‘Wales would get 5% more for health under English formula’
ATHINK-tank’s report on public spending across the UK in the era of devolution suggests that Wales would receive around 5% more to spend on health if resources were allocated according to England’s internal needs-based funding formula.
As things stand, the Welsh Government receives money in line with the population-based Barnett formula, which was devised in the late 1970s as a temporary measure.
Today’s report from the Institute for Government also suggests that the relatively poor performance of Welsh secondary school pupils may be linked to decisions to scrap league tables and end standardised testing.
The report states: “Health spending – on medical equipment, outpatient services, hospitals, public health, and research and development – grew very differently across the first two decades of devolution.
“In the first decade (1999 to 2009) there was rapid growth in spending, but in the second decade (2010 to 2019) spending rose much more slowly.
“Health spending has evolved similarly in all four nations, although Wales cut spending the most at the start of the 2010s, reducing spending per person by 3.4% in real terms between 2010/11 and 2013/14 to protect spending on local government and social care. The intention was to focus on wider public health and prevention – but perceived poor performance and media pressure led the Welsh government to reverse course from 2014/15.
“(The) majority of extra spending in Wales compared to England
is explained by its older population, but that Scotland, Northern Ireland and the North East [of England] spend more than England even after adjusting for age.
“... As Wales and the North East have similar demographic and socio-economic characteristics, the gap in age-adjusted spending suggests that if funding were allocated to Wales via England’s formula, Wales would spend around 5% more than it does now.
“The independent Holtham Commission assessed overall spending in Wales compared to England in 2010 and found that for health care, Wales had needs 14–15% higher than England, and – across public services – Wales was
underfunded relative to estimated needs.
“The UK government continues to allocate devolved funding through the Barnett formula – which does not consider needs.
“However, the Welsh and UK governments reached an agreement in 2016 that future funding increases would be 105% of the increase in English spending, with the aim over time of reaching a ‘funding floor’ of 115% of English spending.”
According to the report, “the devolved administrations need higher funding to provide the same level of health care as England”.
In a section on school performance, the report states: “The
starkly lower performance of secondary school pupils in Wales is notable and consistent over time.
“Children in Wales had lower average vocabulary scores than children in the other nations at ages five and seven, but a higher score than children in England and Scotland at age 11 – suggesting that Welsh pupils make less progress in secondary school than children in the other nations.
“Pupils in Wales appear to make less progress even when controlling for socioeconomic factors.
“A smaller proportion of children eligible for free school meals in Wales – one marker of disadvantage – achieve five or more GCSEs or equivalent at A*–C when compared to children eligible for free school meals in England.
“One analysis which attempted to match schools in Wales with schools in regions of England that share similar economic and social characteristics still found lower performance when comparing the proportion of pupils gaining five or more GCSEs or equivalent – albeit a smaller gap in performance.
“There are many differences between Welsh secondary schools and those in the other nations, but the decisions to remove league tables and standardised testing are two plausible factors in explaining their poorer performance.
“There is robust evidence that the Welsh government’s decision to remove league tables in 2002 reduced attainment.
“Removing league tables was associated with a slower increase in the percentage of Welsh pupils achieving five or more A*-C GCSEs or equivalent qualifications in comparison to English pupils – after controlling for pupil backgrounds, prior attainment and levels of school funding.
“It is possible that removing league tables meant that poorly performing schools in Wales were not publicly shamed and could effectively hide from public pressure.”
Describing how different countries have different pressures, the report states: “Disability is [an] important factor in health and care needs: people with a disability have higher care needs on average.
“Wales has the highest prevalence of disability among the four nations. The increase since 2012 reflects the population ageing, as older people are more likely to have a disability, but also an increase in the number of working-age adults with a disability.”
The report concludes: “The last 20 years provide a fascinating – and sobering – experiment for policy makers to learn from each other.
For the four nations to do so, the IfG report recommends:
The Treasury regularly publish its analysis of the level of spending on comparable public services in each nation and region of the UK;
The four governments work to improve the comparability of public service performance data;
The four governments must work to fill key data gaps in unpaid social care, private funding of social care, and educational attainment before age 15; and
The Treasury and devolved administrations jointly conduct or commission a new assessment of the relative spending needs of each part of the UK.”