not reflect the continued financial pressures facing our universities”.

This is the Welsh Labour government’s final budget before the Senedd election in May. The deal between Labour and Plaid Cymru was necessary as the Labour government does not hold a majority in Cardiff Bay.