Welsh government budget: Labour deal with Plaid Cymru

Deal: Plaid Cymru leader Leanne Wood and Labour First Minister Carwyn Jones

The Welsh government has agreed a deal with Plaid Cymru to pass its budget for next year.

Plaid says it will create "thousands" of apprenticeships and lead to investment in a science park involving Bangor and Aberystwyth universities

With half the 60 seats in the assembly chamber, the Labour administration cannot pass a budget alone.

A spokesman for First Minister Carwyn Jones said he was fulfilling a pledge to reach out to opposition parties.

Plaid leader Leanne Wood said the economy and jobs were her party's top priority.

The two parties were in coalition together during the last assembly, but Labour has been governing alone without an overall majority since the last election in 2011.

The budget deal comes after an influential committee of AMs raised doubts about the affordability of the Welsh government's plans.

A report by the finance committee says there are particular concerns about whether local health boards will need extra funding, which could heap further pressure on other departments.

The Labour-Plaid deal adds an extra £20m to the draft budget for next year to spend on apprenticeships for 16-24-year-olds.

The same amount has been included in indicative plans for the following year and there will be an attempt to secure EU funding to boost the commitment.

Science park

The two sides also agreed £10m of capital over two years for a science park involving Bangor and Aberystwyth universities.

Finance Minister Jane Hutt has been speaking to opponents since publishing the £15bn draft budget last month.

She and the first minister met Ms Wood and her finance spokesman Ieuan Wyn Jones in Cardiff Bay on Monday night.

A spokesman for the first minister said the Welsh government was "very pleased" with an agreement that was "entirely in line with what we're already doing".

"When the Welsh Labour government was elected back in May 2011, Carwyn Jones pledged he would reach out to other parties in the assembly," he said.

"He is fulfilling this promise through the deal we struck last year with the Welsh Liberal Democrats and this year with Plaid Cymru.

'Funding gap'

"As a government, we are true to our word."

Last year's deal with the Lib Dems involved funding for the education of school pupils from poorer backgrounds, something the Welsh government said it would increase.

Ms Wood said: "Youth unemployment is at crisis levels in Wales having quadrupled over the past year.

"The Party of Wales has been consistent in our determination that urgent action had to be taken to tackle that."

A Plaid source said the party's AMs would let the budget pass by abstaining on the vote, but they would not vote for it as doing so would tie them to the rest of the government's commitments.

AMs will next debate the draft budget on 13 November.

Welsh Lib Dem leader Kirsty Williams said her party would not support a budget that fails to close a funding gap between school pupils in Wales and England.

Negotiations with the government "were positive and constructive", but she said Labour could not agree to a "substantial increase" in funding.

The Lib Dems also wanted funding for patients to access treatments that are not routinely available on the NHS - something the Welsh government said it will look at "very closely".

Conservative finance spokesman Paul Davies said: "This is a cheap deal that hails the return of an old and ineffective tag team.

"Plaid has been bought for far less than anyone expected in what is effectively a second-rate trade-off."