Monday 16 September 2013

Not necessarily 5% of everything

When it comes to the way in which governments spend money, “need” - and I put it in quotes because although it’s easy to say, it isn’t at all easy to define – should be a more important driver than equality, a point which I highlighted in this post last week.  Ultimately that assertion is the basis of much of the argument for Barnett reform – Wales has greater need per head on average for those services which are devolved to the Welsh government and should therefore receive a greater share of resources.
It does not mean of course that that greater need is equally distributed across the whole of Wales (similarly, the English average is just that – an average - as well; it varies greatly across England).  It often strikes me as being incongruous, at the least, to see politicians arguing for a reform of the Barnett formula to give Wales a greater share, and then jumping on bandwagons about “postcode lotteries” within Wales when they see inequalities within our country.
Fairness is difficult to define when we look simply at revenue expenditure on devolved matters.  It’s even harder to define when we look at major capital infrastructure projects – such as HS2 for instance.
The call for a Barnett consequential for HS2 has a certain political appeal, supporting the narrative that Wales is losing out, but surely the nature of individual capital projects is that they will inevitably favour some areas over others.  The question of fairness is only relevant when looking at the total of all capital expenditure over a longer period rather than individual projects.
There’s a further complication as well – capital projects which impact major conurbations are likely to be more expensive in terms of £ per mile of road or railway than the same or similar projects in rural areas.  Does that mean that London “needs” more capital expenditure per head than Wales, and that a needs-based distribution should proportionately give a greater share to London?
Or what about the putative HS3?  If a line is built providing fast rail services to Bristol and Cardiff, what proportion of that expenditure should be counted as “Welsh”?  Probably 90% of the capital expenditure would be in England – but that would not reflect the way in which any benefits are shared.
I’m not actually arguing that London should get a greater share of UK capital expenditure; nor even that Wales gets her fair share at present.  But the simplistic response demanding our Barnett share of capital expenditure based on an arithmetical percentage of individual capital projects no more reflects need than does the current Barnett formula.  The question of fairness is far more complex than that.


Glyndo said...

"If a line is built providing fast rail services to Bristol and Cardiff, what proportion of that expenditure should be counted as “Welsh”?"
How about condering the proportion of passengers that travel all the way to Wales compared to the proportion that only stay on board within England?

Pete said...

I've been reading the points being made about the High Speed Rail system with some concern. Your post on "Needs" brings it to a head.
If capital expenditure goes towards providing an improved service from South Wales to London, the outcome will surely be that firms will find it easier to recruit from England than from Wales. If expertise can be found in North or even Mid Wales, but the commute is easier, quicker and cheaper from the South of England, how does this benefit Wales?
What is being done to improve travel around Wales? Improving career opportunities inside Wales would be a far better way of satisfying a need than increasing the London-centric nature of the Island.

John Dixon said...


That depends on whether the trains would actually stop in England. If they were to run via a hub at Heathrow (assuming that Heathrow is still there), then that would be a point to consider; but the distance from London to Cardiff/ Bristol is so short that I'd assume a non-stop service, with passengers wanting to get out at intermediate stops continuing to use the 'old' line. If they were to stop, everywhere that the existing service stops, they'd hardly qualify as high speed any more.


Much of the debate around HS2 has centred on its use by business and the benefit that business gains. I think that's something of a red herring - the issue for me is about transport capacity and planning in more general terms. I simply don't believe much of the talk about the impact on business.

That doesn't mean that you comment about travel within Wales isn't a relevant one; we need to improve that as well. They don't have to be alternatives though.