Tom Griffin (London, OK): The Independent Commission set up to examine the funding of the Welsh Assembly Government began its work this week.
The Commission's call for evidence from interested parties comes as rising inflation is forcing the Government to dip into its reserves to cover its spending plans.
It will take over £200m from reserves, cutting them to 1% of the total budget, as spending rises to £15.2bn.
The money released will fund priorities including £60m over two years for the Foundation Phase education for three-to-seven-year-olds.
But opposition parties said local government was being "clobbered".
Over at the Institute of Welsh Affairs blog, James Foreman-Peck of Cardiff Business School argues that the Commission should consider the option of greater borrowing powers:
Devolving borrowing powers will be resisted by the Treasury on the grounds that there is an implicit Treasury guarantee to such borrowing although they cannot control the amount. The UK central government would be obliged to pick up the tab if the Welsh Assembly Government defaulted. But are we not seeing something like this for our big commercial banks at the moment? Anyway the Treasury’s point will need addressing in any recommendation for greater powers.
