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Monday, March 27, 2023

Welsh Labour Government emulate John Redwood

Those of us who have been in politics a long time will remember the huge fuss, especially from Labour spokespeople, when Secretary of State for Wales, John Redwood returned £100m of the Welsh Office's budget unspent to the Treasury in 1995 at a time when public services were under-pressure and the Welsh economy was under the cosh. 

Well it seems that the Welsh Labour Government have just repeated the trick, though in this case it wasn't intentional, just incompetence in not spending the money on time.

Wales-on-line reports that the UK Government has taken back £155m allocated to Wales because the Welsh Government hadn't spent it:

Most Welsh Government funds are held with in the UK Government Banking Service and the Treasury has taken back £155.5m from the Cardiff Bay administration's balance because it exceeded the amount the UK Government allows the devolved administration to carry forward at the end of the financial year.

The figure emerged as part of the scrutiny of the Welsh Government's accounts by the Senedd's Public Affairs and Public Accounts Committee and has caused controversy. Wales' finance minister Rebecca Evans called the decision "completely arbitrary" and the Welsh Government said it was "wholly unacceptable" and exposed the fundamental flaws in the devolution settlement.
However the committee, which is made up of one member of each political party and is chaired by Conservative MS Mark Isherwood, blamed the Welsh Government for "poor record keeping and mismanagement of public accounts".

This figure is the result of the difference between the balance of the Wales Reserve on April 1 2021, £505.5 million, and the amount that the UK government has set as a limit for the reserve at the end of each financial year of £350 million.

The Welsh Government said the Chief Secretary to the Treasury had rejected its request to carry forward funds in excess of the Wales Reserve limit In a letter, Wales' finance minister Rebecca Evans said she had "pressed the Chief Secretary to the Treasury repeatedly to allow additional flexibility for this excess to be made available to Wales going forward" and had made a "number of reasonable and pragmatic suggestions for how this could be achieved".

She added that the decision by the Treasury was "completely arbitrary" and "does not fully recognise the arrangements agreed with devolved governments" and that "all these requests have been denied". She went on to say: "As a result, Wales will be deprived of £155.5m which we should have been able to carry forward - a position I have expressed to the Chief Secretary as wholly unacceptable."

The committee questioned why the Welsh Government “waited so long to be told it could not do as it wished with the underspend, and why such a request was made retrospectively”. It said the Welsh Government “appears to have assumed, based on previous HM Treasury decisions, that it would be granted flexibility to use the funding”.

The committee said this raises questions as to whether making a request sooner may have enabled the funds to be used, as it warned “lessons must be learnt to ensure such vital funding is not lost from Wales again”.

Chairman of the Papac, Mark Isherwood, a Conservative Member of the Senedd for North Wales, said: “We are very concerned that significant funding was lost to Wales as a result of the underspend in 2020-21. This money could have been used to fund essential services and it is especially frustrating now when there are such pressures on public funding. “It is one of many examples where poor record keeping and mismanagement of public accounts has cost the people of Wales.”

Given the pressures on the Welsh Government in terms of pay claims, the need to maintain bus subsidies and many more, the failure too spend this money is unforgiveable.

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