Welsh Government lobbies Treasury for extra funding flexibilities

12 Nov 15

Welsh finance minister Jane Hutt has called for Cardiff Bay to be given additional financial freedoms in the forthcoming Spending Review in order to boost infrastructure investment.

In a letter to chancellor George Osborne, Hutt said the Welsh Government had faced “unprecedented cuts” in the last five years, amounting to £1.3bn less to spend every year on public services.

She called on the Treasury to reconsider its planned spending cuts, in particular support infrastructure and other projects to strengthen economic capacity in Wales.

The Welsh Government has a Wales Infrastructure Investment Plan, Hutt highlighted, and additional freedoms would boost implementation.

Among the flexibilities sought are a removal of restrictions that prevent the Welsh Government carrying forward funds between financial years and greater scope to switch between capital and revenue budgets.

Hutt also called for enhanced powers to draw forward capital spending, including borrowing, across the period of the Spending Review.

“In order to manage a further period of difficult financial settlements, it is essential that we have the maximum flexibilities available to us,” Hutt wrote in the 3 November letter.

“It would be beneficial if you enhanced the resources available for infrastructure investment in the Spending Review in the form of traditional capital but not at the cost of further revenue reductions which would impact on public services.”

Yesterday Wales Office minister Alun Cairns confirmed that the Spending Review would also introduce a funding floor for Wales for the first time.

The floor will set a minimum level of relative funding based on the Barnett formula – the system which determines the level of central UK government funding that the devolved administrations receive.

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