The UK Treasury will cover increased costs of national insurance in the public sector amid concerns additional funding could be “swallowed up” by tax rises, Mark Drakeford has confirmed.

Wales’ finance secretary said Wales will receive full funding for employer national insurance (NI) contributions for public sector workers, as defined by the Office for National Statistics.

He told the Senedd this will be “above and beyond” an additional £1.7bn announced for Wales last week in Labour’s first UK budget in 15 years.

Prof Drakeford, who will announce the Welsh Government’s own spending plans in December, described the UK settlement as a step change.

But he stressed: “It was never going to be possible to repair 14 years’ worth of damage within the first 14 weeks of a UK Labour Government.”

Prof Drakeford explained the Welsh Government will receive £235m in 2025/26 for capital investment in areas such as repairing schools or building hospitals.

In a statement to the Senedd on 5 November he said: “That is a real-terms seven per cent increase in a single year.

“That compares with 0.5 per cent a year on average over the last 14 years.

“In 14 years of the last Conservative government, the annual uplift in capital available to the Welsh Government accumulated to the uplift we have now received in a single year.”

He contrasted this with an extra £1m in capital spending provided by Jeremy Hunt, the former Tory chancellor, in March, stating Wales now is 235 times better off.

He said: “That additional capital will not fill every hole nor undo all the damage inflicted on the fabric of our public services but it is a different world to the one we had learned to fear.”

Peter Fox, the Conservatives’ shadow finance secretary, criticised the “snatch-and-grab” budget.

He told the Senedd: “Despite all the spin, this is the same old Labour: borrowing more, taxing more – taking more of other people's money.”

Mr Fox said the £40bn in tax rises, which includes employers’ NI contributions, will suppress economic growth and wages, costing jobs and impacting thousands of working people.