Get the latest Welsh rugby news sent straight to your inbox Sign up Thank you for subscribing We have more newsletters Show me See our privacy notice Invalid Email

Wales’ four regions have agreed to increase their wage cap from £3.5m to £4.5m per team.

It means the Scarlets, Ospreys, Cardiff Blues and Dragons will have greater spending power and the ability to strengthen their squads.

The £3.5m cap was self-imposed by the regions back in 2011 in response to the difficult economic climate at the time.

It was felt that belts had to be tightened and wage bills reduced, which inevitably made it harder to hold on to star players.

More:Sam Warburton - I owe the Blues

Spending spree

But now the financial situation is much improved and the regions have mutually agreed to raise the spending limit by a £1m per team.

poll loading Is £4.5m the right salary cap? 0+ VOTES SO FAR YES NO

This is because of the new European deal and the new funding arrangement with the WRU which was put in place following Welsh rugby’s civil war.

As part of the new Rugby Services Agreement, national dual contracts were introduced and 16 players have now been signed up, with Ospreys forwards Scott Baldwin, James King, Dan Baker and Rory Thornton swelling the numbers this week.

(Image: Huw Evans Picture Agency)

More:The future of the Welsh exiles

Under the NDCs, the WRU pays 60 per cent of the players’ wages, which frees up money in the regional budgets to spend on squad strengthening.

The Union now has increased financial muscle following their £33m kit deal with Under Armour and a £10m windfall from hosting matches at the World Cup.

That means as well as securing home-based players on NDCs they are also able to look at bringing back exiles like Jonathan Davies, Leigh Halfpenny and George North.

More:Alun Wyn targeted by Toulon

Investment

With more money now coming into the professional game, the regions feel the time is right to increase the wage cap, with the plan being to invest in the whole rugby set-up.

They will still be some way below the levels in other countries, with the French cap set at £8.6m and the English one rising to £6.5m from £5.5m next season.

But it is at least a step in the right direction and another sign of rosier times ahead in the Welsh regional game.