New Consultation looks at sources of funding for major Welsh Government projects
A new inquiry will review the different sources of capital funding available to the Welsh Government to pay for major projects such as new roads and hospitals.
The National Assembly's Finance Committee will explore which funding streams are the most efficient and offer best value for money to the Welsh public purse.
As well as the Block Grant, the funding allocated to Wales by the UK Government each year, the Welsh Government can also borrow up to £1 billion for major infrastructure projects through the Wales Act 2017. However, annual borrowing is capped at 15% of total borrowing at £150 million, which is consistent with Scotland's borrowing powers.
Other sources of funding available to the Welsh Government include borrowing from the National Loans Fund and through commercial loans, issuing of government bonds and Public Private Partnership models .
The Committee will pay close attention to Welsh Government's Mutual Investment Model (MIM) which sees private partners build and maintain public assets. In return, the Welsh Government will pay a fee to the private partner, which will cover the cost of construction, maintenance and project financing. The asset would then be transferred into public ownership at the end of the contract.
According to the Welsh Government, MIM differs from the discredited Private Finance Initiatives or PFIs as it promotes the public interest including wellbeing and value for money.
A number of MIM schemes are currently in the pipeline including:
- Redevelopment of Velindre Cancer Centre, Cardiff
- Work to complete the dualling of the A465 from Dowlais Top to Hirwaun
- Additional investment in Band B of the 21st Century Schools Programme.
"In the same way as many households need to borrow money, governments also have to borrow money to pay for large infrastructure projects such as new roads or schools," said Llyr Gruffydd, Chair of the Finance Committee.
"In these uncertain times it is essential ministers are using the most effective funding methods which provide the best possible value for money for the public purse.
"We will be reviewing existing sources of capital funding as well as alternative models as part of our inquiry.
"I would urge anyone with an interest in this area to contribute to our consultation."
The public consultation will be open until 23 April 2019. Anyone wishing to know more information or to contribute can visit the Finance Committee's web pages.