THE UK and Scottish governments have agreed to commission an independent report into Scotland’s block grant.
The report will “inform the subsequent review” into the devolved fiscal framework, according to a release from the Scottish Government.
Finance Secretary Kate Forbes met with the Tories’ Chief Secretary to the Treasury, Simon Clarke, earlier today (October 14) to agree to the commission.
Forbes described the meeting as “positive” and said the review of the fiscal settlement should begin in early 2022.
She added: “While the report will look only at the Block Grant Adjustments, we agreed that the review should have a wider scope and involve input from parliamentary committees and wider stakeholders.”
Ahead of the meeting, the SNP minister said Scotland’s fiscal framework had been “thoroughly tested and, in some areas, found wanting”.
Clarke said: “It’s great that we’ve been able to get an agreement and can now get on with the Fiscal Framework Review and ensure fair and sustainable funding for Scotland’s future.
“We’re continuing to work together to tackle the big issues we face as a United Kingdom, including climate change, levelling up opportunities and supporting jobs.”
The Tory MP also chaired a meeting with Forbes and the Finance Ministers from Wales (Rebecca Evans) and Northern Ireland (Conor Murphy). The government said they had discussed “Net Zero, creating jobs across the UK and recovering from the pandemic”.
Posting a photo of the four on Twitter, Clarke wrote: “Great to speak with Finance Ministers from Wales, Scotland and Northern Ireland in person for the first time today.
“Discussed important issues including working together to achieve our climate change ambitions and how we can #buildbackbetter as one United Kingdom.”
Great to speak with Finance Ministers from Wales, Scotland and Northern Ireland in person for the first time today.
— Simon Clarke MP (@SimonClarkeMP) October 14, 2021
The block grant given by the UK Government to the Scottish Government each year includes money Westminster has raised through fuel duty, oil and gas receipts, income tax, national insurance, corporation tax, air passenger duty, VAT, tax on alcohol and cigarettes, inheritance tax, and capital gains tax.
The amount each year is calculated as a population share of changes in spending on public services devolved to Scotland. This is called the Barnett Formula.
For all taxes set, raised or assigned in Scotland, the block grant is reduced.