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Change in rules for End of Year Flexibility but where is return of £385million still owed?

19/07/2022

Plaid Cymru’s Lord Dafydd Wigley has urged the return of £385million to the Welsh Government after the UK Treasury announced a change in the rules for End of Year flexibility.

The Treasury has announced that they will now allow the Welsh Government to carry forward any under-spend in their budget from one year to the next.

This comes after the Treasury last year clawed back £385million from Wales in previous End Year Flexibility savings by changing the rules in the 2010 Comprehensive Spending Review.

In addition to the return of this money, Plaid called for a needs-based formula for funding Wales, as recommended by the independent Holtham Commission, because Wales is under-funded by at least £400m each year.

Lord Wigley said:

“In last year’s Spending Review, the Conservatives and Liberal Democrats in London launched a £385million money grab when they took back our savings. This has meant that our Welsh schools, hospitals and public services have lost out.

“Since then, Danny Alexander and his team have had nothing positive to say on the manner.

“This new arrangement is the most basic acceptable form for End Year Flexibility. Of course we should be able to keep the money we haven’t spent one year to spend in the next. It is common sense budgeting.

“But even then though, we are only going to be allowed to carry forward a small amount – 0.6% of our resource budget and 1.5% of our capital budget.

“This is our money and we shouldn’t be punished for not spending it.

“It is an absolutely ridiculous situation that we should be prevented from doing what we want with the money that we are given in case they take it back.

“Wales loses out by at least £400million under the Barnett Formula which should be scrapped and replaced with a needs-based formula.

“That is the announcement that we are waiting to hear from the UK Government.”