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Finance Minister stands by HS2 funding claim

Finance Minister Jane Hutt is standing by her claim that the Treasury has given the Welsh Government extra money as a result of spending on the controversial HS2 rail scheme.

She'd told the Assembly's Finance Committee that £84m was passed on in the recent Spending Review as a result of Department for Transport capital spending including HS2. The Treasury has disputed that claim.

But in this short interview with Lynn Courtney, Jane Hutt insists that the money - known as Barnett Consequentials after the formula used to work out Wales' share of UK Government funds - does reflect Westminster's spending on HS2.

HS2 opponents say Wales' bonus could add up to £5bn

Money given to Wales as a result of UK Government spending on the HS2 rail project could add up to an extra £5.3bn on the total bill according to opponents of the scheme. Finance Minister Jane Hutt has acknowledged that the Welsh Government has already received a further £84m from the Treasury.

The funding is known as a 'Barnett Consequential' because it's allocated using the Barnett formula for working out the share of UK spending devolved nations should receive. The move has been welcomed by Welsh politicians for setting an important precedent.

But it's also been criticised by opponents of the whole HS2 scheme who say it adds what the call the spiralling costs of the project.

The award for Barnett money to Wales is a clear admission that HS2 doesn’t benefit Wales, it hurts Wales, the same way it hurts many other parts of the country. Northern Ireland is in the same boat and must now be due for a pay out too, and now this precedent has been set we are be talking about another £5.3bn which has to be added to the current £50.1bn costs of HS2.

As we have always said and as keeps being demonstrated, the costs of HS2 will keep going up and the benefits will keep going down. It is time to go back to the drawing board, scrap HS2 and deliver the rail infrastructure improvements the whole country really needs.

– Joe Rukin, Stop HS2 Campaign

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  1. Nick Powell

Welsh share of public spending still down on 1999

Spending per head by the Welsh Government was 25% above England in 1999, now it's around 15% higher Credit: Welsh Government

The Welsh Government has responded to the news that its share of public spending per head is going up compared to equivalent Whitehall departments. It's issued a graph that shows what's happened over the years since devolution.

As public spending took off in the early years of devolution, the so-called 'Barnett squeeze' meant that Wales slipped from being 25% ahead of England to being 15% ahead. In other words, Wales got a smaller share of a cake that was getting larger.

It had fallen further by 2009 but has gone up again as the system is now limiting Wales' share of cuts, not increases. The fact that Wales gets higher spending per head is usually justified by our relative poverty and greater health needs but those factors aren't actually taken into account.

  1. Nick Powell

Welsh share of spending goes up

Figures released by the Treasury show that the process that has given the Welsh Government slightly smaller increases in funds than equivalent Whitehall departments has stopped. In fact it has gone into reverse, putting Wales more than 15% above England in terms of spending per head.

  • 2011/12 15.0% more than in England
  • 2012/13 14.6% more than in England
  • 2013/14 15.1% more than in England
  • 2014/15 15.5% more than in England
  • 2015/16 15.8% more than in England

The Barnett Formula, invented to slowly bring Welsh public spending in line with England's, worked on the assumption that overall expenditure would keep going up. Now instead of restricting the Welsh share of any increase, it will limit the share of cuts.

The figures have been released under an agreement between the Welsh Government and the Treasury to monitor the figures for any return of the 'Barnett squeeze' on Welsh spending.

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