Wales set to get borrowing powers for larger projects
The Welsh government is expected to be given powers that will allow it to borrow money independently in order to finance large-scale projects.
Ministers in Wales have been calling for the devolution of borrowing powers for some time, as it will give the Welsh Assembly more control in the planning and financing of major construction initiatives that would be beneficial to the Welsh economy.
First Minister Carwyn Jones has said that Wales needs a relationship that is similar to what Scotland has with Whitehall.
A spokesperson for the Welsh Assembly said, “The Welsh and UK governments have been engaged in a series of discussions about Welsh devolved funding and enabling the Welsh government to borrow in order to finance capital projects.”
The current funding structure – the Barnett formula – filters money from the government to the nations within the UK. The formula attempts to ensure that public expenditure is proportionate to population size.
It has been argued that this formula has led to Wales being severely under-funded over the years.
Alun Ffred, a Plaid Cyrmu economist, said, “Everyone agrees that Wales is underfunded significantly every year as a result of the discredited Barnett formula. In the short term, a Barnett floor at the right level would deliver a fairer funding settlement for Wales, and borrowing powers would allow us to invest to grow the economy.”