### Drakeford Under Scrutiny as National Insurance Funding Falls Short for Welsh Public Bodies
Mark Drakeford, Wales’ former First Minister, is facing tough criticism after it emerged that the UK Government will not fully cover the additional national insurance costs faced by public organisations in Wales—a situation that contradicts previous assurances given by Welsh ministers.
The controversy began last November, when Mr Drakeford informed members of the Senedd that Westminster would compensate public services in Wales for extra national insurance expenses incurred due to changes in UK policy. At the time, this announcement was welcomed by local authorities, health boards and charitable organisations expecting considerable financial support to address the sudden spike in their employer contributions.
However, it has since been revealed that the UK Treasury will only provide £185 million towards these costs, which are expected to total £257 million. The Welsh Government has managed to secure £36 million from its own reserves to help close the gap. Yet, for the current financial year alone, there still remains a shortfall of £36 million, leaving public sector bodies in a precarious financial position.
This funding deficit has caused alarm throughout the sector. Wales’ 22 local authorities, for instance, are now facing an unexpected £20 million bill to plug. Major charities operating in Wales, including Tenovus and Marie Curie, have warned they are each having to find an extra quarter of a million pounds or more to bridge the difference. Smaller charities and community organisations, too, have voiced concerns about the potential impact of having to redirect already limited resources.
At the centre of the row is disagreement over how the funding should have been calculated. In his comments last year, Mr Drakeford cited assurances from the UK Government suggesting compensation would be calculated according to existing Office for National Statistics definitions for public sector workers. Yet the UK Government, critics note, opted instead to use the Barnett formula—a standard mechanism for determining how much funding Wales, Scotland and Northern Ireland receive from the UK Treasury based on population share.
This approach has significant consequences for Wales, where public sector employment forms a larger proportion of the overall workforce than in England. Consequently, observers argue the allocated funding falls notably short of what is required to meet the nation’s specific needs.
Conservative Member of the Senedd, Sam Rowlands, sharply rebuked Mr Drakeford for offering “guarantees” he was now unable to keep, suggesting the First Minister’s public reassurances had led organisations to make financial plans now rendered obsolete. “How did you get it so wrong, and how can people trust your assurances again in the future?” Mr Rowlands asked during a Senedd session, giving voice to widespread frustration.
Mr Drakeford defended his previous statements, insisting his assurances were rooted in the principles laid out in the statement of funding policy—a key document governing intergovernmental finance within the UK. “When any of the UK’s four governments makes a decision resulting in additional costs for another, it is supposed to meet those costs in full,” he said, adding that the approach taken by the UK Government deviated from this policy.
Efforts to persuade the UK Government to revise its decision have, thus far, not succeeded. Mr Drakeford confirmed that discussions were ongoing, but expressed disappointment at the Treasury’s reliance on the formula rather than a needs-based calculation. Mr Rowlands, meanwhile, described the row as further evidence of a breakdown in effective cooperation between governments, warning that charity and voluntary organisations could be left with no recourse for support.
With pressure mounting and the shortfall still unresolved, stakeholders across Wales are calling for urgent clarity and a fair settlement. Many fear that unless substantial additional funding is secured, frontline services and vulnerable communities could bear the brunt of the deficit in the months ahead. The ongoing row lays bare enduring tensions at the heart of devolution finance, and leaves public bodies and charities alike anxiously awaiting a resolution.