Up to £30m could be stripped from building projects and infrastructure in Wales within the next year to help fund the UK government’s Defence Investment Plan, the Welsh government has warned. The cut would amount to about 0.8 per cent of Wales’s £3.7bn capital budget — and the first minister, Rhun ap Iorwerth, has written to the Welsh secretary, Jo Stevens, saying his “capital budgets are facing cuts this year and in following years to fund the Defence Investment Plan (DIP)”.
The warning came after the prime minister, Sir Keir Starmer, announced a £15bn increase in military spending, to be funded by cutting investment budgets in other areas. Each Whitehall department has been told to find 1 per cent savings from their capital budgets over the next four years. The Welsh government said further reductions are expected up to April 2030, warning of “a direct impact for schools, hospitals, and transport connectivity”.
“Welsh government warns of up to £30m cut to capital budget for defence, threatening schools and hospitals.”
A Welsh Labour source close to the UK government described the cut as “minuscule”, while the UK government said any changes to the Welsh budget would be “minor”. But Elin Jones, the Welsh finance minister, told a committee that her department is “close to committing the entirety of the capital budget”. She said only £29,000 remains unallocated from her mid-year budget, which the Senedd will vote on on 14 July. She noted a £50m reserve is available “if there were issues that needed to be dealt with additionally within the financial year”.
For comparison, £25m is the amount ministers plan to spend on surgical and diagnostic hubs. The Welsh government has not yet said how it would find the savings, but warned the cuts “could be much larger” given the UK government has indicated a further £4.7bn will need to be found at the autumn budget.