By Paul Dicken in Cardiff
09 July 2009
Welsh political leaders have welcomed the report of the Holtham Commission on funding for Wales and called for early implementation of its main proposals.
First Minister Rhodri Morgan, his deputy Ieuan Wyn Jones and Finance Minister Andrew Davies said in a joint statement that the report presented a ‘good argument that need should be the principle for allocating resources in a devolved system’.
They noted that the commission agreed that introducing a needs-based formula would be complex and take time. Davies pledged to raise the findings with the UK government in London.
Plaid Cymru MP Adam Price said: ‘The findings of these investigations by prestigious economists now confirm without a doubt the truth behind the fundamental injustice of the Barnett Formula.’
Welsh Liberal Democrat leader Kirsty Williams called on the UK government to act immediately on the findings. ‘We have long argued that the Barnett Formula is not fit for purpose and needs to be replaced with a fairer system,’ she said.
The Barnett Formula is based on expenditure per head of population rather than need and is adjusted for devolved nations in line with spending changes in England. In 2007/08, the government spent £7,535 per head in England, £8,577 in Wales and £9,179 in Scotland.
The Independent Commission on Funding and Finance for Wales, chaired by economist Gerald Holtham, published its report on July 7. ‘It appears unarguable that the level of public resources made available in Wales ought broadly to correspond to the relative need to spend on devolved activities,’ the report said.
The commission urged that the effect of the formula on public spending in Wales should be stopped to prevent under-funding of up to £8.5bn over the next ten years.
A lack of alignment to need was the ‘fundamental flaw’ of the formula created in the 1970s, with the gap increasing. The commission, which was set up by the Welsh Assembly Government, did not propose a replacement at this stage, but made a range of recommendations.
These included giving more flexibility to the Assembly Government on capital and resource budgets, publishing an annual document on expenditure to increase transparency, and creating an independent advisory body to administer the technical operation of the formula.
The commission will produce a second report next year looking at tax-varying and borrowing powers, as well as recommendations on funding arrangements for Wales.
09 July 2009
Welsh political leaders have welcomed the report of the Holtham Commission on funding for Wales and called for early implementation of its main proposals.
First Minister Rhodri Morgan, his deputy Ieuan Wyn Jones and Finance Minister Andrew Davies said in a joint statement that the report presented a ‘good argument that need should be the principle for allocating resources in a devolved system’.
They noted that the commission agreed that introducing a needs-based formula would be complex and take time. Davies pledged to raise the findings with the UK government in London.
Plaid Cymru MP Adam Price said: ‘The findings of these investigations by prestigious economists now confirm without a doubt the truth behind the fundamental injustice of the Barnett Formula.’
Welsh Liberal Democrat leader Kirsty Williams called on the UK government to act immediately on the findings. ‘We have long argued that the Barnett Formula is not fit for purpose and needs to be replaced with a fairer system,’ she said.
The Barnett Formula is based on expenditure per head of population rather than need and is adjusted for devolved nations in line with spending changes in England. In 2007/08, the government spent £7,535 per head in England, £8,577 in Wales and £9,179 in Scotland.
The Independent Commission on Funding and Finance for Wales, chaired by economist Gerald Holtham, published its report on July 7. ‘It appears unarguable that the level of public resources made available in Wales ought broadly to correspond to the relative need to spend on devolved activities,’ the report said.
The commission urged that the effect of the formula on public spending in Wales should be stopped to prevent under-funding of up to £8.5bn over the next ten years.
A lack of alignment to need was the ‘fundamental flaw’ of the formula created in the 1970s, with the gap increasing. The commission, which was set up by the Welsh Assembly Government, did not propose a replacement at this stage, but made a range of recommendations.
These included giving more flexibility to the Assembly Government on capital and resource budgets, publishing an annual document on expenditure to increase transparency, and creating an independent advisory body to administer the technical operation of the formula.
The commission will produce a second report next year looking at tax-varying and borrowing powers, as well as recommendations on funding arrangements for Wales.
