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