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Written Statement - End Year Flexibility – the Chief Secretary’s Response

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Jane Hutt , Minister for Business and Budget

The Finance Ministers of the Devolved Administrations wrote to the Chancellor of the Exchequer on 15 February to request full draw down of our stocks of End Year Flexibility.  We received a response from the Chief Secretary to the Treasury on 28 February.

The Chief Secretary has again refused to allow us access to our EYF stocks either in this year, or in future years.  This is money voted by Parliament for the people of Wales to support our economic recovery, improve our public services and the lives of people in Wales.  It would help to mitigate the impact of the harsh spending cuts imposed by the UK Government. 

The Chief Secretary has demonstrated his lack of appreciation of the UK Government’s “Respect agenda” by comparing the Devolved Administrations with UK Government Departments in the way he is dealing with EYF.  The Chief Secretary’s letter does not recognise that the Welsh Assembly Government, and the other Devolved Administrations, are democratically-elected and accountable to their own people and electorates. 

The Chief Secretary’s lack of understanding of the realities of devolution and our own accountability arrangements are clearly illustrated by his words.  He considers that his approach to the Devolved Administrations’ EYF drawdown has been generous, in respecting the agreements made with the previous administration.  This however, is only what we should expect as part of the UK Government’s ‘Statement of Funding’ policy with devolved administrations.

Further, the Chief Secretary considers that the Devolved Administrations’ ability to carry forward declared underspends in 2010-11 into 2011-12 was exceptional, as it was not available to UK Departments. 

Our major concern arises from the Chief Secretary’s comments in his letter that EYF is part of the UK wide reserved public spending system and is funded from the Consolidated Fund. He confirms that his decision to abolish the EYF scheme and cancel all existing stocks was in line with the UK Government’s targets on deficit reduction. 

As I have said many times, we have played our part in the budget deficit reduction absorbing the £163m June 2010 Budget cuts through careful management of our finances. We need however, the flexibilities recommended by the Holtham Commission to enable us to manage this challenging financial settlement.
 
We are extremely disappointed in this response, with the continuing lack of understanding of the meaning and implications of devolution, and we will continue to press the Chief Secretary to allow us full drawdown of our EYF stocks in either this or future years.