Former assembly official to lead Welsh funding inquiry
A former clerk to the Welsh assembly will lead an inquiry into the way the devolved administration is funded.
Welsh Secretary Cheryl Gillan named Paul Silk as chairman of the commission, promised as part of the Westminster coalition deal between the Conservatives and Liberal Democrats.
He will be joined by representatives of the four main parties and two independent members.
Mrs Gillan said the assembly must be "more accountable".
At present the Welsh government cannot raise taxes and can only spend what it receives through an annual block grant from the Treasury.
Mrs Gillan said: "Following the referendum in March, the Welsh government has new powers over the devolved areas.
"It is therefore only right and proper that we look at ways to make the assembly more accountable and today's announcement is the first step in taking this forward."
The Labour Welsh government has asked for control of some taxes, including stamp duty.
It also wants powers to supplement its £14.5bn budget by being allowed to borrow money and has called for reform of the Barnett formula which is used in Whitehall to set the budgets of the devolved nations. Critics say it short changes Wales.
But the commission will not look at the Barnett formula, which is being dealt with separately in talks between Cardiff and Westminster.
First Minister Carwyn Jones said: "Those talks will continue while the new commission carries out its work.
"But this is a twin-track process - progress on issues of accountability can only be made if there is also real progress on fair funding and borrowing powers.
"Wales needs a comprehensive package of financial reforms that delivers a fairer, more stable settlement."
Mr Silk - the assembly's clerk from 2001 to 2007 and a former clerk in the House of Commons - said: "The commission has a challenging and complex remit and I look forward to working constructively with the UK government and the Welsh government over the coming months.
"I want to listen and engage with people across Wales on these important issues as we begin our work on the task in hand."
He will be joined by Principality building society chairman Dyfrig John and Prof Noel Lloyd, former vice-chancellor of Aberystwyth University.
The political party representatives are former Labour cabinet minister Sue Essex, the Conservatives' former assembly leader Nick Bourne, Plaid Cymru adviser Eurfyl ap Gwilym and Rob Humphreys, a former president of the Welsh Lib Dems.
The commission will report next year and will submit a second report on the constitutional settlement in 2013.
The second report will look at the assembly's powers and the boundary between what is devolved and not.
Plaid Cymru leader Ieuan Wyn Jones said: "While it is now down to the current Welsh government to negotiate a fair funding deal for Wales in the short term, the commission must create a sustainable fiscal footing for our nation and increase the financial accountability of its democratically elected government.
"It must also be bold and ambitious as it looks at which areas of government should be matters for the Welsh people."
Welsh Lib Dem leader Kirsty Williams said: "Uniquely, Wales has no power to borrow or raise money.
"This lack of accountability for how money is raised breeds irresponsibility about how money is spent."
Shadow Welsh secretary Peter Hain welcomed the establishment of the Silk Commission, but said Labour was "suspicious of the government's motives, and at a time when their savage cuts are hitting Wales so hard, we are sceptical about the impact any tinkering in the funding formula will have".