Questions from Plaid Cymru’s Jonathan Edwards MP to the UK Treasury have revealed that the system by which funding is allocated to Wales is not only outdated and leaves Wales poorer than any other nation in the UK – but has now also been found to be wrongly implemented by the Treasury itself.
Mr Edwards quizzed the Treasury over the way in which the Barnett formula was calculated. The answers revealed that the system is badly flawed. A Barnett consequential should be applied to each government spend – but instead the Treasury only allocates according to each department rather than per individual project.
Mr Edwards said that under the current system, the devolved nations were treated as an ‘afterthought’ and needed to be changed urgently if a real programme of ‘respect’ to the devolved administrations, was to be practised by Westminster.
Mr Edwards repeated Plaid’s calls for the UK Government to publish details of Barnett consequentials of every announced government spend.
Commenting, Plaid’s Jonathan Edwards said:
“The Treasury has essentially confessed that it doesn’t even bother to work out the Barnett formula properly, and that it doesn’t double check their sums.
“Labour’s flawed Barnett formula, that allocates funding to Wales, shortchanges Wales by at least £300 million extra every year – money that should be spent on the NHS and schools.
“It is outdated and unworkable, and now we discover that the Treasury can’t even be bothered to do it properly.
“Instead of allocating a proper Barnett consequential to each aspect of UK Government spend what Wales receives is only worked out at departmental level rather than according to each individual programme.
“Through doing this, Wales has been left worse off in the Spending Review than either Northern Ireland or Scotland.
“The independent Holtham Commission last year recommended an annual publication setting out the effect of Barnett consequentials and spending decisions upon the Welsh budget.
“Whitehall departments treat Wales as some sort of after-thought. This has to stop.
“The effect upon the devolved countries must be central to any financial decision, not tagged on at the end.
“In the spirit of the respect agenda, any government announcement on spending should include the relative effect upon Barnett consequentials and whether this change has previously been announced.
“We need a transparent needs-based formula for spending for Wales, but in the meantime Wales deserves better than the current system which has cost us billions since Labour introduced it.”
