Ring fencing

Tweet The E-coli outbreak five years ago was a very serious matter, and justified the holding of a public inquiry. But public inquiries are only of any real value if lessons are learned. From the Consumer Focus Wales report published on Tuesday, it appears that not enough has yet been done.

One particular point which emerges from this is the question of resources – who supplies them and how they are used. There seems to be a difference of opinion on whether adequate funding has or has not been supplied to councils; but whether the funding was adequate or not, it seems not to have been directed to the necessary activities.

Consumer Focus Wales argue that this topic is so important that money must be ring-fenced to ensure that it is spent in the way required. I think this raises two issues.

The first is that merely ring-fencing the extra cash doesn't necessarily ensure that it achieves the desired result. To ensure that the money really is extra, the whole budget for relevant activities probably needs to be ring-fenced, otherwise authorities can simply add with one hand and take away with the other.

The second issue is that merely spending the requisite amount of money does not, of itself, guarantee the outcomes required – and I think it's the outcomes which are more important to us.

The whole issue also takes us back to the point I've raised a few times recently – what is local government for, and what is the right balance of centralisation versus local control?

In the case of food hygiene, central government already sets the standards and rules under which it operates. If it is also going to decree exactly how much each council spends on the issue, and how that is spent, and then monitor performance, what exactly is the input from locally elected democratic representatives? If the answer is, to all intents and purposes, none, then why not say so and run a single national food hygiene service?

I'm not necessarily advocating that, simply pointing out that that is a logical outcome of ring-fencing money. On this issue, as on so many others, we really need to decide whether, and to what extent, local variations are acceptable - if we decide that they are not, then there is no real value in pretending that this is a locally run service.

Funding Education

Tweet Last night, there was a superb concert at Folly Farm by the Greenhill School Orchestra. There was a worry a couple of months ago that the orchestra would have its funding withdrawn, and its supporters called on Plaid, Labour and Conservative politicians for support to retain an outstanding level of musical provision. Thus it was that I found myself sitting in the reserved seats at the back along with the local MP and AM, in a rare display of political unanimity.

The funding crisis was surrounded in some confusion to start with, and it highlighted for me how difficult it can be at times to pin down exactly who is taking which decisions. Schools receive their money from the county council according to a formula set by the county within government guidelines; but the element relating to sixth-form provision is decided by the Assembly Government and seems to be merely passed through the county's books. On top of that, the county may allow additional funding for certain activities such as music.

When the threat to the school orchestra was first highlighted, the finger seemed to be pointing at the Assembly Government for cutting allocations to sixth forms, but that turned out to be something of a misunderstanding. In any event, the funding problem has been sorted out for the very short term, giving a breathing space to ensure the longer term future. The near £5,000 raised by last night's concert will certainly assist.

Moving from the specific to the general, does school funding need to be this complex – so complex that even the governing bodies aren't always clear who has decided what? Why on earth is the Assembly Government directly setting sixth form budgets rather than leaving that to county councils to decide in the same way that they set the rest of the schools' budgets?

It looks like an unnecessary degree of centralisation to me, and almost guarantees a lack of clarity and accountability from the point of view of schools, governors, and parents. It may be convenient for those in authority to be able to blame someone else, but I don't think it makes sense.

I suspect that it's just another part of the less than entirely open agenda of the Education Department in the Assembly Government. There seems to be a desire to move away from sixth forms towards tertiary colleges, which are funded (and therefore controlled) directly from the centre. That's actually a valid policy to espouse (although not one with which I agree), but it's being promoted in a dishonest fashion, through manipulation of funding allocations, rather than through open and honest debate.

Creating financial crises for schools and making sixth forms financially less viable may achieve the ends of those taking the decisions; but it hardly counts as democratic and open decision-making.

Ducking the issue?

Tweet One e-mail response to a previous post on the Welsh budget deficit raised the question 'but you still haven't said what you will do to reduce the deficit if Wales were to become independent'. Superficially, it appears to be a good question – but I think it's actually the wrong one.

Wales is clearly not going to become independent tomorrow. I've said before that I think independence is at least 15 years away, and the circumstances will be different then. But, for the purposes of debate, let us assume that the people of Wales have voted for independence in a referendum, that independence day has been set for 1st March 2024, and that the first independent government will be a Plaid majority government.

For the 15 years between now and then, most of the major economic decisions affecting Wales will be taken by either a Labour or a Conservative government in Westminster. So, if Labour or Tory opponents of Welsh independence want us in Plaid to set out in detail our figures for a four year period of government starting in 2024, perhaps they could start by telling us in the same detail what they will be doing in the interim, so that we know where they think their policies will have left Wales by then.

Telling us to simply assume that independence happens tomorrow is not only positing a completely unrealistic situation, it is also dodging the issue of what they are going to do in the interim, and why they have been so unable to change the situation - although given their lack of vision for Wales, it's probably not entirely unreasonable to assume that there will have been no significant change in Wales' position. (If there's been a significant period of Plaid government in the Assembly in the interim, then we will have used the Assembly's limited powers creatively to make some progress; but if we could turn the position around entirely within those powers, then we wouldn't have such a great need of independence.)

Assuming that most of the major decisions continue to be made by LabourTory politicians, it is therefore reasonable to also assume that, at the point of independence – whenever it comes – Wales will still be lagging behind the UK average in terms of GVA, still have a less healthy population overall, still have a higher proportion of people economically inactive, and still have lower wages than the UK average. And the Welsh budget is likely to be still running a significant deficit. That is the effect of LabourTory policies today and they have no discernible proposals to change that situation.

The challenge is surely how to change the situation in ways which both we and opponents of independence seem to be agreeing will not happen without that independence.

We will need to bring the budget deficit down; but it is not necessarily the case that that should be the top priority in the short term. Indeed, in order to bring the Welsh economy up to the level at which it should be, there could even be an argument for a deliberate increase in the deficit in the short term in order to make the necessary investments in infrastructure etc. – to deal with the neglect of the past.

Adam Price has previously made a cogent case for reducing business taxes, particularly where the untaxed profits are re-invested in growing the businesses (whereas any profits taken out of the businesses are taxed through personal taxation, such as income tax). That is likely to decrease the tax take in the short term, although increase it in the longer term as the economy develops and provides more and better jobs.

So, in answer to the question about how we will plug the funding gap on day 1 of independence:- in my view, it's the wrong question. The right question is how do we bring the Welsh economy up to the level at which it needs to be for the long term prosperity of the whole nation, because that is the best way to address the budget deficit.

Plaid has been offering manifestoes-full of solutions to that issue for decades, based on Wales taking control of her own future. Our opponents seem to be offering, and assuming, only more of the same. For them, getting the Welsh economy to the point where there is no need for a budget deficit is simply not a priority. It's far easier to simply throw the question at us.

Tory £s world tour

Tweet The Sunday Times carried an interesting story on Sunday on the source of Tory funds. Particularly, the paper highlighted funds emanating from their former Treasurer and current Deputy Chairman, Lord Ashcroft. It seems that the Tories and Ashcroft have been finding ingenious ways of circumventing the legal restrictions on overseas donations.

Whilst there is no suggestion that they have actually broken the letter of the law, it is clear that they have been deliberately subverting both the spirit and intention of the law by using a string of companies – some of which seem not to actually do very much other than funnel funds into the Tory Party – to route money from Belize into Tory funds. The net result is a transaction which would have been illegal if the money had gone directly from its original source to its final destination.

If I were challenged to define 'money-laundering', my definition would bear an uncanny resemblance to what seems to have happened here. As Sir Alastair Graham, former chairman of the committee on standards in public life, said "Money is being bounced around the world before it ends up in Conservative party accounts. This breaks the spirit of the law on foreign donations."

The register of donations on the Electoral Commission website helpfully lists the donations which Ashcroft's company, Bearwood Corporate Services, has given to a whole string of constituency parties across the UK.

It has long been understood that Ashcroft was somehow giving money to a long list of marginal constituencies to try and buy a Conservative victory in the General Election. It remains unclear whether he has ever honoured the commitment he gave when accepting his peerage that he would become UK domiciled, and start paying taxes like the rest of us. Giving money through a company avoids the questions that might be raised if a non-domiciled person made such donations, of course. And it is highly unlikely, according to the Sunday Times, that any tax has ever been paid on the money which is now keeping the Tories afloat.

I'll admit that it was something of a surprise to me to find that this particular company appears not to have channelled any of Ashcroft's pennies into Carmarthen West and South Pembrokeshire (unless they've simply forgotten to declare it). But a quick perusal of the list of donors reveals that they probably don't need any of Ashcroft's money – they have another source of income.

The London office of a New York-based company, Christofferson, Robb & Co, has channelled £40,000 into the Tory coffers locally, in two tranches of £20,000 each over a period of just five months. Interestingly, this constituency is one of only two which seem to be benefiting from their largesse – the other was Harlow, which received a mere £10,000.

Conservative central office received an additional £131,000 in three tranches. I have no idea, at present, why a New York based company would choose to bung £40,000 into Tory coffers in this part of the world, but I'd be delighted to hear from anyone who can enlighten me.