Source · Select Committees · Scottish Affairs Committee
Recommendation 2
2
Accepted
Barnett formula remains fit for purpose without clear need for significant reform.
Conclusion
Whilst the Barnett formula is an imperfect method of calculating Scotland’s funding, we have heard no convincing evidence of a workable alternative. We therefore consider the formula to be fit for purpose and are not convinced there is clear need to reform it significantly. (Conclusion, Paragraph 33)
Government Response Summary
The government accepts the conclusion, citing the significant real-terms settlement for the Scottish Government delivered through the Barnett formula via Phase 2 of the Spending Review, affirming the formula's role in providing financial certainty.
Government Response
Accepted
HM Government
Accepted
Since you took evidence on this subject earlier this year, Phase 2 of the Spending Review has delivered the largest real terms settlement for the Scottish Government since devolution began, with an average £50.9 billion per year between 2026–27 and 2028–29. This includes an additional £2.9 billion per year on average through the operation of the Barnett formula, and follows the £4.9 billion increase to the Scottish Government’s funding for 2024/25 and 2025/26 that the Chancellor set out in the Autumn Budget last year. This means that the UK Government’s Plan for Change has delivered an end to austerity and more money than ever before for the Scottish Government to invest in Scottish public services like our NHS, police, housing and schools. The financial certainty and stability provided by the UK Government stands in contrast to the Scottish Government’s position to scrap the Barnett Formula, which would be a recipe for economic chaos and permanent austerity for Scotland. The most recent Government Expenditure and Revenue Scotland statistics for 2024/25, published in August, showed a net fiscal transfer of £2,578 per person in Scotland compared to UK average.