Pub tax hike and new Welsh budget cuts to prop up NHS

Pubs, shops and restaurants will see their business rates go up as part of plans to put more money into Wales' struggling health service.

They include a fresh round of public spending cuts.

While health spending is increasing, every other department faces real terms cuts, with rural affairs worse hit.

Officials say ministers are prioritising frontline services, including the NHS and councils.

Funding for arts and culture bodies - such as the National Museum and the Arts Council - and Sport Wales are seeing their funding cut by about 10%.

Museums could face having to start charging, while the Welsh government is also considering whether to increase tuition fees and charges for dental and social care.

Finance Minister Rebecca Evans said: "We have had to take some really difficult decisions to radically redesign our spending plans to focus funding on the services which matter most to the people of Wales".

The Institute for Fiscal Studies' David Phillips said the budget "clearly prioritises core NHS services- making very tough choices across a range of other services to provide a £730m (8%) boost to what they pencilled in to spend this time last year".

As part of Welsh Labour's £21bn budget for the 12 months after next April, business rate relief for pubs, shops and restaurants will be reduced from 75% to 40%.

The Welsh government said the discount, which dates back to the pandemic, was "never intended to continue indefinitely".

It remains at 75% in England, where business rates are set by the UK government.

Tuesday's announcement comes on top of the cuts that had already been made in October to help support the NHS and Transport for Wales.

Ministers say there are some things the government will no longer fund.

The Welsh government said the money it is receiving from the UK government was not enough to cover rising costs - particularly for wages in health and education.

Ahead of the budget Conservatives accused the government of wasting "millions" on "vanity projects" such as more politicians, while Plaid Cymru said "everything possible must be done" to protect public services.

The budget was published on the Welsh government website while the Senedd is in recess, meaning politicians did not scrutinise the spending plans in public on Tuesday.

Budget documents show every minister has had to make reductions.

When adjusted for the Welsh government's measure of real terms, all departments, apart from health, have less to spend.

But the focus on frontline services means some sectors are facing large decreases in their funding.

That includes the National Museum and Arts Council Wales, whose cash will fall by around 10%.

Cadw, the body responsible for safeguarding Wales' historic places, will lose £2m out of their budget - a cut of more than 20%.

Rural affairs is taking the biggest hit, confirming fears of farming unions in the run-up to the budget.

After inflation, the day-to-day rural affairs budget will fall by more than a tenth.

Next year, health spend will be £11bn - more than half of government's entire budget.

The Welsh NHS is contending with record high waiting times and growing wage bills, while junior doctors are due to go on strike next month.

The Welsh government's large climate change department, which includes transport, housing and Natural Resources Wales, is seeing the second largest round of new cuts.

Tuition and dental fees might have to increase because of the "extreme pressure" on the Welsh government's budget.

Minister said they would "carefully consider" whether it can bring in more money by charging more for services.

No decisions have been taken and ministers said they would consult on proposals before making any changes.

Budget documents said: "As our budget is under such extreme pressure, we will need to carefully consider whether additional funding can - and should - be raised by increasing charges for a range of services while we continue to ensure we protect those who are least able to afford higher charges."

The Welsh government funds services run from Cardiff rather than Westminster.

That includes education, health, agriculture, bus transport and some rail, and arts and culture.

They also support local councils, which fund social care, schools, leisure centres and refuse collection.

Most Welsh government money comes from a UK government grant, with a small amount from taxes.

The Welsh government has complained that the money was not meeting the pressure of inflation.

For its part the UK government said the Welsh government was "well-funded".