The financing of the Scottish Government

Scottish Affairs Committee Closed Inquiry
Opened: 21 Nov 2024 Closed: 20 Oct 2025 Parliament page
This inquiry is examining the framework for fiscal devolution in Scotland. The Committee is evaluating the effectiveness of the Barnett formula and the fiscal framework in calculating the amount of money available for providing devolved services in Scotland. As part of this, the Committee is examining the interaction between UK … Read more
7 Recommendations
12 Conclusions
1 Report
1 Oral session
2 Letters
2 Events
Activity timeline 7 events
17 Oct
2025
Report published
16 Jul
2025
Report published
9 Jul
2025
Formal meeting (private meeting) · Room 15, Palace of Westminster
5 Feb
2025
Correspondence
29 Jan
2025
Oral evidence
29 Jan
2025
Formal meeting (oral evidence session) · Room 15, Palace of Westminster
22 Jan
2025
Correspondence
Oral evidence sessions 1 session
29 Jan 2025
View on parliament.uk
Claire Murdoch · NHS England David Phillips · Institute for Fiscal Studies Dr João Sousa · Fraser of Allander Institute
Title HC No. Published Items Response
1st report – The financing of the Scottish Government HC 456 16 Jul 2025 19 Responded
Recommendations & Conclusions
6 results
Clear
1 Conclusion Accepted
1st report – The financing of the …
Full fiscal autonomy for Scotland is not a realistic or workable proposition.
We note the Scottish Government’s call for full fiscal autonomy, but do not consider that this currently appears to be a realistic prospect. Fundamental questions remain about how full fiscal autonomy would work in practice, and whether it would be … Read more
Government Response
The government agreed with the committee's conclusion that full fiscal autonomy is not a serious proposition, contrasting it with the financial stability provided by the UK and highlighting a potential £14 billion funding gap for Scotland.
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2 Conclusion Accepted
1st report – The financing of the …
Barnett formula remains fit for purpose without clear need for significant reform.
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 … Read more
Government Response
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.
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3 Conclusion Accepted
1st report – The financing of the …
Keep under review the future need for a needs-based factor in the Barnett formula.
In particular, we are not convinced there is a need to introduce a needs- based factor into the Barnett formula at this time. Scotland currently may be receiving more than it would if a needs-based factor, like the floors introduced … Read more
Government Response
The government accepts the conclusion, reiterating the substantial funding increases for the Scottish Government through the existing Barnett formula, which provides financial certainty and stability without the need for a needs-based factor at this time.
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4 Conclusion Accepted
1st report – The financing of the …
Lack of transparency in Barnett formula comparability percentage calculations limits scrutiny.
The operation of the Barnett formula is not as transparent as it could or should be. In particular, there is a lack of transparency around how comparability percentages are calculated. Comparability percentages are a fundamental feature of the Barnett formula … Read more
Government Response
The government stated that details on how comparability percentages are calculated, including a programme-by-programme breakdown, are already included in Annex B of the Statement of Funding Policy document published in June 2025.
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8 Conclusion Accepted
1st report – The financing of the …
HM Treasury remains ultimate arbiter of Barnett formula, lacking formal dispute resolution
HM Treasury, and therefore the UK Government, is the “ultimate arbiter” of the Barnett formula. As the formula is non-statutory, there is no legal recourse for the Scottish Government to challenge the UK Government’s application of it. There is also … Read more
Government Response
HM Treasury sets out the impact on Scotland of policy changes at fiscal events in the publicly available fiscal event documents.
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11 Conclusion Accepted
1st report – The financing of the …
UK fiscal event timing and uncertainty significantly challenge Scottish Government financial planning
The timing of supplementary estimates and UK Government fiscal events can cause clear challenges for the Scottish Government in terms of financial planning, with the Scottish Government’s final funding position not confirmed until close to the end of the financial … Read more
Government Response
The government explained that the Block Grant Transparency is published annually, and the Scottish Government is informed of changes at the earliest possible opportunity, justifying its current practices as appropriate for managing market sensitive information.
Scotland Office
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Government Response AI assessment · 19 of 7 classified
Accepted 6
Accepted in Part 1
Acknowledged 4
Deferred 6
Not Addressed 2
Total 7 recs + 12 conclusions
Correspondence 2 letters
5 Feb 2025 Correspondence from David Phillips, Associate Director, Institute for Fiscal Studies, regarding the financing of the Scottish Government, dated 30 January 2025
Parliament page
22 Jan 2025 Correspondence from Shona Robison MSP, Scottish Government, regarding the financing of the Scottish Government inquiry, dated 16 January 2025
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