JOEL Barnett probably never imagined his short-term funding formula for a devolved Scotland, Wales and Northern Ireland, designed in 1979, would survive this long.
In essence, it is simply a formula to apply changes in public spending in England to the grants to devolved administrations, in proportion to the population, on an annual basis. The population figures for Scotland for 2011-14 gave Scotland a 10.03% share based on the English population, compared to 5.79% for Wales and 3.45% for Northern Ireland.
The exact application of the formula is down to the Treasury, meaning it has discretion over Barnett’s application – which is why Scotland got nothing extra after the huge Olympic Games spending on London.
Barnett does not apply to all public spending in Scotland. And it does not apply to England nor to the regions of England. It is difficult to know exactly what it contains and, hence, what money it can deliver.
Some politicians talk about Scotland “needing” more public expenditure but that cannot be established from Barnett. There was only one needs assessment, before 1979, and it was never replicated. Similarly, politicians often talk of Barnett consequentials – what money Scotland can expect from increases in domestic spending in England. This is not a stable mechanism for planning Scottish expenditure: it’s funding by accident.
Finally, remember one thing: it’s the politics of the formula that matter, and its use as a political weapon.
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