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03 October 2017

CHC's response to the Welsh draft budget announcement

Finance Minister Mark Drakeford has delivered his draft budget speech for 2018/2019, making a number of commitments relating to housing in the first budget where the Welsh Government is able to use its tax and borrowing powers

The draft budget follows the announcement over the weekend that Welsh Labour and Plaid Cymru had agreed a two year budget deal.

The key funding pledges from the draft budget relating to housing associations were:

  • protection of the Supporting People Programme for the next two years
  • an additional £340m of capital to deliver on Welsh Government’s commitment to their target of 20,000 homes
  • a further £10m each year to reduce homelessness
  • protection of the social care budget for the next two years
  • an extra £1m each year for the Discretionary Assistance Fund

The Finance Secretary also announced that the new Land Transaction Tax (previously Stamp Duty) would be amended, raising the threshold for the lowest rate of tax from £125,000 to £150,000.

With new tax powers at his disposal, he also announced a shortlist of four new taxes which would be considered by Welsh Government, which include a levy to fund social care and a vacant land tax to tackle land banking. Further detail on these proposals will be released as they are be considered over the coming months before a final decision is taken in 2018.

Outside of housing, the NHS budget was increased by £230m in 2018/19 and £220m in 2019/20, £40m for 21st Century Schools and £50m for a new rail station at Llanwern.

In response, Stuart Ropke, Chief Executive of Community Housing Cymru, said:

“This is a good budget for housing with £340m to fund new, affordable homes.

“Protection of the Supporting People programme means that housing associations can continue their important work changing lives by providing support to those fleeing domestic abuse, suffering from mental illness and experiencing homelessness.

“Today’s budget also sees spending on the NHS in Wales approaching 50% of the total Welsh Government budget, and projected to go beyond in years to come. The signals are loud and clear. We need to do things differently. This situation is not sustainable in the long term. Good housing improves health and keeps people out of hospital and in their homes for longer. Today’s budget offers us an opportunity to meet that challenge, and housing associations stand ready to work with our partners including the NHS and local government across Wales. We are ambitious for Wales and want to play our full part.”