The UK Government has clawed back £200m from the Welsh Government's capital budget, says First Minister Mark Drakeford.

Speaking at First Minister Questions in the Senedd, Mr Drakeford said that its capital budget has been hit following a recalculation of Barnett consequentials, where increased spending from the UK Government in devolved areas results in additional finance flowing to Cardiff Bay.

It came in response to a question from Plaid Cymru leader Adam Price, on the amount the Welsh Government would be asking from the UK Government as a result of flood damage in South Wales.

Mr Drakeford said: "Part of the reason why we have had to ask the UK Government for assistance is because with six weeks to this financial year left to go the Treasury wrote to us requiring us to repay to them £100m of financial transaction capital and £100m of conventional capital before the end of this financial year.

"They said that they have recalculated Barnett consequentials and that money needed to be returned to them.

"Now when I say to the Prime Minister that I want money to help us with the impact of flooding here in Wales I am essentially asking him to hand back that he has taken away from us in the last few weeks."

Financial transaction capital can only be used for loan and equity investment in the private sector and must eventually be repaid to the UK Government.

It is being used by the Welsh Government's investment bank subsidiary, the Development Bank of Wales, to invest in Welsh SMEs.

The Welsh Government's total capital budget is in excess of £2bn.

In response a Treasury spokesman said: "The 2019 Spending Round provided the Welsh Government with the biggest day to day funding settlement in a decade. In total, the Welsh Government has received £634m more funding in 2019-20.

"And thanks to our spending plans, the Welsh Government budget is likely to continue to rise in the future.”

Mr Drakeford, said that Finance Minister Rebecca Evans has written to the UK Treasury formally setting out that the Welsh Government would be seeking financial support for flood damage, having already provided £10m itself in emergency funding.

Mr Price said in Rhondda Cynon Taf the clean up bill alone could in the region of £180m.

Show more

Mr Drakeford said it was too early to say what the eventual bill would be, but would run into tens of tens of millions of pounds.

The First Minister added: "It isn't possible at this point to put a precise figure on how much that will be, because some of the damage that will need to be repaired is still under water so it hasn't been possible to get engineers down to look at the scale of the damage and give us an assessment of what it will cost to put it right."