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How is the Welsh Government funded and how does it decide where the money should go?

The Welsh Government receives its budget from the UK government. The Welsh budget is set through UK government spending reviews, which set the budget for UK government departments and devolved administrations. Adjustments to the Welsh budget are determined through the Barnett formula and applied to the Welsh baseline budget. The formula reflects changes that the UK government makes and applies them to comparable budgets in Wales. 

The resources for Wales are provided to the Wales Office following a vote by the UK Parliament. The Secretary of State for Wales retains funding for the Wales Office’s operations and the balance is transferred to Wales. Funding is allocated to the Welsh Government, Assembly Commission, the Wales Audit Office and the Public Services Ombudsman by the National Assembly for Wales.

Within the funding voted to it by the UK Parliament, the Welsh Government has total discretion over where it spends its money. A draft budget for the following financial year is proposed by the Welsh Government each autumn. Assembly committees and other interested parties then scrutinise and comment on the government’s spending proposals, before they are finalised, and approved by the National Assembly for Wales. Budget plans may be changed through a supplementary budget motion approved by the National Assembly for Wales.

While some of the money is spent directly by the Welsh Government in accordance with ministerial priorities, a significant proportion is allocated to the public bodies which it sponsors and funds, for example local government, the NHS in Wales and Welsh Government sponsored public bodies.