Final thoughts on electrification

There's been an interesting exchange on Alwyn ap Huw's blog about electrification. He regards it as a bad thing and, in the subsequent discussion, it seems that some people think that the money spent on the line in Wales (say £250m of the £1.1bn) would be better spent elsewhere ... particularly on improving north-south links.

There's something to that. If I were to be handed £250m to be spent on transport in Wales, I might well decide that it would be better spent on improving other aspects Wales' rail network such as reopening old routes. But that choice was never open to us. The UK government has made the decision to use UK money (Railtrack is essentially a public entity) to electrify the UK rail network. After that, it was just a question of which lines they would do first.

I read through the DfT's document:

     Britain's Transport Infrastructure: Rail Electrification

One diagram in it particularly struck me:


It shows that Britain has had several "spurts" of electrification since the 50s, but that since the 90s there has been virtually no investment in electrification. It is hardly a coincidence that 1993 was when the rail network was privatized under John Major. Perhaps it is not so surprising that the standards of maintenance also fell after privatization, and were a factor in a number of rail accidents. Since Potters Bar in 2002 there has been a real effort to improve maintenance for safety reasons, and safety standards are probably back to where they should be. So now it is a question of making up for the fifteen year delay.

Electrification pays for itself; mainly in reduced maintenance costs for both trains and track. So although it costs money to do the work it will be recouped in about 40 years. Of course if we were to have a carbon pricing scheme (as we almost certainly will) there will then be additional savings in cost. Also the saving in journey times will give a proportionate increase in overall capacity.

That really does make electrification a no-brainer for most main line routes, and for shorter distance commuter routes. It is just a question of what order the lines are done in. We were in fact lucky to be chosen. The business case for the Midland main line to Sheffield was stronger than for the Great Western, and we managed to jump the queue. That can only be down to good negotiating skills.

The question now is whether a future UK government will turn these two projects (GWR and Liverpool-Manchester) into a rolling programme to cover the Midland main line, the GWR to South West England and Cornwall, our North Coast line to Holyhead and the cross country routes that do not radiate out from London.


I'd also like to draw people's attention to what could be a serious potential problem over the route west of Swansea. Many of us will want to ensure that direct trains will be able to run to Carmarthen and Fishguard. Part of the reason for making this decision on electrification now is to do with the new trains that will replace the old HSTs. That decision is pretty much finalized, and the new trains will be the Hitachi Super Express from a consortium called Agility Trains.


     Technical Specification

Nice video. Bright shiny new trains. But the carriages will be longer, so there is a question mark over whether they will be able to go round the tighter curves.

     Better trains could be worse for West Wales
     Western Mail, 25 February 2009

I'd guess the question must have been answered for the route as far as Swansea, but I have not heard anything regarding the route west of Swansea, or the alternative routes such as the Vale of Glamorgan line. I hope someone has got it in hand, because any structural modifications required will be expensive and take time. If anyone has any information, please let me know.


Anyway, in conclusion electrification is just making a sensible and long overdue decision about the rail network we've already got. In the long run it is simply cheaper to electrify this line than not to electrify it ... and the same will be true of the rest of the network in due course, including the existing lines in Wales. Because it is a sound, commercially justified decision, it should make no difference whether Network Rail or the Welsh Government borrows the money to do it.

To my mind, the real test of our vision for what we want as a nation is to reopen closed routes and open up new routes to give Wales a properly integrated rail network that works on a national and local level. Welcome as it is, we must not regard this investment as a substitute for the additional investment necessary to expand the rail network in Wales.

Bookmark and Share

L'Éminence Noire

John Dixon posted this picture from Friday's Western Mail on his blog and, of the suggestions for a caption, I think his own was probably the best:

Not so fast you two. I'm in charge here!

Yes, it was the Labour roadshow arriving in Cardiff before fanning out for a series of horribly over-choreographed photo opportunities, culminating in a cabinet meeting in which I'm sure the main subject of discussion was how well they'd each come across on the evening news.

The joke is that Peter Hain might well be doing his best to hold things in Wales back, but when his bosses sweep into town, he's very much shunted into the background.

But who are his bosses?

Well, Gordon Brown and Alistair Darling, obviously. But there is a much more formidable presence floating in the creaking, shadowy hulk of the Labour government at Westminster. More than just an Éminence Grise, the Prince of Darkness demands a darker epithet. He was at the GEAE factory near Caerffili.


Now if anyone can work out a masterplan to take Labour through to next May's election, it is Peter Mandelson. That's what he was exhumed—yet again—from the political grave to do. He strikes fear into all those who would dare oppose him. Which explains why he's a force not to be messed with ... and, on the other hand, why he's completely unelectable.

So it was with some interest that I read what he had to say about Wales in the Western Mail.

Mandelson praises Welsh measures to fight recession

WALES has blazed a trail for other parts of the country to follow in its response to the recession, Labour powerbroker Peter Mandelson said yesterday.

Baron Mandelson of Foy and Hartlepool—who staged a dramatic political comeback last year when he was recalled from the European Commission to play a leading role in Gordon Brown's Cabinet—also paid tribute to First Minister Rhodri Morgan.

Mr Mandelson, who holds the title of First Secretary of State, Secretary of State for Business, Innovation & Skills and Lord President of the Council, said the people of Wales should be free to decide if the Assembly should gain law-making powers.

He singled out the Assembly Government's anti-redundancy ProAct initiative for praise, saying: "I think the Welsh Assembly Government has been on the front foot during the recession—both in using innovative measures like ProAct, which we don't operate elsewhere in the UK, but also in delivering more pragmatic assistance to businesses to help them get through the severity of the recession. They have seen the threat, they have taken it seriously, they have responded and I think they have provided a good model for other devolved administrations."

When asked whether the picture of devolution which exists across the UK resembles what was envisaged when Labour took power more than a decade ago, he said: "Devolved government works best when it's flexible, when it's fast and when it's able to spot opportunities and pursue them. It's very important layers of Government don't get in the way, that officialdom backs up ministers in their desire to act quickly.

He paid tribute to the First Minister, who is expected to step down later this year, saying: "He's been a very important figure in bedding down devolution. He is a man of strong conviction and strong commitment and is an entertaining character, and that's a good combination."

When asked if he wanted to see Welsh devolution move towards the Scottish model, he said: "I can't comment on that because it's really up to the people of Wales to choose how they want to see devolution evolve in the future. The first thing we need to do is take our cue from them and not tell Wales what it needs."

Now, what are we to make of this? I can only read it this way:

      Labour have decided to let us have the referendum
      on primary lawmaking powers.

My reasons for thinking this? Look again at the two pieces I highlighted:

First, no-one says, "the people of Wales should be free to decide if the Assembly should gain law-making powers" unless they are going to allow the people of Wales to actually vote on the issue. As I have said on several occasions, the All Wales Convention was set up as a way of taking the question of a referendum off the political agenda until Labour could come to a united position on the issue.

The Labour Party now know that it will take a miracle for them not to lose power in the next Westminster elections. The leadership has come to realize that it is better that they remain in government and are able to carry through their programme in one part of the UK than it is for them to be in opposition everywhere. The only place where they have a hope of being in that position is in Wales.

For Mandelson, the issue is not clouded by issues of electability. He does not have to look at it through the eyes of Labour's Welsh MPs. Yes, they personally are likely to lose out if primary lawmaking powers are transferred to the Assembly from Westminster, because it will mean that the number of Welsh MPs will be reduced ... as was the case when Scotland was given lawmaking powers (... note that this is a separate issue from the general reduction in the size of the Commons currently being floated by the Tories).

One of the reasons many Welsh Labour MPs have been so opposed to this transfer of powers is because they want to control the lawmaking process in Wales for themselves. However, even if Labour get a majority of the 40 Welsh seats (which is still quite likely) the Welsh Affairs Select Committee will reflect the size of the parties in the House of Commons as a whole; so they will be in a minority and therefore will not be able to impose their will on the LCO process in the way they currently do. It takes an outsider to see what Labour's Welsh MPs, whose blind spot is their own self-interest, cannot be expected to see. The decision therefore lies with the Labour leadership in Westminster.

Second, Peter Mandelson is most definitely heaping more praise on the Assembly and Rhodri Morgan than it would be reasonable to expect. Especially over something like ProAct.

But the key is in the language. Peter Hain's almost constant refrain when asked about the referendum is that the new arrangements need "time to bed in". Even a month ago he was talking about it being ten years or so before he wanted to see a referendum. But Mandelson has chosen his words very precisely. He said, talking about Rhodri Morgan, "He's been a very important figure in bedding down devolution."

Mandelson is clearly saying that he thinks devolution has "bedded down". Perfect tense. Completed action. The process of bedding down is now over. The Welsh Assembly is making good use of the powers it has.


But, as I've said before, Hain is personally too close to the issue to be able to see things objectively. The GoWA 2006 was his "baby". If he's going to be remembered for anything in his political career, he wants to be remembered for this. After all, what else is there? That's why he was so keen for it to last for "a generation or more" ... as he used to say before he reduced it to a decade.

When all is said and done, Peter Hain is a minor figure on the wider stage of British politics. He may regard himself as a big fish in a small pond, but it is not he who will make the decision about whether Wales gets a referendum on primary lawmaking powers.


The real decision makers in Labour have now spoken. The only way they can be sure of getting the referendum is to get it through the Assembly and Westminster before next May's general election. Because once the Tories get in, they might be in for ten or fifteen years, and a Tory Secretary of State for Wales would be able to veto every area of new legislation the Assembly would want to put through.

The point is this. Even though they will be in opposition at Westminster, Labour's leaders will want to be able to point to the good things that are happening in Wales as a way of embarrassing the Tories ... in exactly the same way that the Tories have benefited from having Boris Johnson as Mayor of London. You need to be in power somewhere in order to shine a spotlight on something. Otherwise it's nothing but empty talk.

Make no pretence, this is more a matter of what Labour see to be in their own self-interest than in what is good for Wales. But should I care? All I want is for Labour to let us have the referendum ... for I have no doubt that we will vote "Yes" when we get the opportunity to have our say.

Bookmark and Share

Holtham - The next stage

The Holtham Commission's first report was an impressive piece of work, setting out clearly why the Barnett Formula ought to be scrapped in favour of an allocation based on need ... a situation which already applies to the regions of England.

However the Commission said that—as an immediate short term measure—any money Wales is due to receive in future as a Barnett consequential should be modified by a factor of 1.14 pending a long term solution.

But this was only the first part of the Commission's task. The second part is to take a wider view about how Wales is financed. This will include looking at assignment of taxes, the ability to set or vary the rate of taxes, and the ability to borrow. The Commission will also have the advantage of seeing what the Calman Commission recommended for Scotland ... especially since the UK government's response to those recommendations has been positive, so that a good case can therefore be made for Wales to get similar fiscal responsibility.

This article was in the Western Mail last Friday, although not on the WalesOnline website:

Review of public spending vital for a devolved Wales

     Gerry Holtham, chairman of the independent commission
     set up to look at the funding of devolution in Wales,
     discusses the next stage of the commission's inquiry.

EVERYONE should know by now that public spending in the UK is likely to be under the cosh in the next few years. Less well-known is that the basis on which public spending is shared out among the nations of the UK could be in for a radical change.

For 30 years, the UK Government has made an annual block grant to finance each of the devolved administrations in the British Isles - Scotland, Wales and Northern Ireland. The relative sizes of those grants derive from what they happened to be when the system began in the late 1970s. Those baselines are linked to the present situation by the operation of the notorious Barnett formula.

Over the past decade, this system has delivered significant absolute increases to the Welsh budget as public spending grew fast UK-wide. However, Barnett has, over time, resulted in a “squeeze” on the relative resources available to Wales, reducing the gap between what's available for us to spend per head on public services in Wales and what is spent in England on comparable activities.

If left unaltered, the Bamett formula will cause spending per head in Wales to move ever closer to the average spending per head in England, irrespective of whether or not needs in Wales are also converging with those of England.


Last year, the Assembly Government set up an Independent Commission on Funding and Finance to look at that situation. Our first report, recently published, proposes a number of changes.

Spending per head varies substantially (and quite rightly) across English regions, with areas of relatively high need receiving extra resources.

Why should Wales be treated any differently?

There is no rationale for any further convergence in public spending per head in Wales towards an English average. We argue for a new needs-based formula to take over from the outdated Barnett approach.

A House of Lords Committee has also recently reported on the Barnett formula and has come to similar conclusions, which may give another push to reform.


But introducing a needs-based formula could be complex and will take time. Any durable settlement based on needs would have to be implemented as part of a comprehensive reform encompassing all the devolved administrations, not just Wales.

In the meantime, we have proposed a simple modification to the Barnett formula that would place a floor under the Barnett squeeze in Wales and that could be implemented in advance of wider reform.


However, changes to the Barnett formula are, not the only reforms afoot. The Calman Commission, set up by the Scottish Parliament and backed by the UK Government, has accepted that in future the block grant should be determined by relative need. The Commission has called for widespread taxing powers to be devolved from Westminster to the Scottish Parliament. Among other changes, UK income tax in Scotland would drop from 20p to 10p and the block grant would be cut by the lost revenue.

The Scottish Parliament would get the power to decide whether to set a "Scottish rate" that would put the 10p back, or alternatively to set a rate that was higher or lower than 10p, with its budget affected accordingly.

Over the coming months, our Commission will be considering the case for devolution of tax and borrowing powers to Wales. The work of the Calman Commission in Scotland is relevant to the debate in Wales. Of course, the constitutional, economic and social circumstances of Wales and Scotland differ and what is appropriate for one country need not be for the other.

On the other hand, there is no reason to assume that Wales should always have less discretion or autonomy than Scotland. This is a matter ultimately for the Welsh public through the political process.

As we consider the case for Wales to acquire the ability to vary taxes and enhance its borrowing powers, we welcome and invite input from everyone in Wales, expert and non-expert alike, that will help us to clarify the judgements that Welsh politicians must soon make.

Information on the call for evidence issued by the Independent Commission for Funding and Finance for Wales can be found at

So, why not do what the man asks? Tell the Commission why you think Wales needs to have more fiscal responsibility. We have until 31 October to submit evidence.

Bookmark and Share


Usury: The practice of lending money and charging the borrower interest, especially at an exorbitant or illegally high rate.

Two unrelated stories that caught my eye earlier this evening cry out to be brought together. The first was the news that Credit Unions in Wales are to get a boost of £750,000:

     Credit Unions land £750k funding - BBC, 22 July 2009

The second was this feature from Newsnight:


We live in a widely unequal society and, in spite of the stated intention of some of our politicians, the gap between rich and poor is not decreasing. One of the reasons for that is access to affordable money. If you aren't in a job, or don't have enough savings, or have any sort of bad financial history you—especially now that the credit crunch has taken hold—get relegated to what can only be described as an economic underclass.

It then becomes expensive to make the sort of financial transactions that the better off among us take for granted. Normal borrowing on overdrafts and credit cards is about 17%-19%, that virtually doubles for those whom the banks and financial institutions regard as greater risks and, if it becomes impossible to get even that your only way of getting credit is through loan sharks and pawnbrokers that could charge maybe 100% or more.


Although the Newsnight piece was presented from a religious point of view (the three monotheistic religions all condemn usury) I would not want to make any point based specifically on faith or belief. However I don't think there can be many people who would not be disgusted about charging the poorest and most vulnerable members of our society exorbitant amounts of interest and fees while the better off get easy access to cheap money. Whether we have any religious beliefs or not, it is still morally repugnant.

Furthermore, it is even worse that financial institutions charge such high rates of interest on borrowing when they themselves can borrow money at only a tiny fraction of the rates they charge. All the more so for banks which are still in business only because they were bailed out at huge expense by the taxpayer.


Now, I might well take the point made by Peter McNamara on Newsnight that small, short-term loans need to be arranged, and that the administration costs money. He might have a point about fees ... but certainly not about the rates of interest they charge.

This is where Credit Unions come into their own. Because they operate at a completely different scale, they do not need to make the same sort of charges. And because they operate at a community level, the attitude that people take towards them is likely to be quite different from the attitudes thay have towards a big bank that can splurge millions on bonuses and pensions. They encourage a greater sense of financial responsibility from those that use them.

So we, at a political level, need in our turn to do what we can to encourage the growth of Credit Unions. I was particularly encouraged to see that some CU's had begin to offer card transaction services in collaboration with the Co-operative Bank, which I mentioned here:

     Syniadau Forums, 30 January 2009

Of course £750,000 is a drop in the ocean compared with the bail out that some of the mainstream banks received. It won't change the world, but it will make a significant difference to the thirty or so Credit Unions we have in Wales. Hopefully, they will now be able to offer services to more people, as a way for them to climb out of the financial underclass we as a society have created.

But as for the banks—as well as for the less reputable organizations and individuals that offer "financial services" of course—we urgently need to have laws that limit the amount that can be charged in fees and interest ... probably on a sliding scale, in proportion to the size and term of loan and to the base rate. And we need to have stronger, criminal sanctions available to use against the loan sharks.

Bookmark and Share

Electrification: To Cardiff ... or to Swansea?

Dan Milmo started the speculation with this article in the Guardian:

     London to Cardiff rail line will be electrified to cut carbon footprint

This was followed today by a story on the BBC:

    Railway line 'to be electrified'

I've been trying to unravel the story. The facts are that Network Rail issued a consultation document on electrification in May, which I commented on here:

     Electrification from Paddington to Swansea

The consultation period ended on 15 July, and I had expected the Department for Transport to have waited a while to digest things before making a decision. But Lord Adonis seems very keen to press on quickly.

The decisive factor is that the UK Cabinet, which has recently embarked on a programme of meetings outside Westminster, is going to meet in Wales for the first time tomorrow. Without being too cynical, these are "roadshow" occasions that are more photo opportunities than business meetings. The purpose is primarily to announce things which make the government look good. So it is getting pretty obvious that the decision on electrification of the Great Western Main Line into (from their perspective) Wales will be one of the things announced tomorrow.


Now the $64,000 question is whether electrification will go through to Cardiff or Swansea. I'm going to stick my neck out and predict it will be Swansea.

My basis for doing this is the consultation document itself. The GW line is going to be electrified as far as Maidenhead as part of CrossRail. The first option was to extend that electrification to Bristol. Then there was the option of electrifying the spur to Oxford. Both these had strong benefit to cost ratios, and are certain to go ahead.

The next option was to electrify through the Severn Tunnel and on to Swansea. There was no option presented that went only as far as Cardiff, but not to Swansea. So to my mind it would be unusual, not to say a little perverse, to only go as far as Cardiff. This is because of the very high freight tonnage carried between Port Talbot and Cardiff, which is in fact much greater than the tonnage carried on the stretch of line between Swindon and Bristol. Railways are about more than just passenger services.


As for the practicalities, Christian Woolmer (whom the BBC describe as a rail expert) seems not to have read any of the recent documents and reports and is talking rubbish about the Severn Tunnel. There's plenty of room to electrify it without any major problem ... a subject that was discussed at length in the WASC's report on cross-border transport links.

     Cross-border provision of public services for Wales: Transport

Of course he's right to say that it won't happen "instantly", but its quite feasible for it to happen within the ten years mentioned. Bear in mind that CrossRail (the essential first element to Maidenhead) won't be complete until 2017 because of all the tunnelling work involved. But electrification is relatively quick and simple. Read all about it in Appendix 2 of the consultation document I linked to in my earlier post. If the political will is there, we could have the whole section from Paddington to Swansea electrified by 2017. We must have it done by 2020 because it is an important element in meeting that deadline date for carbon emission targets.


The more intractable question is funding. The good news is that this is going to be funded in a conventional way by public borrowing:

It is understood that the DfT and Network Rail have discussed funding the work through an increase in Network Rail's borrowings. Network Rail's debt is underwritten by the state and the government will pay off the interest over a number of decades, minimising the immediate impact on the taxpayer.

It's the old thorny question about what is "UK" money. Other major rail improvement works (such as the £10bn upgrade of the London to Glasgow line) were paid for out of UK money. Wales has had a particularly poor share of Network Rail's capital improvements budget. Some projects have been delayed for years: the signalling at Gaer which would enable trains to go from Ebbw Vale to Newport, and redoubling from Cockett to Loughor, for example.

If Network Rail are given the borrowing capacity to electrify the section between Cardiff and Swansea, that's fine by me. The alternative would be for the Welsh Government to be given the same borrowing facility so that they could fund it. It doesn't make much difference because Wales would in effect be getting a Barnett (or son of Barnett) consequential on the electrification programme in England. Network Rail would have to manage, or at least co-ordinate, the work in either case.

But that would reopen the question of the ability of the Welsh Government to borrow. To avoid that, it may well be more politically expedient for Network Rail to programme itself to spend more, rather than less, in Wales by going through to Swansea.

If the announcement tomorrow is that electrification only goes as far as Cardiff, the outcry for Wales to be given borrowing powers to fund its own rail improvement programme will only become more compelling.



I've just had an email from Dan Milmo, the author of the orginal article in the Guardian. Yes, the line will be electrified as far as Swansea!

Great news. Well done to all parties involved in the negotiations!

Bookmark and Share


One of the essential features of a properly integrated public transport network is integrated ticketing. It's been talked about for some time now and was indeed part of the One Wales Agreement:

• We will create a new all-Wales Traws Cambria transport network integrating long distance rail and coach routes with electronic cross-ticketing by 2011.

One Wales Agreement, page 19

So it's good to see that this is has been included in the National Transport Plan. But this is what it says:

We will work to improve interchange and co-ordination across the bus and rail network to ensure greater integration of service provision, including the development of integrated ticketing.


We will ... introduce a Welsh Transport Entitlement card for bus and rail services, which would include integrated ticketing, to allow ‘seamless’ transfer between services and operators, by 2014.

The National Transport Plan, page 12

So there's been a three year slip in the timetable. The obvious question to ask is why.

I don't know the full answer, but I strongly suspect that it has to do with the more general question of being able to regulate bus services. The model that we are likely to follow is that of London's Oyster Card, but that requires similar powers to those exercised by London's Assembly and Mayor.

The Welsh Assembly doesn't have those powers.

In April of last year, Huw Lewis introduced a Member-proposed LCO that would have given the Assembly powers to legislate in this area.

     Bid for powers over bus services - BBC, 30 April 2008

It was broadly supported by all parties, and went out for consultation. But since the consultation closed in September, nothing further has happened.

This is almost certainly because the Welsh Affairs Select Committee in the Commons chose that September to throw what I can only describe as a hissy fit about the LCO process, in a memo in which they claimed that they were unable to handle more than four or five of them a year. At that time there were already 11 LCOs in the system (which they had made no previous objection to, even most were first proposed in 2007) but their memo marked the point where it was clear that any LCO that did make it through would only make it through slowly and with the maximum amount of fuss.

The WASC were particularly savage about Member-proposed LCOs (which in itself is unfortunate, as these were intended to be one of the good features of the GoWA 2006 ... a vast improvement on the system in Westminster under which only a tiny handful of non-government introduced legislation gets anywhere). So our MPs effectively kicked that LCO into the long grass ... and that is almost certainly why the commitment on integrated ticketing is going to be delivered three years later than planned.

It is yet another example of Westminster doing all they can to delay an LCO that was so non-contentious that it had the support of all parties in the Assembly. It should act as a sobering reminder about why we need to have primary lawmaking powers.


I suppose the most important thing now is to decide what to call it. In last week's debate David Melding sheepishly suggested we should call it the "Laverbread Card" ... no comments necessary!


If London has Oyster, it's only right that we should have a version that gets us around more quickly.

So there is only one thing we can call it: Cyflymarch.

Bookmark and Share

Toyota's Hybrid Auris

Although a little late, I want to say something about Toyota's decision to build the new Hybrid Auris in Britain, and especially the fact that the engine is going to be built here in Wales.

     BBC website, 17 July 2009

Although I am very much in favour of a radical shift in transport away from cars and onto public transport—and even more in favour of work, shopping and leisure being located close enough to communities to enable people to walk or cycle to them—the simple fact is that most people need cars for some things, and it is therefore better that we have greener cars to use on those occasions when they are needed.


Negotiations between Toyota and the UK government have obviously been going on for some time, and it is a coup to have ensured that Toyota build the car in Britain rather than anywhere else in Europe.

However the news was leaked by the Sunday Times a few weeks ago, and the quote I've highlighted is particularly interesting:

Britain is to make hybrid cars for the first time after a decision by Toyota to start production of the high-tech vehicles at its Burnaston plant near Derby.

The UK is the first European country the Japanese car giant has chosen for hybrid production, and only the third outside Japan. Toyota makes nearly all its hybrids in Japan, with small numbers produced in China and America. The best known of these cars is the Prius.

The introduction of the new vehicle to Burnaston—a hybrid version of the Auris hatchback—follows intense negotiations with the government in recent months. It is understood that Britain will provide financial assistance to help the move ...

Burnaston makes the Auris and the larger Avensis in their entirety, using engines built at Deeside, North Wales, but the hybrid’s drive system (engine, motor, batteries and electronics) will be imported from Japan.

This will be the first hybrid based on an existing production model that Toyota has sold in Europe.

The Sunday Times, 28 June 2009

Now of course it's possible that the Sunday Times got hold of the wrong end of the stick. But they seem to have been right about the rest of it, so I'd be more inclined to think that the decision to build the engine/drive system in Wales rather than import it from Japan was the result of some skillful negotiation in the last couple of weeks.

The real technological advance is the hybrid drive system, and it is good to see that Wales will be at the cutting edge of this part of the new low-carbon manufacturing sector.

Bookmark and Share

The Lords' Verdict on Barnett

Hard on the heels of the Holtham Commission report, the House of Lords Select Committee on the Barnett Formula has just published its first report, which can be downloaded here:

     Lords Select Committee Report on the Barnett Formula

Including the evidence, it's a mammoth 409 pages. But the report itself is a more readable 45 pages. There's no separate Executive summary, but it starts with a one page Summary (p7), and then condenses its Conclusions and Recommendations into two-and-a-half-pages (pp8-11). I'm grateful.

There are no prizes for guessing what these are: namely that Barnett is arbitrary and unfair, and that it should be scrapped.

But we all know that. So the real question is what should be done about it, and over what timescale.

1. The Treasury

The report is particularly critical of the UK Treasury for acting as "judge in its own cause" when it comes to distribution of money within the UK. Their decision making process is obscure and needs to be replaced with:

A clear process and open consultation with the devolved administrations.

Furthermore although the economic data the Treasury provides is better than it used to be, it still falls short of acceptable standards. The report says that:

Clear, thorough and readily accessible data on public spending across the United Kingdom are not yet being provided.

What we should be getting is:

A single, coherent and consistent publication ... [which] should contain all material data on devolved finance, showing the allocations of grant to the devolved administrations, changes from previous years and explanations for any changes made.

2. An Independent Funding Commission

Although it is right that the UK Treasury is responsible for setting out overall levels of public spending, the Committee recommends that a new, independent body be set up to properly allocate that money between the devolved administrations.

It is particularly impressed with the way things work in Australia (the Commonwealth Grants Commission) and this body provides a model of how things could work in the UK without us having to re-invent the wheel.

The critical question is of course what criteria it should use in making the allocation, but it is absolutely unequivocal about the allocation being made on the basis of relative need. As I mentioned in this post on the Holtham Commission, "need" isn't necessarily a measure of deprivation (although it often can be) it is more accurately a reflection of the cost of providing public services of an equal quality to each region. It is as much a measure of, say, the geography or the age profile of a particular region as it is of deprivation.

The report recommends that:

The new system should be based on the following principles:

• It should consider both the baseline and any increment in funds;
• It should be fair and seen to be fair;
• It should be comprehensible;
• It should respect territorial autonomy; and
• It should be stable and predictable.

Any needs assessment should take these aspects into account:

• The age structure of the population;
• Low income;
• Ill-health and disability; and
• Economic weakness.

3. The Bottom Line

Yes, it's pointless talking in purely academic terms. What actually matters is what will happen to the amount of money that the devolved administrations get. This is what the Lords say:

On the basis of our initial analysis, we believe that Scotland now has markedly lower overall need than Wales and Northern Ireland in comparison to England. The current allocation of spending does not properly reflect this basic pattern across the devolved administrations.

In blunt terms, both Wales and Northern Ireland are being short changed. As I mentioned in my post of 10 July, the huge injustice is that the PESA figures show that, in relative terms, public spending in England and Scotland is going up, but that spending in Wales and NI is going down. Exactly the opposite of what is fair and right.

The Lords have not done a detailed analysis, but this is where the work recently done by the Holtham Commission comes into its own. They have done the sums, and have concluded that a correction factor of 1.14 needs to be applied to any future adjustments.

I want to re-emphasize that this Holtham Correction is just a short term fix to be applied until new allocation criteria are developed for all the devolved administrations.

The Lords envisage that it will take between three and five years to before the final arrangements of the new Independent Funding Commission are in place ... perhaps even seven years. That's a long time, and a lot of money for Wales to lose. So I repeat that the emphasis must be on our politicians—from all parties—to press for the Holtham Correction to be applied immediately.

This is an issue that should unite everybody in Wales. Kick up a fuss. Don't let the work of not one, but now two, expert bodies be kicked into the long grass.

Bookmark and Share

The National Transport Plan - Roads

Now that I've had a chance to read it (sadly, I don't get an advance copy) it's time to comment on the National Transport Plan that Ieuan Wyn Jones announced yesterday.

As I listened to what he said, I punched the air and let out a shout loud enough to disturb my neighbours—or at least give them grounds to think I was disturbed—when he confirmed that the Gwent Levels motorway had been ditched. I was half-confident that it would be, simply on the basis of the principles that were laid out in the previous document. But the sustained pressure over the past few weeks from those elements that think road building is the only thing that matters made me wonder if he would fold.

He didn't. In fact I was very impressed with the confidence of his performance in yesterday's debate. He came across as a man who knew what he was doing and, more importantly, why he was doing it.


Now of course all the news in the morning papers is about the M4. But I want to start by saying that the Plan is much more than that. It is about building an integrated and sustainable transport system. What is groundbreaking about this is that it is the product of new and better thinking about what transport is for. For some decades we have had governments, of all political hues, that have seen road building as the prime, if not only, means of improving transport infrastructure. Only very recently have governments started to think in terms of a more balanced transport mix: something which has either been motivated by gridlock in large cities such as London, or by concerns for the environment.

So the emphasis of this plan is not about what we are not going to do, but about the better things we are going to do instead.


Now it seems that some people just can't get their heads round this. Not only did we see this from the Tories in the debate yesterday, but it was repeated by David Rosser of CBI Cymru in this clip from the news last night:


He seemed to think that it was:

... too big a project for the Welsh Assembly Government's budgets. What does that say about devolution? ... how do we take forward Wales' infrastructure needs in the decades to come?

He's got hold of completely the wrong end of the stick. The money would not have come directly from the block grant. When the new motorway was proposed, it was always intended to be financed by PPP/PFI, which would in the long term have cost us maybe twice as much as traditional funding through borrowing. But let's take a step back and look at the bigger picture.

First, the problem that needs to be solved is relatively minor. There is some peak hour congestion, which is mostly the result of private car commuter traffic. If the whole emphasis of transport policy is to try and get people out of their cars and onto public transport it makes more sense to solve the problem by developing park and ride facilities linked to new rail stations, as I noted here. IWJ has confirmed that this is indeed what is going to happen. That is very welcome news.

Second, the cost is obscene. It is not a question of it being "unaffordable" ... it is a question of this particular scheme being a bad thing to spend this amount of money on. £1bn is out of all proportion to the benefits it could ever be expected to bring. True, that cost would have been funded by PFI/PPP ... but that would of necessity have involved tolling. A "shadow" toll (such as operates on the A55) would have cost the Welsh Government a lot of money. A user-paid toll could only have been made to operate on the same financial basis as the new Severn Crossing: in order to avoid switching, both M4s would need to have matching tolls. I don't think many people would put up with that. The tolls would certainly have had a negative rather than positive effect on business.

Finally, it is not the only route across Newport. What IWJ proposed today is exactly what I said should be done a few years ago, after one of the accidents that closed the motorway:

What I find strangest about incidents like these is how they have "knock-on" effects to the rest of the political agenda.

So, for example, because this crash caused delays to motorists, the news story quickly becomes, "What's happening with the new Gwent Levels toll motorway"

     M4 relief road 'could open 2013' - BBC, 20 September 2007

My reaction to this is that people have been killed ... and if that means a few hours delay, and even if this happens say four or five times a year, so what? Inconvenience doesn't compare with lives.

We need better solutions to our transport infrastructure than building new motorways. We built a parallel M4 for the new Severn Crossing. Now the ball just rolls along a few miles. If we double the M4 to get past Newport, are we then going to double it to get past Cardiff too? Make no mistake, we'll have to, because we'll just create a new bottleneck a few miles further on.

Yes, I do accept that this bit of the M4 is problematic, particularly because of the Brynglas tunnels. But there are better ways of increasing road capacity than a new toll motorway. Why not simply improve the road from the Magor Junction (23a) that runs through the old Llanwern site (Queensway) then go over the new road bridge built just a few years ago? Turn the single carriageway sections to dual carriageway. Maybe tunnel under a few of the surplus roundabouts. Judicious minor works to improve traffic flow. Not a complete new motorway ... and certainly not a restricted access, private toll motorway!


Ultimately, though, the problem is the number of people using cars to get to work and lorries to carry goods. The way to solve that problem ... the only way ... is to make a coordinated shift from road to rail.

Quite rightly, the proposed new motorway needs to be subject to a number of planning, environmental and legal procedures. The public enquiry is due in a two years. Of course the Tories want to rush it forward to get a new private toll motorway as quickly as possible. No big surprise.

     First questions on M-way safety

The political task for Ieuan Wyn Jones is to get a rail improvement plan (both passenger and freight) into proper form by then, so that it (together with minor road improvements as outlined above) will form a convincing alternative to the new toll motorway.

WalesOnline forum - 20 September 2007

Reading the Western Mail's version of the story at the time, it would appear that IWJ was still thinking in terms of building the new motorway. According to yesterday's BBC story, what is now proposed is pretty much exactly what I suggested back then:

[IWJ] said the assembly government would instead spend between £64m and £110m improving the existing M4 network.

Measures would include improvements around Tredegar Park junction, the Brynglas tunnels and the Coldra roundabout, bringing into public use a seven-mile dual carriageway through the Corus site in Newport, and improving the southern distributor road through Newport.

BBC, 15 July 2009

Now of course I'm not taking credit for that. To my mind it was just stating the obvious, and I'm sure others reached the same conclusion long before I did. I'm only glad that the argument has been won. Just in case it isn't clear, this is the route that is now likely to be developed. Click the map for an enlarged version.


It does exactly what it is meant to do: relieve pressure at one pinch point on the perfectly good motorway we already have. Building a brand new six lane motorway would be like taking a sledgehammer to crack a nut. It is overkill.


I suppose I can't really avoid commenting on the Cardiff Airport link road, either. For once I'm going to give some credit to David Jones, because at least he can see the bigger picture, even though he sees it the wrong way round. What he wrote is here.

Most of the plans for a new road from the M4 (probably J34) to Cardiff Airport were based on it also serving the development at St Tathan. A road that would serve both is more feasible than a road that would serve the airport alone. It might even be justifiable, but that depends on the extent of the development.

Now of course St Tathan itself is a completely different issue. It's something I've mentioned before, but not on this blog, so I'll put it on record that I am not against the development of a large defence establishment on the site. If the MoD want a centralized facility, it is better for this part of Wales that it's here than elsewhere. However, what I do have very grave reservations about is the private nature of the proposal and the particular multinational arms companies that will develop and run it.

I am not particularly impressed with "School of Death" labels. Any military training establishment is by definition a place where people learn to kill other people. That is what war is all about! I believe that Wales should retain an effective military after we become independent; the issue is not about us having armed forces, but about what we do with them. So the development itself will serve us very well when we get to run it.

But at present it is far from clear how "on track" the proposed development is. David Jones seems to want it both ways at the same time. For example he quotes Vale of Glamorgan MP John Smith as saying, "If that road is not built, the college will still open ... " but then goes on to say, "The announcement [about the link road] will undoubtedly cause uncertainty over the future of the St Athan project."

My view is that we should wait and see. If the development does go ahead on the scale planned, then it might well make sense for the road to be built; in which case it would serve Cardiff Airport too. Win win. But the airport alone certainly does not justify it.

What is ridiculous, not to say foolish, is the idea that the Welsh Government should build the road first in order to try and swing the balance on whether St Tathan goes ahead. Tails do not wag dogs.


Let's move on. Because the next thing to note is that this Plan is not some sort of vendetta against road building. We need good roads. But we need put them into a larger context. It is very easy for a local AM like Huw Lewis to think that the A465 is the most important road in the world ... but it is only the most important road for him and his locality. The same goes for John Smith's view on a new road to Cardiff Airport. The job of the Welsh Government is to do what is best for Wales as a whole.

A month or so back, I made this post in response to what Huw Lewis had written. He was feigning ignorance about why the Heads of the Valleys road should not be Wales' number one transport priority. I reminded him that the One Wales Agreement had made improving North South links a priority:

• We envisage a Wales where travelling between communities in different parts of Wales is both easy and sustainable. We are firmly committed to creating better transport links, both road and rail, between the North and the West of Wales and the South.

• We will develop and implement a programme for improved North-South links, including travel by road and rail.

• We will press ahead with improvements to major road links between the North, the West and the South of Wales, investing over £50 million for this purpose over the four year Assembly term.

One Wales Agreement, 27 June 2007

To allay Huw's fears, dualling the A465 is still going to go ahead. That was confirmed, once again, yesterday ... and perhaps it's worth noting that this road will provide a better alternative to the M4 for traffic from south Wales to the Midlands and North of England via the A40 and M50, thus in itself reducing the long term need to increase capacity on the M4. But the Plan lists a number of improvements to the main North South road link, namely:

We will:

c. Start work on the programme of proposals, by 2011, to the north-south road corridor to address sub-standard alignment, journey reliability, safety and local environmental issues:

• A470 from Penloyn to Tan Lan, Llanrwst;
• A470 from Cwmbach to Newbridge;
• A470 at Gelligemlyn;
• A470 from Maes yr Helmau to Cross Foxes;
• A470 at Alltmawr;
• A470 from Pentrefelin to Bodnant West Lodge;
• A487 at Porthmadog, Minffordd and Tremadog;
• A483 at Four Crosses.

d. Start work on the programme of proposals, by 2014, to the north-south road corridor to address sub-standard alignment, journey reliability, safety and local environmental issues:

• A470 at Rhayader;
• A470 at Plas Maenan and Bodhyfryd;
• A470 and A483 through Builth Wells;
• A487 from Caernarfon to Bontnewydd;
• A483 in Newtown.

Some of these schemes have been around for a long time. One, the Porthmadog bypass, was given the go ahead only a few weeks ago. But what this Plan does is to bring the proposals together as a co-ordinated set, so that we finally—after years of talking about it—get a half decent road linking north and south Wales. This is an enormous step forward for Wales as a whole.


Anyway, this post is quite long enough. I've concentrated only on the headline issue of roads because that is the main focus of debate and comment in the media today. I've got plenty to say about the public transport that runs on roads, the rail network, and short distance local transport, including cycling and walking. These elements are every bit as important, but I'll have to address them later.

Bookmark and Share

No new M4

Brilliant news from Ieuan Wyn Jones. The Gwent Levels motorway is dead.

Well done!

This is a video of the announcement of the National Transport Plan and a very good debate about it in the Senedd this afternoon. Don't be put off by the fact he starts in Welsh, most of the speech and debate is in English.


You can download the document itself, which contains much more than just the Gwent Levels motorway, here:

     Y Cynllun Trafnidiaeth Cenedlaethol
     The National Transport Plan

Bookmark and Share

The mark of a civilized society


I'm sure I'm just one voice in a large choir, but I want to mark my appreciation of Edwina Hart's decision to allow failed asylum seekers to receive free treatment on the Welsh NHS. The story broke over a year ago when the UK government went to court to enforce a charging policy which they introduced in 2004:

     The right thing to do - Betsan Powys' Blog, 19 May 2008
     Failed asylum seekers' free NHS - BBC, 20 May 2008

I must say that I thought this had all been sorted back then, and I'm sure that for practical purposes it was. I can only guess it needed time to be properly formalized ... and today is the day. Sadly the position has not changed in England.


That is not to say that I condone failed asylum seekers remaining in the UK. I firmly believe that (after all the due processes, including appeal, have been conducted) failed asylum seekers should move on or be deported, except in rare cases where there might be compassionate or humanitarian grounds for them to stay.

I also think that a failed asylum seeker who cannot return because it would be unsafe for them to go back (which is quite often the case) is a contradiction in terms. If it is unsafe for them to be in their home country then that appears to me to be what asylum is all about.

However it is not the job of the NHS to police the asylum system ... that's the job of the UK Border Agency. For as long as asylum seekers are here, it is right that we should take care of their basic health needs.

Bookmark and Share

Holtham and Hain

Here is a clip from Dragon's Eye last night including interviews with Gerald Holtham and Peter Hain:


Gerald Holtham repeated the key point from his Commission's findings: namely that if Wales' devolved public services were funded on the same needs-based formulas the UK spending departments apply to the English regions, we would get 114% of average English spending.

It's good to hear it from the man himself.

But Peter Hain's response ... well that's something else entirely. Let's start with these two quotes:

"Barnett has got Wales to a roughly fair position at the present time."

"I'm persuaded that Wales' funding is pretty well fair now ... but it could deteriorate."

Really? Why not take another look at this chart?


So what is Peter Hain saying? If he thinks that 112% is just about fair now what he's really saying is that Wales was vastly overfunded when relative spending was roughly 125%. Therefore in the twelve years that Labour has been in power, it has been the conscious policy of the Labour government in Westminster to drive down public spending in Wales relative to England.

Is that something for Labour in Wales to be proud of? As Adrian Masters said, it's Peter Hain's job to get a better deal for Wales. But his response was,

"I do precisely that."

No, Peter. You're letting your vanity get the better of you again. That's precisely what you didn't do. Relative spending has dropped from 125% to 112%. Under Labour's stewardship, the relative difference has been cut to less than half what it used to be.


Now of course it could be claimed that it was wrong for Wales to have had such high relative spending back in the 90s. It might be unpopular but, in intellectual terms at least, it's semi-cogent.

But only semi-cogent. Because if you want to argue that it is right for public spending per head in Wales to be driven down, then it must be right that public spending in Scotland—where the differential is very much greater—is brought down too.


If you click on the table above, you will be able to see that this simply hasn't happened. The PESA figures show that over the past six years relative spending (the UK as a whole is 100) in Wales has gone down from 114 in 2002-03 to 110 in 2007-08. But for the same period relative spending in Scotland has in fact gone up from 117 to 118.

So the Secretaries of State for Scotland have obviously been fighting Scotland's corner well enough. It's only in Wales that the Secretary of State hasn't been doing his job!

So what does Hain do next? He wanders off into a fantasy world and says:

"Is Rhodri Morgan going to go to Alex Salmond and demand a bit of Scottish money from Edinburgh?"

No, Peter. It's your job to demand the money. But you don't have to go to Scotland for it. The people you need to deal with are all in London. Alex Salmond doesn't decide how much money Scotland gets ... the Labour government in London decides how much both Wales and Scotland get. You need to be fighting Gordon Brown and Alistair Darling to make sure Wales gets its fair share.


I was at this point going to launch into Peter Hain's hypocrisy. But I thought better of it. Peter Hain is what Peter Hain is. His political priority is London. That's his main home, that's where his bread is buttered, that's where his shadowy think tank, the Progress Peter Forum, is based. Neath was just a safe seat for him to be parachuted into.

Wales has 28 other Labour MPs and, addressing you directly, nearly all of you have a closer association with Wales. If Peter Hain won't fight for Wales, then you must. Your party is in government, your party can do something about it.

What you can do is simple and straightforward: insist that the "Holtham Correction" is applied now. I won't repeat what I said before, I'll just quote verbatim from the Holtham report:

The immediate priority

6.7 We are realistic about the scale of the political challenge and are aware that developing and implementing the new system may take some time. However, the arbitrary and obsolete nature of the formula requires some immediate changes that follow from already agreed principles and can be implemented without any radical innovations in practice.

6.8 Our analysis has shown that Wales currently receives less than it would were it to be funded by the UK Government using the formulae it applies to England. In the absence of reform, the gap between Welsh relative needs as assessed on the UK Government’s criteria and the level of funding provided by that same Government, will increase. This situation cannot be left unresolved until political agreement is secured on more substantive reform.

6.9 As a matter of principle, Barnett-driven convergence should cease when a devolved administration’s budget is no larger than it would be were it funded as an English region. In the case of Wales this point has already been reached; our analysis has demonstrated that Wales would receive £114 to spend on devolved activities for every £100 spent in England if its budget were determined by English funding formulae.

At a minimum, no further convergence in relative funding per head should occur in Wales until a new funding system is in place. A straightforward remedy would be to simply multiply any positive increments allocated to Wales by 114 per cent. This small adjustment to current arrangements would place a floor under the funding provided to Wales, and would prevent any further convergence until such time as more comprehensive reform has been agreed.

Bookmark and Share

Understanding Holtham



  Gerald Holtham   David Miles   Paul Bernd Spahn

The Independent Commission on Funding & Finance for Wales, a three man expert Commission chaired by Gerald Holtham, published its first report yesterday, which can be downloaded here:

     Summary Report
     Full Report

I wasn't sure what to expect, but I didn't expect a report quite like this. When a weathered hack like Martin Shipton of the Western Mail can open an article by saying:

The importance of the Holtham Commission’s findings about the way the National Assembly is funded cannot be overestimated.

Western Mail, 8 July 2009

... it means that we all should sit up and take notice. Of course I don't mean to offend the old hack by describing him that way. He has been around for a long time, and has read more reports and seen more political spin than most others. He's seen it all ... but he knows that this report is something of a different order.

One of the first things to say about the report is that it is a model of clarity. But I realize that even with the best intentions not many people are going to sit down and read it. So what I want to do in this post is give a summary of what it says and why it reaches the conclusions it has. If we are serious about changing the way that funding for Wales works, it requires a lot of us to shout out about it. If we don't do it—or rather, if not enough of us do it—then it won't matter what a few politicians and economists say. A small number can always be ignored, no matter how right they are.

Westminster will want to try and forget about it. It is always easier and more comfortable to hide behind the status quo than change something. To bring about change we need to kick up a fuss ... but we need to know what we're kicking up a fuss about. We need to be able to say why the current system is short-changing us, and we need to have a clear idea of what to put in its place.

1. How DOES the Barnett Formula work?

Historically, public spending in both Wales and Scotland has been at a higher level per head than England. Back in the 70s, when devolution was first considered and might well have become a reality, some method needed to be found to formalize the relative funding arrangements so as to avoid a political bun fight between the UK government and the devolved countries at every spending review. So the Barnett formula was devised to calculate changes in funding to Wales and Scotland based on the changes in spending in England, the degree to which a particular area of spending was devolved, and the size of population.

As it turned out devolution did not become a reality in the 70s, but the formula could still be applied because there was a Welsh and a Scottish Office, headed by the respective Secretaries of State, which made decisions about how money was spent in Wales and Scotland. When devolution became a reality in 1999, the Assembly and Scottish Parliament made those spending decisions instead.

However, because the formula takes account of population, but does not take any account of the original difference in spending per head, it has meant that the relative difference in spending per head has been steadily eroded over the years. This is known as the "Barnett Squeeze" and its affect on Wales is shown in this chart:


Back in the 90s public spending per head in Wales was about 25% higher than in England. Now it is only half that ... and will continue to fall. The rate at which it will fall depends on a number of factors, but the Holtham Commission has worked out a best and worst case scenario:


Under the worst case scenario, the next ten years will see Wales lose out by £8.5bn. That is a problem too big to ignore.

2. How SHOULD things work?

At this point, there is a simple political question to ask. Is it right that, in general terms, governments should spend the same amount of money on everyone? Or is it right that governments should focus public spending on those areas that need it more?

There is no absolute right or wrong answer to these questions. It is a matter of political judgement. However it is worth noting that nearly every developed country in the world adjusts their public spending on a region by region basis, on the principle that it wants to ensure that public services are of more or less equal quality everywhere.

England is no exception. The UK government makes decisions on public spending on behalf of England, but it does not give the regions equal amounts of money per head of population. It applies a range of formulas based on the relative needs of the nine regions of England, spending what is necessary to ensure that the quality of public services is more or less equal. This results in very large differences in spending per head within England. These are the figures for 2008-09 from the IPPR website:


One thing that should be immediately obvious is that there is not necessarily a direct link between public spending per head in each region and the prosperity of each region. A prime example of this is London. Public spending per head in London is much greater than anywhere else in England ... and greater than it is in Wales, Scotland and NI too.

So we need to make a clear distinction between prosperity and need. The reason London gets more money spent on it per head is not because it is less prosperous. The exact opposite is true; it is the richest, most prosperous part of England by far. Neither does it get more money spent on it because it contributes more in taxes. It gets more money purely and simply because its needs, measured by a variety of different formulas, are greater. In this context, "need" isn't necessarily a measure of deprivation (although it often can be) it is more accurately a reflection of the cost of providing public services of an equal quality to each region. It is as much a measure of, say, the geography or the age profile of a particular region as it is of deprivation.

So the issue is this: if the UK government thinks it right to apply a needs based formula to determine relative levels of public spending in the regions of England, it is unfair—in fact downright hypocritical—for it to apply a different set of criteria for determining public spending levels per head in Wales and Scotland.


The clever thing the Holtham Commission has done is apply the UK Treasury's own funding formulas used for determining public spending for English regions to Wales. So far as I know, nobody has done this calculation before. But the three men on the Commission are all experts and know what they are doing ( ... if you doubt it, they explain how they've done it in the report) and the result of those calculations is that Wales would receive 14% more than we currently do if the same formulas were applied to us.

The Holtham report acknowledges that agreeing a new funding formula will be difficult. So it also outlines a simple and practical way of dealing with the problem on a temporary basis: namely that any future adjustment to the money that we get by operating the Barnett formula is adjusted by a factor of 1.14.

This won't change the past injustice. Nor will it take us back to the levels of spending (relative to the other countries of the UK) we had fifteen years ago. But it will be a "safety net" to ensure that the injustice doesn't continue to grow larger.

And they mention other things that can also be done immediately. This time not to change the allocation of spending, but to make the process of allocation more transparent. The logic of doing this is inescapable. The public mood following the expenses scandal means that we must get open and transparent mechanisms and processes, so that we can see exactly how and why public funds are distributed in the way they are. We were right to get angry about the attempts politicians made to hide the money they got from public funds. But it is a drop in the ocean compared with the sums involved for national and regional public spending. Flipping homes and claiming for iPods is as nothing compared to a loss of £8.5bn over ten years.

3. So what happens next?

Well, let's start with the obvious. Every politician who claims to represent Wales, of every political party both in the Assembly and at Westminster, must stand united in making the case for adopting this 114% "Holtham Correction" now, as an interim measure pending a new allocation system.

It's been good to see that politicians are being positive about this. But it does take more than simply saying that Barnett needs to be revised. We all know that Barnett needs to be revised ... in fact we have known it for some considerable time.

We need a firmer and more precise commitment from our politicians: namely that they will press the Treasury to immediately put in place the 114% Holtham Correction.

Bookmark and Share

Welsh in Schools

The provisional Schools Census data for 2009 were released last week on the Welsh Government website. The full data will be released in October.

Year upon year, the numbers in Welsh-medium education have gone up, even against a background of a fall in overall pupil numbers. So it was a slight disappointment to find that the number in WM primary education had for the first time gone down, albeit slightly, from 53,822 to 53,479. However the overall number of pupils in primary schools has fallen sharply by 3,365 to 257,684 ... so the percentage in WM primary education continued its unbroken rise and now stands at 20.8%


However another interesting trend might be emerging. Namely the numbers of children being taught partly in Welsh (excluding Welsh lessons, obviously) has gone up quite markedly in the last two years. Last year the figure was 3,183 (1.2%) and this year it is 4,473 (1.7%).

As I've noted before, even though Welsh is a compulsory subject at all Key Stages, English-medium schools do not have a very good track record of producing pupils who can speak Welsh competently. So this rise reflects a welcome policy by some local authorities to increase the use of Welsh in other subjects and activities so as to reinforce what has been taught in the Welsh lessons. Only time will tell how successful this will be, but at least it is an attempt to come to terms with the problem. The vast majority of people in Wales want their children to be able to speak Welsh as well as English, so the answer is either to improve the way Welsh is taught in EM schools, or for them to switch to WM education.

Taking these two trends together means that the percentage of primary age children being taught Welsh to first language standard has risen from 20.2% in 2005 to 22.5% this year.


The secondary school figures are rather scant. There are no overall figures for those in WM secondary education. Indeed the distinction between WM and EM secondary schools is becoming less clear-cut with the emergence of a new range of classifications designed to reflect the percentage of subjects taught in Welsh rather than the overall ethos of the school ... but that's another matter.


What these figures show is that these is yet another increase in the numbers being taught Welsh to first language standards (i.e. those who would be expected to take a Welsh first language GCSE). The figure for school years 7-11 now stands at 28,320 (16.0%) up from 28,123 (15.7%) last year. In 2005 the figure was 14.8%.


What are we to make of this? Yes, of course we can and should take considerable satisfaction from the fact that the percentages keep on rising year upon year. Yet I must admit to feeling slightly disappointed that the figures aren't rising more quickly.

What do others think?

Bookmark and Share

We can't afford not to borrow

There was a piece on Dragon's Eye last night about what had happened to the new specialist care hospital proposed for Gwent.


I thought, "I can write something about that" and started marshalling my argument, only to realize that I'd already written about it six months ago. Well at least I can say that my suspicions back then seem to have been vindicated now.


But let me first take one step back and start by saying that I was immensely impressed with the Clinical Futures Gwent programme from the moment I first heard about it and looked at the plans in detail. As Mike German said on the video, it is one of those projects that is so obviously right that no-one in their right mind could seriously object to it. It was a model for good hospital design and good strategic planning, especially the idea of smaller community hospitals providing the everyday services close to where people live clustered around a central hospital providing specialist care.

So, back in January, I was delighted to be able to write this post on the Syniadau Forums about the groundbreaking ceremony for Ysbyty Ystrad Fawr. But that was followed only a couple of days later by news that the specialist central hospital had been put on hold, so I followed it up with this post. You're welcome to read the whole thing, but this is an extract from it that is particularly relevant to yesterday's news that a primary reason for delay was the inability to afford it.

£292m new hospital plan on hold

Health officials have been asked to look again at a planned £292m critical care hospital in south east Wales. The specialist hospital in Newport or Torfaen was part of Gwent NHS Trust's Clinical Futures strategy, which includes six local hospitals. But Health Minister Edwina Hart wants more work to show the plans are "ambitious, right and deliverable".

BBC, 19 January 2009

I don't know what others might think. But when you come up with not only a state-of-the-art proposal, but one that has received almost universal support from health professionals and the public alike, it is hard to avoid the conclusion that "look again" is thinly disguised code for "we can't quite afford it". If the programme really is as wonderful as Rhodri Morgan claimed only this week, then Edwina Hart's problem can't be with "ambitious" or "right", but only with the dreaded word "deliverable".

So it's well worth asking the question why we can't afford it.

The answer is this. The One Wales Government made a policy commitment not to use PFI as a funding mechanism for new NHS capital projects. I think this is a good thing, but in order to be able to make infrastructure improvements an alternative model is needed. In the absence of such a model, the projects have been funded out of the Block Grant we get from the Treasury. This is not so illogical. We get some £15bn each year, so a hospital or two like Ysbyty Ystrad Fawr or Ysbyty Aneurin Bevan can be funded from it. But there is a limit to how many projects can be funded this way.

In any normal situation we would borrow money to pay for such infrastructure investment, and spread the cost over ten or twenty years. But the Assembly doesn't have powers to borrow. Moreover the UK Treasury has shown no great signs of wanting to show any flexibility. If we look at a parallel situation, the Scottish Government wants to build a new Forth Bridge at a cost of roughly £2bn. The situation is reported here:

Bridge cash row set to continue - BBC, 9 Jan 2009

The Scottish Government's position is:

Mr Swinney [the Scottish Finance Minister] said: "We have the money to pay for this crossing through our traditional capital budgets. We have £3.5bn of a capital expenditure programme every year and the Forth replacement crossing will cost us about £1.7bn over a five to six-year period."

But he added: "The cost of doing that is that there would be, unfortunately, delays to other projects. That's why we're trying to get the Treasury to give us the type of flexibility that any other normal administration would have by being able to borrow to pay for a once-in-a-generation project like the Forth replacement crossing and spread those payments over a period of years."

Mr Swinney went on to say the Scottish Futures Trust worked in relation to projects such as healthcare developments and school buildings, rather than a single, "generational" build, such as the new Forth crossing.

"The Scottish Futures Trust is there to essentially bring about collaboration between different projects of a smaller scale to deliver value for money," he said.

Now, I'm not entirely sure whether I believe the line that the Scottish Futures Trust was not designed for larger projects of this nature. I think it is much more a case of them having extraordinary difficultly in getting it off the ground when it is being so vehemently opposed by the UK Government. Westminster wants to see it funded by a PFI/PPP arrangement ... quite simply because that's how Labour and the Conservatives prefer to do things, and they want to embarrass the SNP into a U-turn. Of course the chances of that happening are nil.

Which brings us neatly to the Holtham Commission. To put it at its bluntest, Labour have got to find some way of honouring their commitment not to use PFI in Wales. They have to find an alternative mechanism for infrastructure funding, and this can only be by allowing some form of borrowing. That's what the Holtham Commission is for. But if they agree it for Wales, then they surely must allow the same sort of thing for Scotland too.

OK, back to real time, 3 July. Things have moved on in two important respects, the first is that Calman has now reported and recommended that Scotland does get the ability to borrow. Westminster will almost certainly say yes. These borrowing powers will in all probability not be as extensive as the Scottish Government would like. But they will, at a minimum, be on at least the same basis that applies to other Whitehall departments.

The second is that I would now put money on Wales being given the same borrowing powers as Scotland when Holtham reports.

In essence that borrowing will only be allowed for capital projects such as schools, hospitals, bridges, railways and the like. But that is all we need to get over this particular crisis. Therefore I am quite sure that the new Ysbyty Llanfrechfa will go ahead. I don't, for example, share the pessimism of Marcus Longley in the video. His view seems to be based on the current model of projects like this being paid for from public spending ... since, up until now, the block grant we get has always contained an element for capital spending. The difference is that this sort of project will be financed by borrowing. Of course we will still have to use public spending to service the debt, but it is spread over a longer period and therefore affordable.


The big problem is that the UK government has dug itself into a massive hole over borrowing. It has vastly over-borrowed and is over-exposed. So much so that there are some doubts about whether the UK's credit worthiness is going to suffer.

But we need to remember that there is "good" and "bad" borrowing. Good borrowing is to invest in infrastructure and capital projects. A perfect example of bad borrowing was when Gordon Brown gave everybody a tax break in order to make up for abolishing the 10p starter rate of Income Tax. He did it by borrowing £2.7bn. It was acts like that which show that Prudence had long since left the building.

All borrowing is probably going to have to be done by the Treasury, but we need to devise some sort of ring-fence to divide the good borrowing we want to do in Wales from the mountain of bad borrowing that was used to pay for tax cuts at a time when Labour thought they could "buy" the next election.

In an ideal world I'd much prefer that Wales is free to go directly to places such as the European Investment Bank, rather than to have to go through the UK Treasury. But that might be asking too much ... for now.


So in conclusion I want to note that it doesn't so much matter that the UK is in dire financial straights. We are still going to have to build our hospitals, school and transport links for no other reason than that so much of what we have needs replacing ... and that it eventually costs more to do the patching, squeezing and temporary extensions than it would cost to build something new.

And as for Clinical Futures Gwent, I would urge our politicians not to mess with the concept too much. I have been involved in too many building projects where the message has come down from on high to cut costs ... without thinking about the cost in terms of functionality. We have come up with an excellent, world-leading concept. It is worth paying what it costs to get it right.

Bookmark and Share

Care charges to be capped

I was pleased to see that a Measure (the Assembly equivalent of an Act) has been proposed which will cap non-residential care charges by local authorities at £50 per week.


     Care charge to be capped at £50 - BBC website, 30 June 2009

But I think it might be worth commenting on how long it has taken us to get there. In the first instance the Labour party said they would abolish these charges altogether as one of their 2003 manifesto commitments. They decided not to honour that pledge when they got into government.

In their 2007 manifesto the commitment been watered down to:

We will also seek new powers to allow a third-term Labour Assembly Government to amend the law in relation to charging for domiciliary care, so that charges for similar services are made more consistent and less variable across Wales.

In marked contrast, Plaid's 2007 manifesto included:

• stopping the hospital closure programme, and capping and then scrapping the council tax and care charges for the elderly. New ideas for a new era.

OK, that last sentence might have been a little over-the-top. After all, Labour had said they would scrap care charges ... although they didn't actually do it. Either that, or one of the "new ideas" the author had in mind was the startlingly novel idea that a party in government should do what it says it will.

In more detail, the Plaid commitment was:

Free Care

Plaid believes in securing free care provision for older and disabled people, in principle and as an aim. We reject the distinction between nursing and personal care. Intimate personal care can not be described as optional or a matter of convenience for the patient. By linking entitlement to care given by nurses, the current funding structure leads to older people and disabled people being denied appropriate care thereby causing preventable health deterioration and often hospitalization.

In the short term a Plaid Government will:

• Cap Charges set by Local Authorities.
• Raise the savings threshold for contributing towards residential costs to more accurately reflect the value of an average family home.
• Create Benefit Take Up teams in every Local Authority to ensure that older and disabled people receive benefits to which they are entitled.

To bring in our policy of free care, a Plaid Government will request the necessary powers to create a National Care Fund financed through a proportion of the revenue received as part of our proposed local income tax.

OK, so we didn't mange to negotiate all of it into the One Wales Agreement we made with Labour after the election. But I think you can clearly see from which side the initiative and momentum that has now led to this Measure came.


The second thing I would like to note is the timescale. We've been part of the One Wales Government for two years now. Why is this Measure only being announced today?

The answer is the LCO system. The Assembly had no powers to pass the sort of law that would cap the amount that local authorities could charge. We had to go through the drawn-out process of asking Westminster for permission to do it. But in the end they said yes, so let's give them credit for that.

But now think what would happen if a different party happened to be in power at Westminster. It would be very easy to imagine the Tories vetoing the ability of the Assembly to make such a law on the grounds that:

"It is up to local authorities to decide how much to charge. They are answerable to their ratepayers. The Assembly shouldn't interfere with democratic local government, therefore we won't give you the power to make such a law."

That of course sounds quite reasonable ... until you take a look at the huge discrepancies between local authorities. If an authority like RhCT can charge as little as £16.20, why should other authorities charge more than ten times that amount? It is clearly and obviously unfair, and it is therefore right that the Assembly should be able to set limits ... not least because local autorities only raise a comparatively small proportion of their income from local Council Tax payers.


We need to bear this in mind over the next few years, when we will all come under great financial pressure because public money will be in short supply. In essence there are always two ways of handling a problem like this: the first is to use money from the block grant to solve every problem; the second is to use legislation as a means of ensuring that others take a fair share of that responsibility.

The Welsh Government could have chosen to just give money to local authorities so as to make their care charges more uniform. That wouldn't require legislation, just money. But think of the consequences. It would have meant a high charging authority would get more money than a low charging authority. That in turn would have meant that low charging authorities would put their charges up, knowing that they would then recoup the higher charge. So it would result in an upward spiral of costs.

But on the other hand the ability to require local authorities to keep charges down by law has a dampening effect on costs ... and doesn't require additional money to be found from the block grant. Win win.


In other words, the ability to legislate has very real and practical consequences for the ability to deliver public services effectively. This is why we must ensure that we gain the right to legislate without having to ask permission from Westminster every time.

So, if Labour really are serious about defending Wales from the effect of the cuts which are on their way, they know what they must do: make sure that the Assembly gets primary lawmaking powers.

Bookmark and Share