Barnett Formula: Wales

Baroness Wilcox of Newport Excerpts

Wednesday 12th November 2025 Lords Chamber

[Lord Wilson of Sedgefield (Lab)]

I thank the noble Lord for that question. The Barnett formula does reflect the higher level of needs in Wales. A 5% needs-based factor in the formula ensures that Wales receives fair funding. It is the biggest uplift since 1998, when devolution started. As far as the railways are concerned, the UK Government are responsible for heavy railway infrastructure across England and Wales—it is devolved, I believe, to Scotland—so spend money on railways in Wales, rather than funding the Welsh Government to do so. This is consistent with the funding arrangements for all other policy areas reserved in Wales. Wales continues to benefit from rail investment. At the 2025 spending review, the Chancellor announced an investment in Welsh rail of at least £445 million.

[Baroness Wilcox of Newport (Lab)]

My Lords, the UK Government have given the Welsh Government the largest financial settlement in the history of devolution, nearly £5 billion extra to spend on public services in the next three years—not supported in the Senedd by Plaid Cymru. Does the Minister agree that it was most positive to hear the Deputy First Minister telling the Senedd last Tuesday that Ministers had

“secured an agreement with the UK Government”

to further explore the Barnett formula?

[Lord Wilson of Sedgefield (Lab)]

I thank the noble Baroness for that question. It is true that the UK and devolved Governments have agreed to undertake joint working to look at ways of improving the operation of the Barnett formula, to report at the next meeting of the finance Interministerial Standing Committee, expected in early 2026. Just to reiterate, they have had a 20% uplift in their budgeting from the Barnett formula, which is equivalent to £4 billion this year.