Independent Commission on Funding and Finance for Wales

The Independent Commission on Funding and Finance for Wales, also known as The Holtham Commission, was established by Rhodri Morgan (First Minister for Wales), Ieuan Wyn Jones (Deputy First Minister for Wales) and Andrew Davies (Minister for Finance and Public Service Delivery), of the Welsh Assembly Government. The establishment of the Commission was a commitment in the One Wales coalition agreement between Labour and Plaid Cymru in June 2007. Based in Cathays Park, Cardiff, the Commission completed its work in July 2010, publishing its findings in a final report: Fairness and accountability: a new funding settlement for Wales.

The remit of the Commission was to look at the pros and cons of the present formula-based approach to the distribution of public expenditure resources to the Welsh Assembly Government; and identify possible alternative funding mechanisms including the scope for the Welsh Assembly Government to have tax varying powers as well as greater powers to borrow.

The Commission comprised:

The Commission began its work in autumn 2008 and published its first report in July 2009. In its first report, the Commission concluded that the Barnett Formula lacked any objective justification and had survived for reasons of political and administrative convenience. The Commission argued that the formula has caused relative funding per capita for devolved activities in Wales to converge towards the average level of funding in England (the "Barnett squeeze") despite relatively higher Welsh needs. The Commission recommended that in the future funding arrangements for Wales should be based on relative needs. As an interim measure, it recommended a modification to the existing formula that would place a "floor" under the block grant, preventing any further convergence towards the average English level of funding per capita.

In its final report, published in July 2010, the Commission recommended that:

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