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Olympics - A welcome £8.9million should have been so much more

22/12/2011

Olympics announcement confirms Labour cheated Wales out of more than £320 million

Plaid Cymru have welcomed the announcement that Wales will receive £8.9m as a result of spending on the London 2012 Olympic and Paralympic Games since May 2010, but warned that Wales will still have lost out on £420m through the Games.

The announcement confirms the agreement in principle that the Games were an England-only spend which should have generated a Barnett consequential of £330m for Wales, as Plaid Cymru have argued from the very beginning.

The decision overturns that made by the former Labour government that this does not generate a Barnett consequential – a decision which has cost Wales £420m, including £100m from Lottery funding which should have come to Wales but was instead diverted to the Games.

Plaid Cymru MP Hywel Williams said:

“While we welcome today’s announcement, the agreement that the London Olympics should have a Barnett consequential confirms that Wales has been cheated out of more than £320m by the last UK Labour government, and £420m in total by the Games.

“The timing of this statement also raises eyebrows – perhaps more so that Labour are trying to turn their failure into some kind of success story and bury the bad news before Christmas.

“It was always clear to any independent observer that an event held almost entirely in London and involving more than £6bn of public money to regenerate and revitalise inner London was not a UK-wide event.

“However, that was not the position of the Labour government, who let Wales down badly by making this argument and following it to the letter for five years in government in London.

“Where were Peter Hain, Rhodri Morgan or Carwyn Jones when they should have been standing up for Wales’ interests?

“Even ignoring the Barnett formula, a further £100m that should have come to Wales through Lottery funding for good causes was also diverted to the Games, so we have lost out by £420m in total.

“This is a damning indictment of how little influence Labour in Wales had over their London bosses.

“That it took a Conservative government to accept this and provide additional funding shows exactly how badly Labour have neglected Wales.

“Whenever we look around Wales and see schools, hospitals or housing in need of improvement and investment, the people of Wales must remember that Labour actively stopped £420m coming to Wales.

“Plaid Cymru is the only party that has consistently campaign to ensure that our nation receives its fair share of Olympic spend, so that we can invest in much needed infrastructure improvements and facilities here in Wales.

“This shows once again why the Barnett system needs to be scrapped and a transparent needs-based formula introduced in its place.”

 

WRITTEN STATEMENT BY THE WELSH GOVERNMENT

Resolution of Olympics funding dispute

22 December 2011

BY Jane Hutt, Minister for Finance and Leader of the House

In the 2007 Spending Review, the UK Government decided that the new Departmental Expenditure Limit established at that time to fund delivery of the Olympic games in London in 2012 would be non-comparable. As a result, no Barnett consequentials were allocated in relation to the more than £7bn of public spending allocated to deliver the games, despite the fact that a substantial proportion of this spending was to be used to fund regeneration and transport infrastructure in the east London area.

The Welsh Government disputed this decision from the outset. Discussions reached the point in 2010 where the matter was recorded formally as an inter-governmental dispute. This was discussed by the Joint Ministerial Committee (JMC) on 8 June of this year and that helped to clarify unresolved issues in the dispute. It also confirmed the administrations’ shared interest in resolving those issues creatively and constructively with a view to ensuring the success of the 2012 Olympic Games.

Following further consideration, the administrations have now agreed:

to reaffirm their shared commitment to the success of the 2012 Olympics and other major sporting events in the UK;

to reaffirm their shared commitment to the principles of good communication, close cooperation and mutual respect as the means of avoiding and resolving disputes, and to the use and benefit of the JMC’s dispute-resolution protocol as set out in the Memorandum of Understanding between the UK Government and the devolved administrations;

the importance of learning lessons from all disputes in order to make them less likely to arise in the future. In this instance, they noted the agreement reached in earlier discussions of this dispute that decisions on the application of the Barnett formula should “always be evidence based, be undertaken in a timely manner and in consultation with the devolved administrations”. This wording was agreed previously and is now included in HM Treasury’s Statement of Funding Policy which was published alongside the UK Spending Review in autumn 2010;

that there have been significant changes in public finances since this dispute first arose and that they should therefore not revisit decisions on the Olympics budget first made by the previous UK Government;

that the Welsh Government, the Scottish Government and the Northern Ireland Executive will receive a one-off sum equivalent to the Barnett consequentials of relevant changes to Olympics funding since the present UK Government took office in May 2010. These sums amount to £30.2m, of which the Welsh Government will receive £8.9m, the Scottish Government £16m and the Northern Ireland Executive £5.4m (rounded to the nearest £100,000). These sums will be added to the budgets of the devolved administrations so as to be available for spending in 2011-12; and

the importance, firstly, of reviewing thoroughly the costs and benefits of the 2012 Olympic Games and other major sporting events in the UK and, secondly, of Governments co-operating on and sharing such studies.

The agreement set out above represents a final settlement to the Olympics dispute, subject to existing agreements that UK Government operations and specific legacy project costs, funded by individual UK Departments, attract Barnett consequentials in the usual way.

This statement is being issued during recess in order to keep members informed. Should members wish me to make a further statement or to answer questions on this when the Assembly returns I would be happy to do so.