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Tuesday, September 03, 2019

Playing fast and loose with the figures

I was intrigued at the claim by local Conservatives this morning, that Wales is to receive £1.2 billion as a result of the Prime Minister's announcement on education spending in England. If that is the case then surely he has also changed the funding formula under which the Welsh Government receives its money.

In fact, using the Barnett formula, the schools spending announcement would mean an extra £153m in 2020-21, £283m in 2021-22 and £419m in 2022-23 (nominal terms), a total of £855m. This is because the £1.2bn figure includes allocations for increased pension costs (which will go back to the Treasury). That only applies if the announcement is new money. If some of the extra funding has come from underspends elsewhere then Wales will receive a lesser amount.

In the past, after such announcements the Welsh Government has found that cuts to other areas of devolved spending has reduced the amount of money actually passed on to their budget. Furthermore, as the Wales Governance Centre has pointed out, the delayed Spending Review, the lack of a fiscal plan and the uncertainties around the fiscal and economic implications of Brexit make assessing the implications of one spending announcement on future Welsh budgets pretty meaningless.

It is of course up to the Welsh Government how any extra cash is spent, though I tend to agree that education should be the main priority, given cuts since 2013-14 and spending comparisons with other UK countries (the gap in spending per pupil compared to England is £200 rather than the £645 per pupil suggested by the Conservatives.

I am sure that the Welsh Government will make an announcement once it is clearer how much extra they are actually receiving.
The Tories will put the best 'spin' on the news for them. Not necessarily the true position.
Brexit and a new Govnt could change the funding
The £645 is the 'spin' to make it sound better than it is.
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