Is time running out for the Barnett Formula?
Author: Public Finance |
A Lords inquiry has issued the latest in a series of official reports calling for the scrapping of the controversial 30-year-old funding mechanism for the UK nations. But replacing it will not be easy.
The conclusions are unequivocal and the language unambiguous. The Barnett Formula, which accounts for 50bn of public spending every year, is ‘arbitrary and unfair’ and must be scrapped.
That verdict, issued by a House of Lords committee on July 17, forms the core of the fourth official report in two months to recommend that the funding mechanism be replaced.
The formula is the method used by the Treasury for allocating cash grants to Scotland, Wales and Northern Ireland (see below). It dates back to 1979, and has survived the introduction of devolved government in Stormont, Holyrood and Cardiff.