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Betsan Powys | 14:31 UK time, Wednesday, 10 October 2007

When my mother in law, who's 80 next week, was a little girl she'd con her little sister out of orange pop by pouring rather more into her own glass. When little sis complained that she was losing out, big sis would slurp the extra pop, smile and point out that now they had the same. Another slurp. Now little sis had a bit more than big sis. Big sis had been really generous. No problem. It took little sis a few years to work out that particular recallibration in baselines.

Confusion still seems to reign over yesterday's Spending Review. We've spent the morning answering questions from our own newsroom, so let me pass on to you all our efforts to explain it.

In the spirit of yesterday's performance by Alistair Darling I'm going for the wholesale nicking of Brian Taylor's clothes/entire wardrobe. He's come up with a Q+A so I'll nick his Qs and insert our own As where they differ. Where they truly differ, of course, is that arguments over baselines in Scotland are raging between a government of one colour in Edinburgh and an UK government of quite another hue. We're deciphering a Labour-led Welsh government arguing the toss with a Labour UK government. Who needs 'enemies' when you've got friends like these?

Here goes:

Has Wales' budget been cut? No, it's going up, over and above inflation. The row is over the rate of increase.

Is it a tight deal? Yes, the tighest since devolution.

Has the Barnett formula been applied strictly? Yes, to Scotland, Wales and Northern Ireland.

Is that at good thing? It used to be when Barnett felt generous. The formula's been tightened over the years. Now tends to squeeze, especially in Northern Ireland.

Was the formula fiddled? No.

What's this about the new baseline? The Treasury decided to recalibrate certain existing budgets for England, principally the NHS: essentially, assuming they'd got less this year than the actual out-turn figure.

Why did they do that? Version One, it was a standard statistical exercise. Version Two, it made the percentage increase for health look bigger.

Why does that affect Wales? Barnett. Wales experiences changes consequential upon all comparable English departments, eg health. So this time we've lost out, right from the very first calculation, to the tune of £260million+

Is that fair? It's the formula. Live with it - or negotiate everything from scratch, which might not be to our advantage.

What does it do in practice? It explains why the Wales Office say the growth increase over three years is 2.4% (cf Labour Secretary of State Peter Hain today in HofC: "a massive injection - a 2.4% real-term increase per year") while Welsh Assembly Government say it's 1.8% (cf Labour Finance Minister Andrew Davies today in Assembly: " It is important that Assembly Members note that these increases are calculated on an adjusted 2007-08 baseline ... Based on our previously published baseline, the average real terms increase is 1.8% per year". In other words they're using a different starting point.

What else? It explains why Rhodri Morgan says the first year growth is particularly tight - the effect of changing the baseline impacts in the first year.

What happens now? Welsh Assembly Government can complain to the Treasury about the first year deal.

Chances of success with that? 0.0%. In real terms. Andrew Davies says "very robust discussions" with the Treasury are continuing. So maybe that baseline of 0.0% ought to be revisited ...

Thanks Mr T.

And now I return to answering more questions, this time on whether it's true we've been 'robbed' of £6.5 million to counter the impacts of foot and mouth on livestock farmers. English farmers get £12million. Scottish and Welsh farmers were going to get £8m and £6.5m ... but now, apparently, they're not.

Guess what?

"The Assembly Government is continuing to pursue this matter vigorously with Ministers both at the Treasury and in DEFRA."

Comments   Post your comment

  • 1.
  • At 04:51 PM on 10 Oct 2007,
  • John R. Walker wrote:

All of which just goes to show how much easier life was, and was always destined to be, if the EU Region currently called Wales was still run from Brussels via London...

The way I see it, Wales can be run from London with about 250 extra people - so why are we paying at least 10,000 to do the same job? Badly!

While people bicker about the Wales precept, they should perhaps consider that much of it is simply English taxpayers' money being used and abused to duplicate public sector establishment facilities. What a waste!

  • 2.
  • At 05:35 PM on 10 Oct 2007,
  • Arfon Jones wrote:

John Walker is obviously confused by all the economic and statistical data provided, you only need to remember one statistic to see that devolution has brought great benefits to Wales. The budget has DOUBLED from £7 billion in 1999 to £14 billion in 2007 and up to £16 billion by 2010. You clearly need to remove the John Bull blinkers.

  • 3.
  • At 09:09 PM on 10 Oct 2007,
  • Rhydian James wrote:

Mr Walker, your ignorance seems to know no bounds. Firstly, you could run Wales with 250 extra people in London? 5.8% of the UK population run by 250 extra people? I can't think of a way to pour enough scorn on that idea! Let's move on.

Wales gets money by the Barnett Formula. It takes the precise ratio of our population to England's, and that is how much our budget is. That is, Wales gets the money it would get even if it were not devolved. How did all this manage to pass you by?

Public sector establishments are not duplicated at all. Education and health are markedly different in Wales, or did you not bother to check that? Devolved matters are decided in Wales, not just duplicated.

The next time you decide to spout some ridiculous anti-devolutionist rubbish, check the facts first!

Betsan - how about a blog on how this Barnett formula works ? What's included and excluded from the baseline calculation - I've never quite got it...

  • 5.
  • At 10:14 AM on 11 Oct 2007,
  • MH wrote:

Two children get £10 pocket money a week.

George only spent £9 of his £10 last week. But because he didn't spend it, Daddy took it back. However Daddy made up for it by proudly announcing that he was giving George a 10% increase, so that George would get £11.

David did spend all his £10. But Daddy explained to David that because George had only spent £9 last year, would only be fair to give David the same. But he could have the same 10% increase as George, so he would get £9.90 this week.

Daddy proudly told everyone that he was very generous (he had given them both a 10% increase) and that he had treated them equally.

Next week, Daddy is going to be scrupulously fair and give them both another 10% increase. George will get £1.10 more, David will get 99p more.

  • 6.
  • At 12:40 PM on 11 Oct 2007,
  • Richard Harris wrote:

More New Brown Labour "creative non spin!"

"National transport spending will increase by 32 per cent over the next three years - and NOT double, as indicated by the chancellor.

Figures from the comphrensive spending review reveal that the Department for Transport budget will increase from £12.6 billion in 2007-8 to £13.4 billion in 2008-9, £14.6 billion in 2009-10 and £16.5 billion in 2010-11.

That represents a 32 per cent increase over three years, or a 2.25 per cent average annual increase in real terms.

This stands in contrast to Alistair Darling's claim in his Commons speech yesterday that "we will double investment" on transport.

The "doubling" actually refers to the increase in funding between 1997-8, when Labour came to power, and 2018-19, a Department for Transport spokeswoman said."

(Source) : Regeneration.Net Today.

"Plus ca change" as they say in Bargoed Working Mens Club...

Gee Dewi - thanks. I think that's what they call a 'hospital pass'. Rather appropriate these days come to think of it, NHS underspend and all that ... I'll take you up on the challenge but not now. It has to be a quick one today.

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