Recommendations & Conclusions
6 items
5
Conclusion
1st report – The financing of the Scott…
Deferred
In all future Statements of Funding Policy, the UK Government should include details of how the comparability percentage of each department has been calculated, including a programme-by-programme breakdown of what has and has not been included in the calculation. (Recommendation, Paragraph 42)
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In all future Statements of Funding Policy, the UK Government should include details of how the comparability percentage of each department has been calculated, including a programme-by-programme breakdown of what has and has not been included in the calculation. (Recommendation, Paragraph 42)
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Government response AI summary
The government states that officials have agreed to begin preliminary work on the scope for the next review of the Fiscal Framework, deferring the discussion rather than committing to include detailed comparability percentage calculations in future Statements of Funding Policy.
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Scotland Office
6
Conclusion
1st report – The financing of the Scott…
Deferred
We recognise the importance of the Block Grant Transparency document, as well as the value in it being published in a timely manner. We welcome the Secretary of State’s commitment to publishing an updated document after the 2025 Spending Review and hope the Government will continue this practice in future …
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We recognise the importance of the Block Grant Transparency document, as well as the value in it being published in a timely manner. We welcome the Secretary of State’s commitment to publishing an updated document after the 2025 Spending Review and hope the Government will continue this practice in future years. We see no reason why HM Treasury cannot provide an updated Block Grant Transparency document alongside each major fiscal event in the same way in which it provides a raft of other relevant documents to accompany such events. (Conclusion, Paragraph 46)
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Government response AI summary
The government discusses Scottish Government borrowing limits and the Fiscal Framework review, rather than addressing the recommendation to publish the Block Grant Transparency document alongside each major fiscal event.
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Scotland Office
7
Recommendation
1st report – The financing of the Scott…
Deferred
The UK Government should publish an updated Block Grant Transparency document alongside each fiscal event which will result in changes to Scotland’s funding. (Recommendation, Paragraph 47) Dispute resolution and formalisation
Government response AI summary
The government states it shares the position, but then pivots to discussing VAT assignment, the Building Safety Levy, and Aggregates Levy, failing to address the specific recommendation to publish an updated Block Grant Transparency document alongside each fiscal event.
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Scotland Office
14
Recommendation
1st report – The financing of the Scott…
Deferred
We note also that the jeopardy for returning funds to the UK Treasury at the end of the financial year incentivises poor behaviour in departmental spending, relative to value for money to the taxpayer. The removal of the Reserve, which is simply a treasury rule, would allow the Scottish Government …
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We note also that the jeopardy for returning funds to the UK Treasury at the end of the financial year incentivises poor behaviour in departmental spending, relative to value for money to the taxpayer. The removal of the Reserve, which is simply a treasury rule, would allow the Scottish Government to plan more strategically both within and across financial years. A political decision could remove the Scotland Reserve in advance of the next Fiscal Framework event in 2027 to the immediate benefit of the Scottish Government’s budget setting. (Conclusion, Paragraph 100)
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Government response AI summary
The government explained the current Scotland Reserve limits were agreed with the Scottish Government and deferred any changes, including potential removal, to the next Fiscal Framework review in 2028.
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Scotland Office
15
Recommendation
1st report – The financing of the Scott…
Deferred
At the next Fiscal Framework review, the UK Government should consider removing the cap on the Scotland Reserve, to ensure the Scottish Government’s fiscal flexibility is not unduly limited and to avoid the undesirable possibility of it having to return funds. (Recommendation, Paragraph 101)
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At the next Fiscal Framework review, the UK Government should consider removing the cap on the Scotland Reserve, to ensure the Scottish Government’s fiscal flexibility is not unduly limited and to avoid the undesirable possibility of it having to return funds. (Recommendation, Paragraph 101)
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Government response AI summary
The government deferred considering removing the cap on the Scotland Reserve to the next Fiscal Framework review, expected in 2028, with preliminary scoping work beginning soon. They noted the current limit was agreed with the Scottish Government and is uprated annually.
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Scotland Office
17
Recommendation
1st report – The financing of the Scott…
Deferred
We recognise the arguments presented calling for reform to the Scottish Government’s current borrowing arrangements. We maintain that such borrowing should continue to be subject to interest payments, the same as it is for any other government when it borrows to cover for its own forecast errors. However, we agree …
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We recognise the arguments presented calling for reform to the Scottish Government’s current borrowing arrangements. We maintain that such borrowing should continue to be subject to interest payments, the same as it is for any other government when it borrows to cover for its own forecast errors. However, we agree with the Secretary of State that borrowing limits should be linked to the measure which offers the Scottish Government the highest level of flexibility but, crucially, we note that which metric delivers this remains undetermined. The UK Government should therefore publish a transparent analysis of what borrowing limits would look like based on the different metrics advised in the evidence for this inquiry. At the next Fiscal Framework review, we encourage the UK Government to consider reforming the Scottish Government’s capital borrowing powers, by automatically coupling borrowing to the metric which offers the highest limit. (Recommendation, Paragraph 114)
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Government response AI summary
The government explained current borrowing limits are mutually agreed and uprated annually, stating they will consider further reforms to Scottish Government borrowing arrangements at the next Fiscal Framework review. They did not commit to publishing an analysis of different metrics as recommended.
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Scotland Office