Tuesday, 9 October 2007

Post-pre-Budget report

I managed to survive the day without using too much of the accountancy jargon thrust upon us after Alistair Darling's spending review.

As a bonus, we even managed to entice a Government Minister or two onto the airwaves.

But when you look at the small print of the Welsh settlement there are big questions to ask about why the Assembly Government budget this year is more than £200m less than it expected.

The answer, according to governments at both ends of the M4, is that the NHS in England (unbelievably you might think given its financial crises) actually underspent last year and under that formula I try to avoid mentioning a couple of hundred million or so that could have been spent in Welsh hospitals or on other public services was sliced off the balance sheet.

(Under the formula, Wales gets a share of any increase in comparable spending in England - and a share of any decrease).

The Assembly Government says it's keen to negotiate with the Treasury to get the money - after all it's twice what John Redwood sent back during his time as Secretary of State in the 1990s.

The reduction of up to £260m a year also allows the UK Government to claim bigger increases in Welsh spending, thanks to the lower base. (I should point out that spending will still increase in real terms, although not as quickly as the Assembly is accustomed to).

As you might expect, opposition parties are queuing up to attack what's been called the "worst" spending round since devolution.

That rather assumes all state spending is a good thing - you don't need to be John Redwood to prefer a more neutral ("tightest"?) term but the budget will certainly make life more interesting for Labour and their new best friends in Cardiff Bay.

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