Select committee: Scottish Affairs Committee
Recommendation 9
1st report – The financing of the Scottish Government
Published 16 Jul 2025
Addressed to Scotland Office
Scottish Affairs Committee The financing of the Scottish Government All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
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
From: Scottish Affairs Committee, 1st report – The financing of the Scottish Government (HC 456), 16 July 2025
Government response
The government responded to the whole report on 17 October 2025 (deadline 16 September 2025).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government's response sets out where it considers existing arrangements already meet the Committee's recommendations, declines to publish the Block Grant Transparency document alongside each fiscal event, and says it "will consider" borrowing arrangements at the next Fiscal Framework review.
- On Recommendation 1, the government says the Statement of Funding Policy "does include" details of how each department's comparability percentage is calculated, with a programme-by-programme breakdown in Annex B of the June 2025 document.
- On Recommendation 2, it says publishing the Block Grant Transparency document alongside fiscal events "would not be appropriate", because review by the devolved governments can only happen after they receive their block grant totals. It states that annual publication "remains the most appropriate response".
- On Recommendation 4, it says "no formal impact assessment is carried out" given the mechanical nature of the Barnett formula, though impacts on devolved funding are "considered as a matter of routine". The Scottish Government is given notice "at the earliest possible opportunity".
- On the Fiscal Framework, the next review is expected in 2028, with preliminary scoping work to begin "in the coming months". It says it "will consider" borrowing arrangements at that review, and notes that the Scotland Reserve limit was agreed with the Scottish Government.