:Independent Commission on Funding and Finance 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.{{cite web|title=Independent Commission on Funding & Finance for Wales – About us|url=http://wales.gov.uk/icffw/home/about/?lang=en|publisher=Welsh Assembly Government|access-date=27 July 2010|archive-url=https://web.archive.org/web/20110215044303/http://wales.gov.uk/icffw/home/about/?lang=en|archive-date=15 February 2011|url-status=dead}}

The Commission comprised:

• Gerald Holtham (Chair), Managing Partner of Cadwyn Capital LLP and a visiting professor at Cardiff Business School.
• David Miles, Member of the Bank of England's Monetary Policy Committee and visiting Professor of Financial Economics at Imperial College London.
• Paul Bernd Spahn, Professor Emeritus of Goethe University, Frankfurt am Main, Germany, and macro fiscal advisor to governments across the world.

The Commission began its work in autumn 2008 and published its first report in July 2009.[https://archive.today/20120716213045/http://new.wales.gov.uk/icffw/home/news/firstreport/?lang=en Press notice announcing the first report] 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.Final Report Summary, page 5

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

• the Assembly Government should pursue the introduction of a needs-based formula for determining the Welsh block grant;Final Report Summary, page 20
• the Assembly Government should acquire limited powers to vary income tax rates in Wales;Final Report Summary, page 32
• the Assembly Government should seek a discussion with the UK Government about the feasibility of devolving corporation tax;Final Report Summary, page 35
• stamp duty should be devolved to Wales;
• capital gains tax on property and land should be devolved to Wales, if the administrative costs are not prohibitive;
• the Assembly Government should consider the reform of Council Tax;
• local authorities should be given discretion to levy a higher council tax on second homes;Final Report Summary, page 39
• landfill tax, air passenger duty and aggregates levy should be devolved to Wales if deemed useful;Final Report Summary, page 40
• a procedure should be created to enable Parliament to confer power on the National Assembly to introduce new taxes in Wales when requested;Final Report Summary, page 41 and,
• the Assembly Government should receive limited powers to borrow to finance capital expenditure;Final Report Summary, page 45

Public Finance magazine reported that the Holtham Commission's final report was welcomed by Labour, Conservative and Plaid Cymru politicians – although Welsh Business and Budget Minister Jane Hutt was said to have given a more "muted" response to Holtham's recommendation that the Assembly Government should gain tax-varying powers.{{cite news|last=Dicken|first=Paul|title=Holtham review calls for Welsh tax powers|url=http://www.publicfinance.co.uk/news/2010/07/holtham-review-calls-for-welsh-tax-powers/|access-date=22 July 2010|newspaper=Public Finance|date=15 July 2010}} Former First Minister Rhodri Morgan opposed this idea, arguing that there was "no mandate" for tax-varying powers in the 1997 devolution referendum.{{cite news|title=Rhodri Morgan opposes tax-varying powers for assembly|url=https://www.bbc.co.uk/news/10545283|access-date=22 July 2010|publisher=BBC News|date=7 July 2010}}

James Mitchell of Strathclyde University called the Holtham Commission's conclusions "remarkably bold... its proposals on income tax are, in important respects, bolder than those proposed by Calman" (the commission created in 2007 to review Scottish devolution). Mitchell noted that Holtham's critique of the Barnett formula, which he regards as advantageous to Scotland, "ought to be a wake-up call".{{cite news|last=Mitchell|first=James|title=A perfect example of how devolution should operate|url=http://www.heraldscotland.com/mobile/comment/guest-commentary/a-perfect-example-of-how-devolution-should-operate-1.1040151|access-date=23 July 2010|newspaper=The Herald|location=Glasgow|date=9 July 2010}}

• Barnett Formula
• Commission on Scottish Devolution

{{reflist|30em}}

• {{cite web|title="Fairness and accountability: a new funding settlement for Wales", final report by the Independent Commission on Funding and Finance for Wales|url=http://wales.gov.uk/docs/icffw/report/100705fundingsettlementsumen.pdf|publisher=Welsh Assembly Government|access-date=12 July 2010|archive-date=16 August 2010|archive-url=https://web.archive.org/web/20100816171559/http://wales.gov.uk/docs/icffw/report/100705fundingsettlementsumen.pdf|url-status=dead}}

• [https://archive.today/20130416022253/http://www.walesfundingreview.org/ Official website of the Independent Commission on Funding and Finance for Wales]
• [http://new.wales.gov.uk/icffw/home/report/firstreport/;jsessionid=dgFvKXxHqnqLYrl42s1hG1lhn2K6tcYCnZdRks7Q4kNZHNHpfhLR!1458373683?lang=en "Funding devolved government in Wales: Barnett & beyond", first report by the Independent Commission on Funding and Finance for Wales (full and summary versions) ]
• [http://www.assemblywales.org/bus-home/bus-chamber/bus-chamber-third-assembly-rop.htm?act=dis&id=147353&ds=10/2009#3 The National Assembly for Wales's debate on the Commission's first report]
• [https://web.archive.org/web/20120229144434/http://new.wales.gov.uk/icffw/home/report/fundingsettlement/?lang=en "Fairness and accountability: a new funding settlement for Wales", final report by the Independent Commission on Funding and Finance for Wales (full and summary versions) ]

{{Welsh devolution}}

{{DEFAULTSORT:Independent Commission On Funding And Finance For Wales}}

Category:Government of Wales

Category:Welsh devolution

Category:2007 in politics

Category:2007 establishments in Wales

Category:Plaid Cymru

Category:Welsh Labour

Category:Organisations based in Cardiff

Category:Constitutional commissions

Category:Political organisations based in the United Kingdom