Key Points
- The Welsh Government and Welsh Labour have reached an agreement for the Supplementary Budget for 2026-27.
- The agreement has an additional provision of £60 million to fund Additional Learning Needs (ALN) in the present financial year.
- This money will go to cover schools and local authorities, a long-term sustainability strategy, and further education through Medr.
- This follows the rejection of the initial budget in the Senedd in July after 49 members rejected it and 44 supported it.
- The new budget will be put before the Senedd on October 13, with a discussion set for November 3.
- Initially, the Welsh Labour Government was asking for £100 million in funding for ALN, whereas Plaid Cymru offered £40 million annually over three years; however, the final budget has agreed upon £60 million in this fiscal year only.
- The Welsh Conservative leader Darren Millar MS said that his party welcomes the increased funding for ALN, but criticized the budget strategy as the failed Labour-Plaid approach.
- Similarly, Reform UK criticized the agreement, stating that it favors Plaid Cymru and Labour, not the people of Wales.
- The initial budget has provisions of £100 million for the NHS to shorten the wait time, £55 million for childcare.
Wales (Wales Times) October 13, 2026 — The Welsh Government and Welsh Labour have reached an agreement that adds £60 million for Additional Learning Needs (ALN) and clears the way for the administration’s Supplementary Budget to return to the Senedd after its defeat in July.
As reported by the BBC, the Plaid Cymru-led government had failed to pass its mini-budget during the summer, but ministers have now agreed extra funding for children with additional learning needs. The agreement means the Supplementary Budget can be laid before the Senedd on Tuesday, October 13, and debated from Tuesday, November 3.
The deal was confirmed in a written statement by Anna Brychan MS, the Welsh Government’s Cabinet Minister for Education and the Welsh Language. She said the Cabinet Minister for Finance had laid a Second Supplementary Budget following an agreement between the Welsh Government and the Labour Group in the Senedd.
What does the £60 million cover?
The additional £60 million will be invested in Wales’s ALN system during the current financial year. According to the Welsh Government’s written statement, £56 million will go to the Education Reform (Local Authority Education Grant), divided 80/20 between schools and local authorities.
That allocation amounts to £44.8 million directly for schools and £11.2 million for local authorities. A further £1.5 million will support the development of a long-term sustainability plan, while £2.5 million will go to Medr for the further education sector.
Ms Brychan said the funding is intended to relieve “some of the more immediate financial and operational pressures” facing schools, colleges, local authorities and support services. She added that the Welsh Government remains committed to developing a sustainable ALN system for the medium and longer term.
As reported by ITV News Wales, the £60 million is on top of what Plaid Cymru announced in June, but is below the £100 million Welsh Labour had initially called for.
Why did the budget fail in July?
The original Supplementary Budget was defeated in the Senedd on July 14. As reported by Nation.Cymru, 49 Members of the Senedd voted against the plans and 44 voted in favour.
The first budget included £300 million in spending adjustments, with funding intended to reduce NHS waiting times and expand childcare. Ministers had also set aside £247 million in day-to-day spending that had not yet been allocated.
Labour, the Conservatives and Reform UK all opposed the July plans. Nation.Cymru reported that Reform UK said the plans did not meet its demands, including cuts to overseas spending, while Darren Millar criticised ministers for bringing forward a budget without first securing sufficient support.
As reported by the BBC, Finance Minister Elin Jones accused Labour of acting as a “destructive opposition” during the July proceedings. Darren Millar described the decision to proceed with the vote without an agreement as “bonkers”.
The defeat was the first time a Welsh government had lost a vote on a Supplementary Budget, according to BBC reporting. It was also described as the first major setback for the Plaid Cymru administration following May’s election.
What did Labour want?
Welsh Labour had pressed for greater investment in ALN support. As reported by the BBC, Labour leader Ken Skates had called for £100 million during discussions on the Supplementary Budget.
During exchanges at the Senedd in the final week of term in July, Labour rejected a Plaid Cymru proposal of £40 million annually over three years. BBC reporting stated that Labour had turned down that offer amid heated discussions at the Welsh Parliament.
The final agreement of £60 million for this financial year falls between Labour’s original £100 million demand and the earlier £40 million-a-year proposal. As reported by WalesOnline, Labour dismissed a proposed £120 million deal spread over three years, while seeking £100 million, before agreeing to the latest offer.
It remains unclear whether Labour will vote for the budget or abstain under the agreement. The BBC reported that a Labour source said the party intends to allow the Supplementary Budget to pass.
What does the revised budget include?
The revised Supplementary Budget retains the investment package first announced in June. Nation.Cymru reported that it covers the NHS, childcare and free school meals, alongside the new ALN funding for this financial year.
According to BBC reporting, Plaid Cymru’s initial mini-budget proposed £100 million for the NHS to reduce waiting times, £55 million for childcare and £40 million for school repairs.
WalesOnline described the Supplementary Budget as containing £433 million in spending adjustments for the year. The outlet reported that the budget was presented for a vote in July but failed to attract support from opposition parties.
The Welsh Government said the agreement allows it to bring forward a Supplementary Budget that continues investment in the NHS, childcare and free school meals.
How have opponents responded?
Darren Millar MS, Leader of the Welsh Conservatives, commented on the agreement in a statement published by Aberdare Online and the Welsh Conservatives. He said: “While we welcome any extra funding for pupils with Additional Learning Needs, this deal is merely a continuation of the same failed budget approach by the Labour-Plaid duopoly that has been letting down…”
The published excerpt of Mr Millar’s statement was cut off in the available source material. His broader criticism, as reported by the BBC, was that the deal represented “merely a continuation of the same failed budget approach by the Labour-Plaid duopoly that has been letting down” Wales.
Reform UK also criticised the agreement. As reported by the BBC, the party said the deal benefits Plaid Cymru and Labour but not the people of Wales.
The Conservatives had previously voted against the July budget. In a statement following that vote, Mr Millar argued that the original Supplementary Budget maintained the priorities of the earlier budget rather than responding to changing pressures, and criticised the absence of an ALN allocation in the original proposals.
What happens next?
The Second Supplementary Budget has been laid before the Senedd. A debate is scheduled for November 3, when Members will consider the revised spending plans for 2026-27.
If the Supplementary Budget does not pass, the Welsh Government would need to find alternative ways to fund its new plans. The BBC reported that ministers would have to explore other funding avenues if the budget failed again.
First Minister Rhun ap Iorwerth was expected to face questions about the agreement at First Minister’s Questions. WalesOnline reported that his party is poised to secure approval for the Supplementary Budget following the deal with Labour.
The First Minister previously said his administration had learned “lessons” from the July defeat and pledged to improve the way his government works with other parties.
Background of the development
Plaid Cymru leads a minority administration in the Senedd, meaning it requires support from other parties to pass budgets and legislation. The party lost the July vote on its first Supplementary Budget after Labour, the Conservatives and Reform UK opposed the plans.
The dispute centred on funding for children with additional learning needs. Labour demanded £100 million, while Plaid Cymru initially proposed £40 million a year over three years. The two parties have now agreed £60 million for the current financial year.
The ALN system has faced financial and operational pressures across schools, colleges, local authorities and support services. In her written statement, Education Minister Anna Brychan said the government had engaged with education trade unions, the Welsh Local Government Association and the Association of Directors of Education in Wales, who highlighted the need to get more funding into schools and settings.
Prediction: How this affects Welsh families and schools
The agreement is likely to provide additional in-year resources for schools, local authorities and further education providers supporting learners with additional learning needs. For families, the immediate effect will depend on how quickly the £56 million allocated to schools and local authorities is distributed and how it is used on the ground.
Schools and local authorities may be able to direct the funding towards pressures identified by the Welsh Government, including support for learners, wellbeing, mental health and disadvantaged learners. However, the government itself acknowledges that the ALN system is “not yet working as well as it could be everywhere or for everyone”, meaning the £60 million is presented as relief for immediate pressures rather than a complete solution.
For parents and carers of children with ALN, the deal may increase the resources available to schools and support services during the current financial year. For school leaders and local authorities, it may ease some budgetary pressure, although the Welsh Government has said future ALN allocations will be considered during preparations for the Draft Budget for 2027-28.
For patients, parents using childcare and families eligible for free school meals, the passage of the Supplementary Budget would preserve the wider spending package announced in June, including NHS, childcare and free school meals investment. If the budget passes in November, those commitments can proceed through the approved Supplementary Budget process; if it fails again, the government would need to identify alternative funding.
