Select Committee on Welsh Affairs Minutes of Evidence

Examination of Witnesses (Questions 60-79)



  60. We have met the English regions and it seems that they seem to co-ordinate with each other perhaps more than they do with Wales. One of the things that came out of our inquiry last week was that that was the situation. I wondered if there was any acknowledgement of that and whether you thought that maybe personally a system could be set up to spread the good news through all the Objective 1 areas of the UK.
  (Mr Neve) In the past the DTI has played a role in ensuring co-ordination amongst the practitioners involved in implementing the funds. We used to have regular meetings of structural fund practitioners. Under the current programme for 2000/2006 the priority until now has been for the individual programme managers and directors to get the programmes under way. We are now reaching a position at which it would be useful to have more exchange of information and to have sharing of information about best practice. The DTI does have it in mind in the coming months to convene a number of meetings at various levels for that purpose.
  (Mr Bayer) If we go back a few years, when the regulations were negotiated they were led by DTI but we involved all the other departments in the devolved administrations in that and representatives of Wales were at all of those meetings. When programmes were drafted and negotiated DTI were involved in some of the meetings as adviser. In fact, I attended many of the negotiation meetings in this co-ordination role. Whenever there is an issue which needs to be taken to the Commission normally the DTI would take this forward but we always consult with colleagues in other departments in the devolved administrations and those here today know me and I know them because of that role. I am also an adviser on the Programme Monitoring Committee and I attend that sometimes, so there is an ongoing co-ordinating role, and the DTI is also the editor of a manual of office practice which is used throughout the UK and some of my team back in London are always on the phone to others. In that way there is this continuing co-ordinating role but, as John has said, with regard to getting round the table and discussing the implementation now is about the time we should be doing that. We have also asked that this sort of discussion take place at the Community level with the Commission to see how we think the regulations are being implemented and if there are any pinch points or anything like that.

  61. We are going to Brussels next week to ask them questions as well.
  (Mr Morgan) The description that has been given by the three central Government civil servants now we are very happy with. It is just a matter of phasing that. In the run-up to the inception of real Objective 1 programme commencement there was a great deal of joint working and concentration over the past 15-18 months has been, now that the show is on the road, on the partnership working with the potential applicants in Wales, with presumably the same thing going on in England. There are some exceptions to that such as on Finance Wales which was done jointly across all four Objective 1 areas, and John Clarke may want to say a word about that, but perhaps we are getting to the stage now where there is sufficient experience during that first 15-18 months whereby we could be swapping best practice and ideas which perhaps have already been invented which we do not have to re-invent across the border and vice versa.
  (Mr Clarke) Finance Wales and its equivalent in England is an excellent example of a highly focused project which did benefit from the four Objective 1 regions working together and working with the European Commission. Considerable informal networking goes on between Wales and the English regions. I was talking to my counterparts in England the other day. Wales has benefited from quite a senior director who came to us from Merseyside, so we have had quite a lot of Merseyside experience injected into the Wales programme.

  Chairman: They have a lot of experience in Merseyside. They are on their second tranche, we have discovered.

Mr Caton

  62. This is predominantly for the UK Government departments and follows on from what you have already told us. Objective 1 has been described to us as "the ultimate joined-up issue", cutting across the work of almost every Government department. Our representatives from the DTI have told us how they have the overseeing function and mentioned the relationship they have with other Government departments. I wonder if you could expand on that and say exactly how other Government departments, including perhaps the Wales Office, are involved in the development and delivery of Objective 1 programmes.
  (Mr Bayer) Of course life in England is much more complicated because we do not have the National Assembly for Wales. There are a number of departments that have responsibility for the structural funds. The DTI has some responsibility because it deals with business support and R&D. DTLR deal with infrastructure. DWP deal with the Social Fund and DEFRA deal with the Fisheries Fund and the Agricultural Fund, so we automatically have a number of departments as well as our colleagues in the Treasury who have responsibility for implementing the structural funds in England. The responsibility for implementing Objective 1 and Objective 2 programmes in England lies with DTLR, not DTI. We co-ordinate at the UK level. It is a bit of a problem to co-ordinate all these departments but I think it is done pretty well because it is implemented through the Government offices which are representatives of four major departments: DEFRA, DTI, DTLR and DWP. It is done through these Government offices and therefore it is devolved from London to the regions. It is rather different of course in Wales because, as we have heard, the programmes cover very large amounts of Wales and you set up a rather unique system here with WEFO and Scotland is somewhat similar but they have devolved some of their implementing responsibility to the private sector although they still deal with finance at the Scottish Executive level. In Northern Ireland, because of the political situation, it is a bit more complicated but I do not think you can say that there is any direct correlation between what happens in England and what happens in Wales. What you have in Wales is what Wales wants and what you have in England is what England wants, but the co-ordination is still there with the DTI.

Mr Wiggin

  63. In the 2000 Comprehensive Spending Review the Barnett formula was bypassed to provide an amount of additional resources to Wales in support of its Objective 1 programme. How was this amount arrived at and was it by reference to Wales' entitlement to EU grants, project rate of spend, or perhaps some other criterion?
  (Mr Murphy) I said before that it was a unique situation for a variety of reasons, first because the Government had decided (and the Prime Minister and the Chancellor of the Exchequer went to Berlin) that there was a very strong case for taking up what was our entitlement by way of the mechanism which allows Objective 1 to be taken up, that is to say, the relative deprivation of a large part of Wales in European terms, but also, in so taking it up, recognising that there was a unique situation in Wales which the system we were then operating under could not actually cope with. You will all remember that there was a year of frankly pointless speculation as to how this would all roll out. The Prime Minister had said, and the Chancellor of Exchequer, that the Government would not let Wales down, and we did not, on the basis that if we were to rely on the present consequential systems of Barnett in what was a huge structural fund programme for Wales it simply would not work in the way that we wanted it to work. It was a unique opportunity, six or seven years in order to transform the Welsh economy to ensure that the GDP in Wales rises and that we enhance the skills and the talents of Welsh people, particularly young people. That is why it was so important for us to have another look. In my previous role in Government, when I was Finance Minister in Northern Ireland, where we also had a lot to do with structural funding, including Objective 1, even there, with all the problems that Northern Ireland faced, the only additional funds that came to Northern Ireland were the Peace Programme funds that were over and above the normal ones. The structural funding, Objective 1, had to be found within the block which was allocated on the formula each time you have a Spending Review. The consequence of that was that the change which took place in the Spending Review 2000 was really very significant. It meant that something like 500m[1] over that spending period came as an addition to the block grant and did not have to be found from within it. That was unique. As to the way in which that was calculated, that was done very much in co-ordination with both the National Assembly officials and the Treasury, and of course bear in mind the experience of other parts of the United Kingdom in terms of how much money they thought could be spent realistically in that particular three year period. That is why I think that that assessment was pretty accurate in the sense that that is what will happen and that the spending profile is more or less what we thought it would be. It was with close co-operation with the Assembly and with those who have been involved in running these schemes and on the basis of what had happened in the past that they worked out that that would be the figure. It was then for myself, working with Rhodri and with the Chancellor of the Exchequer and the Chief Secretary to the Treasury, to work out precisely how that would be put into the Spending Review 2000 which, as we all know, it was.

  64. With all those very laudable aims are you not very disappointed at the speed at which the Objective 1 project has been progressing? If it would be possible do you not think that perhaps the Minister for Economic Development should have been sacked, although perhaps it is not technically possible with both of them here?
  (Mr Murphy) No, is the answer to that. As we will hear later when we go into more detail about the nature of the spend of Objective 1 structural funding in Wales, we will see, as I indicated just now, that that is pretty well on target, and indeed may even be above it in certain areas. As to the political arrangements in the National Assembly, that is of course for Assembly and Rhodri to answer, but I see as an interested observer rather than as a full member of the Assembly that things are going well so far as Objective 1 is concerned. This particular programme lasts for six or seven years. It is not all going to happen overnight, nor should it. If it is going to be a sensible programme which is to address the problems of Wales in a very fundamental way then it has to deal with those things fundamentally and with a great deal of thought. That is what has occurred as far as I can see in terms of the partnership and the way in which the Objective 1 structural funding operates and I have no reason to believe that what we thought would happen three years ago has not happened, because it has.
  (Mr Morgan) If we in Wales were behind the three English regions, either in formulating strategy or in approving projects I think it could be regarded as acceptable that we were behind. In fact we are ahead as far as we understand it, but even if we were behind it probably would be acceptable because the Welsh Objective 1 region is so much more heterogeneous than Cornwall, South Yorkshire and Merseyside. They are homogeneous areas. Cornwall is a well established administrative unit with well established statistical figures, a well established tourist industry, with some remnants of mining and so on. Merseyside and South Yorkshire are very concentrated on docks and allied industries and on steel. They are remarkably homogeneous areas. The Welsh Objective 1 region is anything but homogeneous and there has never been a previous definition of Wales using West Wales & the Valleys. It would therefore have been justifiable had we been behind the three English regions, and Merseyside of course is a follow-on Objective 1 region with seven years' experience. In fact we are, as we understand it, ahead of the three English Objective 1 areas so, in overcoming the difference between us and the three English regions in terms of heterogeneity, I think we have done remarkably well to be ahead of them at this stage. It is not just a matter of course of being ahead. You have always to keep a balance between strategy on the one hand and spend on the other. You cannot be concentrating all on strategy but not getting some money out of the door, but on the other hand, if you regard it solely as an exercise in getting money out of the door without worrying about the strategy, that would be an equally unbalanced approach. There is every reason to suppose that of the four Objective 1 regions we have got more than plenty to be proud of in the way we have handled it.

  65. At the UK level how does the Government allocate public sector match funding across different departments and devolved governments?
  (Mr Murphy) That is mainly through the different programmes that each Government department is responsible for, that the programme itself would be responsible for the match funding to match the European Structural Funds. Rhodri again will obviously speak from a Welsh point of view but the success of it is self-evident in that if the schemes are going ahead, if the schemes are agreed and committed, they cannot be agreed and committed unless they can show that they have match funding. That has not been a problem, nor to my knowledge will it be. I think it would be best if my colleagues from the DTI particularly could answer from the English regions because obviously they will know more about it than I do.
  (Mrs Dunn) I think the answer to the question about how match funding is determined is that department settlements in Spending Reviews are not determined on an allocation or a formula basis. Match funding can come from a range of sources donating to programmes from the public sector, from the private sector and the approach taken in the Spending Review is that the departments responsible for those programmes, once the settlements have been reached, will allocate funding on a basis that ensures that there is sufficient match funding available. The evidence is that sufficient match funding was made available to the UK departments and to Wales in the last Spending Review.
  (Mr Murphy) And I think it is fair to mention again, although I know that you have touched on it from a UK Government point of view and it is for Rhodri to answer for the National Assembly's position, that it was my view and certainly Rhodri's view that the size of the overall settlement in Spending Review 2000 was such, because it was so big,—it goes to 10 billion a year—that within that there would be no problem in finding a sufficient match.
  (Mr Morgan) That is absolutely right in the sense of the original point about why it was taken outside the Barnett formula, and the actual public expenditure cover for the extra 200 million approximately for the year on top of the 1.2 billion programme over seven years, which has yo-yo-ed about because of the relative value of the euro versus the pound, is an extra two per cent a year on a 10 billion budget, although that is a moving target because it was eight billion and then it was nine billion and then it was ten billion and now it is 11 billion, because that is the way the budget has gone. That is what we said: you cannot find an extra two per cent on top of your budget by losing it within the overall size of that budget. It is much too tightly committed to health and education and the environment and so on. Match funding is different and it does not look as though there is a shortage of match funding, but we could never have had the PES cover without an extra Barnett one-off deal with the Treasury.

Chris Ruane

  66. Would it be true to say that as far as take-up in Wales is concerned it is a mixed picture across Wales? Las week I was sent by Denbighshire County Council a league table graph of spend per county, and I was pleased to see that Denbighshire was top at 45 per person, followed by Conwy at about 40 per person, and bottom was Bridgend at 5 per person. Within Wales there are different take-up rates for different counties. What can be done to narrow the gap?
  (Mr Morgan) There are 15 local authorities within Objective 1. Once you draw a league table then somebody has got to be at the top of it and somebody has got to be at the bottom of it. There is of necessity a systemic problem caused by the fact that you have got a league table now after 18 months in which an authority by its nature is bound to be number one and another is number two. The problem is, is the gap between number one and number two too great and is it something that will adjust itself over the remaining four or five years of the programme?
  (Mr Clarke) I have seen the figures in question. I would put a little question mark over them because they are drawn from a database which is as yet not finally complete. There are projects that emanate from within county counties and local authority boundaries, and there are also projects which impact on the individual counties but which cover a national theme and are sponsored by the WDA, for example, or ELWa. It is not always entirely plain as yet from the data base where the projects are going to impact. The bottom line is that we should have clearer figures to give everyone in the spring when the impact of all projects, be they national or locally based in terms of jobs and spend, will be more easily calculated. There is a slight health warning over the figures you quote at the moment but stand by for more to come in the spring.
  (Mr Morgan) We will supply those figures to you if you like.[2]


  Chairman: Thank you, Rhodri. That would be useful.

Adam Price

  67. Is it not a worrying aspect of those figures though that while we were jointly congratulating the local partnerships in Denbighshire and indeed in Conwy, who are at the top of the range of figures for spending in commitment per head, they are two of the most affluent areas within the Objective 1 region? Is it not worrying that at the one end we have some of the poorer areas—Merthyr, for instance—at the bottom in terms of rate of commitment, whereas some of the more affluent areas in the region are speeding ahead in terms of rate of commitment?
  (Mr Morgan) We have heard this point put, that the Heads of the Valleys areas, which I suppose were Merthyr, Blaenau, Gwent as exclusively Heads of the Valleys authorities, somehow are failing to engender schemes because, by the nature of the areas, they come up with fewer ideas, but on any measure of where you have the poorest communities in Wales I think Rhyl West, which would be in Denbighshire, is the poorest community in Wales, is it not?

Chris Ruane

  68. Of the 865 wards Rhyl West is the poorest. It depends which statistics you use. When the Cardiff Business School gave the statistics for the new 22 counties four years back I gave these to the House of Commons research library and they re-jigged them according to how Brussels would look at the figures, and Conwy came out bottom for poverty jointly with Bridgend at 58 per cent of EU GDPs, so it depends on which statistics you use. Denbighshire was 72 per cent of the EU GDP.
  (Mr Morgan) There was a mass of very confusing statistics during the round. There was a publication last week by Business Strategies Ltd showing that Bridgend was the borough with the highest rate of job growth in the entire UK with a 45 per cent increase in the number of jobs between 1991 and 2001, higher than Milton Keynes, higher than Wokingham, and so on. We do not know how firm one could go on figures like that, but all that one can say is that it is a fairly confusing pattern.

Mrs Williams

  69. The budgetary settlement for Wales agreed as part of the 2000 Comprehensive Spending Review implied that Objective 1 spending would be weighted towards the middle and end of the implementation and programming period. This suggests to me that the forthcoming Spending Review in 2002, which will set the Assembly's budget for the next three years, will be very important to Wales. Will new levels of cover or provision to spend Objective 1 monies have to be negotiated for the remaining years of the programme, and will additional money be required over and above the Barnett formula to deliver appropriate amounts of both cover to spend European monies and public sector match funding for projects? If so, how much?
  (Mr Murphy) You would not expect me to answer that one, Betty.

  70. I have left the last question until the end.
  (Mr Murphy) As you know, the current Spending Review negotiations are starting and will be completed by June/July of this year. We are back in exactly the same situation that we were in some years ago when we originally were dealing with Objective 1 structural funding and, as I said before, there was a huge amount of speculation as to what should or should not happen or could or could not happen, some of it unhelpful. All I can say is that the Government made its position clear at the beginning, that it would not see Wales let down. Secondly, no-one has indicated to me that there is going to be any change in the programme, but I have to put the inevitable caveat to all that, that whatever is spent by any Government department is now subject to that Spending Review, whether it is us in the Wales Office or whatever. Clearly we cannot say at this stage any more than any other minister can say for anything at this stage what is going to be in the Spending Review. You were right, Betty, in saying that as the structural funding programme goes through more money is going to be spent because the profile has been agreed. We will be in constant contact with Rhodri and his officials as to the nature of all that and, as usual, part of my job is to negotiate that block grant with the Chancellor of the Exchequer and the Chief Secretary and clearly we will putting all those points during the course of the next few months. The basis of the Spending Review is always confidential until it emerges because that is the nature of it. It will be for every Government department to be in the same boat. However, as I said, there was a lot of speculation before and what happened was that we had the settlement that we did which ensured that we bypassed that formula because of the very special nature of Objective 1 funding.

  71. Do you see that the additional money will be needed over and above the Barnett formula the second time?
  (Mr Murphy) We have seen what the profile is likely to be. I have given you the reasons why we felt it was necessary to ensure that there was that additionality there: because of the nature of Objective 1 funding in Wales and the size of the project, two-thirds of Wales being part of it. That was why we decided to do what we did and the Chancellor of the Exchequer announced what he did in Spending Review 2000, and we recognised the importance of those arguments. It would be wrong for me at this stage in the Spending Review, like every other Government Minister, to go into the decisions that may or may not be made by the Chancellor of the Exchequer. The speculation that occurred before did not help. In some ways I think it has meant that some people shied away from taking advantage of Objective 1 structural funding because they thought it was not going to come in the way that it did. Well, it did.
  (Mr Morgan) The arguments are exactly the same now as they were then. Whether they will prevail again is a matter of discussion between ourselves and Paul, Gordon Brown and the Chief Secretary of the Treasury, Andrew Smith. The arguments are the same, namely that all the previous precedents did not apply in the case of Wales. The previous precedents of the Highlands and Islands meant that they did not get any additional funding whatever in the Scottish Office budget. Merseyside did not cause the old DETR to get any additional PES cover in their budget because the Highlands and Islands is only six per cent of Scotland, so the Treasury said, "Look: you can find that extra money you need in your 15 billion budget. It is not that big." Likewise for the English departments that ran Merseyside, DTI, DETR, DfEE or whatever it was called at the time: they could find that bit of extra that they would need to fund the PES cover for any additional programmes in Merseyside because you can lose it in the ginormous budgets that they have of 30 or 40 billion a year. We cannot find that sort of money without having to take it out of health and education, so the same arguments that we successfully ran before will apply this time, but you cannot give any guarantee of success. It is part of the normal argy-bargy that goes on in the run-up to any Spending Review every three years, or every three years minus one obviously is the way these triennial budget settlements work.
  (Mr Murphy) Which is better than annual ones.
  (Mr Morgan) Much better. We have got one year off now anyway.

Adam Price

  72. Paul, I am as keen as you are to avoid an unhelpful political row, particularly in the run-up to the next Assembly elections on this issue of match funding. I can understand that you cannot go into figures but can you give us a guarantee that the full amount will be provided necessary to draw down the EU funding allocation and of course then to provide the match funding necessary for the next tranche of Objective 1 programme money?
  (Mr Murphy) No, is the answer, I cannot give you a guarantee about anything. I cannot give you a guarantee about the amount of money that has come into schools and education and hospitals or anything in the Spending Review because that is not how it is done. As you know, Adam, it is done in the sense of negotiation so far as our block grant is concerned, and Scotland and Northern Ireland are in the same boat, but we negotiate with the advice of the Assembly on all the financial issues that affect Wales. I think it is worth repeating all the time that if there is some headline that emerges from that answer—"No guarantee for match funding for Wales" or whatever—that is obviously not the way to look at it because that would be unproductive and unhelpful in terms of the schemes themselves and how this project is going. The reason that I cannot give you a guarantee is not because I do not disagree with the points that Rhodri is making as to why it was two years ago that the block grant simply could not cope with this additional huge amount of injection of funds. It is because I am forbidden, as all ministers are, by precedents whilst we are discussing the whole business of the Spending Review to reveal those details until the Spending Review is complete. To take another example, my colleagues in education and health, for example, will be pressing their case very strongly undoubtedly, as all departments do, during the course of the Spending Review. The Government as a whole with the Treasury taking the lead then has to take a view as to what are the priorities for the Government. I do not think you have to be rocket scientists to work out that what Rhodri has just said were the arguments when we dealt with these matters some years ago. I cannot see any reason to believe that those arguments have changed, but at the same time the nature of the Spending Review over the whole of the United Kingdom is under negotiation, under discussion, for the next six months. I know what this Committee will feel when you finally come up with your recommendations and I know what the Assembly feels on that. Both the Committee and the Assembly will rest assured that those arguments will be well used.

  Mrs Williams: I asked, "If so, how much?", and I can understand why Paul is answering the way he is answering the question. Thank you.

Albert Owen

  73. Still on the Spending Review, can you clear up who will be involved in these negotiations and are those negotiations likely to be hindered in any way by possible underspend in the Assembly's budgets?
  (Mr Murphy) Perhaps Rhodri can answer for himself, but on the latter part there is not any evidence to suggest that there would be an underspend. From my point of view it is part of my job, as I said earlier, to negotiate the block grant as a whole for Wales at each Spending Review. That includes matters affecting structural funding and the way in which that is dealt with, so basically it is me and I negotiate with Rhodri and together we look at these matters, and with the Chancellor of the Exchequer and the Chief Secretary. Ultimately of course the decisions are finally made. You know, Albert, that the last time this occurred such negotiations went on for a very long time, inevitably. We were all deeply involved, Rhodri and I particularly, in looking at all the detail of this, so that when the points are made in negotiations within the United Kingdom Government nothing is omitted, nothing is missed out, and we have all the facts and figures available. The other important point, and in a sense, Martyn, why we are meeting in this guise today, why Rhodri and I are meeting jointly with you, is that Rhodri is heading the Government here in Wales, myself representing Wales within the United Kingdom Government. It is a team approach. We represent the same people, all of us round this table. That is very important to understand, that the aim of Objective 1 funding, which is to increase the prosperity of Welsh people, is important to us both because we represent both people.

  74. I can see another headline coming up, "The Gang of Four".
  (Mr Morgan) Yes, and strangely enough the Treasury has an interest as well because they would be more than happy if people in Wales paid more tax by virtue of being more prosperous in the sense that we are five per cent of the UK population but we only provide four per cent of the taxes because we are per cent below the UK in average prosperity. The Treasury would be highly delighted if the five per cent of the population in Wales also contributed five per cent of the taxes. We do our best to make up for it by overspending on the Lottery but that is a different matter. We will not speculate on that. The question about underspending is very interesting because there are two issues here. There is underspending generally of the entire budget of the Assembly, and there is also underspend in certain specific categories of the 33 categories in Objective 1. It is certainly important to every single department of the UK Government plus Scotland, Wales and Northern Ireland that they are seen to have clean hands, efficient management, the ability previously to have estimated roughly how much money they would need for their programmes and then to have committed it and spent it. My understanding is that on that general underspending issue we are less afflicted with the underspending problem than some heavy spenders of the UK central Government departments—Health, Education and so on. The ones that provide many of the same functions that we do have a big problem in getting money out of the door for capital projects and so on because the skill of capital monitoring and project management has rusted away over the last either 10 or 15 or 20 years and has not been fully recovered yet. Relative to the departments that do the same job as we do, we are less afflicted by a general departmental underspend. When it comes to Objective one specifically, over the 33 different categories it is difficult not to underspend, to be honest, because you cannot say, right: there will be one pot of money and one Objective 1 programme and we are going to hit 300 million by that date, 400 million by that date, because really you are carrying 33 categories together all the time and any one of those can let you down because of arguments within the partnership as to whether to spend on this type of infrastructure or that type of infrastructure. Of the 33 categories there is overspending in two and there are some problems in another two, but in 29 out of the 33 things are pretty close to the target and we hope to sort out the problems in infrastructure, and John will mention the other one because it is more in his area than mine as regards the specifics of underspending within the 33 separate categories in Objective 1.
  (Mr Clarke) In the context of Objective 1 Rhodri was not talking about underspend but under-commitment relative to the indicate allocations that we agree with Europe. When we say that Wales has committed to spend 288 million of Objective 1 so far, the actual physical spend is somewhat less than that because these are two or three year projects that take a little time to spend and claim their expenditure on from us.

Mr Wiggin

  75. Do you know roughly what that figure is?
  (Mr Clarke) Yes, it is 60 million as at the end of December.
  (Mr Morgan) Of all the discussions that we have been having interdepartmentally in the office involving WEFO and our finance people, we have been looking at the possibility of overspending just as much as the possibility of underspending.

Adam Price

  76. When was the last time you met with Treasury Ministers?
  (Mr Morgan) That is a good question. I will have to have notice of that. I will have to write to you on that[3].

  77. I have laid quite a few parliamentary questions and I have yet to get an answer. When is the next time you expect to meet Treasury Ministers to discuss the Objective 1 programme?
  (Mr Morgan) I do not know of any particular proposals to meet Treasury Ministers to discuss the Objective 1 programme. They have not asked to meet me and I have not asked to meet them. What did you have in mind, Adam?

  78. Of course there is the issue of the negotiations in the run-up to the Comprehensive Spending Review, but particularly on the issue of operating aids, for instance, there have been no ministerial meetings on the issue of operating aids and the tax incentive proposals that you have submitted?
  (Mr Morgan) No. That has mostly been dealt with by officials and in writing and has been pretty progressive and pretty good. We know their point of view and they know our points of view and there has been a lot of progress made.


  79. But you would be involved?
  (Mr Murphy) Yes. I should like to answer those points. First of all, the nature of our devolution settlement, as you know, and one of the reasons for my existence is that I am that bridge if you like between the Assembly, of which I am a non-voting member, and the Government in terms not just of finance but other things too, but particularly in the context of this inquiry of the funding arrangements and the block grant. When we dealt with these issues several years ago it fell upon me (as it does now) to negotiate on behalf of Wales but in so doing I was constantly in negotiation and in discussion with Rhodri and some others, Edwina Hart particularly, of course, and other ministerial colleagues, although there will be occasions when the First Minister will meet directly with Whitehall ministers other than myself. So far as the operating aids are concerned Rhodri has discussed these matters with me, obviously, in the course of our weekly meetings and we have also corresponded on the issue.


1   Actually 421m, to cover Objective 1 and other European funded programmes. Back

2   See page Ev 42. Back

3   See page Ev 42. Back

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