Devolution, Independence and Wales’ Fiscal Deficit

Abstract

Debate around Wales’ place in the United Kingdom has intensified over recent years, with radically differing visions for the union of the Welsh and UK governments emerging alongside growing (though still minority) support for Welsh independence. This article argues that these constitutional debates must be considered alongside Wales’ current fiscal position. Wales’ estimated fiscal deficit is reflective of long-standing economic underperformance as part of the UK, which we argue is unlikely to be addressed under current economic, fiscal and constitutional arrangements. On the other hand, it also suggests a difficult economic outlook for an independent Wales, which would require tough fiscal and economic choices to address Wales’ apparent balance of payments deficit.

Welsh productivity performance: lost cause or still waiting for a miracle?

“…This is a cultural feature of policy making which, over nearly a quarter of a century of devolved government, has been largely absent (Bradbury and Davies, 2022). In summary, a widening gap between the value of what is produced in Wales and the earnings, consumption, and delivery of public goods aspirations of its population implies over the longer term either a widening Welsh fiscal deficit or the growing political frustrations of its population (Ifan et al, 2022). 1…”

“…Closing the Welsh fiscal gap with the UK is apparently a stated aspira on of the current First Minister (seeIfan et al, 2022). 2 At the me of wri ng ONS provide consistently defined regional and sub-regional es mates of output (GVA) per filled job from 2002 to 2021, and of output per hour worked from 2004 to 2021.…”

Preventative Social Care and Community Development in Wales: “New” Legislation, “Old” Tensions?

“…These principles encompass discourse over financial imperatives, cost-saving and budget reductions, together with values-based ideas such as encouraging independence, social justice, and a more general sense that prevention is "doing the right thing." The tensions emergent from the co-existence of different principles have implications for actors within local government seeking to further a prevention agenda in a context of devolved financial challenges (Ifan & Sion, 2019).…”