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
5 Conclusion Deferred
1st report – The financing of the …
Include detailed comparability percentage calculations for each department in future Statements of Funding Policy.
In all future Statements of Funding Policy, the UK Government should include details of how the comparability percentage of each department has been calculated, including a programme-by-programme breakdown of what has and has not been included in the calculation. (Recommendation, … Read more
Government Response
The government states that officials have agreed to begin preliminary work on the scope for the next review of the Fiscal Framework, deferring the discussion rather than committing to include detailed comparability percentage calculations in future Statements of Funding Policy.
Scotland Office
View details
6 Conclusion Deferred
1st report – The financing of the …
HM Treasury should provide updated Block Grant Transparency documents with each fiscal event.
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 … Read more
Government Response
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.
Scotland Office
View details
7 Recommendation Deferred
1st report – The financing of the …
Publish updated Block Grant Transparency documents with each fiscal event impacting Scotland's funding
The UK Government should publish an updated Block Grant Transparency document alongside each fiscal event which will result in changes to Scotland’s funding. (Recommendation, Paragraph 47) Dispute resolution and formalisation
Government Response
The government states it shares the position, but then pivots to discussing VAT assignment, the Building Safety Levy, and Aggregates Levy, failing to address the specific recommendation to publish an updated Block Grant Transparency document alongside each fiscal event.
Scotland Office
View details
14 Recommendation Deferred
1st report – The financing of the …
Removing Scotland Reserve cap would enable more strategic Scottish Government financial planning
We note also that the jeopardy for returning funds to the UK Treasury at the end of the financial year incentivises poor behaviour in departmental spending, relative to value for money to the taxpayer. The removal of the Reserve, which … Read more
Government Response
The government explained the current Scotland Reserve limits were agreed with the Scottish Government and deferred any changes, including potential removal, to the next Fiscal Framework review in 2028.
Scotland Office
View details
15 Recommendation Deferred
1st report – The financing of the …
Consider removing the cap on the Scotland Reserve at next Fiscal Framework review
At the next Fiscal Framework review, the UK Government should consider removing the cap on the Scotland Reserve, to ensure the Scottish Government’s fiscal flexibility is not unduly limited and to avoid the undesirable possibility of it having to return … Read more
Government Response
The government deferred considering removing the cap on the Scotland Reserve to the next Fiscal Framework review, expected in 2028, with preliminary scoping work beginning soon. They noted the current limit was agreed with the Scottish Government and is uprated annually.
Scotland Office
View details
17 Recommendation Deferred
1st report – The financing of the …
Publish transparent analysis of Scottish Government borrowing limits based on various metrics
We recognise the arguments presented calling for reform to the Scottish Government’s current borrowing arrangements. We maintain that such borrowing should continue to be subject to interest payments, the same as it is for any other government when it borrows … Read more
Government Response
The government explained current borrowing limits are mutually agreed and uprated annually, stating they will consider further reforms to Scottish Government borrowing arrangements at the next Fiscal Framework review. They did not commit to publishing an analysis of different metrics as recommended.
Scotland Office
View details
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
Parliament page