Row over £30m for Ukraine taken from Welsh government funds

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Ukraine tankImage source, Reuters

A row has broken out over £30m from the Welsh government's budget being put towards the £1bn the UK is sending to Ukraine for military aid.

The money will come from Welsh ministers' capital budget, used to fund projects such as hospitals and roads.

Finance Minister Rebecca Evans said she agreed to provide the cash, rather than have it taken away later under UK Treasury processes.

But she also said how the cash was found was "not right" and "worrying".

She said a precedent should not be set for Welsh government money to go on things usually handled by Westminster.

Ms Evans told a Senedd committee that she had been asked to either provide the money "upfront" or through a budget reduction later, as a knock-on effect from UK government departments providing cash for military aid.

The UK government disputed a claim from the Education Minister Jeremy Miles that the Welsh government was not consulted.

Some £65m for Ukraine will come from Scottish government budgets.

Speaking at the NATO summit, Boris Johnson said: "UK weapons, equipment and training are transforming Ukraine's defences against this onslaught. And we will continue to stand squarely behind the Ukrainian people to ensure Putin fails in Ukraine."

The UK's military support for Ukraine is in addition to the £1.5bn of humanitarian and economic support provided to the country since February.

The Welsh government's Finance Minister Rebecca Evans said it was "a novel, worrying and potentially divisive approach by the Treasury - seeking to use devolved budgets, that should be for investment in devolved areas, like health and education, to fund reserved spending areas such as military aid and defence".

"Funding for these areas should rightly be met by the UK government," she said.

She added: "Ultimately, because of the exceptional circumstances, we have accepted this situation in light of our ongoing commitment to support Ukraine and the Ukrainian people in their fight against this senseless act of aggression, but it should not be a precedent."

Devolved areas are parts of government policy which are controlled by ministers in the Welsh government, and where laws for them are made in the Senedd.

The armed forces and foreign aid are not devolved.

'There wasn't any consultation'

On Radio Wales Breakfast Welsh Education Minister Jeremy Miles said ministers in Cardiff "were told by the UK Treasury the budget would be cut".

"There wasn't any consultation," he said.

But this was denied by the UK government.

A spokesperson said: "To say the Welsh government was not consulted on this matter is incorrect - they were consulted and agreed to make a contribution.

"Following discussions last week with the chief secretary, the finance ministers in the Welsh and Scottish governments agreed to make a contribution as part of the funding being provided to maximise the international effort to support Ukraine, following Russia's unprovoked, illegal invasion."

In committee, Ms Evans said the consultation amounted to a "call" with Simon Clarke, chief secretary to the Treasury, a week ago "where he set out what the options are, and then we had a couple of days to consider those options before responding to the Treasury".

She said Mr Clarke had told her that the UK government was "looking to all Whitehall departments to return 1.5% of their capital budgets to fund this particular intervention".

"The choice at that time was to either provide upfront a contribution from Wales, which would be around the same order of funding, or to wait to later on in the year and have that reduced as a negative consequential (where reductions in UK government spending on matters Welsh ministers are responsible for in Wales result in the Welsh government budget falling".

'Must not be seen as any kind of precedent'

The row over Ukraine funding is the second between Welsh and UK ministers this week, after the UK government reiterated plans to scrap a Welsh trade union law.

Scottish Finance Secretary Kate Forbes said ministers in Scotland "agreed to providing funding on this occasion given the clear need to maximise the international effort to support Ukraine".

However she added that "this must not be seen as any kind of precedent which leads to devolved budgets being used to help pay for clearly reserved policy areas".

Llyr Gruffydd, who speaks for Plaid Cymru on finance matters, made the same point.

"Money that is there to be invested in areas that Wales has powers over - health, education, transport - shouldn't be used to fund a non-devolved spending area and we hope that, in a week where we have seen devolution heavily undermined, that this case isn't precedent setting from the UK government," he said.

Wales Office minister David TC Davies said the "British government has given incredible support to Ukraine".

"At the end of the day, the parliamentary government is not going to do anything to undermine devolution," he said.

Analysis by BBC Wales political reporter Adrian Browne

This is a row deep in the weeds of how the Welsh government is funded.

On the one side, UK ministers argue they simply gave ministers in Cardiff the chance to put some cash in the pot to help Ukraine now, rather have that money removed later because of how spending has been moved around Whitehall to pay for the aid.

On the other, Welsh ministers point out the UK government is using money from Whitehall departments' underspending, when Welsh government departments are working in a way that avoids such underspends.

Welsh ministers say it is simply wrong for their budget to be squeezed because of underspending in England.

The Scottish government, hardly fans of Boris Johnson's administration, have chosen not to have the same high octane row with the UK government on this one.

Regardless of the rights and wrongs of how funding in the UK works, is it a good look to be rowing over cash to help Ukraine's fight for survival, however much Welsh ministers stress their support?