Welsh Government needs borrowing boost to build economy says Finance Committee03 July 2012
The National Assembly for Wales’s Finance Committee has recommended that the Welsh Government should be granted the power to borrow, without a negative impact on the Welsh block grant, in order to finance capital spending and boost economic growth in Wales.
In its report published today, the Committee recommended that, if the Welsh Government were to be granted such powers, they should be put on a firm legislative footing and exercised responsibly with due regard for prudence, sustainability and affordability.
During the course of its inquiry into borrowing powers and innovative approaches to capital spending, the Committee looked at the borrowing arrangements which are currently in place across the UK and the lessons which could be learned from local government and other parts of the UK.
The Committee recognised that there are varying levels of the skills required to develop and use innovative financial models and borrowing, both in the Welsh Government and in the wider Welsh public sector. It called on the Welsh Government to learn from the establishment of a centre of expertise in Scotland and to ensure that the whole public sector in Wales has access to a central source of expertise to complement existing capability and capacity.
The Committee makes 17 recommendations in its report, a number of which are closely related to the work of the Silk Commission (see notes to editors).
“In the current economic climate and against a backdrop of decreasing capital budgets, it is vital that governments are able to use limited resources effectively to undertake capital investment which can act as an important lever to support economic growth,” said the Chair of the Finance Committee, Jocelyn Davies AM.
“We have made a series of recommendations based on the evidence we heard. Many of these are linked to the work of the Silk Commission and we hope that the Commission will consider our recommendations in the course of its work.
“We have also made recommendations relating to aspects of financing which are already within the Welsh Government’s competence and we hope that these will be taken forward.”