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
Burnham more willing to listen on Welsh devolution, says First Minister
Rhun ap Iorwerth says he will press the new Prime Minister for powers over policing, railways and Wales’ natural resources when the two leaders meet.
FIRST MINISTER Rhun ap Iorwerth has said he believes Andy Burnham is more willing to listen to Wales’ demands for further devolution than his predecessor, Sir Keir Starmer.
The Plaid Cymru leader is expected to hold an introductory meeting with the new Prime Minister on Thursday, following a telephone conversation between the pair earlier this week.
Mr ap Iorwerth said he hoped the change in leadership at Westminster would provide an opportunity to take Welsh devolution to the “next level”.

Speaking to BBC Radio 4’s Today programme on Wednesday, he said: “I had a conversation with Andy Burnham yesterday, congratulated him on becoming Prime Minister, and we both made it clear to each other that we wanted to have a positive relationship, a constructive relationship.
“I know that he understands devolution for Manchester. I want to help him understand what devolution means in Wales and what tools we need to make it work better.”
The First Minister said his government had been elected with a mandate to seek greater control over policing and justice, rail services and funding, as well as Wales’ natural resources.
He said: “There is a list, if you like, of things that we need to devolve now in order to move the story of Wales, the story of devolution, on to the next level.
“It’s clear that we now have a Prime Minister who is open to listening, perhaps in a way that Keir Starmer wasn’t, and I’m eager to do everything that I can to make the case for Wales.”
A planned meeting between Mr ap Iorwerth and Sir Keir failed to take place before the former Prime Minister left office, with the First Minister previously blaming “chaos in Westminster”.
Plaid Cymru formed the Welsh Government in May after ending more than two decades of Welsh Labour rule at the Senedd election.
Mr Burnham has extensive experience of devolved government after serving as Mayor of Greater Manchester, where he repeatedly called for greater powers and funding to be transferred away from Westminster.
However, the new Prime Minister has sought to play down the prospect of major constitutional reform.
During conversations with the leaders of Wales, Scotland and Northern Ireland on Tuesday, Mr Burnham said his immediate focus would be on “practical measures” rather than constitutional changes or further independence referendums.
Mr ap Iorwerth supports Welsh independence but has said his government will not seek to hold an independence referendum during its first term.
Thursday’s meeting is expected to focus on the working relationship between the Welsh and UK governments, as well as funding, transport and the future balance of devolved powers.
News
Welsh passengers could pay more as England gets £2 bus fare cap
Welsh Labour urges Plaid Cymru Government to match Prime Minister Andy Burnham’s cost-of-living measure
BUS passengers in Wales could be left paying more than people across the border after the UK Government announced a new £2 cap on single fares in England.
Prime Minister Andy Burnham confirmed on Wednesday (July 22) that eligible single bus journeys in England will be capped at £2 from January 1, 2027.
The measure, which will run throughout 2027, will reduce the existing maximum fare from £3 and is being presented as one of the new Prime Minister’s first steps to ease pressure on household finances.
However, transport policy is devolved, meaning the announcement will not automatically reduce fares in Wales.
Welsh Labour leader Ken Skates has now called on the Plaid Cymru-led Welsh Government to introduce its own £2 limit, warning that passengers in Wales risk paying more than those making comparable journeys in England.
Mr Skates said: “It’s great to see the new Prime Minister Andy Burnham acting quickly to give families some breathing space with the cost of living.
“Introducing a £2 bus fare cap in Wales is of course a decision for the Welsh Government. That’s why Welsh Labour had a manifesto commitment to do just that.
“This Plaid Cymru Government should urgently look to introduce a cap in Wales. Otherwise people in Wales will be left paying more for bus travel than our neighbours across the border.”
The UK Government said its scheme would be supported by an additional £454m, including funding for the devolved governments.
That could provide additional resources for Wales, although it will be for Welsh ministers to decide whether any funding received is used to match the £2 fare cap or spent elsewhere.
The distinction is particularly important in rural and coastal communities, where passengers often travel longer distances to reach employment, hospitals, education and essential services.
In Pembrokeshire, Ceredigion and Carmarthenshire, limited routes and less frequent services already mean many residents have little choice over when or how they travel. Without a national fare ceiling, the price of journeys can also vary considerably between routes and operators.
Wales currently has a £1 single fare and £3 day-ticket scheme for children and young people aged between five and 21 on participating services. People aged 60 and over, along with eligible disabled passengers, can also travel free using concessionary passes.
However, most passengers aged between 22 and 59 are not covered by a national single-fare cap.
Before May’s Senedd election, Welsh Labour promised to introduce a £2 limit for adult single journeys and create 100 additional bus routes if it formed the next Welsh Government.
Plaid Cymru instead pledged to continue the £1 youth scheme and concessionary passes while expanding tap-on, tap-off ticketing and introducing daily fare caps across bus and rail services.
The new Welsh Government has not yet announced that it will introduce a universal £2 single fare.
The row is likely to increase pressure on ministers to explain whether Wales will match the English scheme before it begins in January, particularly if additional funding is provided to Cardiff as part of the UK Government’s package.
Announcing the English cap, Mr Burnham said affordable transport was essential and that nobody should be priced out of access to employment, education, healthcare or family.
The Prime Minister said: “Lower fares will help people get to where they need to, giving them breathing space to help with the cost of living.”
For passengers in Wales, the question is now whether the same breathing space will be offered on this side of the border.
News
Neil Kinnock hails son’s promotion to Welsh Secretary
Stephen Kinnock enters Cabinet promising to champion Wales as pressure grows for further devolution
FORMER Labour leader Lord Neil Kinnock has spoken of his pride after his son, Stephen Kinnock, was appointed Secretary of State for Wales.
The Aberafan Maesteg MP was promoted to the Cabinet by new Prime Minister Andy Burnham on Monday (July 20), replacing Cardiff East MP Jo Stevens.
It is Mr Kinnock’s first Cabinet position, having previously served as a health minister in the UK Government.
Lord Kinnock, who led Labour between 1983 and 1992, said his son was “thrilled to bits” when they spoke late on Monday night.
He told BBC Radio Wales Breakfast: “We had our midnight conversation, not the first in our lives it has to be said, and usually that was because he came home late.
“It was a delight.”
Lord Kinnock, 84, said his son had earned the appointment through “a lifetime of action and service” and would now be able to influence UK Government decisions affecting Wales directly.
Stephen Kinnock described becoming Welsh Secretary as “the privilege of my life” and promised to provide a strong voice for Wales around the Cabinet table.
He said he would work with the Welsh Government, councils and institutions across the country to secure better outcomes for Welsh communities.
Mr Kinnock added: “Wales succeeds when we all pull in the same direction.
“As Welsh Secretary, I will ensure that the Wales Office continues to champion Wales within the UK Government and that the needs of the Welsh people are prioritised.”
He said his ambition was to help build “a strong Wales within a strong United Kingdom”, with economic growth reaching communities across the country.
The appointment comes at a politically important time for Labour following the party’s heavy defeat in the Senedd election in May.
Plaid Cymru now leads the Welsh Government under First Minister Rhun ap Iorwerth, while Welsh Labour is attempting to rebuild under its new leader, Ken Skates.
Gower MP Tonia Antoniazzi described the Cabinet reshuffle as a “brutal 24 hours” for some Labour colleagues.
She said Mr Burnham and Mr Kinnock faced the task of winning back voters who had switched from Labour to Plaid Cymru or Reform UK.
The new Welsh Secretary is also likely to face immediate pressure over further devolution.
During his first conversation with Mr Burnham as Prime Minister, Mr ap Iorwerth called for powers over policing, justice, rail infrastructure and the Crown Estate to be transferred to Wales.
The First Minister said the change of leadership at Westminster presented an opportunity to redefine relations between the UK and Welsh governments.
He urged Mr Burnham to turn his support for devolution into action by strengthening the Senedd rather than bypassing it.
Downing Street said the Prime Minister wanted a “collaborative, practical and pragmatic” relationship with the devolved administrations.
Plaid Cymru’s Westminster leader, Liz Saville Roberts, congratulated Mr Kinnock but repeated her party’s view that the position of Welsh Secretary had become an “anachronism” following devolution.
She said Plaid would nevertheless seek a constructive working relationship with him and press the UK Government over rail funding, the Crown Estate, justice and policing.
Ms Saville Roberts said Plaid’s Senedd election victory had given it a clear mandate which Westminster should respect.
Jo Stevens held the Welsh Secretary post from July 2024 until Mr Burnham’s reshuffle.
She said serving in the role had been “a privilege and an honour” and pointed to what she described as major achievements during her time in office.
These included a record devolution-era funding settlement for Welsh public services, support for the steel industry, investment in a proposed new nuclear development at Wylfa and a £14bn commitment for Welsh railways.
Ms Stevens wished both the new Prime Minister and her successor well, saying she believed they would work with Ken Skates to deliver for Wales.
Who is Stephen Kinnock?
Stephen Kinnock was born in Tredegar in 1970 and is the son of Neil Kinnock and the late Glenys Kinnock, who served as an MEP, government minister and member of the House of Lords.
He is married to former Danish prime minister Helle Thorning-Schmidt, with whom he has two children.
Before entering Parliament, he worked for the British Council and held senior roles in international business and public affairs.
He was first elected as MP for Aberavon in 2015 and continued to represent the area when the constituency became Aberafan Maesteg following boundary changes.
Mr Kinnock served as a junior health minister after Labour returned to power at Westminster in 2024.
He now takes charge of the Wales Office and becomes Wales’ principal representative within the new Prime Minister’s Cabinet.
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