Devolved Budget for Wales: Inflation

Lord Wigley Excerpts

Wednesday 15th March 2023 Lords Chamber

[Baroness Penn (Con)]

I believe the noble Lord was referring to the Lords Committee on the Barnett Formula in 2009, which called for a review of that, including implementing a needs-based factor. That is exactly what we have done through implementing the recommendations of the Holtham commission, which found that the Welsh Government should have at least 15% more per person than equivalent UK government spending to reflect the Welsh Government’s additional needs. In fact, that figure is 20% more per person in the 2021 spending review, which is about £1 million more each year than the Holtham commission indicated and which the Welsh Government agreed was fair for Wales relative to England.

[Lord Wigley (PC)]

My Lords, did not the Holtham commission have as one of its three points the need to do away with the Barnett formula as it exists and to replace it with a needs-based formula? That has not been accepted by the Government. Will they please think again?

[Baroness Penn (Con)]

Instead of removing the Barnett formula, we have amended it to include that needs-based factor. The Barnett formula is simple and efficient and provides a clear and certain outcome. With the addition of the needs-based factor, the people of Wales have the guarantee that funding based on their own needs will not fall below the assessment of where those needs are.