MINISTERS must “play fair” over funding for Wales, Unison said today as public services in the nation face a shortfall of up to £65 million due to the rise in National Insurance costs. 

Unison urged the government to think again about whether the Barnett formula — used to allocate public funding to devolved administrations — is the best way to compensate the nation’s public services for the National Insurance increase.

When employer National Insurance contributions go up tomorrow, all additional costs for public services in England are set to be covered by the Treasury, said the union.

But the formula that Chancellor Rachel Reeves is using to give additional money to Wales will leave the government in Cardiff millions of pounds worse off because the size of the public sector is comparatively larger in Wales. 

Unison Cymru secretary Jess Turner said: “Our plea to the UK government is to treat Wales fairly.

“If public services in England are to be covered for the coming National Insurance increase, then those in Wales must be too.

“But that additional cash can only come from Westminster.”

Ms Turner said the Treasury is “effectively penalising” Wales because of the comparatively larger size of its public service workforce.

“Fifteen years of underfunding has placed public services under intolerable strain,” she said.

“A shortfall of millions of pounds will harm the quality of public services further still and place the Welsh workforce under even greater pressure to do much more with much less.

“More broadly, it’s clear the way Wales is funded within the UK needs to be reviewed.”

The Welsh Finance Secretary Mark Drakeford this week said that Ms Reeves is “wrong” to use the Barnett formula to distribute funding for public services.

He criticised her decision not to fully cover the cost of higher employers’ National Insurance contributions (NICs) for public bodies, saying that it could leave a shortfall as large as £65m.

Plaid Cymru finance spokeswoman Heledd Fychan said: “Wales is facing a £65m black hole in our public services’ finances thanks to Labour’s NIC rise.

“This is yet another example, if we needed one, of the ‘fundamental unfairness’ of the funding formula and how Westminster — and Labour — take Wales for granted.”

The Treasury was contacted for comment.