1. ITV Report

Wales is losing out on £540 million a year in funding according to new research from Plaid Cymru

Plaid Cymru press conference Photo: Lynn Courtney

This morning's Plaid Cymru press conference was taken by party leader Leanne Wood AM and Plaid's financial Guru ,Eurfyl ap Gwilym. The focus of the presser was, as it has been in many of their briefings lately ,on the state of the Welsh Economy.

But this time our attention was drawn to new research by Plaid that indicates that Wales is missing out on up to £140 million more per year than was originally estimated by the Holtham Commission.

Plaid says it has looked at Treasury figures for 2010/11 published in Public Expenditure, Statistical Analyses and has found that the actual funding shortfall for Wales in that year totalled £540 million, a figure substantially more than was estimated by the Holtham Commission in July 2010.

Plaid Cymru leader Leanne Wood is urging that the underfunding must be tackled by the Welsh and UK Governments immediately:

What this figure proves is that the Barnett formula shortchanges Wales by more than was originally thought. Since the Holtham Commission's report was published, new data suggests the situation is worse and that the need to replace the Barnett formula is more pressing than ever.

While Plaid Cymru has consistently called for the Barnett Formula to be scrapped, the Labour Welsh Government is seeking to implement a "Floor" mechanism which would halt further decline in Welsh funding in the short term. While the Barnett Floor is an acceptable short term solution for it, it must be set an adequate level, or else it could essentially lock in unfair funding. The other key factor concerning the proposed Floor is the length of any transition period over which the current underfunding is corrected.

– Leanne Wood AM , Leader of Plaid Cymru

Put simply, the Barnet Floor is a device proposed by the Holtham Commission as a way of dealing with future funding for Wales and Scotland. It is a creative way of stopping convergence or in otherwords , a way of stopping the shortfall to Wales getting any deeper.

Plaid Cymru is saying that it favours this " Floor" as a short term fix but believes the means of funding Wales via calculations made by the Barnett Formula must be overhauled rapidly. It claims the system is both unfair and not fit for purpose.