Monitoring the financial aspects of the devolution settlement: issues and data requirements

The subject of this paper is the requirement to monitor the financial aspects of the Scottish devolution settlement. Financial aspects will, almost inevitably, underpin the success or failure of devolution. The precise issues involved, and the question of the data requirements for monitoring these issues, are topics which so far have attracted relatively little attention. The Scottish Parliament needs to understand fully how the major component of the Scottish Budget, the Departmental Expenditure Limit (DEL), is derived by the ongoing application of the Barnett formula. We argue in this paper that the Scottish Parliament will also need to be able to: (a) check whether certain key implicit assumptions underlying the devolution settlement continue to hold through time (b) ensure that there is proper articulation between devolved and non-devolved services (c ) ensure that Scotland is getting adequate "value for money" from the various categories of non-devolved expenditure, and also from European funding. For this, extensive data will be needed - relatively little of which is currently readily available. The paper examines these data requirements.