Sheltering from the Storm? Welsh Devolution and Public Services in a Period of Economic Crisis

The introduction of devolution by the Labour Government in 1999 fundamentally recast the territorial governance of the United Kingdom (UK). However, the range of powers devolved to Wales fell a long way short of the ‘reserved powers’ model introduced in Scotland and control of key economic and fiscal levers remained highly centralised. Based on extensive empirical investigation in 2012-2014, the paper addresses the adaptation of this Welsh territorial model to the political, economic, social and intergovernmental challenges that are usefully described in terms of crisis. Given the UK’s position outside of the Eurozone and the Fiscal Compact, Wales is not directly subject to many of the convergence mechanisms found in similar localities elsewhere in Europe. However, the austerity measures pursued by the UK Coalition Government since the 2010 General Election have increasingly shaped the policy agenda within Wales. The paper offers a fine-grained analysis of the devolved policy community in public finance and wider debates around public services within contemporary Wales. The paper examines the potential role of both exogenous and endogenous forces in driving convergence and divergence. It explores the hypothesis that public finance is shaped more by exogenous factors driving convergence, rather than domestic or endogenous sources of divergence which may be expected in policy areas such as education or health. The paper concludes that the saliency of economic crisis was weaker than in Brittany or Andalusia, suggesting that territorial policy communities were bound up (in spite of themselves) with institutional futures and political decentralisation.