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By LGCnet political correspondent Robert Hedley ...
By LGCnet political correspondent Robert Hedley

The Barnett formula should be thrown on to the same bonfire as its English standard spending assessment cousin, David Taylor, Labour MP for North-west Leicestershire, told Welsh secretary Paul Murphy.

Mr Taylor, a CIPFA-qualified accountant, said: 'The perverse nature of the government grant distribution system within the United Kingdom must not be allowed to continue. The secretary of state knows that even though Wales's population of 2.9 million is identical in aggregate to the east midlands counties of Leicestershire, Derbyshire and Nottinghamshire pre-1997, and the two regions have similar economic and social profiles, the level of public expenditure in Wales is significantly higher. Is not a full-scale economic and social assessment long overdue to form the basis for regional distribution?'

Mr Murphy said the government kept the formula under review, but had no plans to change it. The Barnett formula had served well for 20-odd years under both Labour and Conservative governments. It prevented constant haggling about finance every year, and dealt only with changes in spending levels.

'The chief reason why Barnett was established was that deprivation in Scotland and especially in Wales was acute and needed to be tackled. The Barnett formula has done that very well', he added.

Elfyn Llwyd, Plaid Cymru MP for Meirionnydd Nant Conwy, said Lord Barnett had said it was not meant to be a formula and was intended only to be a temporary measure.

'It is time that we revisited it and introduced a proper needs-based formula, which is what is really needed in Wales and other parts of the UK', added Mr Llwyd.

Mr Murphy said there was little evidence to suggest such a move would benefit Wales. Former Welsh Office minister Win Griffiths, Labour MP for Bridgend agreed, saying: 'May I suggest that, in fact, the complexity of changing from Barnett to some other formula would result in much wailing and gnashing of teeth throughout the United Kingdom, as we in Wales found when changes were made to the local government formula and all the new arrangements were regarded as worse than the originals?'

Conservative spokesman Nigel Evans said that because of the Barnett formula more money per patient was spent on the NHS in Wales than in England. However, Mr Murphy said the formula and the changes to it gave Wales extra money, but it was for the national assembly to decide how it was distributed - and it had given extra money to the health service in Wales.

Hansard 10 Apr 2002: Column 3-7

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