Source · Select Committees · Scottish Affairs Committee
Recommendation 6
6
Deferred
HM Treasury should provide updated Block Grant Transparency documents with each fiscal event.
Conclusion
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)
Government Response 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.
Government Response
Deferred
HM Government
Deferred
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. Resource and capital borrowing powers and limits have been jointly agreed by both the UK and Scottish Governments in the updated 2023 Fiscal Framework – these are fixed in 2023–24 prices and uprated annually using the GDP deflator at the time of the Scottish Government’s draft Budget to maintain their real value. The limits are linked to inflation as that maintains the real value of the borrowing arrangements over time. The scope of the next Fiscal Framework review will be determined by the Joint Exchequer Committee (Scotland) at least 3 months before the review is to start. Any future reviews would require mutual agreement between the Scottish and UK Governments. We will consider the Scottish Government’s borrowing arrangements at the Fiscal Framework review. Currently, the borrowing limits are uprated using the GDP deflator, with a methodology agreed with the Scottish Government.