Barnett formula from Westminster: FOI release

Information requested

The annual changes to the Scottish Government's Block Grant funding over the last ten years has met the inflation rate at the time.

Response

The block grant transparency report (latest version available here Block Grant Transparency: July 2023 - GOV.UK (www.gov.uk) ) sets out how the block grants for the Scottish Government, Welsh Government and Northern Ireland Executive are calculated.

The publication presents a breakdown of changes in the devolved administrations’ block grant funding from the 2015 Spending Review up to and including Main Estimates 2023-24.

The devolved administrations’ block grant funding is presented as Total Departmental Expenditure Limit (DEL) within the budgeting framework. It is split between resource DEL and capital DEL.

RDEL spending covers day-to-day costs (like wages, purchasing goods and services, and grants and subsidies). Within RDEL, there is also a separate ringfence for depreciation of capital assets.

CDEL spending covers longer-term investment (like hospitals, roads, and research and development). With CDEL, there is a separate ringfence for financial transactions (FTs) capital is sometimes called ‘net lending’ or ‘policy lending’ and includes loans or equity investment by the devolved administrations into the private sector.

More detail on HM Treasury’s budgeting framework can be found in the Consolidated Budgeting Guidance (latest version available here Consolidated budgeting guidance 2023 to 2024 - GOV.UK (www.gov.uk).

Within the block grant transparency report, table A.1 can be found. This summarises the overall block grant to the Scottish Government from 2016-17 to 2024-25 as of Main Estimates 2023-24.

To note, for this table 2016-17 to 2021-22 show outturn, 2022-23 to 2024-25 show plans.

In order to have a comparison for 10 years, the 2015-16 numbers have been gathered from the following report. Scotland Office and Office of the Advocate General 2015–16 Supplementary Estimates Memorandum (parliament.uk).
Since the report was last published in July, there have been 3 fiscal events;

• Autumn statement
• Supplementary estimates and,
• Spring statement.

As a result of these 3 events, the amounts for 2023-24 and 2024-25 need to be amended to reflect any funding changes since July. The amended numbers can be found within the following report; committees.parliament.uk/publications/43889/documents/217667/default/

Finally, to account for the additional funding provided for COVID-19, the following amounts have been removed from the following years;

2020-21 = £9.8 billion
2021-22 = £4.8 billion

The amended table is as follows;

Budget (£'bns)	2015-16	2016-17	2017-18	2018-19	2019-20	2020-21	2021-22	2022-23	2023-24	2024-25
RDEL (excluding depreciation)	26.2	26.1	26.7	27.3	28.6	29.3	32.1	36.0	37.6	37.7
CDEL	3.2	2.9	3.2	3.6	4.0	4.8	5.2	6.1	6.1	5.5
CDEL FTs	0.0	0.3	0.4	0.3	0.2	0.4	0.0	0.3	0.3	0.2
Total	29.3	29.3	30.3	31.1	32.9	34.5	37.4	42.4	44.0	43.4

To note, RDEL block grant adjustments have been removed the table as this includes adjustment for tax raising powers and social security benefit expenditure which are devolved to the Scottish Government.

In order to account for the effects of inflation, the totals for each year need to be deflated appropriately. The last published version as at the end of a financial year (March 2024), can be found here; GDP deflators at market prices, and money GDP March 2024 (Budget 2024) - GOV.UK (www.gov.uk).

This document contains gross domestic product (GDP) deflators. The GDP deflator can be viewed as a measure of general inflation in the domestic economy.

The deflators used in this answer are as follows;

Financial year	2022-23	GDP deflator at market prices per cent change on previous year
2015-16	82.498	0.72
2016-17	84.375	2.27
2017-18	85.696	1.57
2018-19	87.504	2.11
2019-20	89.570	2.36
2020-21	94.447	5.45
2021-22	93.674	(0.82)
2022-23	100.000	6.75
2023-24	106.544	6.54
2024-25	107.397	0.80

For years 2023-24 to 2024-25 (2024 to 2025), this presentation only shows percentage changes in line with data taken from the OBR GDP deflator forecasts as of march 2024 EFO detailed forecast tables.

Budget (£'bns)	2015-16	2016-17	2017-18	2018-19	2019-20	2020-21	2021-22	2022-23	2023-24	2024-25
RDEL (excluding depreciation)	26.2	26.1	26.7	27.3	28.6	29.3	32.1	36.0	37.6	37.7
CDEL	3.2	2.9	3.2	3.6	4.0	4.8	5.2	6.1	6.1	5.5
CDEL FTs	0.0	0.3	0.4	0.3	0.2	0.4	0.0	0.3	0.3	0.2
Total	29.3	29.3	30.3	31.1	32.9	34.5	37.4	42.4	44.0	43.4
Per cent change on previous year	1.0000	1.0227	1.0157	1.0211	1.0236	1.0545	0.9918	1.0675	1.0654	1.0080
Real-terms total	29.3	28.7	29.9	30.5	32.1	32.7	37.7	39.7	41.3	43.0
Real terms change against prior year (£'bn)	0	(0.631)	0.527	0.143	0.996	(0.179)	3.189	2.375	(1.139)	(0.961)
Real terms change against prior year (%)	0.00%	(2.15%)	1.79%	0.47%	3.20%	(0.55%)	9.25%	6.36%	(2.86%)	(2.18%)

Note: 2016-17 to 2023-24 show outturn, 2024-25 shows plans
Note: 2020-21 to 2021-22 numbers have been amended to remove additional Covid-19 funding.

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