The Welsh Government has published its Final Budget for 2026–27, setting out spending plans totalling £27.5 billion. The budget confirms funding allocations for the next financial year and reflects revisions made since the Draft Budget was published in October 2025.
Below is a summary of the main announcements, followed by a focused look at areas relevant to renewable energy, climate change and housing.
Overview of the Final Budget and Economic Context
The Welsh Government has confirmed that all departments will receive at least the same level of funding in real terms as in the current financial year. Overall, the budget provides:
£1.2 billion additional funding for people, public services and businesses across Wales compared with 2025–26 and around £400 million of new allocations since the Draft Budget
£300 million in additional revenue funding has also been allocated for local government and the NHS. This additional funding follows a budget agreement between the Welsh Government and Plaid Cymru.
Economic forecasts published by the Office for Budget Responsibility (OBR) in November indicate:
- GDP growth of 1.3% in 2025–26, a slight increase on the March forecast
- GDP growth of 1.5% in 2026–27, revised down by 0.4 percentage points compared to March
These forecasts form part of the wider context in which the Welsh Government has set its spending plans.
Renewable energy, climate change and housing
There were limited new announcements directly relating to renewable energy within the Final Budget. However, several relevant portfolios received increases in revenue funding.
Climate change and rural affairs
- £597 million total revenue allocation for 2026–27
- Increase of £29 million (5%)
Economy, energy and planning
- £497 million total revenue allocation
- Increase of £17 million (3.5%)
Housing and local government
- £5.877 billion total revenue allocation
- Increase of £319 million (5.7%)
Green Homes Wales Scheme
The budget confirms an additional £2 million of FTC funding for the Green Homes Wales scheme, bringing total funding to £5 million for 2026–27.
The scheme is managed by the Development Bank of Wales and is intended to support eligible homeowners to undertake energy efficiency improvements and clean heating upgrades. It focuses on households that can borrow but may not have access to upfront capital, providing both financial support and technical guidance.
Other Key Budget headlines
The Final Budget includes the following headline measures:
- £113 million in additional funding for local government, increasing council budgets by 4.5%
- £120 million of capital funding set aside for the next Welsh Government to invest in major infrastructure projects following the Senedd election
What the Budget could mean for organisations in the net zero economy
From a communications and engagement perspective, this budget highlights several relevant themes:
Stability over scale:
The budget focuses on maintaining existing programmes, with incremental funding increases across relevant departments, rather than introducing significant new funding commitments for renewable energy or infrastructure.
Local delivery matters:
Increased funding for local government underlines the role of councils in unlocking the delivery of new infrastructure and achieving climate goals.
Looking beyond 2026–27:
The decision to set aside capital funding for the next Welsh Government indicates that major investment decisions will be taken beyond the current financial year, bringing future priorities and post-election planning into focus.
Summary
The Welsh Government’s Final Budget for 2026–27 prioritises maintaining real-terms funding across departments, with additional resources directed towards local government. While there are few new policy announcements for renewable energy, existing programmes linked to climate change and energy efficiency continue to receive funding increases.
The full budget can be viewed here – Final Budget 2026 to 2027 | GOV.WALES