The Barnett squeeze in spending review 2000

Jim Cuthbert, Margaret Cuthbert, Brian Ashcroft (Editor), Eleanor Malloy (Editor), Sarah Le Tissier (Editor)

Research output: Contribution to journalArticle

50 Downloads (Pure)

Abstract

One form or other of the Barnett formula has been operational since 1978. However, while the government has published annual figures for the Scottish Block, and for its post devolution successor, the Scottish DEL, it has failed to publish the corresponding expenditure aggregate for England. This corresponding English aggregate has no administrative meaning in itself in the English context, since it consists of elements of programmes of a number of Whitehall Departments: this is why, presumably, the government has not bothered to publish this figure. But without knowledge of this aggregate, it is not possible to check directly how the corresponding aggregates in England and Scotland have evolved. Secondly, the government does not publish the detailed calculations on how Barnett is applied. Barnett did not apply at all strictly for t he first fifteen years of its existence. In particular, prior to 1993, in establishing the new end-planning year at the start of each public expenditure planning round, the previous end year figure for both Scotland and England was uprated for inflation. This meant that a substantial part of the cash increases required for inflation was taken out of the Barnett discipline. (HM Treasury (1997)). Finally, although the Barnett formula is simple to state in words, it is difficult, without going into the algebra, to uncover the subtlety of how Barnett interacts with differences in population growth between Scotland and England. This paper is primarily intended to provide an estimate of the size of the squeeze on Scottish expenditure implied by the SR 2000, over the planning period for that review. Our findings are that Scotland will experience a relative squeeze of over £ 1 billion by 2003-04, compared with the funding it would have received on English expenditure growth rates.
Original languageEnglish
Pages (from-to)27-33
Number of pages7
JournalQuarterly Economic Commentary
Volume26
Issue number2
Publication statusPublished - May 2001

Fingerprint

England
Scotland
Planning
Government
Expenditure
Inflation
Population growth
Devolution
Funding
Public expenditure
Cash

Keywords

  • Scottish devolution
  • public finances
  • Scotland
  • Scottish economy
  • Departmental Expenditure Limit (DEL)
  • Barnett Formula
  • Scottish spending review

Cite this

Cuthbert, J., Cuthbert, M., Ashcroft, B. (Ed.), Malloy, E. (Ed.), & Le Tissier, S. (Ed.) (2001). The Barnett squeeze in spending review 2000. Quarterly Economic Commentary, 26(2), 27-33.
Cuthbert, Jim ; Cuthbert, Margaret ; Ashcroft, Brian (Editor) ; Malloy, Eleanor (Editor) ; Le Tissier, Sarah (Editor). / The Barnett squeeze in spending review 2000. In: Quarterly Economic Commentary. 2001 ; Vol. 26, No. 2. pp. 27-33.
@article{9f592feeb81d488caba322b7189f8f00,
title = "The Barnett squeeze in spending review 2000",
abstract = "One form or other of the Barnett formula has been operational since 1978. However, while the government has published annual figures for the Scottish Block, and for its post devolution successor, the Scottish DEL, it has failed to publish the corresponding expenditure aggregate for England. This corresponding English aggregate has no administrative meaning in itself in the English context, since it consists of elements of programmes of a number of Whitehall Departments: this is why, presumably, the government has not bothered to publish this figure. But without knowledge of this aggregate, it is not possible to check directly how the corresponding aggregates in England and Scotland have evolved. Secondly, the government does not publish the detailed calculations on how Barnett is applied. Barnett did not apply at all strictly for t he first fifteen years of its existence. In particular, prior to 1993, in establishing the new end-planning year at the start of each public expenditure planning round, the previous end year figure for both Scotland and England was uprated for inflation. This meant that a substantial part of the cash increases required for inflation was taken out of the Barnett discipline. (HM Treasury (1997)). Finally, although the Barnett formula is simple to state in words, it is difficult, without going into the algebra, to uncover the subtlety of how Barnett interacts with differences in population growth between Scotland and England. This paper is primarily intended to provide an estimate of the size of the squeeze on Scottish expenditure implied by the SR 2000, over the planning period for that review. Our findings are that Scotland will experience a relative squeeze of over £ 1 billion by 2003-04, compared with the funding it would have received on English expenditure growth rates.",
keywords = "Scottish devolution, public finances, Scotland, Scottish economy, Departmental Expenditure Limit (DEL), Barnett Formula, Scottish spending review",
author = "Jim Cuthbert and Margaret Cuthbert and Brian Ashcroft and Eleanor Malloy and {Le Tissier}, Sarah",
year = "2001",
month = "5",
language = "English",
volume = "26",
pages = "27--33",
journal = "Fraser of Allander Economic Commentary",
issn = "2046-5378",
publisher = "University of Strathclyde",
number = "2",

}

Cuthbert, J, Cuthbert, M, Ashcroft, B (ed.), Malloy, E (ed.) & Le Tissier, S (ed.) 2001, 'The Barnett squeeze in spending review 2000', Quarterly Economic Commentary, vol. 26, no. 2, pp. 27-33.

The Barnett squeeze in spending review 2000. / Cuthbert, Jim; Cuthbert, Margaret; Ashcroft, Brian (Editor); Malloy, Eleanor (Editor); Le Tissier, Sarah (Editor).

In: Quarterly Economic Commentary, Vol. 26, No. 2, 05.2001, p. 27-33.

Research output: Contribution to journalArticle

TY - JOUR

T1 - The Barnett squeeze in spending review 2000

AU - Cuthbert, Jim

AU - Cuthbert, Margaret

A2 - Ashcroft, Brian

A2 - Malloy, Eleanor

A2 - Le Tissier, Sarah

PY - 2001/5

Y1 - 2001/5

N2 - One form or other of the Barnett formula has been operational since 1978. However, while the government has published annual figures for the Scottish Block, and for its post devolution successor, the Scottish DEL, it has failed to publish the corresponding expenditure aggregate for England. This corresponding English aggregate has no administrative meaning in itself in the English context, since it consists of elements of programmes of a number of Whitehall Departments: this is why, presumably, the government has not bothered to publish this figure. But without knowledge of this aggregate, it is not possible to check directly how the corresponding aggregates in England and Scotland have evolved. Secondly, the government does not publish the detailed calculations on how Barnett is applied. Barnett did not apply at all strictly for t he first fifteen years of its existence. In particular, prior to 1993, in establishing the new end-planning year at the start of each public expenditure planning round, the previous end year figure for both Scotland and England was uprated for inflation. This meant that a substantial part of the cash increases required for inflation was taken out of the Barnett discipline. (HM Treasury (1997)). Finally, although the Barnett formula is simple to state in words, it is difficult, without going into the algebra, to uncover the subtlety of how Barnett interacts with differences in population growth between Scotland and England. This paper is primarily intended to provide an estimate of the size of the squeeze on Scottish expenditure implied by the SR 2000, over the planning period for that review. Our findings are that Scotland will experience a relative squeeze of over £ 1 billion by 2003-04, compared with the funding it would have received on English expenditure growth rates.

AB - One form or other of the Barnett formula has been operational since 1978. However, while the government has published annual figures for the Scottish Block, and for its post devolution successor, the Scottish DEL, it has failed to publish the corresponding expenditure aggregate for England. This corresponding English aggregate has no administrative meaning in itself in the English context, since it consists of elements of programmes of a number of Whitehall Departments: this is why, presumably, the government has not bothered to publish this figure. But without knowledge of this aggregate, it is not possible to check directly how the corresponding aggregates in England and Scotland have evolved. Secondly, the government does not publish the detailed calculations on how Barnett is applied. Barnett did not apply at all strictly for t he first fifteen years of its existence. In particular, prior to 1993, in establishing the new end-planning year at the start of each public expenditure planning round, the previous end year figure for both Scotland and England was uprated for inflation. This meant that a substantial part of the cash increases required for inflation was taken out of the Barnett discipline. (HM Treasury (1997)). Finally, although the Barnett formula is simple to state in words, it is difficult, without going into the algebra, to uncover the subtlety of how Barnett interacts with differences in population growth between Scotland and England. This paper is primarily intended to provide an estimate of the size of the squeeze on Scottish expenditure implied by the SR 2000, over the planning period for that review. Our findings are that Scotland will experience a relative squeeze of over £ 1 billion by 2003-04, compared with the funding it would have received on English expenditure growth rates.

KW - Scottish devolution

KW - public finances

KW - Scotland

KW - Scottish economy

KW - Departmental Expenditure Limit (DEL)

KW - Barnett Formula

KW - Scottish spending review

UR - http://www.strath.ac.uk/frasercommentary/

UR - http://www.strath.ac.uk/fraser/

M3 - Article

VL - 26

SP - 27

EP - 33

JO - Fraser of Allander Economic Commentary

JF - Fraser of Allander Economic Commentary

SN - 2046-5378

IS - 2

ER -