Recommendations & Conclusions
4 items
9
Recommendation
1st report – The financing of the Scott…
Acknowledged
We are not convinced that putting the Barnett formula on a statutory footing, or otherwise formalising it, would significantly improve its effectiveness. The use of the Barnett formula is already a well-established practice, not unlike other features of the UK’s uncodified constitution. Although new routes to legal challenge may be …
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We are not convinced that putting the Barnett formula on a statutory footing, or otherwise formalising it, would significantly improve its effectiveness. The use of the Barnett formula is already a well-established practice, not unlike other features of the UK’s uncodified constitution. Although new routes to legal challenge may be opened though legislation, such a change would restrict the flexibility of the operation of the formula, with little evidence there would be practical benefits for either Government. We also cannot see how a new dispute resolution process 44 specifically for the Barnett formula would not unduly overlap with or duplicate the existing intergovernmental dispute resolution process. (Recommendation, Paragraph 69) Budget stability
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Government response AI summary
The government repeats the committee's conclusion verbatim.
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Scotland Office
10
Conclusion
1st report – The financing of the Scott…
Acknowledged
The Committee notes that the Block Grant is the single largest source of Scottish Government funding, and that tight rules on borrowing and fiscal reserves mean that significant changes to the block grant will almost always require significant, urgent changes to the Scottish Government’s spending plans. (Conclusion, Paragraph 80)
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The Committee notes that the Block Grant is the single largest source of Scottish Government funding, and that tight rules on borrowing and fiscal reserves mean that significant changes to the block grant will almost always require significant, urgent changes to the Scottish Government’s spending plans. (Conclusion, Paragraph 80)
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Government response AI summary
The government provided an update on the Scottish Government's block grant, stating it has received the largest real terms settlement since devolution and additional funding, contrasting this with the Scottish Government's stance on the Barnett Formula.
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Scotland Office
13
Conclusion
1st report – The financing of the Scott…
Acknowledged
Given the challenges the Scottish Government faces, we recognise its need for fiscal flexibility. The Scotland Reserve is a key tool that enables the Scottish Government to carry funds from one year to another, and there seems little benefit in capping the amount of money that can be stored in …
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Given the challenges the Scottish Government faces, we recognise its need for fiscal flexibility. The Scotland Reserve is a key tool that enables the Scottish Government to carry funds from one year to another, and there seems little benefit in capping the amount of money that can be stored in it. 45 The danger of the Scottish Government having to surrender funds, due to a late addition which pushes the Reserve over the limit, whilst hypothetical, remains of concern to us. (Conclusion, Paragraph 99)
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Government response AI summary
The government explained the Scotland Reserve limit was mutually agreed and is uprated annually, with consideration of any changes deferred to the next Fiscal Framework review expected in 2028.
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Scotland Office
16
Conclusion
1st report – The financing of the Scott…
Acknowledged
At present, the Scottish Government’s limited borrowing powers constrain its ability to manage fiscal shocks, as it is only able to borrow for resource purposes to cover forecast errors. Capital borrowing limits are currently linked to and grow in line with inflation, which may not necessarily be the highest metric …
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At present, the Scottish Government’s limited borrowing powers constrain its ability to manage fiscal shocks, as it is only able to borrow for resource purposes to cover forecast errors. Capital borrowing limits are currently linked to and grow in line with inflation, which may not necessarily be the highest metric of growth. (Conclusion, Paragraph 113)
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Government response AI summary
The government acknowledges the conclusion by explaining that borrowing powers and limits were jointly agreed in the 2023 Fiscal Framework and are uprated annually by the GDP deflator to maintain real value, committing to consider these arrangements at the next Fiscal Framework review.
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Scotland Office