IT has been a subject of controversy practically since it was invented in 1978, but now a prominent think tank is suggesting that Brexit could well mean the end of the Barnett Formula.
The formula automatically adjusts the amount of public spending allocated to Scotland, Wales and Northern Ireland by the UK Government.
READ MORE: First Minister rejects Tory Brexit deal as Labour 'sell Wales down river'
With Brexit set to end income from the European Union, the Scottish Parliament’s Finance and Constitution Committee has been seeking views on how funding for agriculture, economic development and innovation may be replaced after Brexit – Scotland is gaining €5.6 billion from EU funds in the current budget period that ends in 2020.
After Brexit next March, replacement funding is guaranteed from Westminster until at least 2020 and possibly 2022 for farming.
Institute for Fiscal Studies (IFS) researchers Nicolo Bird and David Phillips point out that the formula takes no account of differences in funding needs or population growth between nations. It does not account for the outcomes achieved by funding either.
READ MORE: Spike in number of EU nurses leaving UK after Brexit result
The report states that a key consideration is how often funding allocations are updated.
“Frequent and fuller updates can help target regional development funding at the most disadvantaged areas,” says the report. “On the other hand, they can reduce the fiscal incentives for devolved and local governments to encourage economic growth and tackle deprivation.”
The researchers suggest that rather than allocating all replacement funding to the Scottish Government to distribute to specific projects, there may be benefits to making decisions at a UK-wide level or seeking to remain in EU-wide schemes.
They state: “An example could be funding for research and innovation, where existing EU programmes aim to invest in the best projects across the EU. In recent years, Scottish institutions have won funding that is significantly greater than a population-based share.”
David Phillips, associate director at the Institute for Fiscal Studies, said:
“The UK is set to receive around €8bn a year from the EU budget over the next three years. But big choices loom about how much to spend on programmes to replace the EU’s agriculture, regional development and research and innovation funding after 2020, and how that spending should be allocated and managed.”
Scottish Brexit Minister Mike Russel added: “This is yet another report that suggests that staying within EU institutions and funding flows is the best option for Scotalnd.
“Such reports are appearing every day but the Brexiteers – and the Prime Minister – resolutely refuse to see or hear sense. They are pursuing a course that will cause substantial and sustained damage to Scotland but they are driving ahead regardless.”
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereLast Updated:
Report this comment Cancel