Select Committee · Scottish Affairs Committee

The financing of the Scottish Government

Status: Closed Opened: 21 Nov 2024 Closed: 20 Oct 2025 7 recommendations 12 conclusions 1 report

This inquiry is examining the framework for fiscal devolution in Scotland. The Committee is evaluating the effectiveness of the Barnett formula and the fiscal framework in calculating the amount of money available for providing devolved services in Scotland. As part of this, the Committee is examining the interaction between UK Government fiscal events and in-year …

Reports

1 report

Title	HC No.	Published	Items	Response
1st report – The financing of the Scottish Government	HC 456	16 Jul 2025	19	Responded

Recommendations & Conclusions

2 items

18 Conclusion 1st report – The financing of the Scott… Not Addressed

Assignment of VAT revenues to Scotland faces significant, likely insurmountable, implementation challenges

It seems highly unlikely to us that the assignment of VAT revenues will ever come into force. It is clear that implementing the assignment poses a significant challenge, and given the amount of time that has passed since the change was due to come into force, it is far from …

Government response. The government acknowledged continuing work on Smith Commission recommendations, including VAT Assignment, but did not directly address the committee's conclusion that its implementation seems highly unlikely and unrealistic.

Scotland Office

19 Recommendation 1st report – The financing of the Scott… Not Addressed

Explain feasibility of VAT revenue assignment and update on implementation progress by 2026

We call on the UK Government, in its response to this report, to explain why it thinks the assignment of VAT revenues is still possible, despite robust views to the contrary, and whether the Scottish Government shares this position. We also call on the UK Government, by the summer of …

Government response. The government stated that HM Treasury will continue to work with the Scottish Government to deliver Smith Commission recommendations, including VAT Assignment, but did not explain why it thinks assignment is possible or commit to a 2026 update as requested.

Scotland Office

Oral evidence sessions

1 session

Date	Witnesses
29 Jan 2025	Claire Murdoch · NHS England, David Phillips · Institute for Fiscal Studies, Dr João Sousa · Fraser of Allander Institute	View ↗

Correspondence

2 letters

Date	Direction	Title
5 Feb 2025	—	Correspondence from David Phillips, Associate Director, Institute for Fiscal St…
22 Jan 2025	—	Correspondence from Shona Robison MSP, Scottish Government, regarding the fina…