Wednesday, 10 March 2010

Fair's Fair - but not the Barnett Formula!

Yesterday (9th March), I attended the "Big Ask" Event in Cardiff arranged by ACEVO (Association of Chief Executives of Voluntary Organisations) - a good event which provided excellent opportunities to speak with leaders from other organisations.

We discussed the impending General Election and the impact this may have on the Third Sector in Wales. Of course, many organisations in Wales receive their funding from the Welsh Assembly Government and therefore think that the General Election would have little impact on funding arrangements in Wales. Yes, it is true, that because of devolution, we look to the Welsh Assembly. However, the amount of money that comes to Wales is decided by Westminster. So, the General Election, whichever party wins, will have a major impact on the Third Sector in Wales.

At the moment, the way funding is channelled to Wales is, more or less, determined by a formula called the Barnett Formula. This is a mechanism used by the Treasury to adjust automatically some elements of public expenditure in Wales. Indeed, this formula is used when determining how much money is allocated for the Third Sector in Wales.

To say that the Barnett Formula is outdated is an understatement. It was devised in the late 1970s in the run up to the planned devolution in 1979 (which never happened). It takes no account of needs, or different needs or different costs in different areas. It is essentially based on population - hardly fair when Wales has some of the most deprived areas within the UK.

From my perspective, within the Third Sector in Wales, the new UK Government must look at this system of distribution - after all, the Barnett formula was meant as a temporary feature, just like Income Tax was when it was first introduced!!!

So, if you want to know what a new UK Government can do for the Third Sector in Wales - they can start with Barnett Formula and bring into place a system that gives everyone a fair share of the cake!

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