Plaid Cymru AM Helen Mary Jones has called for additional funds for the Welsh Government in order for public bodies to be able to respond more effectively to the coronavirus crisis.
The Instiute of Fiscal Studies has pointed out: “…the funding arrangements for the devolved governments may not be appropriate for the task at hand. This is because they have limited reserves, constrained borrowing powers, and the funding flowing to them as a result of the Barnett formula may not reflect the challenges that they face. As a result, their ability to respond effectively may be delayed or compromised, and vital funding misallocated across the UK. There is a case to give them access to greater borrowing powers and to consider bypassing the Barnett formula.”
Mid and West AM Helen Mary Jones, Shadow Economy Minister said:
“This expert analysis is notable because the data shows Wales is worst hit by coronavirus of all the UK countries. We have a higher rate of infection, higher elderly population, and therefore more vulnerable.
“We also have a higher dependency economically on the hospitality industry. One could argue that our freelance/self-employed economy is more brittle than others as they’re often lower-paid. This is why this week in the Senedd I called for protection for sole workers, self-employed people and freelancers.
“I’ve asked the Welsh Government what discussions they’ve had with the Westminster Government about additional funds over and above the Barnett funding formula to address the Coronavirus crisis.
“The Barnett formula – the way we are underfunded has once again been brought to light by this public health crisis. We are funded by an outdated formula devised in the last century and based purely on population not need.”
The Welsh Government budgets for 2019-20 and 2020-21 already involve drawing down reserves by the maximum £125 million a year it is allowed.
Analysis by the Institute of Fiscal Studies concludes: “There is therefore a case for giving the devolved governments greater access to borrowing via the National Loans Fund, at least for Coronavirus related measures. This would allow them to develop, cost and announce plans more quickly than if they have to wait until UK government plans for England have been announced. Effective communication and coordination between the UK and devolved governments should also be a priority – at least for now.”
Mid and West AM Helen Mary Jones added: “Borrowing by the Welsh Government is currently limited to £1 billion over five years. This is far too low. Wales should be permitted to borrow to invest up to £5 billion over five years.”
