Barnett formula Written Statements and Written Answers in Parliament

As stated in the written statement of 20 July 2010, further work is being done in discussion with the bodies concerned and other interested parties to finalise the details and timings of these proposals. Where bodies are being abolished, we will look to transfer key functions to other existing bodies to support our sectors and preserve the necessary expertise.

This work is at too early a stage to say what the impact of the changes will be on Wales specifically.

As to the impact on the Barnett formula, no departmental expenditure limits (DELs) have yet been set for the years after 2010-11. DELs for the four years from 2011-12 will be set in the spending review on 20 October 2010. For 2010-11, the work is at too early a stage to firmly quantify the impact at this point.

To ask the Chancellor of the Exchequer what effect implementation of the proposals in the Department of Health's White Paper on NHS reform will have on the amount of money made available under the Barnett formula for Scotland.

To ask the Secretary of State for Scotland what the implications would be for funding of higher education under the Barnett formula in Scotland from introduction of a graduate tax in England.

At the time of the 26 May announcement, the savings in respect of the Olympics programme had not been confirmed. The Barnett formula was therefore initially applied to all the DCMS savings, rather than the DCMS savings excluding the Olympics savings, which was done once the Olympics savings were confirmed.

To ask the Secretary of State for Scotland whether any consequential adjustment to payments to Scotland under the Barnett Formula arise from the changes to the Building Schools for the Future programme in England.

Full details of the operation of the Barnett Formula are set out in the Treasury publication Funding the Scottish Parliament, National

Assembly for Wales and Northern Ireland Assembly: Statement of Funding Policy. The SFP can be accessed at:

Convergence is a mathematical property of the Barnett formula exhibited under certain conditions, particularly when departmental spending is growing. Table 2.3 in the Budget sets out falling implied DEL totals over the course of the SR period.

I have been asked to reply.

The Government announced in the June 2010 Budget that they are committed to protecting health and overseas aid in the Spending Review. Health is a devolved programme so the Northern Ireland Executive will benefit from health being protected in England through the operation of Barnett formula consequentials in the spending review. However it is for the Northern Ireland Executive to make its own decisions on how to allocate its block budget in Northern Ireland.

To ask the Chancellor of the Exchequer what his policy is on implementing the recommendation of the Independent Commission on Funding and Finance for Wales that the Government produce an annual publication enabling comparisons between Welsh Assembly Government expenditure under the Barnett Formula and equivalent expenditure in England.

In relation to changes to the funding of the National Assembly for Wales announced on 22 June 2010, the recycled savings announced on 24 May 2010 were adjusted to reflect changes in business rate relief announced in the Budget. There was a reduction in the recycled savings for the Welsh Assembly Government in 2010-11 of £1.5 million. This was calculated using the Barnett Formula in the normal way. Details of the Barnett Formula, including details of the population figures and comparability factors, are published in the Statement of Funding policy.

The Welsh Assembly Government's budget for the spending review period will be published at the end of the spending review.

On 24 May, as part of the Chancellor of the Exchequer's statement on the £6 billion of efficiency savings to be realised in 2010-11, it was announced that £50 million would be re-prioritised from Train to Gain to further education capital. On 21 June, Government made a further announcement setting out the details for how this additional money would be reallocated to support a range of capital infrastructure projects prioritising those colleges who have not previously benefited significantly from further education capital investment. The Barnett formula was applied to these recycled savings, which were included in the Welsh Assembly Government figures also announced as part of 24 May statement. The Barnett consequential for Wales of the £200 million recycled savings was £11.6 million.

To ask the Chancellor of the Exchequer what estimate he has made of the Barnett formula consequentials for Wales of the measures announced by the Chief Secretary to the Treasury in his statement on public spending on 17 June 2010; and whether these consequentials were taken into account in (a) the consequential changes announced on 24 May 2010 and (b) subsequent announcements.

The consequentials of the £6.2 billion cuts announced on 24 May 2010 were calculated through the Barnett formula in the usual way. The consequential cut for the Welsh Assembly Government was subsequently reduced by £1.4 million following confirmation of a cut to the Olympics budget, which is UK-wide and therefore not comparable for the purposes of the Barnett formula. Details of the operation of the Barnett formula were set out in the Statement of Funding Policy published by the Treasury in October 2007.

The Government recognise the concerns expressed by the Holtham Commission on Welsh funding, the House of Lords Select Committee report on the Barnett formula and other commentators on the system of devolution funding.

However, as set out in the coalition programme for government, at this time the priority must be to reduce the deficit and therefore any change to the system must await the stabilisation of the public finances.

To ask the Chancellor of the Exchequer how much money is available to the Welsh Assembly Government under the Barnett formula for financial year 2010-11.

To ask the Chancellor of the Exchequer whether expenditure in England on the boiler scrappage scheme will be subject to the Barnett formula and consequential funding made available for Wales.

Under the Barnett formula the devolved Administrations receive a population based share of comparable changes in spending by UK Government Departments. These calculations are based on overall changes in Departments' provision rather than disaggregated by individual programmes. The costs of devolved policies, for instance on free care for the elderly or free prescription charges, are met by the relevant devolved Administrations within their existing block budgets.

To ask the Chancellor of the Exchequer how much was paid to each devolved administration under the Barnett formula in the most recent financial year for which figures are available; and what corresponding funding allocation was made to Government departments in respect of services delivered in (a) England only, (b) England and Wales, (c) England, Wales and Northern Ireland, (d) England, Wales and Scotland and (e) the UK.

holding answer 30 November 2009

The Barnett formula has been applied to changes in provision of UK Government Departments in spending reviews over the last five years. The Barnett formula is applied to the aggregate changes in provision of Departments. Details are provided in spending review White Papers. Under the Barnett formula arrangements the Scottish Executive receives an unhypothecated block budget which it then allocates reflecting its own priorities. Details of spending by UK Government Departments can be found in their departmental reports. So while the Scottish Executive has received Barnett consequentials on spending on renewable energy sources these are not separately calculated or identified in its spending review settlements.

To ask the Chancellor of the Exchequer on what date he agreed to the introduction of a spending base in respect of Barnett formula funding for Wales; and if he will place in the Library a copy of his correspondence with the Secretary of State for Wales on that matter.

To ask the Chancellor of the Exchequer when he expects the first compensatory payments to be made in respect of Wales under the Barnett formula following his reconsideration of convergence in spending per head.

To ask the Chancellor of the Exchequer what criteria his Department uses to determine whether Wales is disproportionately disadvantaged in the allocation of funding under the Barnett formula.

To ask the Chancellor of the Exchequer when he expects the full assessment of the extent of convergence under the Barnett formula in respect of Wales as part of his evaluation of the relative position of Wales in respect of the level of funding allocated to parts of the UK under that formula to be published.

To ask the Chancellor of the Exchequer when he plans to undertake the first evaluation of the relative position of Wales in respect of the level of funding allocated to parts of the UK under the Barnett formula.

To ask the Chancellor of the Exchequer whether he plans to publish his Department's factual paper on the Barnett formula.

The Government are today publishing their response to the House of Lords Select Committee report on the Barnett formula (CM 7772). This paper and the evidence referred to in it also meet the Government's commitment to produce a factual paper on the Barnett formula.

In parallel with the White Paper "Scotland's Future in the United Kingdom: Building on ten years of Scottish devolution", I am pleased to inform the House that the Government have agreed new arrangements in relation to future funding in Wales.

These address concerns, expressed by the House of Lords Select Committee report on the Barnett formula, the Independent Commission on Funding and Finance for Wales (chaired by Gerald Holtham), and also by the Welsh Assembly Government, about the continued application of the formula in Wales, in particular whether pressures in the Barnett formula for additional convergence towards the English average could in future disadvantage Wales.

The Government welcome many aspects of the Holtham report, which it continues to study in detail.

The new arrangements are as follows:

the Government agree that the Barnett formula could lead to convergence to an extent that would be regarded as unacceptable although further convergence is not currently expected in the coming years;

the Government will make a full assessment of the extent of convergence with consideration of Wales' position relative to other parts of the United Kingdom as part of each spending review; and

following this assessment the Government would be prepared to take action if appropriate to ensure Wales is not disproportionately disadvantaged.

The House agreed on 25 October to the introduction of topical debates on an experimental basis for the 2007-08 Session, following the recommendations of the Select Committee on Modernisation of the House of Commons in "Revitalising the Chamber: The Role of the Backbench Member"⁽¹⁾.

I am today announcing that I will be conducting a review into the operation of topical debates. The results of the review will be published before the House rises for the summer recess. Any Member wishing to submit their views is asked to do so by 23 May 2008.

The provisions in the Railways Bill, which is due to complete its Commons consideration today, would devolve to the Scottish Ministers additional powers and functions to determine Scottish railway strategies; to let, monitor and manage the Scotrail franchise; and to specify rail infrastructure needs in Scotland. They will also be able to set fares and fund improvements to the railway. Only some functions—principally safety and the licensing of railway operators—will remain reserved to UK Ministers.

The changes in the Railways Bill affect the executive powers of the Scottish Ministers. Responsibility for primary legislation dealing with the management and operation of railways remains reserved to the Westminster Parliament.

Under the Sewel Convention the Government have committed not to vary the executive competence of the Scottish Ministers without the consent of the Scottish Parliament. Therefore, in order to legislate in the Railways Bill the Parliament must give its consent to the Sewel motion for those aspects of the Bill which relate to devolving additional executive powers and functions to the Scottish Ministers. The motion put to the Scottish Parliament was:

Railways Bill

"That the Parliament agrees that those provisions that confer executive powers and functions on the Scottish Ministers in the Railways Bill and those that relate to devolved matters should be considered by the UK Parliament".

The Scottish Parliament considered and agreed this motion on 26 January.

To support these devolved responsibilities, the Secretary of State has announced that agreement has been reached with Scottish Ministers to transfer approximately £325 million to the Scottish Executive which would provide sufficient funding to cover all the responsibilities being transferred by virtue of the Railways Bill.

As part of this settlement the following funding transfers have been agreed:

The Scottish Executive will receive a Departmental Expenditure Limit (DEL) transfer from the Department for Transport (DfT) of £7.5 million to accompany the transfer of the majority of the Strategic Rail Authority's (SRA's) functions to the Scottish Executive. This sum represents the application of the Barnett formula (0.1023) to 75 per cent. of the relevant SRA budgets for 2004–05.

The Scottish Executive will receive a DEL transfer from DfT of £302 million to fund Network Rail's Operation, Maintenance and Renewals activities in Scotland to deliver the network outputs in Scotland. This will take effect from 1 April 2006.

A significant proportion of the £302 million total relates to a new Scotland element of Network Rail's regulatory asset base (RAB). The disagregation of the current GB RAB into elements for Scotland and for England and Wales will be determined by the Office of Rail Regulation (ORR) before the end of 2005, following joint representations by DfT and the Scottish Executive. The DfT and Scottish Executive will each receive funding precisely sufficient to remunerate their respective RABs. The Scottish Executive and DfT agree that the best estimate that can be made of the RAB for Scotland in advance of the ORR's determination is that it will be very close to 10 per cent. of the RAB for Great Britain, which is the basis on which the RAB spend above is calculated.

In addition, in order to fund rail enhancements the Scottish Executive will receive the following:

a DEL transfer of £17 million from 1 April 2006;

a proportionate increase, via the application of the Barnett Formula, of future increases in DfT's spending on enhancements in England and Wales as an outcome from future Spending Reviews.

Scotland will also benefit from a proportionate share of the following funding sources:

A 10 per cent. share of the planned "small schemes pot" funding for Network Rail to take forward small enhancement schemes, as was announced in the White Paper.

The undertaking of enhancement works in Scotland to enable compliance with the provisions of the Disability Discrimination Act 1995.

Finally, the ORR will have the same range of responsibilities in Scotland as in England and Wales. Like the Secretary of State for Transport, Scottish Ministers will be required to provide guidance to the ORR on desired outputs, and ORR will determine the cost of delivering these outputs. To reflect the fact that in future Network Rail will be funded by two Governments, a separate binding arrangement between Scottish Ministers and Network Rail will be established, similar to the parallel binding arrangement between UK Ministers and Network Rail. No transfer of resources is required to reflect these arrangements.