The Senedd’s children’s committee scrutinised ministers about the potential impact of stretched budgets on children and young people in Wales.

Eluned Morgan told the committee she expects health boards to ring fence frontline services for children and young people in their 2024-25 spending plans.

Wales’ health minister said an extra £450m for the NHS in 2024-25 will mitigate the impact of inflationary pressures, including rising energy costs and an 11% increase in medicine prices.

Asked whether children’s health services will need to be scaled back, Baroness Morgan said that might have been the case had ministers not managed to put extra funding in place.

Laura Anne Jones, for the Conservatives, raised the Welsh Local Government Association’s (WLGA) warning that it is only a matter of time before a Welsh council goes bankrupt.

Highlighting a continuing rise in the number of children needing care and protection, she said £41m of the current year’s £219m overspend is from pressures in children’s social care.

Julie Morgan recognised that councils across Wales will face difficult decisions but she stressed that social services are a priority.

She explained that funding is unhypothocated, meaning councils have flexibility to make decisions about spending at a local level.

The deputy minister for social services said a 3.1% increase in the revenue support grant for councils recognises the crucial importance of children’s services.

Asked about funding for charities in the children’s field, Mrs Morgan said Welsh ministers chose not to impose any cuts on multi-year grants for the third sector. 

Labour’s Ken Skates questioned an £11m cut in the social care workforce grant.

Mrs Morgan said recruitment and retention is going in the right direction, with an increase in staffing within children’s services reported in 2022-23.

Mr Skates raised concerns about potential unintended consequences from ministers’ commitment to eliminating private profit from the care of looked-after children.

He told MSs the Association of Directors of Social Services (ADSS) Cymru and the WLGA have warned it is already having a detrimental impact on the availability of placements.

Mr Skates said: “We're hearing that this is contributing to the financial pressures faced by local authorities, who are having to go out of area for placements.”

He told the meeting on Thursday January 11 that there are still 1,880 children in care that need to be moved to not-for-profit placements by 2026.

Mrs Morgan stressed that the WLGA and ADSS support the policy as the right thing to do.

She said there is no evidence from Care Inspectorate Wales that the policy is having a detrimental effect on placements.

Vikki Howells, the Labour MS for Cynon Valley, asked about the impact of a £7m cut to the children and communities grant which will be £174m in 2024-25.

Mrs Morgan replied: “Though it's very disappointing that we've had to reduce it at all, I think it's important that it is a very small reduction.”

She added that funding to expand the Flying Start programme to all two-year-olds has been protected as part of the co-operation agreement with Plaid Cymru.

Ms Howells asked about an extra £140m from UK Government spending on childcare, which has not been allocated to children in Wales.

Julie Morgan said Wales has a different approach to childcare and it is up to the Welsh Government to decide how it spends consequential funding.

She argued the Welsh Government’s childcare offer is one of the best in the UK as it covers 48 weeks of the year and it’s not limited to working parents.

Lynne Neagle said the Welsh Government has protected mental health services, with a £25m increase in ring-fenced funding.

Ms Neagle assured MSs that funding for the “critical” whole-school approach to mental health has been maintained at £13m.

“I’m very confident that we have got the mechanisms in place to ensure that we continue to drive change in this area,” said the deputy minister for mental health.

James Evans, the Conservative MS for Brecon and Radnorshire, questioned whether there is enough money in the draft budget for eating disorder services.

Ms Neagle told committee members that eating disorder services are a priority for the NHS executive, with a clinical lead appointed and a focus on identifying any gaps.

She said the Welsh Government’s new mental health and suicide prevention strategy will be published for consultation in the near future.

Rhun ap Iorwerth raised concerns about £3m being taken out of preventative policies targeted at people who smoke or are obese.

He added that Wales is paying the price for failing to regulate vaping early enough.

Ms Neagle explained that the funding was set aside for prehabilitation for people on waiting lists and the cut will not impact work under the obesity strategy.

She shared the Plaid Cymru leader’s concerns about the numbers of young people vaping.

The deputy minister pointed out that the Welsh Government tried to regulate vaping in 2016 but the proposed reforms fell after Plaid cymru withdrew its support.

Ms Neagle highlighted joint work with the UK Government, which holds many of the levers around vaping and smoking, on legislation to create the first smoke-free generation.