£105m boost for capital funding in Wales

The investment in key public infrastructure such as schools, hospitals and transport - together with an extra £8.3m in 2012-13 and £8.07m in 2013-14 - was announced by the First Minister, Deputy First Minister and Minister for Business and Budget.

It comes after the UK Government’s Comprehensive Spending Review saw the overall Welsh capital budget cut by more than 40% in real terms over the next four years.

The extra funding announced this week will help cushion the impact of that cut, giving the go-ahead for projects that would otherwise not have happened.

Managing the disproportionate reduction to our capital budget is one of the greatest challenges arising from the Comprehensive Spending Review

The cash has come from a surplus generated by the Welsh Assembly Government as it made cutbacks to its spending in response to economic pressures. Of this money around £55m will be used to enhance the Centrally Retained Capital Fund, which was recently announced by the Business and Budget Minister. This fund, with an initial allocation of £50m in each of the next three years, supports the public sector in managing lower budgets and funding initiatives to achieve revenue savings. For 2011-12, the focus will be on cushioning the overall reduction to capital budgets as much as possible to protect frontline services for vulnerable people including children and the elderly, as well as maximising the economic benefits as Wales recovers from the recession.

First Minister of Wales, Carwyn Jones, said of the announcement: “Managing the disproportionate reduction to our capital budget is one of the greatest challenges arising from the Comprehensive Spending Review. Ministers have had to make difficult choices about priorities in developing their capital spending plans, so I am pleased that we can now provide clarity about our plans for 2011-12 to our partners in local government, the NHS, the third sector, the private sector and elsewhere.

“In spite of a very difficult capital settlement - the worst of any part of the UK - we have maintained our capital investment for this year while ensuring that, through careful planning and financial management, we have additional money to support the Welsh construction industry through 2011-12."

In spite of a very difficult capital settlement - the worst of any part of the UK - we have maintained our capital investment while ensuring that we have additional money to support the Welsh construction industry through 2011-12 

  Minister for Business and Budget, Jane Hutt, added: “The additional investment will provide a much-needed boost to our private and public sector partners as essential construction work can now get underway. This means total spend on capital projects in 2011-12 will be more than 8% higher than the level set in the Assembly Government’s Final Budget, approved last month.”