Politics
Welsh public bodies ‘could be shortchanged on NI hike’
PUBLIC bodies in Wales may not receive full compensation from the UK Government for the cost of employer national insurance increases unlike in England, a committee heard.
Mark Drakeford told the Senedd’s finance committee the cost of workers within the Office for National Statistics definition of a public sector employee will be covered by the UK treasury.
Andrew Jeffreys, director of the Welsh treasury, explained the UK Government plans to use the Barnett formula to decide how much Wales will receive based on the costs in England.
But Prof Drakeford said: “That’s not my position … if public authorities in England are getting 100% compensation then public authorities in Wales should have 100%.
“The Barnett share may turn out to be less than we need in Wales.
“That would seem to me fundamentally unfair if English public authorities know they’re getting everything covered and in Wales we’re left filling gaps.”
He added: “If things worked out in the way we just described where Wales doesn’t have full cover but English public authorities do …, I won’t simply be leaving it there.”
Peredur Owen Griffiths, who chairs the committee, raised a warning from Ynys Môn council of a “gaping hole” in the budget that leaves local authorities facing an existential crisis.

He said councils could be put in an invidious position of having to balance books, potentially making jobs redundant, in the interim before clarity on compensation in May or June.
Pointing to the example of extra cash from UK pay deals, Prof Drakeford stated ministers took a risk-based decision to plan for the funding coming to Wales despite some uncertainty.
He told the committee: “I think local authorities will want to do that. They will look to see the ONS definition … and make assumptions against that. I equally think there will be organisations who … will need to plan on the basis they won’t get help from the treasury.”
Prof Drakeford, who was appointed finance secretary in September, said he would be loath to use money that comes to Wales to “substitute for responsibilities held elsewhere”.
Giving evidence after unveiling his £26bn draft budget, including a £6bn planned settlement for councils in 2025/26, Prof Drakeford said local government funding will increase by 4.3%.
The former First Minister told Senedd Members headline figures on how much funding each council receives often disguise the fact some are doing well on a per-head basis.
Prof Drakeford said he would look if anything more can be done to assist councils at the bottom end before the final budget is published on February 25.
He said the mission has not simply been to restore the position before wide-ranging cuts across almost every Welsh Government department were announced in October 2023.
He told the committee: “I’ve resisted with my colleagues suggestions that what we should be doing with the money we’ve got available next year is go back and fill the holes that we had to create in order to make this year’s budget viable.”
Pressed about tough decisions he has had to make, Prof Drakeford said: “There’s very little in this budget where people have had to deprioritise …. Last year we were using that term to denote the fact we were having to cut budgets, there’s very little of that in this budget.”
He suggested he would have liked to have allocated more than an extra £20m for childcare due to pressures to raise the hourly rate for providers and extend the Flying Start scheme.
Conservative Peter Fox questioned whether enough funding would be provided to the NHS in the draft budget to tackle the record 618,000 people in Wales on waiting lists.

Prof Drakeford replied: “There’s no ceiling here where you could say ‘well, the health service has now got everything it needs’ because there is always more demand…. I am satisfied that there is adequate funding … to make inroads into those waiting lists.”
Mike Hedges asked for an update on introducing a vacant land tax after talks with the Tory UK Government on devolving powers requested nearly five years ago broke down.
Prof Drakeford told his Labour colleague plans for a vacant land tax had completely stalled but he had a positive meeting with James Murray, exchequer secretary to the UK treasury.
He said he was given a commitment to revisit the proposal which aims to test arrangements set out in the 2014 Wales Act to devolve powers for new taxes to Wales.
Pressed about talks with the UK treasury on the Welsh Government’s borrowing powers and flexibility with reserves, Prof Drakeford warned the issue becomes more pressing every year.
He said if capital borrowing continues at the current rate of £150m a year, the Welsh Government will hit the £1bn cap during the next Senedd term from 2026.
Health
Welsh Government intervenes as Gwent health board’s finances ‘deteriorate rapidly’
THE WELSH Government has escalated intervention at Aneurin Bevan University Health Board to one step short of special measures, amid concerns about an £18m deficit and A&E failures.
Jeremy Miles, Wales’ health secretary, announced the Gwent health board will move to level four for finance and emergency care on the government’s five-point scale.
In an update on escalation at each NHS organisation in Wales, Mr Miles warned the health board’s financial position has “deteriorated rapidly” over the past year.
“It is forecasting an £18.3m deficit by the end of March. This is not acceptable,” he said, announcing he will revoke approval of the health board’s three-year plan.
Mr Miles said the health board had been at level three due to concerns about emergency care at the Grange hospital in Cwmbran but will move to level four.
He told the Senedd: “The health board has failed to deliver the required improvements… This will result in direct intervention by the Welsh Government… to improve the timeliness and quality of urgent and emergency care for people living in the Gwent region.”
Mr Miles announced Betsi Cadwaladr Health Board, in north Wales, would remain at level five or special measures. He pointed to interventions including a review of planned care, cancer and emergency services as well as an investigation into management of waiting times data.
But he raised “considerable” progress on governance and leadership at Hywel Dda Health Board following the appointment of a new chair and chief executive.
He announced Hywel Dda will be de-escalated to routine, level-one arrangements for governance and leadership. However, the west-Wales health board remains at level three for planned care and cancer as well as level four for finance and A&E performance.
He told Senedd members he was appointing a “senior turnaround director” to provide support to Cardiff and Vale Health Board, which was placed into level four in July.
Mr Miles said the escalation levels of Cwm Taf Morgannwg, Swansea Bay and Powys health boards, as well as other NHS bodies such as the ambulance services trust, will not change. All seven health boards in Wales remain in some form of escalated status.
In today’s (December 16) statement, Mr Miles said long waits are falling as he pointed to a 43% reduction in lost ambulance hours since the last six-monthly update in July.
But James Evans, the Conservatives’ shadow health secretary, questioned whether intervention is delivering meaningful improvements for patients and staff.

Pointing out that Betsi Cadwaladr Health Board has been “trapped” in special measures for most of the past decade, he told the Senedd: “It is deeply concerning that, once again, we see multiple health boards at levels four and five.”
Mr Evans urged ministers to publish performance metrics, risk assessments and evidence used to assign escalation levels to enable decisions to be properly scrutinised.
He warned focusing on local financial mismanagement of health boards risks ignoring wider, systemic challenges driven by the Welsh Government’s policy and funding decisions.
Plaid Cymru’s Mabon ap Gwynfor agreed with his Tory counterpart about “deeper and more systemic” failures becoming a “constant feature” of the government’s record.

“Measures that should be exceptional, temporary and used only as a last resort have instead become routine,” he said. “It is the people of Wales who are paying the price for that failure.”
The Plaid health spokesperson said Betsi Cadwaladr Health Board has come to “embody the Welsh Government’s failure to embed lasting performance improvement”.
Mr ap Gwynfor told the Senedd: “This situation suggests one of two things: either the special measures system itself is not working or there’s no ceiling to Labour’s mismanagement.”
Mr Miles emphasised that escalation is about supporting health boards, not punishing them. The health secretary also pointed to challenges in other parts of the UK, with 12 of the 14 health boards in Scotland also in escalation.

Speaking ahead of the Senedd debate, South Wales East MS Natasha Asghar said: “This serious intervention is a damning indictment of Labour’s track record when it comes to the health service here in Wales and it is my constituents who are paying the price.
The Conservative MS continued: “Our dedicated NHS staff go above and beyond day in, day out, often under unimaginable pressure, but they are being let down by the chaos and mismanagement from the Labour Welsh Government.
“The problems within our health service have been known for quite some time, yet it appears Labour politicians in the Senedd are either reluctant or totally incapable of doing anything to fix the system.
“The Welsh Government must now finally declare a health emergency and focus all efforts on improving outcomes for patients, driving down shamefully high waiting lists, and turning our health service around.”
News
Parliament narrowly backs move towards UK-EU customs union
A TEN Minute Rule Bill calling for the UK to negotiate a customs union with the European Union has passed its first Parliamentary hurdle after a knife-edge vote in the House of Commons.
The proposal, brought forward by Liberal Democrat Europe spokesperson Al Pinkerton MP, was approved by a single vote on Tuesday after the Commons split 100 votes to 100, with the Deputy Speaker using their casting vote in favour of the Bill proceeding.
The Liberal Democrats described the result as a “historic victory”, arguing it sets an important parliamentary precedent for closer post-Brexit trading ties with the EU.
The vote saw 13 Labour backbenchers break ranks to support the proposal, alongside MPs from the Liberal Democrats and Plaid Cymru. In Wales, six MPs voted in favour, including Plaid Cymru’s Liz Saville Roberts, Ben Lake, Llinos Medi, Ann Davies, and Liberal Democrat MP David Chadwick, as well as Labour’s Tonia Antoniazzi, the MP for Gower.
However, the majority of Welsh Labour MPs chose not to back the measure. Among those abstaining was Henry Tufnell, Labour MP for Mid and South Pembrokeshire, who did not vote either for or against the Bill.
Other Welsh Labour MPs who abstained included representatives from Cardiff, Swansea, Llanelli, Neath, Newport, the Valleys and north Wales constituencies.
Economic impact of Brexit cited
The Liberal Democrats pointed to analysis from the House of Commons Library, commissioned by the party, which estimates the UK is losing around £250m a day in tax revenue as a result of Brexit-related economic impacts.
The party also highlighted concerns about the effect of Brexit on Welsh trade, citing research suggesting the volume of Welsh exports to the EU fell by around 31% between 2019 and 2024, while EU imports into Wales declined by approximately 20% over the same period.
They argue that small and medium-sized businesses in Wales are particularly exposed to additional trade barriers with the EU, given Wales’ historic reliance on European markets.
Speaking after the vote, Welsh Liberal Democrat Westminster spokesperson David Chadwick MP said the result reflected growing pressure for a change in the UK’s trading relationship with Europe.
“Across Wales, people are crying out for real change and a solution to the cost-of-living crisis,” he said. “A customs union with the EU is the single biggest step the government could take to grow our economy, put money back into people’s pockets and generate billions for our public services.”
Government position unchanged
The vote does not change government policy, and Ten Minute Rule Bills rarely become law without government backing. Labour ministers have so far ruled out rejoining the single market or customs union, citing commitments made during the general election campaign.
However, the narrow margin and cross-party support are likely to add pressure on the government as it seeks to “reset” relations with the EU through negotiations on trade, defence and regulatory cooperation.
For Pembrokeshire, where agriculture, food production, tourism and small exporters form a significant part of the local economy, the debate is likely to resonate, particularly among businesses affected by post-Brexit paperwork, costs and delays.
The Bill will now proceed to a second reading at a later date, though its long-term prospects remain uncertain.
News
Government ignores public concern over Digital ID Scheme, says Lib Dem MP
Chadwick calls for scrapping of costly and controversial policy after thousands of Welsh signatures and Westminster debate
THOUSANDS of people across Wales have voiced their opposition to the UK Government’s proposed mandatory digital identity scheme, with the Welsh Liberal Democrats accusing ministers of ignoring the concerns of the public.
David Chadwick, the Liberal Democrat MP for Brecon, Radnor and Cwm Tawe, led calls in Westminster to scrap the controversial policy, following a debate in Westminster Hall on December 8, 2025. Chadwick expressed concerns over the cost, the exclusion of digitally disadvantaged groups, and the potential for the scheme to be ineffective in tackling its stated goals, including illegal immigration.
Chadwick referred to the case of Harry Willcock, the last person in the UK to be prosecuted for refusing to produce an identity card in the 1950s, in an effort to highlight the historical and civil liberties concerns surrounding the proposal.
Growing opposition across Wales
According to figures released by the Welsh Liberal Democrats, 4,587 people in Chadwick’s constituency have signed the public e-petition opposing the digital ID scheme, and more than 154,000 people across Wales have added their names to the growing list of signatories. The petition has gathered over three million signatures nationwide, reflecting widespread opposition.
Concerns over cost and exclusion
Speaking in Parliament, Chadwick pointed out that the scheme, which is estimated to cost at least £1.8 billion, is likely to exceed this figure, given the track record of large-scale government IT projects. He warned that such a large financial commitment could divert much-needed resources away from essential services such as the NHS, policing, and local councils.
Furthermore, Chadwick raised concerns that the digital identity system would exclude vulnerable individuals, particularly the elderly and those living in areas with limited digital access. These groups could struggle to engage with an increasingly digital-first society, leaving them further marginalized.
Security risks and ineffectiveness
The Liberal Democrats have also warned that the concentration of personal data in one centralised system poses significant risks, including the potential for data breaches and cyberattacks. Chadwick described the scheme as a “gold mine” for hackers, urging caution.
Critics argue that the digital ID system will not effectively tackle illegal immigration. Chadwick highlighted that existing systems, such as National Insurance numbers and right-to-work checks, already address the issue, making the proposed ID system redundant.
Calls for immediate scrapping
In his closing remarks, Chadwick said: “The fact that so many people in Brecon, Radnor and Cwm Tawe have signed this petition shows how deeply concerned the public is about mandatory digital IDs. Yet, the Government seems determined to ignore these concerns.”
“The scheme’s projected £1.8 billion cost is an astonishing priority, especially considering the many challenges facing our public services. This proposal is not the answer to issues like immigration or public safety—it’s an expensive distraction,” Chadwick concluded.
The Welsh Liberal Democrats are continuing to campaign against the scheme, calling for the Government to redirect funds to more pressing public services. The debate is likely to continue as the UK Government assesses public and parliamentary opinion on this divisive issue.
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