Welsh budget to fall by £162.5m in spending cuts

The Welsh budget will be cut by £162.5m as a part of £6.2bn spending reductions to tackle the UK's deficit unveiled by Chancellor George Osborne.

The Wales Office said recycled £24.4m savings would reduce the impact from the original £187m.

Welsh, Scottish and Northern Irish ministers, who were meeting in Belfast, said they were working on a "common approach" to dealing with the cuts.

The assembly government can defer cuts by a year but this may not be taken up.

If the cuts are delayed to the following year the budget is likely to be reduced by even more.

Details of the cuts were set out in an announcement by Mr Osborne and Chief Secretary to the Treasury, David Laws.

The devolved administrations in Wales, Scotland, and Northern Ireland have been told they will have to save £704m, with the option of deferral.

Welsh First Minister Carwyn Jones joined his Scottish and Northern Irish counterparts at Stormont, the home of the Northern Ireland Assembly, to consider their options.

Mr Jones said there were "challenging times ahead financially" and it was important to have "a good line of communication between ourselves and with the UK government so that issues can be dealt with as quickly as possible".

Mr Osborne announced a civil service recruitment freeze, and cuts to IT programmes, property and quangos.

Welsh Secretary Cheryl Gillan told Carwyn Jones that the cuts amounted to 1.2% of the assembly budget.

Mrs Gillan said: "These have been hard and difficult decisions but it is only right and proper that Wales makes its contribution to helping reduce the massive fiscal deficit that has been left as the legacy of the previous Government.

"I am pleased that we have been able to limit the savings in Wales to 1.2%, significantly less than many government departments. This is a fair and proportionate deal for Wales."

The assembly government said it wanted more details from ministers in London about what impact there would be if the cuts were to be deferred until next year.

Business and Budget Minister Jane Hutt said Wales needed to play its part in reducing the national debt but she added that the assembly government would "not be taking knee jerk action now to cut budgets in Wales".

"These cuts are being imposed despite the fact that - as the Holtham Commission has demonstrated - Wales is already being underfunded by some £300m annually.

Front line services

"It would therefore be completely inappropriate for Wales to suffer large in-year cuts. Whatever the circumstances may be in England, our current underfunding means it is impossible to extract £187m from the budget this year without impacting on front line services."

The assembly government also criticised the chancellor's plans to scrap the Child Trust Fund.

Leaders of devolved institutions meet at the Northern Ireland Assembly in Stormont, including Carwyn Jones (R)

Plaid Cymru claimed the cuts in Wales will be a third more than the UK average.

Welsh Liberal Democrats said ministers in Cardiff Bay should find "cleverer, smarter ways of delivering their services."

Welsh Lib Dem leader Kirsty Williams said "The Welsh government has known for a long time that there was going to be a dip in its budget.

"It is now up to the Welsh government to demonstrate that it can act responsibly to ensure that frontline services are protected - as the UK government has done today.

Among the cuts the Department of Culture, Media and Sport confirmed that Welsh-language broadcaster S4C would suffer a £2m cut in its funding this year.