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  1. ITV Report

Letters show Welsh Government's borrowing bid was all about new M4 for Newport

The additional costs where the proposed road would cross the Usk at Newport Docks was one of the main reasons put forward by Mark Drakeford for needing to borrow more money to build the new motorway. Credit: Welsh Government

Letters released to ITV Cymru Wales by the Welsh Government show that a request to the Treasury for greater borrowing powers based its case for more money entirely on the rising costs of the proposed M4 relief road, a new motorway that would run to the south of Newport.

After Monday's Budget, when the Treasury agreed to consider increasing the Welsh Government's current £1 billion borrowing power, there was anger in Cardiff Bay at the suggestion that the money would have to be spent on a particular project.

In his letter, Finance Secretary Mark Drakeford said that without prejudicing the outcome of the public inquiry, he wanted to explain why the project was going to cost more than originally envisaged.

The details of the project have been further refined, including enabling works too integrate Newport Docks with the M4 project ... Together with other factors such as construction inflation arising from the change in the start date, the costs of the project have increased from previous estimates ... The overall cost of the scheme is now estimated at £1.3 billion, excluding VAT and inflation.

– Finance Secretary Mark Drakeford AM
Mark Drakeford wrote to the Chief Secretary to the Treasury on 26 April...
...and the Chief Secrertary, Liz Truss wrote back a month later, agreeing to talks between officials.

It seems that Mark Drakeford needed to make a strong case, as the Chief Secretary to the Treasury, Liz Truss, pointed out in her reply that the Welsh Government had not yet used any of the substantial borrowing powers that it had already been given. But she agreed to let officials meet to discuss what could be done.

The Treasury still hasn't actually agreed to the extra borrowing powers but there seems to be strong support for the idea within the UK Government, notably from the Welsh Secretary, Alun Cairns, just so long as it means that the new motorway is built.