A job for the Finance Committee of the Regions

Peter Finch considers following the trail of the Barnett Formula a modern-day equivalent of the quest for the Holy Grail

It could be that this is what life is actually about – an endless quest where the act of seeking becomes more significant that the thing we need to find. The end of the rainbow, the holy grail, the lost city of Atlantis, the Golden Fleece, the Barnett Formula…

In Welsh terms Holy Grails are easy – the top of Cadair Idris, the view west from St David’s Head, Foel Tri Garn on the Golden Road, the silence of Llyn Cwm Llwch in the Brecon Beacons, Big Astey’s (when it was there) outside Cardiff General Station. These are all places where the meaning of life suddenly becomes blindingly apparent. Golden Fleeces we have in abundance. Even Atlantis is not so impossible in a Welsh context. It’s in the sea off the tip of Lyn. But the Barnett Formula? That’s something else altogether.

Baron Barnett, Privy Councillor, the man who invented the formula, was Chief Secretary to the Treasury in the failing Callaghan Government of the 1970s. An accountant from Runcorn Joel Barnett went to Manchester Central High School. He sounds an unlikely T. Lobsang Rampa or Carlos Castaneda but that’s what he’s become.

Ask anyone what the Barnett Formula is about and they’ll nod wisely. They’ll talk about allocating additional finance based on population rather than need. Then something about how this works wonderfully well in Scotland where, as we all know, the rainbow actually does end. Finally, how this works far less effectively in Wales where, despite our constant rain showers, rainbows rarely if ever appear.

Back in 1978, when the formulae was invented, shimmering out of the shamanic air around Joel’s pen, Scotland and Wales’s large physical area, low average income and perceived greater need required a way of being funded that would satisfy voters and stop cabinet ministers bickering.  Barnett’s new system, which excluded defence and a few other sacred cows, gave 85p of every Government pound spent to England, 10p to Scotland and 5p to Wales. Sounds so simple, doesn’t it? But simple things never are.

The formula moved into the mystic as civil servants addled it with considerations of Northern Irish consequentials, baseline exclusions, the application of comparability percentages, and three-year average departmental expenditure levels. Ground moved and the fog came in.

In my personal hunt for the truth I have consulted a number of Barnett gurus. They nod, when asked, and tell me, yes, they understand, most of it, but it’s complicated.  They go on to discuss the West Lothian Question and the shift in baseline populations between Wales and Scotland. How Scotland has shrunk and Wales has grown. Yet over the decades the block grant, the conglomerated resource delivered by Barnett’s aging Upanishad, has remained more or less the same.

Change needs to come.  But no one yet has been able to manage it, despite 30 years of trying. Both partners to our new and still shiny coalition have declared, however, that they are up to the job. A new body, the Finance Committee of the Regions (FCotR) will be established and something that considers need as much as it does sheer population numbers will be established. In Wales we’ll receive more. Maybe. So long as the English regions don’t get their needs in before we do and prove beyond doubt that the wastes of northern Yorkshire are as deprived as the Cynon Valley and should be considered an even more special case.

If that fails then Wales will need to either up the search for Celtic oil or carry on increasing our population until the figures stack so solidly that, in the way that black holes bend space-time around them, Barnett will recalibrate itself.

I suggest that the incoming FCotR meet deep in the Dyfed triangle where flying saucers are still to be seen and levitating Welsh Buddhists are among the population norm. By osmosis a new understanding may emerge. On the other hand, given Welsh luck to date with the new administration, it won’t.

Peter Finch is Chief Executive of the Welsh writers’ organisation Academi

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