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Labour MS calls on new Prime Minister to review controversial Barnett Formula

10 Jul 2024 3 minute read
Mike Hedges MS – Image: Senedd Cymru

Emily Price

A Labour MS has called on the Welsh Government to make urgent contact with the new Prime Minister asking him to conduct an independent review of the controversial Barnett Formula.

Opening the first FMQs session since the General Election which saw a landslide victory for Keir Starmer’s party, Mike Hedges quizzed First Minister Vaughan Gething on plans for fairer funding for Wales from the new UK Government.

The Barnett Formula is used by the UK Treasury to calculate the annual block grants for the Welsh, Scottish and Northern Irish governments.

Cash for the three administrations is determined based on whether the UK Government increases or decreases funding for departments that cover areas that are devolved.

The formula is widely recognised as being controversial because it takes no account of different needs or costs in different areas.

Underfunded

It is named after the former Labour Chief Secretary to the Treasury Joel Barnett and has been deemed to have underfunded Wales over the years on large projects such as HS2.

The Barnett Formula has no legal standing or democratic justification and being merely a convention, could be changed at will by the Treasury.

The Swansea East MS told the Senedd: “We’ve had piecemeal and asymmetric devolution, which needs addressing. Will the First Minister, as a matter of urgency, contact the Prime Minister and ask for an independent review of Welsh funding via the Barnett formula, creating a new formula?”

In 2017, former First Minister Carwyn Jones said that Labour would scrap the Barnett Formula because it couldn’t be “defended”.

The then Cabinet Secretary For Finance, Mark Drakeford carried out negotiations to introduce an additional needs-based element in the funding formula.

Mr Gething said that despite the Welsh Government being in a “much better place” – it was not a “long term answer”.

He said: “We’ve been used in the last four or five years to having regular attempts to get around Barnett and I think, now that there is more significant devolution in England as well, with metro mayors, it will help us to make the case that, actually, funding for the nations of the UK, and for the regions of England, really does matter.

“The Prime Minister made a pledge in his first press conference about power and decision making needing to come out from Westminster. That’s good news for us, good news for the rest of the UK, and, I believe, it will set us on a path to a fairer long-term funding formula.”

Fair

In March, Plaid Cymru led a debate in the Senedd calling for the future UK Government to commit to a fair funding model for Wales.

Plaid’s motion proposed to bring the Barnett Formula to an end and to fund Wales according to need and not based on population.

However, the Welsh Government proposed this point be deleted.

It was replaced with a proposal to replace the Barnett Formula with a new “relative needs-based system agreed by all four nations”.


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Mr Williams
Mr Williams
4 days ago

Mike Hedges is a great politician. I always love reading his articles on Nation.Cymru.

Howie
Howie
4 days ago

Labour may talk devolution to all regions but all of their actions are centralisation.
From controlling candidates where they can from centre, to deciding staff appointments.
They will serve up their diktats on planning from the centre then expect the Welsh Govt to bend the knee and implement them into Wales Planning Policy.
With disregard for existing staff and politicians who do not conform to their likeness, in Wales this will be evident by the list nominees in 2026, very 1984.

Gwyn Hopkins
Gwyn Hopkins
4 days ago

According to Google, the principle by which the Barnett Formula operates is that any increase or reduction in expenditure in England leads to a proportionate increase or reduction in resources for Wales’ Government. This essentially means that the annual Barnett Grant for Wales is based on the needs of England – not those of Wales.  This is obviously a ludicrous situation with Wales short-changed year-on-year.  Wales is a much poorer country than England, not least because its population is a lot more aged, so that its needs are substantially greater than England’s. 

Why vote
Why vote
4 days ago

If our politicians had the mindset to do anything around the total independence for Wales they would not now be holding their caps in their hands asking for more, instead they prop up a foreign labour government who only say “More why do you want more”? Or is it the inability to raise equal or enough funding from within Wales by following the dream of independence. So first minister stand on the steps of the senedd and declare independence from England today, why the 25 year wait are you and the senedd not capable of running an independent country??

Morfudd ap Haul
Morfudd ap Haul
4 days ago
Reply to  Why vote

The people have voted and it was not for independence. It is a dream that is not supported in Wales. Plaid will have to do a much better job to achieve its aims.

Garycymru
Garycymru
4 days ago

Even those in the financial sector overwhelmingly condemned it as unfair to all, within 2 weeks of its implementation.

The fact of the matter is, that Wales and Scotland ard being stolen from.

Not just by a few million, but we’re having billions taken from us. This will not change while a government from another country makes our decisions.

The 5th biggest clean energy producer in the world should not be broke. This is fraud. The Welsh people are bring taken for a ride.

Brad Steel
Brad Steel
4 days ago

The urgent focus must be on health and social care funding. This must be needs-based and not dependent on what a younger healthier and wealthier population in England costs to look after.

Sneb yn gwbod.
Sneb yn gwbod.
4 days ago
Reply to  Brad Steel

We are reliant on English hospitals at the minute because there are parts of Wales too distant from Welsh hospitals. We also need the hospitals we have to be up to standard.

Brad Steel
Brad Steel
4 days ago
Reply to  Sneb yn gwbod.

The point is about the funding model, but the cross-border aspects of health care provision work in both directions.

Morfudd ap Haul
Morfudd ap Haul
4 days ago
Reply to  Brad Steel

There is a massive difference in usage. Yes works both ways but there are no A&E and major hospital facilities in swathes of mid Wales.

Brad Steel
Brad Steel
3 days ago

In 2016 around 15,000 Welsh residents were registered with English GPs and 21,000 English residents were registered with Welsh GP.

Annibendod
Annibendod
4 days ago

Labour have a serious shortcoming here and it is a matter of principle – or values if you prefer the term. Labour politicians are very keen on telling us all that they believe in “redistribution”. This apparently is a great thing and evidence that the UK is “Progressive”. The word progressive here has been turned from an adjective into a noun, a badge to differentiate the protagonist from their Right Wing Tory antagonists. I find it grossly insulting to describe the UK as progressive (I wrote an article on this some time ago). The UK has amongst the worst comparative… Read more »

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