Public bodies in Wales may not receive full compensation from the UK government for the cost of employer national insurance increases unlike in England, a committee heard.
Mark Drakeford told the Senedd’s finance committee the cost of workers within the Office for National Statistics definition of a public sector employee will be covered by the UK treasury.
Andrew Jeffreys, director of the Welsh treasury, explained the UK Government plans to use the Barnett formula to decide how much Wales will receive based on the costs in England.
But Prof Drakeford said: “That’s not my position … if public authorities in England are getting 100% compensation then public authorities in Wales should have 100 per cent.
“The Barnett share may turn out to be less than we need in Wales.
“That would seem to me fundamentally unfair if English public authorities know they’re getting everything covered and in Wales we’re left filling gaps.”
He added: “If things worked out in the way we just described where Wales doesn’t have full cover but English public authorities do …, I won’t simply be leaving it there.”
MS for South Wales East Peredur Owen Griffiths, who chairs the committee, raised a warning from Ynys Môn council of a “gaping hole” in the budget that leaves local authorities facing an existential crisis.
He said councils could be put in an invidious position of having to balance books, potentially making jobs redundant, in the interim before clarity on compensation in May or June.