- 10 updates
The agreement, with the Westminster Government, is being seen as an important step on the path to further devolution. Our political editor Adrian Masters has been looking at what difference the change could mean.
Finance Minister Jane Hutt received broad support from Conservatives and Liberal Democrats when she spoke in the Senedd about today's announcement of the Welsh Government's deal with the Treasury on funding and borrowing. But the former Deputy First Minister, Ieuan Wyn Jones was highly critical.
Today's statement from the two governments says a new funding settlement to replace the 30 year old Barnett formula is 'an essential precondition for any significant devolution of taxes' but that any borrowing powers will be subject to there being tax -or other- revenue to repay the loans.
Mr Jones claimed that the Welsh Government had failed to secure a key objective set out by the First Minister, that borrowing powers and tax raising powers would not be linked. Earlier, Ms Hutt had confirmed that discussions on paying for improvements to the M4 are 'at the top of the agenda'.
Plaid Cymru says there's no detail on borrowing in the Welsh Government's deal with the Treasury. The party says there's also no clear commitment to reform the Barnett funding formula. The former Deputy First Minister, Ieuan Wyn Jones, says he would have been ashamed to have signed such a deal.
The Shadow Welsh Secretary Owen Smith says the possible borrowing powers for the Welsh Government need to be seen in the context of cuts in capital spending imposed by the UK government.
Welsh Conservatives say today's funding deal between the Welsh and UK governments contrasts with when Labour were in power at Westminster.
The Welsh Liberal Democrats say the news that future public spending settlements won't involve further cuts in Wales' share of expenditure is a significant step towards putting an unfair system right. The Treasury has also agreed in principle to giving the Welsh Government borrowing powers.
The UK and Welsh Governments have reached an agreement on borrowing powers for Wales and changing how Wales' share of public spending is worked out. But it's very much an agreement in principle, the Welsh Government cannot yet raise any loans and there will be no immediate change on funding.
The UK Government says it accepts that the Welsh Government should borrow money for construction projects but there must be the revenue to pay for it. There will be no decision on tax raising powers until after the Silk Commission has recommended what taxes, if any, should be devolved to Wales.
Talks are continuing about how to pay for specific projects, notably relieving congestion on the M4 around Newport. Last year, the Chancellor suggested that toll revenue from the Severn Bridges could be used to repay a loan once the cost of building the Second Severn Crossing has been met.
Latest ITV News reports
The UK Government agrees to stop further cuts in Wales' share of public spending. It also agrees in principle to Welsh borrowing powers.