Welsh Government hopes for budget deal by start of 2017

A new budget deal could be finalised with the UK government by the start of 2017, the Welsh Government hopes.

Detailed negotiations between ministers in Wales and Westminster over the so-called "fiscal framework" are due to start later this month.

Changes to the Welsh Government's budget will reflect the devolution of tax-raising powers to Cardiff.

The UK Treasury agreed a similar deal with the Scottish government in February after almost a year of talks.

Welsh ministers are hoping to use the Scottish negotiations as a blueprint in order to reach an agreement within a shorter timescale.

Former Welsh Government advisor, Gerald Holtham, has criticised the deal with Holyrood as "a messy old fudge" and urged Welsh Labour ministers "to agree something more sensible".

As it stands, most of the Welsh Government's £15bn annual budget is funded by the Treasury by what is known as the block grant.

But this block grant will be cut and the gap filled by Welsh ministers with powers over stamp duty, landfill taxes and the aggregates levy that are due to pass to Cardiff in 2018.

Welsh Government Finance Secretary Mark Drakeford will meet Chief Secretary to the Treasury David Gauke at the end of September to discuss these budgetary implications and the partial devolution of income tax.

BBC Wales understands Mr Drakeford will also try to convince the Westminster government not to time-limit a minimum funding pledge for Wales.

A promise in the 2015 Spending Review that spending per head on devolved services in Wales would not fall below 115% of spending per head in England was guaranteed for a five year period.

Mr Drakeford is aiming to complete the negotiations before assembly members are asked to give their consent to the next phase of devolution - the latest Wales Bill is currently making its way through the UK Parliament and is expected to receive Royal Assent in early 2017.

First Minister Carwyn Jones has previously said the assembly should not accept those new powers before a deal is reached on a "fiscal framework".

A Welsh Government spokesman said: "Ongoing detailed discussions with the Treasury about the fiscal framework will take place this autumn.

"Finance Secretary Mark Drakeford will meet the chief secretary for the treasury later this month as part of that process, which we anticipate will be completed to coincide with a Legislative Consent Motion [in the assembly] on the Wales Bill early next year."