Belfast Telegraph

UK Website Of The Year

Executive: Barnett Formula outdated

By Liam Clarke

Published 24/06/2015

The Executive will put pressure on the Government to change the formula used to calculate how much money Stormont gets from Westminster after a report predicted it might lead to cuts in the future.

The infamous Barnett Formula was supposed to be a temporary mechanism, but has been around since 1978. Even Lord Joel Barnett, who devised it, criticised it as unfair before his death last year.

Yesterday, a report from the Committee of Finance and Personnel predicted the formula used by Barnett might lead to cuts in the future.

The money Northern Ireland receives from its block grant - currently around £10bn - is calculated on the basis of public spending in England.

Public expenditure per head here is £10,961, 26% higher than the £8,677 spent in England. It is also higher than Scotland (£10,275) or Wales (£9,923), but there are fears that future spending plans may swing the balance against us.

Spending from major civil engineering projects in England has not been included in the calculation, with the Government arguing they benefit the whole of the UK and therefore Northern Ireland didn't need a financial share of the spend.

The report noted that Barnett is wholly under the control and discretion of the Treasury which does not require agreement from the devolved governments.

Judith Cochrane of Alliance welcomed the proposals but doubted if any renegotiation would result in more money from London, while Finance Minister Arlene Foster complained of a lack of transparency in how Barnett is worked out.

Belfast Telegraph

Read More

From Belfast Telegraph