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Rise in Welsh spending slows down Rise in Welsh spending slows down
(about 2 hours later)
Welsh Assembly Government spending will rise by an average of 2.4% a year above inflation for the next three years, says the Treasury. Welsh Assembly Government spending will rise by an average of 2.4% a year above inflation for the next three years, according to the Treasury.
It means that while more money will be available for public services like schools and hospitals, spending will not rise as quickly as previously. The statement, part of Chancellor Alistair Darling's Comprehensive Spending Review, means spending will not rise as fast as previously.
The details were announced as part of Chancellor Alistair Darling's Comprehensive Spending Review.
Assembly government spending will go up from £14bn to £16bn by 2010, he said.Assembly government spending will go up from £14bn to £16bn by 2010, he said.
Welsh Secretary Peter Hain said extra public spending in Wales would continue to outstrip spending growth across other parts of the UK. Welsh Secretary Peter Hain said it was a "good deal for Wales" but Plaid Cymru said the figures were "misleading".
He said: "This is a good deal for Wales. Mr Hain said extra public spending in Wales would continue to outstrip spending growth across other parts of the UK.
"It shows how this Labour government in Westminster is working together with the assembly in Cardiff Bay to deliver for the people of Wales." He said: "It shows how this Labour government in Westminster is working together with the assembly in Cardiff Bay to deliver for the people of Wales."
The budget for Wales effectively doubled over the past eight years since the assembly was founded, but the finances will be tighter over the next three. But Plaid said it was the "worst financial settlement for Wales since devolution".
Plaid MP Adam Price said the UK government had "massaged" the figures by changing the basis by which they were calculated.
"The people of Wales will be £700m worse off than they should have been had the (UK) government stood by its budget promise," he said.
The budget for Wales has effectively doubled over the past eight years since the assembly was founded, but all the main parties agree the finances will be tighter over the next three.
UK government revenues are under pressure and the economy's rate of growth is also predicted to slow down.UK government revenues are under pressure and the economy's rate of growth is also predicted to slow down.
The result is that Mr Darling's spending review is less generous than those of Gordon Brown when he was chancellor. The result is that Mr Darling's spending review was less generous than those of Gordon Brown when he was chancellor.
'Tight squeeze'
It means the Labour-Plaid coalition in the assembly government will face tougher budget decisions than its predecessors.It means the Labour-Plaid coalition in the assembly government will face tougher budget decisions than its predecessors.
If, for example, Cardiff Bay ministers wish to continue to make health and education top priorities, as the UK government is expected to do, other departments will have to tighten their belts that much more.If, for example, Cardiff Bay ministers wish to continue to make health and education top priorities, as the UK government is expected to do, other departments will have to tighten their belts that much more.
Ahead of Mr Darling's statement, Nick Bourne, leader of the Conservatives in the assembly, said he suspected the new assembly government would have "massive difficulty" fulfilling the promises it had made. Shadow Welsh Secretary Cheryl Gillan, for the Conservatives, predicted the spending statements would "place significant pressure on the Labour-Plaid coalition and its ability to deliver its policy commitments".
Education Minister Jane Hutt said the policies agreed by the Labour-Plaid Cymru administration were both "ambitious and radical" as well as "realistic and deliverable". "After years of throwing money at the problem without coming up with any workable solutions, ministers now have to behave more responsibly when it comes to public spending," she said.
The Liberal Democrats said Labour and Plaid Cymru now faced a "big test," and finance spokesperson Jenny Randerson said: "The first minister has put off explaining how he will pay for some of his government's plans - now he must explain how".
"This might mean a tight squeeze for some of Plaid's more ambitious projects that found their way into the coalition agreement".
A Plaid spokesperson said it was "a very challenging settlement" but insisted that the assembly government was "committed to delivering on all of its commitments".