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Governments reach new agreement on Welsh funding
For the first time, both Governments have established a common position on how English and Welsh funding per head has converged in the past and the likely trend in the future.
The UK and Welsh Governments have also agreed that, in principle, the Welsh Government should have access to capital borrowing powers on the condition an independent revenue stream, such as tax powers, is in place to support them – as currently being considered by the Silk Commission.
Chief Secretary to the Treasury, Danny Alexander, said:
"Today’s announcement agrees in-principle to devolved capital borrowing powers for the Welsh Government. This is an important step forward on the devolution journey for Welsh people, and will bring them significant benefits. I am delighted that the two Governments have worked closely together to deliver this good outcome for Wales."
Welsh Government Finance Minister, Jane Hutt, said:
"The statement we are publishing today includes a new commitment by both Governments to review the path of Welsh relative funding at future Spending Reviews. I welcome the in principle devolution of capital borrowing powers, which should give the Welsh Government an additional lever to generate economic growth."
Secretary of State for Wales, David Jones, said:
"I hope that today’s announcement will reassure the people in Wales of the progress both Governments have been making on Welsh funding arrangements. In addition to the in principle capital borrowing powers, the UK Government has recognised the concern in Wales about long term convergence and is committed to investigating options to address it once it resumes.
"The commitments made today establish a strong basis from which to work with the Welsh Government after the Silk Commission reports to me next month."