Wednesday, 22 April 2009

The Budget, Barnett and Consequentials

I've just had the craziest day of my life which included being allowed into the Commons to watch Darling deliver his latest budget and holding up Robert Peston in the dinner queue.

But I digress! It's been a confusing afternoon but I hope to alleviate that somewhat help understand this post better it might be worth taking a look at Dewi Un's post from earlier this evening first then get back to me!

After the budget I was in a press briefing with the Secretary of State for Wales who told us that Wales would be getting £216m less revenue funding than they were supposed to be getting according to the Comprehensive Spending Review of 2007 (confused yet? Just wait...).

He then said that taking into account the “Barnett consequentials” which total £60m (and by that he means a proportion of revenue to be spent on things like Mr Darling's plan to invest in further education development etc.) there would be £156m less in total than was predicted 2 years ago (ie £216m-£60m=£156m).

Still with me?

However, the Welsh Assembly Government has since released figures (first published on Betsan's blog) that imply the £60m had already been taken into account when calculating the £216m.

These budgets are very confusing things.

ITV and PA are both reporting Paul Murphy's assessment as fact while the BBC are using this £416m estimate (which also includes £200m of capital funding which was carried forward to the end of last year so we've known about it for ages).

I suppose £60m here, £60m there, sooner or later it's starts adding up to real money...

Either way it's not great. It means that the Welsh Assembly Government isn't getting as much money as it was told it was getting and it also means that there is a distinct lack of communication between the Welsh Office in Whitehall and Ty Hywel in Cardiff Bay.

Politics Cymru will be looking into the figures properly tomorrow and expect more discussion in the weekly Podcast but from this Dewi who's just come back from a round trip to London it's time for bed!

Nos da
Dewi Tri



Anonymous said...

I posted on something similar myself (A Fair Price) on how Wales budget cuts compare to Scotland.

James D said...

Does anyone want the Barnett Formula any more? Rightly or wrongly, it has never been perceived as fair in England, and it does nothing but a disservice to the Welsh and Scottish governments not to have the control of their own supply that is essential for them to be able to implement their policies. The current crisis highlights the importance of fully devolving HM Treasury's powers in Wales and Scotland.

Anonymous said...

But what they all forget is that this is just the start. The £216 million is for next year. It gets worse after 2012 whoever is in power at Westminster. According to IFS the a plausible scenario will be 2.3% real cuts between 2011 and2014.After 2014 another 3.2% of GDP tightening will be required which will take spending down to at least 2002 levels. Whoever runs Wales after 2011 with a fixed budget is going to have to come up some interesting ideas. In this environment if there is no referendum before 2011 I think that we can kiss goodbye to a 'yes' vote!