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BBC News
7 hours ago
- Business
- BBC News
Rachel Reeves' spending review sets Wales' 2026 election scene
The spending review that Chancellor Rachel Reeves will deliver this week isn't just a big deal in Westminster, it will also prepare the ground for next year's Senedd will tell UK government departments how much they will get to spend over the next three doing so, she will also reveal the funding available to the Welsh government that voters will elect next parts of the UK government have been negotiating with the Welsh government – which is responsible for the NHS, education and other big public services – has been doing something can raise money through taxes, but the vast majority of its budget comes in a grant from means the chancellor's decisions have a huge influence on what the Welsh government can and cannot Cardiff Bay, they await her statement with bated breath. For months, Welsh government officials have been busily working on their own spending review, making long-term plans for the years beyond say they are grappling with a "challenging fiscal outlook".In other words, they are not feeling so far they have lacked a crucial piece of information: How much money to expect from the UK might have heard of the Barnett formula - an obscure piece of mathematics that has a big impact on the UK government spends more on things that are devolved to Wales the formula triggers a top-up to Wales' looks likely the NHS will be prioritised by Reeves. Because health is devolved that would swell the Welsh government's cuts to other UK departments could drag Wales' budget back down again. The funding for the day-to-day running of public services, which pays for wages and administration costs, is likely to grow in this spending if lots of that is swallowed by health and defence, other parts of the government could will have to make trade-offs between these competing priorities. Tough choices are "unavoidable", says the respected think-tank the Institute for Fiscal outcome will be closely watched in Cardiff, where political parties will soon start writing manifestos for next year's about how to pay for the policies in those manifestos will depend on how much money is spat out by the Barnett Morgan says she has asked Sir Keir Starmer for extra funding to reduce hospital waiting times, which have grown to record-high levels recently, and for social housing. New railway stations for Wales Her government is also waiting to see if plans for five railway stations around Cardiff and Newport are will hope Reeves offers something to turn around Welsh Labour's poor performance in recent opinion poll ratings make the Labour landslide at last year's general election seem like a distant that time, Labour promised to form a government in Westminster that would work with the Labour government in spending review will be scrutinised as a crucial test of whether it is living up to that of that, Reeves won't just publish a load of spreadsheets that explain how taxpayers' money is divvyed will also set the terms of debate for a Welsh election in 11 months' time.
BBC News
a day ago
- Politics
- BBC News
Wales not given fair funding for rail, says Lee Waters
Wales does not get its "fair share of rail funding" and the system must be "fixed", said a former Labour minister responsible for for a £6.6bn Oxford-Cambridge rail line were previously classified as an England-only project, which means Wales could have been entitled to more the Treasury announced there was a "publishing error" in a 2020 document and it should have been classified as an England and Wales Waters, the Labour MS for Llanelli said the "cock-up" highlights the broader issue of how "unclear" and in need of reform the funding system is. Rail in Wales is not devolved, which means funding is determined through the UK government using the Barnett formula. Speaking to BBC Radio Wales Breakfast on Monday, Waters said: "Is it cockup, is it a conspiracy? Who knows - almost always a cockup in my experience."But he said "it speaks to the broader truth" that "the system needs fixing".He said: "We have not had our fair share of funding, the formula does not work to our advantage. "It is not clear how the formula works and therefore we don't trust when things like this pop up."Waters said only a few weeks ago the Welsh government "had to dip into our own coffers" to pay for the national insurance costs, which should be covered by the UK government as per a Treasury agreement."We need to reform the Barnett formula," Waters said. "We need to have the UK treasury acting as a UK treasury for the whole of the UK, not just for whoever happens to be in government in England at the time."He added that this is not "a party issue" because "this happened under the last government, it's happening under this government".He said it is "the government machine" which must be "changed and fixed".He said he is "confident" his London colleagues are ensuring Wales gets more funding, but is "less confident" they are trying to reform the Barnett said part of the issue is there "is not a Wales pot of money for rail, we have to fight our corner in the England and Wales pot."Waters said: "There's a UK Labour manifesto commitment to create a Wales fund for schemes so there can be transparency."But he said he is "nervous" about "wholesale devolution of rail without the extra funding", because it comes with the responsibility of repair work. He said: "You can argue we should get the extra funding, but it's back to 'do we trust the UK funding arrangements to do that?'"The UK government previously said the "error" over the Oxford-Cambridge line classification "will be amended when an update is published at the spending review".The HM Treasury has been approached for comment.
Daily Record
02-06-2025
- Business
- Daily Record
Nigel Farage met by protesters on visit to Scotland as he criticises Holyrood funding
Nigel Farage has signalled he would launch a full-scale review of how public services are paid for in Scotland if he becomes the next prime minister. The Reform UK leader said today the Barnett Formula - used by the UK Treasury to determine how much money is given to the Scottish Government each year - is "out of date". The Clacton MP also said he wanted to see Holyrood "raise a bit more of its own revenue" and claimed the Scottish economy wouldn't grow unless the decline in North Sea oil and gas production was reversed. And he claimed "devolution is here to stay" - despite John Swinney previously warning Reform would look to abolish the Scottish Parliament if they took power at Westminster. Speaking on a visit to Aberdeen Harbour, Farage also accused members of the Scottish media of leaking details of his press conference to a small but vocal group of protesters who had gathered outside. He was also downbeat on his party's chances of winning the Hamilton, Larkhall and Stonehouse by-election - claiming the prospect of beating both Labour and the SNP was "improbable". Farage has previously been scathing of how the Scottish Goverment is funded. During a leaders' TV debate ahead of the 2015 general election, the then UKIP leader said tax payers in England were "cheesed off" at the amount of public money given to Holyrood. The Barnett formula is a system of grants which dictates the level of public spending in Scotland, Wales and Northern Ireland. Under it, extra funding - or cuts - from Westminster are allocated according to the population size of each nation and which powers are devolved to them. The system has long proved controversial as it means public spending per head is considerably different in different parts of the UK. It has typically been 20 per cent higher in Scotland than in England. Asked today by the Record if he still viewed public spending in Scotland as too high, and whether he would scrap the Barnett Formula, Farage said "of course" there was an argument for it to be looked at. He said: "The Barnett Formula seems to me to be somewhat out of date. What I'd like to see is a Scottish Government that's able to raise a bit more of its own revenue, and a Scottish economy that has genuine growth. "And I don't believe that can happen without this sector (North Sea oil and gas) booming. "The Barnett Formula goes back to the 1970s. Is there an argument that it should be looked at again? Of course there is. "But frankly, if you look at welfare dependency, if you look educational standards, the idea that 50 billion this year going to Scotland isn't going to be enough until it has an economy that is thriving." Pressed by the Record on whether his party was supportive of devolution in general , Farage added: "Devolution should extended to England, right down to the counties. "Devolution is here to stay. Sadly, over the course of the last 20 years or so, devolution has not worked very well." Farage also doubled down on his attacks on Anas Sarwar, with the Reform UK leader using a visit to Scotland to again accuse him of 'sectarian politics'. He claimed the Scottish Labour leader has a 'record of obsession' – citing a speech he gave in Holyrood in 2020 as evidence of this. The Hamilton by-election race has been dominated by a row over a Reform advert which has been branded 'racist' by Reform's opponents, and which claims that Sarwar will 'prioritise' the Pakistani community in Scotland. But Farage today insisted Reform UK 'don't talk about race at all'. He pointed out his party's chairman, Zia Yusuf, was someone who 'is Scottish born, but comes from parents who come from the Indian subcontinent'. Farage continued: 'We think everybody should be treated equally. We object, very strongly, to the segmentation of people into different types.' Michael Marra, Scottish Labour finance spokesman, said: "Nigel Farage has said the quiet part out loud and admitted he plans to cut funding for Scotland's public services. "He has already said he wants to privatise the NHS and now he is planning to take an axe to funding for the rest of our frontline services. "This is yet another sign of how out of touch this charlatan is. The SNP don't deserve to win but it is crystal clear that Reform do not have the answers that Scotland needs. "Only Scottish Labour will stand up for our public services and deliver a new direction for Hamilton, Larkhall and Stonehouse."
Powys County Times
07-05-2025
- Business
- Powys County Times
Powys Council may have to fund national insurance rise
POWYS County Council may have to dip into its reserves to pay higher staff national insurance costs - but neighbouring councils in England won't. Last month it was revealed that the NI hike will leave Welsh local authorities with a shortfall with estimates ranging from £20 million to £65 million. Funds have been allocated to English councils to cover the higher costs, but because of the way the Barnett Formula allocates Treasury funding to devolved nations, Wales is not expected to receive the full cost of the NI hike. English local authorities have suffered deeper cuts to services than Welsh ones – and as such have less services and staff to fund. Plaid Cymru group leader, Cllr Elwyn Vaughan asked: 'All public bodies in England will be protected against the national insurance increases cost. 'However, they have decided to fund Wales via the Barnett formula - a decision that is leaving Wales £65 million short of funding.' Cllr Vaughan asked: 'What effect will this have on Powys Council financially?' Interim head of finance Ann Phillips answered: 'Although we are aware that the funding is being transferred through the Barnett Formula, and there may be a shortfall, we do not have any detail about the overall quantum and what it is expected to cover.' Ms Phillips explains that as part of this year's budget setting process money has already been allocated to pay for the growth of national insurance costs for social care providers. Ms Phillips said: 'But we expect funding from Welsh Government to cover the cost of our directly employed staff. 'We have specific reserves set aside for payroll pressures, and this would need to be drawn against if there is a budgetary shortfall.' Ms Phillips added that as soon as the council has clarity on what will be funded or not, the finance department will work out what the overall financial impact to the council will be. The last financial report for the 2024/2025 budget as it stood at the end of February, the council had a total of £55.259 million in usable reserves. In April, the new class one national insurance costs for employers increased from 13.8 per cent to 15 per cent.
