The Barnett Formula is dead. Long live the new Barnett Formula, writes Clive Betts from the National Assembly press gallery.
The formula is of course the method for deciding how much money is allocated by Westminster to the devolved parliaments and assemblies in the UK.
It seems the new formula which will eventually appear will be almost exactly the same as the old one. Almost the only difference will be that an appeal formula will be built in so that the “regions” can object to the way the carve up that has been decided by the Treasury in London.
The future of the formula is currently being considered by the Jerry Holtham Independent Commission on Funding and Finance for Wales, set up by the Assembly after the last election. An “independent” commission only in so far as it was founded by the Assembly Government and signed into existence by Rhodri Morgan.
This committee will, of course, not be able to rewrite the formula – that has to be agreed by all sections of UK governance – in particular, London.
But for years, the Labour Party had been deeply opposed to any re-think of the formula. Why then has the Welsh party suddenly changed its mind.
Finance minister Andrew Davies, speaking to the press, more or less admitted that he didn’t want to risk any change until he was sure that Wales would come out better – which is a fair enough way of going about politics.
So what changed his mind ? Becoming finance minister, it seems.
He then discovered how the formula was drawn up. It was already known that large construction projects in Wales (such as the A55 Expressway through the North) are excluded from it because they would cause so much distortion.
Quite what other projects are included or excluded is totally unknown. This is, after all, hardly an open part of government. Not that much is open, anyway – after the fiasco of the publication of MPs’ expenses.
So why suddenly an urge to change ? Mr Davies told us, out of nothingness, that one of the reasons the party had changed its opposition to Barnett being opened to consideration was the lack of a proper appeal procedure to the decisions made by Treasury officials.
“They are judge and jury,” said Mr Davies.
The only procedure which currently exists is to appeal to one of the rarely-used committees which deals with coordinating relations between the countries which make up the UK.
But that committee is chaired by the Prime Minister Gordon Brown. In other words, that is the Treasury in another guise. Judge and jury again, repeated Mr Davies.
It seems that this issue of creating an appeal procedure could open the way to major change.
With the road to some kind constitutional reform (in the wake of MPs’ expenses) now open, and much talk about power moving away from self-satisfying MPs, perhaps we could find the Barnett allocations decided no more by just civil servants and the London Cabinet?
Mr Davies mentioned a suggestion which came forward some time ago from former Lib Dem leader Mike German. This was the Australian system, where funds are distributed to individual states strictly in accordance with need.
Apparently the system is pretty open. Although it can result in quite a political battle, as each state lists how great its “needs” are.
But it would be very different from the 30-year-old British system – which everyone seems to accept as outmoded.
