Welsh Gov’t call for Chancellor to rule out a public sector pay freeze

Ahead of the UK Government’s Spending Review statement this week, the Welsh Government is urging the Chancellor to rule out a public sector pay freeze.

Chancellor Rishi Sunak has suggested he could impose a public sector pay freeze in his spending review on Wednesday.

Wales’ finance minister, Rebecca Evans has called on the Chancellor to use the UK Treasury’s levers to stand by the frontline workers who have sacrificed so much this year.

Workers across the NHS, schools, colleges and local councils all continue to play a critical role in the midst of a global pandemic to help save lives and keep services running.

They should be recognised for this effort and not forced to pick up the bill.

In a letter to the Chancellor, the Finance Minister also called for urgent commitments for Wales on:

• long term funding to deliver certainty for Welsh communities affected by intense storms and coal tip safety issues
• delivering post EU-funding guarantees
• budgetary flexibilities to ensure existing funding can be targeted where it is needed, when it is needed

Speaking ahead of Wednesday’s announcement, Finance Minister Rebecca Evans said:

We are facing an unprecedented set of challenges, with the damage caused by the coronavirus pandemic, compounded by the uncertainty around the end of the EU transition period.

With the economic recovery hanging in the balance, we need a firm commitment that Wales will receive adequate funding to address these challenges and to support a fair recovery.

The Minister also urged the Chancellor to provide Welsh communities with certainty on the funding needed to address flood repair and coal tip safety costs.

Rebecca Evans said:

Communities in Wales were hardest hit by the February storms and the legacy of the coal tips means a disproportionate cost for Wales which predates devolution. These costs are not met by the needs-based factor in the Barnett formula, which was not designed to deal with this significant legacy issue.

We have provided assurances to local authorities for the immediate work, but the Chancellor can use this statement to deliver a long term settlement that finally recognises the anxiety felt by communities affected by this issue.

As we move ever closer to the end of the EU transition period the Minister reiterated the Welsh Government’s calls to Westminster to respect devolution and honour its commitment to replacing EU funds in full. With farming and rural communities at the heart of our economy, Wales will be hardest hit if adequate funding is not provided.

Responsibility for delivery of replacement structural funds will play a central part in post-Covid recovery and should be fully devolved.

Any attempt to bypass the Welsh Government and spend directly in Wales on devolved matters would completely undermine the devolution settlement.

It threatens years of hard work by the Welsh Government and stakeholders across Wales to develop a new regional investment framework to meet the needs of its people, communities, and businesses.

Rebecca  Evans said:

The UK Government must make good on promises repeatedly made that Brexit would not mean any loss of funding or devolved powers. Wales must not be a penny worse off than it would have been within the EU.

If the UK Government is serious about levelling up and addressing regional inequality then we would also welcome it making good on its previous commitment to address the historic under-investment in Wales’ rail infrastructure.

Finally, the Minister continued to press for additional budgetary flexibilities to help maximise the Welsh Government’s resources to respond to the evolving pandemic as the end of the financial year approaches. A call that is supported by the Wales Governance Centre, FSB Cymru, Wales TUC and the Senedd’s cross party Finance Committee.