Embeddedness of UK devolution finance within the public expenditure system

Heald, D. and McLeod, A. (2005) Embeddedness of UK devolution finance within the public expenditure system. Regional Studies, 39(4), pp. 495-518. (doi:10.1080/00343400500128556)

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Abstract

Before devolved government was established in 1999 in Scotland, Wales and Northern Ireland, it was expected that the financing system would become more transparent. In fact, greater transparency about process (i.e. the rules) has not yet been matched by transparency about the numerical operation of a key element in the system, namely the Barnett formula, which regulates the budget envelopes of the devolved administrations. This paper tracks the numerical implementation of the Barnett formula since devolution in order to deepen understanding of how devolution finance is embedded within the UK's public expenditure planning system. Accordingly, data are provided showing the generation of formula consequences for Scotland in each of the UK Spending Reviews 2000, 2002 and 2004. This cannot yet be done for Wales or Northern Ireland because the necessary data are not in the public domain. Then, for all three devolved administrations, the paper chain‐links their ‘Departmental Expenditure Limits’ from one Spending Review to the next. These changes are systematically analysed into six analytical categories developed for the purpose. The empirical results show that the UK devolution financing system cannot be understood simply in terms of applying the Barnett population‐based formula proportions to changes in comparable expenditure in England. Finally, practical suggestions are made about the steps necessary to render the system fully transparent.

Item Type:Articles
Keywords:Barnett formula, devolution finance, public expenditure planning, transparency, UK territorial public finance, HJ Public Finance
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Heald, Professor David
Authors: Heald, D., and McLeod, A.
College/School:College of Social Sciences > Adam Smith Business School > Accounting and Finance
Journal Name:Regional Studies
Publisher:Taylor & Francis
ISSN:0034-3404
ISSN (Online):1360-0591

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