New Assembly Government to Confront
Spending Squeeze
PRESS RELEASE
From the Institute of Welsh Affairs
For publication after 0010 Monday November 27th 2006
Following next May’s election the new Assembly Government will
have to manage its money much more carefully if it wishes to make
new policy initiatives and improve public services. This is a key
message in Time to Deliver, a 300-page report on policy options for
the National Assembly’s Third Term to be published today (Monday
27 November) by the Institute of Welsh Affairs.
Treasury forecasts show that year on increases in the Assembly’s
block grant during the third term will be half the current three per
cent, leaving very little room for manoeuvre. “To a great extent,
in the first two terms, the Assembly Government was buoyed up and
taken forward by an unprecedented period of growth in public expenditure,”
the report says. “This will no longer apply,” To address
this reality the Assembly Government will need to:
• Make greater efficiency savings than are at present envisaged
• Utilise private finance for capital spending.
• Prioritise spending between policy areas more effectively
• Manage public expectations
• Be subjected to greater financial scrutiny by backbench Assembly
members.
The report identifies a finance scrutiny deficit in the Assembly which
it describes “as a dangerous state of affairs”:
“If the Assembly Government has severely limited financial headroom
even under a relatively benign public spending regime and a government
of the same hue at Westminster, we need, at the very least, to think
seriously how any future Government in Cardiff would cope, under a
much stricter spending regime and a government of a different persuasion
in London. It is our belief that unless Wales develops a more sophisticated
understanding of its public finances, the public interest will suffer
and our politics will seem amateur. A fuller understanding of our
public finances both in terms of expenditure and outcomes is an essential
pre-condition of a more mature approach to policy development.”
The report identifies education as in need of greater investment:
“It is chilling to think that the funding gap between Wales
and England (let alone Scotland), at almost every level of education,
is as wide as it is and, worse still, might not change. Since a devolved
administration has no levers with which to effect economic performance
in the short term, it must concentrate on the long term, and nothing
in that long term is as effective as investment in education. Despite
the incontrovertible evidence to this effect, we do not doubt that
it will require courage to make this shift of priorities. Moreover,
it should be the job of all political parties and politicians at all
levels to persuade the Welsh public of the absolute primacy of educational
objectives. Success in every other field depends upon it.”
The report, the work of eight Policy Groups made up of 103 experts,
will be discussed at a special conference to be held in Cardiff on
Monday November 27th. For further details on how to obtain copies
of Time to Deliver (price £30 plus £2 p&p), please
call 029 2066 6606 or e-mail wales@iwa.org.uk
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