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Wales to be robbed of a further £2.7bn in rail funding, says academic

28 Jul 2023 5 minute read
HS2 Artist Impression

Martin Shipton

Wales is due to be robbed of a further £2.7bn in rail funding by the 2040s, according to a leading transport academic.

Professor Mark Barry of Cardiff University has calculated the figure based on information in the UK Government’s Integrated Rail Plan.

Our nation’s shortchanging stems from an alteration in the “Barnett consequential” factor which Westminster’s Department for Transport (DfT) has set for Wales, reducing it from 90% in 2015 to 36% in 2020/21.

The Barnett formula, devised in the late 1970s and named after the Chief Secretary to the Treasury at the time, determines how much money goes to the devolved nations and is based on percentages of money spent by the UK Government in England according to a population-based calculation. Sometimes, however, the amount allocated does not represent a fully proportional share based on population.

The Barnett consequential factor which the DfT has set for Wales changed from 90% in 2015 to 36% in 2020/21, with the reduction attributed to the high cost of funding for the HS2 rail project in England and the inclusion of Network Rail in the DfT’s spending portfolio, neither of which favours Wales.

Unlike Scotland and Northern Ireland, whose factors are currently set above 90%, Wales was assessed as meriting just 36%.

HS2

Prof Barry has calculated Wales would be receiving £4.5bn worth of funding from the Integrated Rail Plan, but currently it is predicted to only receive £1.8bn. However, that is the overall figure for the DfT budget. The issue becomes even less favourable for Wales once a calculation is done to determine how much of a Barnett consequential Wales receives for HS2.

While Scotland and Northern Ireland have a 100% consequential factor for HS2 funding, Wales receives 0%, as HS2 is considered an “England and Wales” project, despite not a single inch of track being laid down in Wales for it.

While £74m has gone to Wales of the £5.67bn spent on HS2 to 2020/21, this is only 1.3% of the benefits through funding, with England receiving 96.7%. However, even this paltry amount is counteracted, according to the DfT’s own Regional Economic Impacts analysis, by a net loss to Wales’ GDP of £150m per year caused by HS2.

Prof Barry added: “This is not actually spending or money in Wales – this is the amount of the capital spend on HS2 that is allocated to Wales when the Treasury assesses capital spending across the UK based on where they think the ‘benefits of HS2 fall’. So, the Treasury think only 1.3% of the benefits of HS2 fall in Wales – yet they also determine it is an England and Wales project and so get 0% consequential funding for Barnett purposes. This contradiction completely wipes out any benefit. On the basis of where they think the benefits fall the consequential funding for HS2 should be (5-1.3)/5 x 100 or 74%.”

This completely wipes out any benefit HS2 funding may have had on Wales – what South Wales Central MS Rhys ab Owen has called “the great train robbery” – furthering the case for having the consequential factor increased so that Wales receives fair funding for its transport services like Scotland and Ireland.

Mr ab Owen has written to the UK Government questioning how it is fair that Wales does not receive adequate funding, when HS2 and the Integrated Rail Plan have nothing to do with Wales, and in fact cause damage to the Welsh economy.

According to Prof Barry, Cardiff is one of the worst connected main cities in terms of rail in the UK, which correlates to the economic performance of the region. He has called for discussion about the devolution of rail infrastructure funding to Wales and a new joint-government plan, including boosting the number of trains an hour through the Cardiff West junction in Canton from a measly one or two, to a minimum of four.

The new South Wales Mainline Programme from Transport for Wales is suggested to have a potential £1bn in economic benefits, furthering the argument for an Integrated Rail Plan for Wales.

Rhys ab Owen said: “The Canton junction is a bottleneck. To unblock it would transform the rail network in the capital and increase connectivity with the Valleys no end.”

The MS has questioned why DfT promised to renew the junction to allow for four trains an hour in 2012 and 2015, but have yet to put the money forward, seemingly having lost interest. He added: “The answers we’re receiving back from the UK Government are becoming more and more weak, and that is to put it mildly.”

Prof Barry said: “Fixing Cardiff West is the single most important measure we can progress to augment the Core Valleys Line Metro now being developed by Transport for Wales.”

Challenged

In March Swansea West MP Geraint Davies challenged Transport Secretary Mark Harper in the House of Commons about rail underfunding for Wales.

Mr Harper said: “The UK Government is responsible for heavy rail infrastructure in Wales. Conversely, it is a devolved responsibility in Scotland, so the Scottish Government receives Barnett-based funding. That is consistent with the funding arrangements for all other policy areas that are reserved in Wales but devolved in Scotland.”

Mr Davies responded: “In other words, Wales has only had 1.5% of rail enhancement investment for the UK for 5% of the population, while Scotland gets 8% for its 8% of the population. That is why wages in Wales are something like 73% of the UK average, compared with 92% in Scotland. Will the Minister give an undertaking that Wales should get its fair 5% share of HS2 – £5bn – in the same way that Scotland will get its 8%, or £8 billion? Will he raise that with his colleagues in the Cabinet?”

Mr Harper said: “The Welsh Government has actually received a significant uplift in its Barnett-based funding due to UK Government spending on HS2. I also point out that the UK Government has committed £2bn [for Wales] for the period 2019 to 2024 – more than double the £900m invested between 2014 and 2019.”


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Cathy Jones
Cathy Jones
8 months ago

Cymru gets ripped off again…..and I bet we will respond as we often do: Shrug and then go back to wondering when the pub opens/when [NAME REDACTED] is up and ready to shot beak.

If you think that’s unfair, prove me wrong Cymru, and start getting mad instead of depressed and/or wreckettttt mayyyyyte.

Gareth
Gareth
8 months ago

Could Labour in Cymru bend over just a little bit more please, yes that should do it, now this wont hurt, much.

Y Cymro
Y Cymro
8 months ago

When will will the naive people of Wales wake up and realise that this false United Kingdom does nothing for Wales but manage our poverty, lower any national expectations and plunder our natural resources And if Welsh voters stupidly assume Blue Labour will like the cavalry come to our rescue are fools because the only ones who benefit are those Labour MPs from Wales who love the London lifestyle so much forget that they were elected to serve their constituents not themselves, and closit Conservative Keir Starmer who lusts for power and will focus solely on England and neglect Wales.

Steve Duggan
Steve Duggan
8 months ago

The Welsh independence movement must include this and other injustices in leaflets across Wales. Also, public gatherings need to happen to make our people fully aware of the neglect and what the alternatives are. We can’t let this continue we have to act.

Llyn
Llyn
8 months ago

Always entertaining to read the bizarre excuses and reasoning used by far-right and right wingers on Twitter (generally with Union flags, “patriot”, “family man”, “anti-woke” emblazoned on their accounts) laughably trying to defend this rail funding rip off.

Gwyn Hopkins
Gwyn Hopkins
8 months ago

    This is merely one more appalling example of the on-going discrimination perpetrated by successive UK governments against Wales. This is even entrenched in the way Wales is financed – by the Barnett formula. GDP-per-capita is accepted by most economists as a valid measure of well-being for a country and a GOOGLE enquiry shows that in this respect England is 35% richer than Wales, so that Wales’ needs are obviously much greater than England’s. Yet Wales’ annual Barnett grant is outrageously based on the needs of England, not on the needs of Wales, meaning that we are permanently doomed to be… Read more »

David Pearn
David Pearn
8 months ago

Cymru how much longer are we going to put up with being 2nd best in a so called union, goodness me its patently clear we’re the nobody’s of the UK. Its time for the non political yes cymru to push as hard as possible to get the Welsh population to fight this horrendous injustice.

Donna
Donna
8 months ago

I love Wales but when we are travelling from liverpool .the trains are over crowded people trying to rush on to get a seat .it’s awful they need to put on more longer trains

Linda Jones
Linda Jones
8 months ago

Our politicians are failing us as Westminster rides roughshod over our rights to fair funding. It is also a failure of Welsh news outlets as the extraction of wealth, resources and entitlement to funding from Wales to England does not get the coverage it needs and deserves. Mostly silence is the order of the day.
These injustices highlighted in part by this article should be shouted from the rooftops and fought against at every turn. Instead we have a political/media fully signed up to the status quo, lining their own pockets at our expense.

Pete Cuthbert
Pete Cuthbert
8 months ago
Reply to  Linda Jones

Amused to rad that the Prof thinks that “Cardiff is one of the worst connected main cities in Wales”. He really does need to get out more from the Bubble and see what the rest of us are experiencing.

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