One pound bus fares for under-21s in Wales

Young people aged 16 to 21 will be able to ride for £1 on buses across Wales as part of a budget deal between Welsh Labour and the Welsh Liberal Democrat leader Jane Dodds.

Announced on Thursday, the deal worth more than £100m will also see extra money which officials hope will complete the roll out of universal childcare to two year olds.

It means the Welsh government’s £26bn spending plans for the NHS, education and other public services will pass in the Senedd next month, and includes a ban on greyhound racing and cash for local councils.

Dodds said the agreement “is a positive step in making Wales the fairer and more prosperous country I want it to be”.

Finance Secretary Mark Drakeford added: “The additional investment will make a real difference to communities across Wales, particularly in rural areas.”

Meanwhile, the government has announced an extra £4m for arts and culture bodies following criticism of cuts in previous years.

The Welsh Conservatives said the budget for 2025-26 “will not fix Wales” and called for a winter fuel allowance for older people in Wales.

With Labour holding 30 of the Senedd’s 60 seats, Welsh government ministers need the help of at least one opposition politician to get laws and budgets passed.

Until last summer it had relied on a deal with Plaid Cymru. Both Plaid and the Tories say they will oppose the budget.

The Welsh government needs the help of one opposition politician to get its budget passed in the Senedd when it comes to a vote in March.

Under a £15m pilot scheme, people aged 16 to 21 will be able to travel anywhere in Wales for any journey for £1, with unlimited day tickets for £3.

It will run for one academic year, from this September.

A body representing bus operators welcomed the move as “long overdue” as “Wales was the only nation in Great Britain with no national scheme to reduce fares for bus users”.

Confederation for Passenger Transport Cymru director Aaron Hill said: “Encouraging young people to travel by bus is an investment in the wellbeing of future generations.

“This is great news for young people across Wales who will be able to travel more affordably to work, to education and to see friends and family in local communities.”

Nine local authorities will benefit from a boost to their funding, worth £8.24m, ensuring no council receives less than 3.8% extra in cash next year.

While overall council funding was raised by 4.3%, because of the way the formula for funding works some authorities would see less, with Monmouthshire receiving an increase of 2.8% and Powys and Gwynedd 3.2% each.

The Welsh Local Government Association (WLGA) leader, Labour’s Andrew Morgan, said: “Over a decade of cuts by previous governments cannot be undone overnight in a single budget. But this settlement is a decisive step in the right direction.”

The Welsh government has promised an extra £30m for universal childcare.

Officials hope it will be enough to complete the Welsh government’s plans to reach more two year olds through the Flying Start programme.

A total of £10m of the figure will go towards upping the hourly rate that childcare providers are paid to £6.40.

National Day Nurseries Association Cymru chief executive Purnima Tanuku called the money a “positive step in the right direction for the early years sector across Wales” that shows “the Welsh government is committed to supporting providers delivering vital early years places”.

Rather than digging into reserves or making cuts, Drakeford has used money set aside when the draft plans for the budget were announced last year.

No money has been set aside for a ban on greyhound racing, which was announced by the Welsh government earlier this week.

Dodds told BBC Wales the ban was “part of the package” agreed with Labour.

But she said it was something ministers had consulted on, was going to happen anyway and she “hopefully just moved it forward” to avoid unnecessary deaths and injuries of dogs.

Greyhound Board of Great Britain chief executive Mark Bird called the ban a “dirty, dodgy, backroom deal to get their budget through”.

“This is not how any piece of legislation should be decided upon and is the kind of cynical behaviour that destroys people’s trust in government,” he said.

Conservative Preseli Pembrokeshire MS Paul Davies said the Welsh government should “concentrate on the priorities of Wales’s people, such as health, education and the economy, and not dogs.”

He said he had an open mind on the ban and would decide how to vote after listening to the debate but it “wasn’t appropriate at all to include this in the budget”.

An extra £30m has been promised for social care – specifically to assess and provide care packages for people who are in hospital but medically well enough to leave.

Funding will be given to restore the fifth train service on the Heart of Wales line that runs from Swansea to Shrewsbury.

A total of £5m would be offered to improve playgrounds and play facilities, £5m for water quality, and £10m worth of support to help councils borrow £120m for road and pavement repairs.

Some £5m will be offered to leisure centres so they can be more energy efficient, and extra £5m will be given to tackle water pollution, and £10m will be earmarked for rural investment schemes.

The extra cash for the arts, sport and culture sectors is not part of the budget deal.

Welsh government officials said the cash would restore funding to 2023-24 levels.

Conservative shadow cabinet secretary for finance, Sam Rowlands, said the budget was not addressing “the people’s priorities, with woeful outcomes like excessive waiting lists and low educational standards speaking for themselves”.

“Welsh Conservatives would instead focus on putting money back into Welsh people’s pockets, starting with creating a Welsh Winter Fuel Allowance to replace the payment cut by Keir Starmer, funded by slashing inflated spending on Welsh government bureaucrats.”

Plaid Cymru finance spokesperson, Heledd Fychan, said her party is unable to support the budget, saying it “fails to adequately address the challenges we face as a nation”.

“Elements of the budget are to be welcomed but there are gaping holes which cannot be ignored, and the so-called ‘partnership in power’ between the Welsh and UK Labour governments is a sham – no HS2 consequentials, no fair funding formula and no devolution of the Crown Estate.”

By Gareth Lewis, BBC Wales political editor

The Welsh government’s spending plans have already been criticised for not doing enough to address the cost of living crisis, so is this budget going to be enough to make voters feel better off?

There is also uncertainty around how much of the extra spending will be gobbled up by the rise in National Insurance brought in by Labour at Westminster.

This budget will take us through to April next year – just a month before the Senedd election.

Welsh Labour now has the votes for budget to pass a vote in the Senedd on 4 March, but will these plans impress you enough to vote Labour in May 2026?

And if you’re living in Powys – given there is quite a bit of Powys in the deal – would it persuade you to vote Lib Dem?

Additional reporting by Daniel Davies and Adrian Browne