NEW REPORT Clearly the present crisis is having a seismic impact of the finances of the UK state, but what does it mean for Wales? Our @WalesGovernance colleague @Guto_Ifan has produced the following analysis and it's really important stuff...

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https://www.cardiff.ac.uk/__data/assets/pdf_file/0005/2132654/COVID19_Welsh_Budget_FINAL.pdf

because the @WelshGovernment's financial clout is not only going to be vital in getting us through the crisis. It's going to be just as important when we finally start to climb out of it.

And as the report shows, there are some serious issues that need to be addressed

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The good news is that seriously large amounts of money are being diverted to Wales as a result of the UK govt's actions to address the crisis. The kicker is, however, that the way that these monies are being divided across the state is likely to prove deeply problematic.

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Yes, I'm afraid there's no way of avoiding the constitution and even our old friend, the Barnett formula. This because it's Barnett that's being used to decide what comes to Wales and because of the very tight restrictions on the borrowing powers of @WelshGovernment

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What's the problem with Barnett? Well it's a population based and *not* a needs based formula.

We can't yet predict how this crisis eventually pans out and, therefore, whether Wales will be impacted more or less harshly than other parts of the state.

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But without being unduly pessimistic, I'm afraid that there are good reasons to expect the worst on this account. After all, we are on average older and more likely to have underlying health issues.

And so, we really need to consider whether or not Barnett is appropriate?

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Then we have the restrictions on the borrowing powers of @WelshGovernment (and they are, in comparative terms, strikingly restrictive.) These are likely to seriously constrain the ability of the government to respond flexibly and rapidly to the crisis.

It's worth recalling

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that @WelshGovernment is not only in receipt of additional money from UK Govt, it is also seeking to very move large amounts of money across its own existing budget lines to address the crisis. This is obviously going to be an enormous challenge

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And it's going be rendered more difficult than it has to be because of the lack of flexibility around its borrowing powers. Which why we're delighted that @WalesOnline has endorsed the report's call that this be addressed as a matter of urgency.

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Please read the report!

Our colleagues @Guto_Ifan @EdGarethPoole @CianTudur and @jarodriguez849 all @WalesGovernance will continue with the analysis in coming weeks and months and so watch this space.

FIN