Page last updated at 15:18 GMT, Tuesday, 13 October 2009 16:18 UK

Debate on the Holtham Commission report

The government led the debate by proposing that the Assembly welcomes the commission's report and supports its recommendations on 13 October, 2009

The Holtham Commission was established to look at the pros and cons of the present approach to how the UK government distributes public money to the Welsh Assembly Government, as well as identifying alternative funding mechanisms.

A second report, due in 2010, will deal with taxation and borrowing powers.

Public money is currently distributed to Wales through a combination of the Welsh block grant and the Barnett Formula.

The size of the Welsh block grant is set in advance for a period of three years.

When the UK government increases funding for departments such as health and education in England, the Barnett formula is used to decide how much money devolved governments in Cardiff, Edinburgh and Belfast receive.

The report says that under the current system, Wales is losing out by £300m a year and underfunding could reach £8.5bn over the next decade.

The Holtham Commission suggests a needs base methodology in order to calculate the appropriate level of funding for all devolved administrations.

The Welsh Conservatives and Liberal Democrats tabled amendments to the motion calling for the Assembly Government to implement the Holtham Commission's recommendations as soon as possible.

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