Minister defends Welsh Government over lost £155 million

Trefnydd Lesley Griffiths has revealed that the Treasury clawed back £25 billion from UK Government Departments along with the money it reclaimed from Wales following recent changes to the rules.

Ms Griffiths, who is the minister responsible for organising government business in the Senedd, was making a statement on the £155.5 million which has been returned to Whitehall as a result of an underspend.

Earlier this week, the Senedd’s Public Accounts and Public Administration Committee blamed “poor account management” for the return of the £155.5 million.

On Monday, Committee Chair Mark Isherwood MS said “We are very concerned that significant funding was lost to Wales as a result of the underspend in 2020-21.

“It is one of many examples where poor record keeping and mismanagement of public accounts has cost the people of Wales.”

The amount returned is the result of the difference between the balance of the Wales Reserve on April 1 2021, £505.5 million, and the Wales Reserve’s limit of £350 million.

As a fiscal devolution measure, the Wales Reserve was established for the Welsh Government to deposit any resource or capital funds which can be drawn down to fund future spending.

The reserve is held within the UK Government and is capped at £350m.

£25 billion

Ms Griffiths told the Senedd that Welsh Government had plans to spend the money which has been clawed back by HM Treasury.

“That was our money” Ms Griffiths said, “the rules were changed.”

Furthermore, she added: “Departments in Whitehall returned about £25 billion to the Treasury.

“If you look at the Department of Health and Social Care in England alone, they returned £18.6 billion to the Treasury.

“If you think about what our Barnett consequential share would have been of that funding, we would have had an additional £1 billion.

“But we didn’t return that £1 billion, because we spent more in Wales. Our offer to businesses during the Covid pandemic was much more generous, for example, and we also spent better, avoiding the scandals of those dodgy PPE contracts.”

Ms Griffith’s statement came about following a request by Huw Irranca-Davies MS, who said: “We have, in effect, lost £155.5 million and I would like to see a statement on that, how we can avoid this in future, and why it was clawed back from Wales, when, actually, the amount was significantly bigger in some UK Government departments.”

He added: “The precedent in previous years” was that there was “flexibility on this,” but several options to change the money “into capital, from revenue spending was declined” by the Treasury.