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.
News
Housing plans for former Penally asylum seeker camp
THE EARLY stages of plans for a potential housing scheme at a Pembrokeshire military training camp, controversially used to house asylum seekers, have been submitted to the national park.
The camp, which has been in existence since 1860 as a military training facility, was prominent in the headlines between October 2020 and March 2021 when it became the controversial base for asylum seekers.
Amid protests from inside and outside its gates, the camp housed up to 250 asylum seekers at the height of its occupancy.
It came under fire from its residents and independent inspectors for its poor living conditions.
After the last of the asylum seekers departed, it was handed back to the MoD by the Home Office, who had previously repurposed it, the camp itself closed in late 2022, and was put up for sale the following year.
During the camp’s usage there were protests from both inside and outside the camp, with more than 200 people protesting at one stage against the plans and numerous arrests made.
The camp housed up to 250 men at any one time, and a 30-strong group of them took to the streets of Tenby in a march to show their unhappiness at what they said was their ‘prison-like’ environment.
At the time of that 2021 protest by the camp inhabitants, a spokesman for Stand Up to Racism West Wales said: “They have had enough of the poor food, bullying from security staff, cold huts, lack of medical care, blocked toilets, poor adherence to Covid regulations (some staff don’t bother to wear masks), lack of mental health support, but above all, being treated as prisoners rather than asylum seekers.
“Things must change.
“They need to be transferred to proper accommodation. Other camps in England are doing this.
“Why not Penally?”
Despite the-then Home Secretary Priti Patel maintaining that there had been consultation with ‘everybody’, a 2021 independent report stated that the Home Office did not consult in advance with local stakeholders – such as those who needed to set up healthcare for residents.
The inspectors were from the Independent Chief Inspector of Borders and Immigration (ICIBI) and Her Majesty’s Inspectorate of Prisons (HMIP).
Their report highlighted ‘filthy’ conditions in parts of the accommodation and residents feeling ‘depressed’, ‘hopeless’ and ‘trapped in poor conditions’.
An early stage ‘observations’ application, validated by Pembrokeshire Coast National Park planners, lists “Proposed residential redevelopment of the former Penally Training Camp,” the scheme listed as being received on January 7 and currently being processed.
The national park has been approached for further details about the scheme proposed.
News
UK Government acknowledges rail funding shortfall in Wales
THE UK GOVERNMENT has, for the first time, admitted that Wales has been underfunded in rail infrastructure. However, despite this significant acknowledgment, concrete financial commitments remain absent, raising concerns about the future of Wales’ rail network.
In a letter from Transport Minister Heidi Alexander and Secretary of State for Wales Jo Stevens, the Government admitted that railways in Wales have suffered from “low levels of enhancement spending” in recent years. The letter follows criticism of underinvestment compared to projects like HS2, which has excluded Wales from its benefits while consuming billions of public funds.
The correspondence recommended prioritising key initiatives, including new stations on the South Wales mainline and upgrades to the Borderlands line between Wrexham and Liverpool, as suggested by the North Wales and South-East Wales Transport Commissions and the Union Connectivity Review. However, it stopped short of detailing how much funding Wales can expect or whether spending levels will align with those in England.
First Minister: A ‘step forward’
First Minister Eluned Morgan called the admission a “massive step forward,” noting during a Radio Wales interview that this marked the first time in 14 years the UK Government has admitted to underfunding Wales’ railways. However, she cautioned that discussions are ongoing and described the Welsh Government’s “long list” of rail projects ready for potential funding.
Morgan reiterated her concerns over HS2, labelling its classification as a project benefiting both England and Wales a “fundamental injustice.” She argued that Wales should receive at least 5% of the HS2 budget—a consequential sum of around £4bn—none of which has yet materialised.
Plaid Cymru: ‘Labour failing to deliver’
Plaid Cymru criticised the First Minister’s optimism, accusing Labour of failing to secure the funding Wales is owed. Llyr Gruffydd MS argued that the letter fails to address the unfairness of HS2 or commit to rectifying the £4bn shortfall. He called for the full devolution of rail infrastructure to ensure Wales receives equitable investment.
Gruffydd said: “The First Minister must be reading a different letter. It does not acknowledge the unfairness of HS2 nor promise to right the wrong of the £4bn consequential owed to Wales. Labour must deliver on their promises if they are serious about fair funding for Wales.”
Calls for reform
Transport experts have echoed calls for substantial reforms. Professor Stuart Cole advocates for the full devolution of rail infrastructure, allowing Wales to manage its transport priorities. Meanwhile, Professor Mark Barry proposes that, in the absence of devolution, Wales should receive a ring-fenced fund of £2bn to £3bn over 15 years to address critical infrastructure needs.
What next for Wales’ railways?
While the UK Government’s recognition of underfunding is a crucial first step, the lack of firm financial commitments leaves Wales in uncertainty. The Wales Rail Board has highlighted immediate priorities, including Metro-style services, new stations, and capacity upgrades. However, with the UK Government citing public finance constraints, it remains unclear whether recognition will lead to real investment.
As spending decisions loom, Wales faces a critical question: will the UK Government back its words with action, or will this become another missed opportunity to rectify decades of neglect?
Photo caption: Underfunded: Wales’ rail network faces an uncertain future despite acknowledgment of funding shortfalls (Pic: Herald).
Politics
Senedd Member criticises ‘behind-closed-doors’ appointments
A SENEDD Member denounced his colleagues’ “absolutely stupid, behind-closed-doors” decision to nominate themselves for positions on an inter-parliamentary body.
Labour’s Alun Davies criticised the nomination process for the Senedd’s representatives on the UK-EU parliamentary partnership assembly, which was set up after Brexit.
Mr Davies, who represents Blaenau Gwent, hit out at the decision which was revealed in a letter to Senedd Members from Elin Jones, the speaker or Llywydd.
The chairs’ forum, which is made up of the chairs of Senedd committees, decided to nominate two of their own number following “discussion outside of the forum”.
Referring to the letter during a meeting of the legislation committee on January 13, Mr Davies said: “I disagree … I think it’s a stupid decision frankly, absolutely stupid decision.
“Now, it’s not surprising the chairs’ forum decides that chairs should represent the Senedd.
“That’s pretty unsurprising but the fact that we don’t have a representative from this committee on the UK-EU parliamentary partnership assembly is ludicrous, considering this committee has largely done the work on that.”
Mike Hedges, who chairs the committee, said: “In general, I believe every appointment should be made by the Senedd rather than via committees putting names forward.”
In her letter, Ms Jones confirmed the chairs of the economy and culture committees will represent the Senedd at the parliamentary partnership assembly.
She wrote that members had agreed to the “allocation of roles to be determined with those committee chairs outside the chairs’ forum meeting”.
But Mr Davies, a former minister in the Welsh Government who has been a backbencher since being sacked by Mark Drakeford in 2018, was dissatisfied.
He said: “I’ve got no notice of this chairs’ forum, obviously I’m not a part of it. I’ve got no input into it … and no report from it apart from this note telling us it’s all been decided.
“I think it’s the wrong decision. I don’t think this is the way that decisions should be taken in democracy – behind closed doors – I think it’s absolutely the wrong decision to take.”
Mr Hedges suggested: “Perhaps, we can go into more detail in the private session.”
The committee then agreed to exclude the public and press from the rest of the meeting, without providing any grounds for doing so as is required by the Senedd’s rules.
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