Select committee: Scottish Affairs Committee
Recommendation 12
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)
The importance of regular communication between the UK and Scottish Governments, in respect of UK spending decisions which could impact Scotland’s budget, cannot be overstated. The UK Government must ensure that the impact of UK budgetary changes on the block grant is assessed and considered while decisions are being made. The details of such impact assessments must be released alongside or very quickly following any spending decisions. While we recognise the need for due process, the Scottish Government should be informed of major changes which impact its funding as early as possible. (Recommendation, Paragraph 93) Flexibility
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.