Coronavirus: Welsh Government announces £1.1bn funding

First Minister Mark Drakeford has announced new funding to help businesses come through the coronavirus pandemic

A £1.1bn support package for the economy and public services in Wales has been unveiled.

First Minister Mark Drakeford said the fighting fund was to help businesses "weather the coronavirus storm", at the daily Welsh Government briefing.

Further schemes will be announced throughout the week as part of the package of support.

The package consists of cash reallocated from existing budgets and new money from the UK Treasury.

Speaking at the daily briefing on Monday, Mr Drakeford said: "The effect on the economy is extraordinary" adding the money would be targeted to "specific Welsh needs".

The £1.1bn being announced is "reprioritised" money.

There will be a £500m economy crisis fund for businesses, charities and social enterprises to help them to survive the crisis so that they can provide jobs and products in the future.

Money which would have been used for enforcing speed limits will be repurposed as roads are much quieter

Mr Drakeford said this money was over and above what had been given to businesses by the UK government to help those firms who need to go into hibernation during the pandemic.

As part of that fund, £100m will be administered by the Development Bank for Wales to help firms with cashflow problems including loans between £5,000 and £250,000 with minimal interest payments attached.

The remaining £400m will form an emergency fund giving £10,000 to firms employing fewer than nine people, grants of £100,000 to business with 10 to 250 employees as well as support for larger companies that are significantly important to Wales and have their headquarters here.

Responding to the announcement, Paul Davies AM, leader of the Welsh Conservatives said: "The Welsh Government's £1.1bn announced today consists of only 25% of Welsh Government money as the rest is from European funding and the UK Treasury.

"Surely, we must see ministers re-prioritising their budgets even further as the emergency the country finds itself in cannot be business as usual."

He called on the Welsh Government to "immediately bring forward a supplementary budget as the first minister promised last week".

Analysis from Sarah Dickins, BBC Wales economics correspondent

The Welsh Government, by the way that they are allocating these funds, is recognising the importance of manufacturing firms to jobs and livelihoods in Wales.

The UK government has prioritised retail, leisure and hospitality businesses but in Wales the help is available for all sections of the economy including social enterprises and charities. Companies will have to apply for the support and meet certain criteria.

I understand that there have been detailed discussions within the Welsh Government about how its spending plans could be altered to prioritise financial help for health and economy during the crisis.

For instance money has been moved from the Welsh Government's international trade department and also money that was to have been spent on enforcing speed limits on highways will now be prioritised to help protect jobs in the wider economy.

I also understand that around one quarter of the £1.1bn has come from European Union funds that had been given to help new businesses start up. It will now be used to help existing businesses survive.

The BBC understands that about 25% of the £1.1bn is from its existing budget.

Half of the £1.1bn comes from the consequential of what has been announced in Westminster, for example, money for the health service or railways.

However the Welsh Government, unlike the UK government, is not giving rate relief to the very biggest of properties, such as the biggest Tesco and Sainsbury's.

Cafes and bars are particularly at risk from the tight restrictions

That money - approximately £12m - which, in England, would have gone to those big business sites, will fund other businesses, social enterprises and charities.

The £1.1bn announced on Monday is in addition to the £1.4bn announced by Economy Minister Ken Skates earlier.

The first minister also said Wales should get more money to deal with coronavirus because of the legacy of mining and heavy industries on the population's health.

"We have an older, sicker population. Our history of coal mining and heavy industry means we have people with breathing problems that the coronavirus is particularly likely to affect.

"Money should come to Wales based on our need, not simply our population share," he told the press conference.

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Mr Drakeford said he had "no doubt at all" the lockdown restrictions would go beyond three weeks and warned individuals and businesses to expect a "long haul".

He was responding to comments made by England's deputy chief medical officer Jenny Harries yesterday, who said she expected the restrictions to continue for up to six months.

Mr Drakeford said: "There is no doubt at all that we are facing restrictions beyond the three weeks of the immediate period that we made on Monday of last week.

"I think there will be a gradual reduction in restrictions over time."

He added: "We may need significant restrictions for longer than the original three weeks and beyond that period there will be time when we don't just go from everything being restricted to nothing being restricted. That's going to be a long haul, a difficult haul for individuals and businesses."

Mr Drakeford also announced that antibody tests would be coming over the next weeks or months but were not ready yet.

He paid tribute to health and social care workers and said the response from people wanting to volunteer was "amazing".

Prioritise existing funds

Mr Drakeford announced severe restrictions on people and businesses last Monday, including shutting all high street shops except those selling food, as well as pharmacies, banks and post offices.

The Welsh Government's cabinet met last week to discuss how to prioritise its existing funds.

It has already been announced Welsh ministers will invest £1.4bn to help companies through grants and business rate relief.

Economy Minister Ken Skates previously said the Welsh Government would match plans announced by UK Chancellor Rishi Sunak to help English businesses.

It included a business rate holiday for all firms in the retail, leisure and hospitality sectors for 12 months and funding grants of between £10,000 and £25,000 for small businesses.

But the Welsh Government has since decided not to give business rate relief to the "fewer than 200 properties across Wales" with a rateable value of £500,000 and above.

The money will instead be used to create a £100m fund to help other businesses, social enterprises and charities during the coronavirus crisis.

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In a joint statement, Finance Minister Rebecca Evans and Mr Skates said the businesses affected by the decision would be able to apply for extra support.

Businesses will start to receive the emergency funds by the middle of the week.

Last week, the UK government announced a scheme to pay 80% of the wages of employees unable to work during the crisis and a separate package allowing self-employed workers to apply for a grant worth 80% of their average monthly profits.