Devolution in 1999 dramatically changed the way the United Kingdom is governed, in different ways in different nations of the Union. It was also the beginning of a process, especially in Wales, where the scope and scale of devolution is already far beyond the modest change initially envisaged.
In this Report, we recommend a number of structural changes to improve the relationship between Wales and Whitehall. The effective operation of the settlement will be best ensured by mutual knowledge and understanding. Elected politicians, Ministers, civil servants and officials of the two legislatures should all be encouraged and expected to contribute to the building of an effective relationship
The Memorandum of Understanding which forms the basis of inter-governmental relations between the Welsh Assembly Government (and the other devolved administrations) and the United Kingdom Government was developed during a period when the same political party was in power in both Wales and Whitehall. We believe that a broad review of the machinery for co-ordinating inter-governmental relationships is necessary. It is not enough to rely solely on the strength of informal relationships. An updated Memorandum of Understanding between the Government and the devolved administrations is long overdue. We urge the Government to publish the newly agreed revised version as soon as possible. We recommend that the Memorandum of Understanding be reviewed at the start of every Parliament. The status of Devolution Guidance Notes should be strengthened after appropriate consultation.
We welcome the role of the Joint Ministerial Committee and recommend that it meets on a regular basis. We believe that as well as practical, problem-solving work the Committee has symbolic value in embedding the principle of mutual respect and expectation of proper consultation across Whitehall and with the Welsh Assembly Government. Whilst we recognise that the relationship between the UK Government and the Welsh Assembly Government is not one of constitutional equals, we urge the Cabinet Office to look at the British-Irish Council as an example of effective joint working. On appropriate occasions, consideration should be given to inviting a devolved administration to take the lead on a particular issue.
Whitehall responsibility for devolution
Since the advent of the devolution settlements, overall responsibility for devolution strategy has moved between a number of departments. Currently the co-ordination of government business for Wales is shared between three departmentsthe Ministry of Justice, the Cabinet Office and the Wales Office. There is an absence of a strong centre in relation to devolution within the Government which prevents a co-ordinated view of devolution. We considered the merits of locating the central responsibility for devolution within the Ministry of Justice because of the constitutional role of that department, but concluded that this was too removed from the centre for day-to-day co-ordination, and we were also unconvinced that the department has a strong understanding of the devolution settlement embedded in its ethos. We therefore believe that that role belongs to the Cabinet Office, with its position close to the Prime Minister, and we recommend that this should be recognised and developed and appropriate resources allocated for this purpose.
Awareness of the devolution settlement in the Civil Service
Whitehall has not fully engaged with the complex nature of the devolution settlements. There is a need for a proper understanding of the devolution settlements to be fully embedded within Whitehall departments and a realisation that the differences in constitutional arrangements have implications for policy and legislation. This requires more consistent training (including a formal mechanism for secondments between Wales and Whitehall), a clear department-by-department focus on developing and retaining a knowledge and understanding of devolution, and investment in making the settlement work. The devolved administrations are not just another set of Whitehall departments and the Civil Service needs to recognise this.
Officials in the Welsh Assembly Government have also had to learn new ways of doing things in the last ten years. We have heard criticisms that the Welsh Assembly Government is inward looking, which is perhaps understandable in the first few years of an institution when it is trying to develop its own policies. However, it must now have the confidence to interact with Whitehall and to highlight areas of good practice with a belief that it can play a consistently leading role in the United Kingdom.
A key official player in making the devolution settlement work is, and will continue to be, the Cabinet Secretary and Head of the Home Civil Service. To ensure that devolution remains on the agenda across Whitehall, we recommend that the Cabinet Secretary should give evidence to the Committee annually, to set out what progress has been made in raising awareness of devolution across Whitehall and in the Welsh Assembly Government and to answer questions on the development of the Welsh devolution settlement. We also believe that the Permanent Secretary at the Welsh Assembly Government needs to take a proactive role in explaining developments in Wales to her colleagues across Whitehall. We commend the way that Dame Gillian Morgan has described her role and we recommend that she too should give evidence to the Committee annually in addition to the regular evidence from the First Minister which has become an established part of the Committee's work.
We are concerned about the time it has taken for some Legislative Competence Orders to receive Whitehall clearance. They are frequently not given priority within Whitehall departments, which may affect the delivery of the Welsh Assembly Government's legislative timetable. As we have previously argued, we believe there is a strong case for a more formal reporting system on the Whitehall clearance system.
The Welsh Assembly Government also receives legislative powers through primary legislation. Framework powers are not scrutinised to the same degree as proposed Legislative Competence Orders, either by Parliament or the National Assembly for Wales. We suggest that it is appropriate for a Welsh Affairs Committee in the next Parliament to provide more oversight of such powers.
We recommend that the Standing Orders of the House should provide for the Speaker to lay before it any formal communication conveyed to him or her from the National Assembly for Wales.
The financial settlement constituted by the Barnett Formula does not seem to us to be guaranteed to be sustainable. It needs to be built on an agreed and enduring basis which is demonstrably fair and sensitive to the particular circumstances of Wales. We urge the Government, as a priority, to review the current arrangements and to adopt a needs-based approach to a new financial settlement. As well as bringing about a formula which is fairer to Wales, the need for predictability for some time ahead is of enormous importance and we strongly recommend that any such formula should not be subject to year-on-year or even three-year variations which depend on a contemporary interpretation of statistical information.