Belfast Telegraph

MPs call for clarity on how cash is allocated to all four UK regions

The Public Accounts Committee has now called for greater transparency about how funding decisions are made (stock photo)
The Public Accounts Committee has now called for greater transparency about how funding decisions are made (stock photo)
Mark Bain

By Mark Bain

A new report into how the Government funds the UK regions says there is a need for greater transparency on how the money is allocated.

The call comes as the report, released today by the Public Accounts Committee, shows Northern Ireland received over £2,000 per head of population more than England in 2017-18.

But it noted that levels of funding were agreed over 40 years ago and most of the money is simply rolled forward from one year to another without being revised for changes in relative population or need.

"HM Treasury therefore does not know to what extent the funding provided is meeting the needs of the populations," the report stated.

In 2017-18, spending per head in Northern Ireland was highest at £11,190, followed by Scotland at £10,881 per head and Wales at £10,397. England was lowest at £9,080.

For more than 40 years the Barnett formula has been the Treasury's primary means of calculating spending in Scotland, Wales and Northern Ireland, and is based on Government spending on public services in England and the population of the country receiving the money.

The Public Accounts Committee has now called for greater transparency about how funding decisions are made.

"The complicated and often opaque method for calculating funding levels for devolved administrations is based on population levels and needs across the UK agreed 40 years ago," committee chair Meg Hillier MP said.

"At future spending reviews, HM Treasury should publish more detailed and transparent information about its funding decisions."

At spending reviews, the Treasury allocates a 'block grant' to the devolved administrations that they use to provide public services.

It then uses the Barnett formula to calculate changes to this funding when there are changes in UK Government spending plans that affect devolved services.

It may also announce funding for new priorities on an ad hoc basis outside of the Barnett formula.

At the 2018 Autumn Budget, this resulted in additional funding of £960m for Scotland, £554m for Wales and £325m for Northern Ireland.

"A lack of detailed supporting information to Parliament makes it difficult for such ministerial decisions to be properly scrutinised," said Ms Hillier.

The report also revealed that from the 2018-19, the Treasury introduced a needs-based factor into the Barnett calculation for Wales which uplifted funding.

An independent review for Scotland is scheduled to take place in 2021, but there is no such plan for Northern Ireland.

A long period of consultation is also expected on how EU funding will be replaced after Brexit.

Ministers can also allocate funding directly to the regions, such as funding to Scotland to meet the policing costs associated with US President Donald Trump's visit, and funding allocated to Northern Ireland as part of the confidence-and-supply deal between the Conservative Party and the DUP.

But this does not trigger changes in funding for England or the other regions.

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