Implications of Welsh Government’s Draft Budget 2023-24 on sport & leisure
Tuesday 13 December marked the publication of Welsh Government’s draft budget for 2023-24. It comes in unprecedented times, when a cost-of-living crisis is compounding the financial hardship created by the COVID-19 pandemic. The effects have been indiscriminate, with sport and leisure like so many other sectors feeling prolonged existential challenges.
The publication of Welsh Government’s draft budget comes very soon after news of Powys County Council’s proposed decision, alongside its leisure operator and Welsh Sports Association (WSA) member Freedom Leisure, to temporarily shut down facilities at several leisure centres to cope with increasing energy costs.
Support to local authorities
In their draft budget, the Welsh Government outlined the support they’ll provide to local authorities:
We will continue to do all we can to support local authorities through these testing times and to ensure they continue to be sustainable into the future. As a result of the decisions we are taking, we are providing an additional £227m in 2023-24 and £268m in 2024-25 to the local government settlement; this builds on the funding we outlined as part of our 2022 Spending Review, now providing £1bn up to 2024-25.
This year’s provisional local government settlement shows an additional increase of £227m which will provide support to schools and other services supported by local authorities.
Changes to non-domestic rates relief
Meanwhile, the draft budget laid out Welsh Government’s plan to support business with non-domestic rates relief.
In a written statement, the Minister for Finance and Local Government, Rebecca Evans MS, explained:
“I am today announcing that the Welsh Government will be providing an additional package of non-domestic rates support worth more than £460m over the next two financial years.
“The Welsh Government recognises the pressure that the current economic context, including high inflation, is placing on businesses and other ratepayers in Wales. Those pressures are also being felt by the public services we all rely on, and which are themselves reliant on the revenue raised through local taxes.”
Setting out and breaking down the support, the draft budget laid out the following:
We will continue to provide support for those sectors most directly affected by the pandemic through a 2023-24 retail, leisure and hospitality rates relief scheme. This will provide more than £140m of non-domestic rates relief for eligible businesses.
Retail, leisure and hospitality ratepayers in Wales will receive 75% non-domestic rates relief throughout 2023-24. Like the similar scheme announced by the UK Government, the Welsh Government’s scheme will be capped at £110,000 per business across Wales. Our approach ensures that businesses in Wales will receive comparable support to that provided in other parts of the UK.
In addition to the retail, leisure and hospitality rates relief scheme, the non-domestic rates multiplier in Wales will be frozen in 2023-24. The estimated cost of this measure is more than £100m.
The next non-domestic rating list will come into force on 1 April 2023, following revaluation. The Welsh Government will provide all ratepayers whose liability is increasing by more than £300, as a consequence of revaluation, with transitional relief. Any increase in non-domestic rates liability as a result of revaluation will be phased in over two years.
A ratepayer will pay 33% of their additional liability in the first year (2023-24) and 66% in the second year (2024-25), before reaching their full liability in the third year (2025-26). The Welsh Government is providing £113m over two years to fund this transitional relief, supporting all areas of the tax base through a consistent and straightforward transitional scheme.
This £319m package of support is in addition to our fully funded permanent relief schemes that provide over £240m of relief to businesses and other ratepayers every year. We are committed to supporting businesses to recover from the impacts of the pandemic and to support them through the current cost of living crisis, to ensure Wales continues to have a thriving economy. This will result in a combined package of £460m over the next two financial years.
“This generous £460m package of support is in addition to our fully funded permanent relief schemes that provide over £240m of relief to businesses and other ratepayers every year,” concluded Rebecca Evans’ statement. “We remain committed to supporting businesses to recover from the impacts of the pandemic and current economic challenges, to thrive moving forward.”
Sport & leisure participation in Welsh Government’s Draft Budget 2023-24
The draft budget also gave Welsh Government an opportunity to address the issue of sport participation.
A Sport Wales report issued in August 2022 found that two in five respondents said the cost-of-living crisis has had a negative impact on their ability to be active, with almost three in 10 saying they have been doing less sport and physical activity due to changes in the cost of living.
As a measure, the draft budget later laid out:
Over an additional £3m will be provided to all five culture and sport arm’s length bodies (National Library of Wales, Amgueddfa Cymru-National Museum Wales, Arts Council of Wales, Sport Wales and Royal Commission on the Ancient and Historical Monuments of Wales), Careers Wales and Cadw to help ensure they remain sustainable, recognising we cannot meet their collective pressures in full.
Please visit the Senedd website to view a statement by Rebecca Evans MS, followed by a debate in the chamber, on the draft budget.
The WSA will continue to monitor the political landscape and engage with Members of the Senedd in order to keep members informed on the cost-of-living challenges currently facing the sector. A debate on Welsh Government’s draft budget is scheduled for February 7 2023, before the final publication on February 28 2023, around when we will continue to communicate the effects to sport and leisure.
We’d like to remind our members that our services present opportunities for vital support. Our Procurement Portal, in particular, offers organisations the opportunity to make economies of scale on a range of necessities and product categories from gas to renewable energy sources and from office furniture to broadband.
Please don’t hesitate in contacting the WSA team to make any queries!