Draft Government of Wales Act 2006 (Increase of Capital Borrowing Limits) Order 2026

Peter Fortune Excerpts

Wednesday 1st July 2026 General Committees

[The Parliamentary Under-Secretary of State for Wales (Anna McMorrin)]

I beg to move,

That the Committee has considered the draft Government of Wales Act 2006 (Increase of Capital Borrowing Limits) Order 2026.

It is a pleasure to serve under your chairship, Mrs Harris. I am grateful for the opportunity to debate this draft order today. The Government were elected on a manifesto commitment to work in partnership with the Welsh Government to ensure that the Welsh fiscal framework delivers value for money.

It was as a result of joint working between both Governments that my right hon. Friend the Chancellor announced, as part of the autumn Budget last year, some fiscal flexibilities for the Welsh Government’s budget to enable them to better support businesses and public services in Wales. That included increasing the Welsh Government’s annual and cumulative capital borrowing limits, their overall reserve limit and their annual RDEL and CDEL drawdown limits by 10% this year. From next year, each of those limits will be uprated annually in line with inflation.

Only one of those limits has a legislative basis: the Welsh Government’s cumulative capital borrowing limit. Section 122A(1) of the Government of Wales Act 2006 currently sets this limit at £1 billion. Section 122A(2) of that Act enables the Secretary of State to vary this limit with the consent of the Treasury. The order before the Committee this afternoon, made under section 122A(2), will increase the Welsh Government’s cumulative capital borrowing limit by £100 million, in line with that autumn Budget commitment.

The Welsh Government remain accountable to the Senedd for how they use these increased borrowing powers. The Wales Office will bring forward further orders annually to further increase this limit in line with inflation, as is the current process in respect of the Scottish Government’s borrowing limits.

In summary, this order will increase the Welsh Government’s cumulative capital borrowing limit to £1.1 billion, in line with the commitment made at the autumn Budget last year. The changes to the fiscal framework, together with additional funding through Barnett consequentials and the largest settlement in the history of devolution, mean that the UK Government are providing the Welsh Government with nearly £6.5 billion in additional spending power.

[Peter Fortune (Bromley and Biggin Hill) (Con)]

What impact assessment has been done to look at the Welsh Government’s ability to service the additional borrowing?