Politics has been relegated to the second most widely discussed topic in Welsh tearooms and pubs this month. Understandably Wales’ fantastic run in the rugby world cup has been the major topic of discussion for most of us. However, there have been some important political developments too.

The Wales Audit Office produced a rather gloomy report on A Picture of Public Services 2011 that is compelling reading for anyone with an interest in the Welsh economy. Perhaps the most striking aspect of the report is the forecast that 21,000 public sector jobs will be lost in Wales, but if you look closer there is even worse news. The full impact of the cuts will not be felt until 2014-15.

The report praises the Labour-run Welsh government for having ‘prudently planned for the worst case scenario’. Because of this careful planning, and tough decisions being taken in the recent budget negotiations, Welsh public services will not be as heavily affected as feared.

However, the report warns public services not to ‘breathe a sigh of relief’. While the situation is not as bad as many feared it would be, it will get worse, and further spending cuts may be necessary.

Perhaps the most significant result is the effect the cuts could have on the health service in Wales, which the report says is ‘likely to struggle to meet the immediate financial challenges. The result of the spending cuts, imposed by George Osborne in Whitehall, will make health spending per head in Wales the lowest in the UK by 2014-15.

This report seems to confirm Labour’s instincts that these cuts are going too far, too fast. Next time David Cameron says ‘we’re all in this together’ I hope he considers the poor and the sick in Wales, who will be paying for his irresponsible ideological economic experiment.