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20 October 2010

Funding the Scottish Parliament, Welsh Assembly Government and Northern Ireland Assembly: Statement of Funding Policy

The Statement of Funding Policy sets out how spending is allocated for the devolved administrations of Scotland, Wales and Northern Ireland. Spending is allocated using the long-standing Barnett Formula, which allocates changes in funding based on population.

This is the 6th edition of the Statement and has been updated to reflect revised mid-year estimates of population published by the Office for National Statistics and changes to public expenditure guidelines.

Under the Barnett Formula, Scotland, Wales and Northern Ireland receive a population-based allocation of spending, comparable to those in England. Changes in each devolved administration's spending allocation are determined by the changes planned by UK government departments, comparing services of the devolved administration with those of  UK departments  and by each country’s population.

The devolved administrations  determine the allocation of public expenditure between the services under their control. The devolved administrations will normally be expected to accommodate additional pressures on their budgets with access to the Reserve being considered in exceptional circumstances only. This is consistent with the arrangements for departments of the United Kingdom Government. Unforeseen pressures are expected to be catered for by offsetting savings and re-allocating priorities.

• Funding the Scottish Parliament, Welsh Assembly Government and Northern Ireland Assembly: Statement of funding policy (PDF 420KB)

Update: October 2012

A joint statement outlining new commitments on funding in Wales was published by the UK Government and the Welsh Government on 24 October 2012. For the first time, both Governments have established a common position on how English and Welsh funding per head has converged in the past and the likely trend in the future. The UK and Welsh Governments have also agreed that, in principle, the Welsh Government should have access to capital borrowing powers on the condition an independent revenue stream, such as tax powers, is in place to support them – as currently being considered by the Commission on Devolution in Wales (the Silk Commission).

• Press notice: Governments reach new agreement on Welsh funding

The joint statement between the UK and Welsh Government is available below:

• Joint statement on funding reform (English version) (PDF 72KB)
• Joint statement on funding reform (Welsh version) (PDF 71KB)

Supporting technical annex:

• Technical annex to joint statement on funding reform (PDF 61KB)

The documents on this page are available in Adobe Acrobat Portable Document Format (PDF). If you do not have Adobe Acrobat installed on your computer you can download the software free of charge from the Adobe website. For alternative ways to read PDF documents and further information on website accessibility visit the HM Treasury accessibility page. 

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