Mark Drakeford, Cabinet Secretary for Finance and Local Government
As part of the fiscal framework the Welsh Government committed to putting in place arrangements for the independent production of tax revenue forecasts for devolved taxes. While those arrangements are being established, there is an interim process of independent scrutiny and assurance of Welsh Government tax revenue forecasts.
In my Written Statement on 9 March 2017 I informed Assembly Members that, following a competitive procurement exercise, a team from the Business School at Bangor University was appointed to scrutinise and assure the Welsh Government’s devolved tax revenue forecasts for inclusion in the 2018-19 Budget. The team from the Business School has been working with Welsh Treasury officials to develop and refine the methodology used to produce the Welsh Government’s tax revenue forecasts for the draft budget.
The final independent report, summarising the work undertaken together with an overall assessment of the Welsh Government’s forecasts, will be published to inform the Assembly's consideration of the draft budget.
I have been considering the options for future years which will require a body independent of the Welsh Government to produce tax revenue forecasts for devolved and partially devolved taxes in Wales. It is important that the resources that are dedicated to this new function are proportionate to the task and reflect the range of taxes that are currently under the control of Welsh Ministers.
In assessing the options I have set the following criteria:
• It is essential that the function is exercised in a way which is sufficiently independent from Government;
• Discharge of the function should represent value for money; and
• The body appointed to fulfil the function should have demonstrable expertise to fulfil its mandate.
I wanted to report to Assembly Members that consideration has narrowed the field to two feasible options. The first would involve setting up an independent commission in Wales to produce forecasts for devolved tax revenues; the second would use an existing body to carry out this function. In relation to the latter option, I am in discussions with the UK Government about the feasibility of the Office for Budget Responsibility undertaking this work.
I will update Assembly Members on my preferred option in the autumn alongside the draft budget.