Support our Nation today - please donate here
News

Welsh Government recalculates sum owed in HS2 consequentials to just £350m

27 Jun 2024 5 minute read
Representation of what the new HS2 trains could look like. Photo HS2

Emily Price

The Welsh Government has recalculated the amount of money owed to Wales in HS2 consequentials at only £350m.

The UK Treasury previously classified the high speed rail project as an “England and Wales” scheme despite the fact it does not cross the border.

This means it did not trigger the Barnett Formula mechanism that would usually send money to the Welsh Government.

It has long been argued by all parties in the Senedd that Wales is owed billions from the UK Government.

Consequentials for HS2 have already been paid to the devolved administrations in Scotland and Northern Ireland using this formula.

Westminster has argued that Wales isn’t owed cash because Welsh people will benefit from improved journey times to London.

But when the Manchester leg of HS2 and its Crewe interchange were scrapped last year this justification was no longer acceptable.

Earlier this month, the Senedd voted unanimously to call for Wales to be given its fair share of funding.

But the Welsh Government’s new figure is hundreds of millions of pounds short of the £3.9bn sum previously calculated.

Cabinet Secretary for Finance, Constitution & Cabinet Office – Rebecca Evans MS

‘Correct figures’

During a debate in the Senedd on Wednesday (June 26), Cabinet Secretary for Finance, Constitution and Cabinet Office Rebecca Evans urged MSs to use the “correct figures” when making the case for Wales to receive its HS2 cash.

She said: “£350 million has been lost to Wales as a result of the misclassification of HS2. We’ll continue to press the UK Government – any UK Government – to reclassify HS2 as an England-only project and to provide us with our fair share of the consequential funding.”

Plaid Cymru MS Mabon ap Gwynfor asked the Cabinet Secretary to explain how she came to the £350m figure.

Ms Evans responded saying she had sent an “explainer” to colleagues on how much Wales had received from the UK Government in each of the financial years when HS2 has been under construction.

She said: “Wales must have its fair share of funding. But, equally, it’s important that we do use the correct figures, because they’re being used in this Chamber, but now also in the media, and I just think that that clarity is important.”

In March last year, Ms Evans called on the Chancellor of the Exchequer, Jeremy Hunt to provide Wales with its “£5 billion” share of HS2 funding.

She said: “The UK Government must commit to review the categorisation of this £100 billion investment as an England and Wales project and provide the Welsh Government with its £5 billion share of consequential funding.”

Last year, former First Minister Mark Drakeford said legal action was being considered over his government not receiving the additional cash.

But in April 2024, the Welsh Government confirmed it would not be pursuing the billions of pounds through the courts.

In the explainer sent to MSs sent last week, Ms Evans said it was “not possible” to say with any precision how much additional funding the Welsh Government should receive over the lifetime of the HS2 programme.

She said: “We can however estimate how the Welsh Government’s block grant would have changed to date, if HS2 had been classified as an England only programme. More precisely it is possible to calculate the additional funding the Welsh Government would have received since 2015 if it had comparability with HS2 in the Barnett formula. (HS2 was not separately identified in the comparability schedule at the time of the 2010 spending review or 2013 spending round, so there were no Barnett formula comparability issues before the 2015 spending review.)

“In aggregate the additional funding would have totalled around £350 million for years
up to 2024-25, including changes up to and including the March 2024 Budget.

“The additions arise because the Welsh Government would have had a higher comparability factor with the Department for Transport (DfT) at Spending Reviews. DfT has generally seen increases to its budget over the period, so higher comparability would have meant bigger positive consequentials for the Welsh Government’s block grant through the Barnett formula. The Welsh Government would also have received consequentials from changes outside spending reviews, including individual HS2-related allocations.”

A Welsh Government spokesperson added: “£350m reflects how the Welsh Government’s funding would have differed if HS2 had been deemed an England-only project in the Barnett formula since the 2015 Spending Review.

“It covers years up to and including 2024-25. It does not include any amounts in relation to future years, as those would depend on the future trajectory of UK Government spending plans.”

The new calculation comes less than a week before the nation finds out which party will be in power in Westminster.

Polling suggests Labour will win a landslide victory.

In a general election interview with S4C last week, Labours Shadow Welsh Secretary Jo Stevens claimed that HS2 doesn’t exist.

Asked whether Wales would get consequential funding from HS2 if a Labour government came into power, the senior politician said the project is “no longer in existence”.

She said: “We don’t know how much money has actually been spent – we don’t know what money is left – if there is money left.”

The current UK Government says the high speed rail project is at “peak construction”.

In 2022, Ms Stevens tweeted saying: “Wales loses £4.6bn of funding because the Tory UK Government says HS2 is an England & Wales rail project.

“‘Levelling up’ will remain a empty Tory slogan unless the UK Government coughs up.”


Support our Nation today

For the price of a cup of coffee a month you can help us create an independent, not-for-profit, national news service for the people of Wales, by the people of Wales.

Subscribe
Notify of
guest
17 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Ap Kenneth
Ap Kenneth
17 days ago

So that is why Gething is in place, to put no demands on London. Northern Ireland – half the population of Wales – received £1.3 billion.

David
David
16 days ago
Reply to  Ap Kenneth

Does this mean that Northern Ireland & Scotland have to pay back money to London.

Linda Jones
Linda Jones
17 days ago

Odd. I cant help wondering if the hugely reduced amount has the hand of Starmer and Gething on it.

Robert Williams
Robert Williams
16 days ago
Reply to  Linda Jones

Neither can I, Linda! Their fingerprints are all over it.

Paul ap Gareth
Paul ap Gareth
17 days ago

If HS2 was £100bn (like the article states), how can the amount owed to Wales only be £350m? That is only 0.35% of the cost?

The ONS states that the comparative populations are as follows:
England: 56,536,000
Wales: 3,105,000
So Wales’s population is 5.49% of that of England.
Surely Wales should get at least 5.49% of the spending in England, or £5.49bn.

Paddy
Paddy
17 days ago

Sell-outs

Padi Phillips
Padi Phillips
17 days ago

So, variously Wales is owed £5 billion or £4 billion while Labour is in opposition, but now there is the prospect of Labour being in government in Westminster, the amount owed is now a mere £350 million. I wouldn’t be surprised if in two weeks time that figure is further revised to £350,000. Clearly this is a stitch-up, and the Welsh Labour government is complicit in this as well as guilty of taking the Welsh electorate for fools, though they already have form on this, and have sadly been taking the Welsh electorate for fools, or at the very least… Read more »

Last edited 17 days ago by Padi Phillips
Why vote
Why vote
17 days ago

How easy it is to manipulate money, the question is why. If wales was an independent country it would get nothing under this scheme, is this why Labour don’t really want it, the gravy train keeps on coming.

Frank
Frank
16 days ago

Well, that’s as clear as mud!! Is this woman related to the Welsh Secretary by any chance?

Last edited 16 days ago by Frank
G. Williams
G. Williams
16 days ago

This stinks of collusion between Starmer and Gething. This story should be top of the news agenda in Wales. Yet, there seems to be no mention of it in the mainstream Welsh media.

Elaine
Elaine
16 days ago
Reply to  G. Williams

Can’t you just hear the headline “Labour government pays HS2 compensation to Wales thanks to intergovernmental cooperation”?
Talk about a sleight of hand, the big stink is spreading.

Dai Ponty
Dai Ponty
16 days ago

I have just been watching I T V this morning where the leader of Plaid was on there and the other 4 who he was discusing it with you could see the arrogance and ignorance in their faces all English they kept saying its an english/Welsh project H S 2

Bob McIntyre
Bob McIntyre
16 days ago

Can’t do arithmetic? Can’t run a health service… Can’t educate our children… Can’t see a steel works owned by a foreign company is going to close, regardless… Certainly can’t run a transport system… And an FM lacking the decency to resign…

And Labour are going to win a landslide?

It’s no use having this argument over how many angels can dance on the head of a pin. Until we realise, and do something about, the disastrously poor quality of our politicians in Wales of all parties, then a pox on all their houses!

Dai Ponty
Dai Ponty
16 days ago
Reply to  Bob McIntyre

That is True BUT ALL THOSE POINTS TORIES ARE DOING THE SAME TO ENGLAND ON A MUCH MUCH LARGER SCALE AND TO THE U K so its not one sided face the bloody facts

Karl
Karl
16 days ago

Given the spread of our population, which part of HS2 swings past Bristol Parkway then to make it quicker to get to a place I won’t be visiting

Howie
Howie
16 days ago

Evans said they have recalculated the block grant and HS2 it is now 1/10th of previous estimate, either their calculations have changed due to an external influence or they had more funding in the block grant than they should have, while pleading underfunding, either way it smacks of incompetence or deliberate misrepresentation of the Welsh budget.

Gareth
Gareth
16 days ago

Why do we put up with this! Wake up Cymru!

Our Supporters

All information provided to Nation.Cymru will be handled sensitively and within the boundaries of the Data Protection Act 2018.