Welsh Government and Plaid Cymru agree budget deal
The agreement will ensure that the 2026/27 budget will pass
Last updated 9th Dec 2025
The Welsh Government and Plaid Cymru have reached an agreement which will allow next year's budget to pass.
The agreement secures almost £300m of additional investment in Wales’ public service, however both the Welsh Conservatives and Reform UK have criticised the deal.
The Tories have described it as "another Plaid-Labour stitch up".
The deal avoids the potential of no budget being passed, with Labour having an insufficient number of seats in the Senedd to pass the budget on their own.
First Minister Eluned Morgan said: "This agreement shows the strength of the Senedd parties working together on shared priorities to deliver for Wales. Through this agreement we have secured the passage of the budget and prevented potentially catastrophic cuts to funding next year.
“This agreement unlocks a further £300m of extra investment for Welsh councils and the NHS, on top of more than £27bn secured through the Draft Budget.”
Rhun ap Iorwerth, leader of Plaid Cymru said: “Our aim in negotiating with Welsh Government was to look after public services, protect jobs and keep council tax bills as low as possible.
“By securing £300m of additional funding for front line services, it avoids the potential of a cliff edge for public spending in Wales and, in May 2026, puts the next Welsh Government on a firmer footing than would otherwise have been the case.
“Whilst I recognise that councils and the NHS will continue to face challenges this marks a significant increase in funding compared to the draft budget.”
Other parties have hit out at the deal which they say will lead to more 'wasteful spending".
Leader of the Welsh Conservatives, Darren Millar MS said: “Yet again, it appears that the Welsh Government is set to pass a budget that falls short, thanks to another Plaid-Labour stitch up.
“The Welsh Conservatives reached out in good faith to offer a bold agenda to cut tax and cut wasteful spending in order to get the Welsh economy moving again, but the First Minister was clearly playing games.
"Labour and Plaid's deal will mean yet more of the same wasteful spending on extra politicians, overseas embassies and trees, instead of focusing resources on the priorities of the people of Wales, and putting more cash into people's pockets.
“It's clear that only the Welsh Conservatives can be trusted to end the Labour-Plaid axis in Wales and deliver a credible plan to fix Wales.”
A Reform UK Wales spokesperson said: “This is more evidence that a vote for Plaid next year is a vote for Labour.
“While Labour find themselves without a paddle, Plaid have stepped in yet again to save them.
“The only way to get real change in Wales is with Reform.”
The deal secures additional funding for local government, with all councils receiving increases above 4% in 2026/27. The health and social care budget will receivee an extra £180m, while £120m of capital funding will be available to the next government after the Senedd election to allocate.