Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how much his Department allocated for public sector pay increases in the Spending Review 2021 for the next three financial years; and how much has been allocated to the Welsh Government in Barnett formula consequential funding in the same period.

The Autumn Budget and Spending Review 2021 (SR21) set departmental budgets up to 2024-25 and confirmed that total departmental spending will increase by £150 billion in cash terms over the course of this Parliament. Since then, targeted additional funding was provided to support key public services continue to deliver – including £14 billion for health and social care and £4.6 billion for schools across the next two years. This means that total departmental spending will grow in real terms at 4% a year on average over this Spending Review period.

It is for individual departments to weigh up their priorities and consider the affordability of these recommendations against other priorities.

The Government confirmed on 13 July that it will be accepting the headline pay recommendations of the independent Pay Review Bodies in full for 2023/24. This will be funded from within existing department budgets through a combination of greater efficiency and reprioritisation. This will not mean any cuts in frontline services.

It is for the Welsh Government to decide how to allocate their funding in devolved areas. SR21 set the largest annual block grants, in real terms, of any spending review settlement since the devolution Acts. This provided £18 billion per year for the Welsh Government. That settlement is still growing in real terms over the three-year spending review period, despite inflation being higher than expected.

A full breakdown of changes to devolved administrations’ block grants, including Barnett consequentials, is set out in the published Block Grant Transparency document. An updated version of Block Grant Transparency will be published on 20 July.