Source · Select Committees · Scottish Affairs Committee
Recommendation 10
10
Acknowledged
Significant Block Grant changes necessitate urgent Scottish Government spending plan adjustments
Conclusion
The Committee notes that the Block Grant is the single largest source of Scottish Government funding, and that tight rules on borrowing and fiscal reserves mean that significant changes to the block grant will almost always require significant, urgent changes to the Scottish Government’s spending plans. (Conclusion, Paragraph 80)
Government Response Summary
The government provided an update on the Scottish Government's block grant, stating it has received the largest real terms settlement since devolution and additional funding, contrasting this with the Scottish Government's stance on the Barnett Formula.
Government Response
Acknowledged
HM Government
Acknowledged
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.