Holtham tells them what they want to hear...*

A commission considering the way the assembly government is funded says Wales is losing out by £300m a year.

The commission chair, economist Gerald Holtham, warned the underfunding could reach £8.5bn over the next decade, or £2,900 for everyone living in Wales.

The report, for Welsh ministers, concludes that a new funding formula is needed to reflect the actual cost of providing services for Wales.

A further report on taxation and borrowing powers will follow next year.

The commission was established as part of the coalition deal between Labour and Plaid Cymru after the assembly election two years ago.

Mr Holtham said the Barnett formula, drawn up by the Labour government in the late 1970s, was "arbitrary" and in "urgent need of reform".

When the UK government increases funding for departments such as health and education in England, the formula is used to decide how much money the devolved governments in Cardiff, Edinburgh and Belfast receive.

The needs-based system the commission favours would take into account factors such as the age of the population and levels of poverty.

Mr Holtham admitted the commission did not suggest any "magic bullet" to replace the Barnett system.

He indicated the commission's second report, due around the middle of 2010, would include research on what should be included in a new needs based formula.

*... and what the rest of us already expected.

The Commission will be:

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

Timetable

The Commission began work in autumn 2008 and reported to the Welsh Assembly Government Ministers on the first part of its remit in July 2009.

The Commission is due to report to the Assembly Government on the second part of its work in summer 2010.

Hearing on pay equality in the Department for Transport

Preperations are made for a tribunal hearing on pay equality in the Department for Transport (DfT).

The case involves Executive Officers (EO) in the Driver and vehicle Licensing Agency (DVLA) who are seeking equal pay with driving examiners from the Driving Standards Agency (DSA).

For information, EOs are paid up to £5k less than examiners, even though they do work of equal value. The hearing is expected to be over a few weeks with an estimate end date of 22 May 2009.

The DfT's Defence:

... is one of arguing that the DVLA and DSA are seperate organisations whose pay is determined from different sources.

The other side:

This ignores the fact that both agencies are based within the DfT which is overseen by the Treasury which controls Civil Service pay. Unions have argues that if this defence is succesful, it will be used across the civil service to block equal pay claims.

Government deserves to fall on data loss alone

Two reports have concluded that no individual member of staff was to blame for last year's child benefit data loss.

Reports by the Independent Police Complaints Commission on the original data loss, and PricewaterhouseCoopers (the 'Poynter' review) on the wider question of data protection, revealed systematic and institutionalised failings within the HMRC department.

The Poynter review identified low morale in HMRC; said there needs to be a better focus on engaging with staff; and recommended HMRC should consider redeploying staff to improve services and increase tax yield rather than continuing with job cuts.

The Chancellor Alistair Darling announced at the time that £155m will be needed over three years to implement the Poynter recommendations. But, unfortunately, no new money is being provided by the Treasury.

Government data loss

[Pippa Wagstaff is currently on a blogging break]

Missing tax billions scandal

The UK government's policy of cutting thousands of jobs in HM Revenue and Customs (HMRC) flies in the face of the latest research that shows the UK is losing £42 billion in unpaid taxes.

The publication of a hopefully unbiased Trade Union Congress report earlier this year demonstrates that these missing billions could be used to transform public services and take millions of children and pensioners out of poverty.

It simply doesn't make sense to cut staff when more not less staff are required to recover these billions in lost taxes.