Welsh Assembly Government Spending Review

In plenary on 10 December, in response to Jenny Randerson AM, I said I would provide more information for all members on the process and the criteria to be used in the Assembly Government's spending review.

We are taking the review forward in two main ways. On the one hand it is examining our existing programmes and evaluating their contribution to our priorities.  On the other hand it is looking in more depth at a range of specific issues and bringing that information to bear on the Cabinet's future decisions about budget allocation. 

The evaluation exercise

The Cabinet has agreed a set of criteria against which current spending is being assessed and evaluated.  Those criteria are derived from:

• our vision set out in "Wales: A Better Country",
• our manifesto commitments,
• our values of equality, social justice and sustainable development,
• our commitment to effective, efficient delivery and 
• our statutory requirements.

The evaluation exercise is being carried out using an approach based on the US Office of Management and Budget's PART system.  It will provide information in a structured format to help ministers assess the relevance of each main spending programme against the Assembly Government's priorities and alongside evidence of the effectiveness of the expenditure.

Specific issues

The review is drawing on in-depth projects including the Wanless Review implementation and the reports from a number of task and finish groups set up by the Cabinet.  We will be involving delivery organisations, such as our ASPBs and the local authorities in the review.  My officials have made contact with ASPBs to set the scene and have held early discussions with the WLGA.  In addition I shall be holding a short series of round-table discussions with representatives of a range of organisations to hear their views.

We shall also be looking in more depth at some major spending issues.  The review will be informed by work being done on implementing the Wanless report on health and social care.  We are looking at the efficiency gains to be made from the 10-year Merlin contract for IT and business change, and how those gains can deliver more revenue to front line services.  We shall be looking at the scope for savings in procurement - including the potential benefits from the award-winning Wales Procurement Initiative.  We are looking at the large number and variety of grant schemes operated by the Assembly Government and its ASPBs.  We will be taking account of the mid-term evaluations of the EU structural fund programmes.  We also expect the evaluation exercise to generate further issues to consider.

Efficiency review

The spending review team is keeping in close touch with the joint Treasury/Cabinet Office efficiency review.  We have begun a short scoping study to see how far this will be relevant to our own continuing activity in improving efficiency.

Timing

At the March supplementary budget I will publish some revised baselines for 2005-06.  These will comprise the necessary changes to the current flat baselines to enable key capital programmes to plan ahead and to meet any other essential short-term changes.  I will make a statement then on progress with the review.  I do not, though, want to pre-empt the main outcome of the review which will inform the 2004 draft budget (for 2005-06 to 2007-08) on which we will be consulting in the Autumn.

In the Autumn committees will be considering priorities for the budget and will be consulted on my draft proposals.  I will make available information generated by the spending review's evaluation to inform committees' considerations.  I will incorporate the outcomes of the spending review in my statement on the draft budget.

In undertaking the review we are confronting established spending patterns.  Adjusting these to reflect our priorities will require some difficult decisions. We are fully committed to the actions and values we set out in "Wales: A Better Country".  The review will inform our decisions to ensure that our budget is allocated in the way that most effectively enables us to deliver the Assembly Government's priorities.