Magazine article Public Finance

Testing Times for Coalition

Magazine article Public Finance

Testing Times for Coalition

Article excerpt

Devolution has delivered some unforeseen consequences. In Wales, since July, we have had a coalition government of unexpected partners Labour and Plaid Cymru - under the 'One Wales Agreement'.

The powers of the National Assembly in Cardiff are less than those of the Scottish Parliament or the Northern Ireland Assembly. They are, however, being augmented through the Government of Wales Act 2006. This gives the Assembly immediate power to formulate primary legislation for Wales, subject to a consenting order to be passed by both houses of Parliament at Westminster. It also provides for converting the Assembly into a Scottish-type Parliament, at the request of two-thirds of Assembly members and subject to a referendum.

On the basis that a referendum for these purposes should be held sometime between now and 2011, Plaid Cymru agreed to enter coalition government with Labour. Plaid has four members of the new government, including Deputy First Minister leuan Wyn Jones, who is also economic and transport minister.

The One Wales Agreement has 217 new policy commitments, which should be fulfilled between now and May 2011. Of these, no fewer than 102 have additional spending implications. These include: improving the skills of the workforce to meet future workplace needs; developing new links between education and business; reducing business rates for small businesses; improving north-south road and rail links within Wales; improving collaboration between universities; and establishing a National Science Academy.

Public service bodies in Wales are also under the spotlight. There are plans to review governance in the wake of Sir Jeremy Beecham's report, Beyond boundaries: citizen-centred local services for Wales. The aim is to improve co-ordination between local government and health authorities, possibly including pooled budgets. A Strategic Capital Investment Board is to be set up, to ensure that best use is made of capital funds.

The agreed legislative programme includes new laws for the rights of carers; grants for first-time house buyers; new mental health laws; legislation to safeguard vulnerable children; and improved standards of school transport.

When the coalition government was established, there were misgivings about the adequacy of the funding of public services in Wales. So a central commitment in the coalition agreement was to review Assembly funding and finance, including the appropriateness of the controversial Barnett Formula.

The National Assembly has no tax-varying powers. …

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