ATL

Northern Ireland

A method for deciding funding in the devolved regions is under review writes Mark Langhammer

The end could be nigh for the Barnett formula, the system used to partly determine the spending plans for the Scottish Parliament, the National Assembly of Wales and the Northern Ireland Assembly. A House of Lords Select Committee has recommended it be replaced with a needs-based methodology.

Widely considered as a temporary measure, the simplicity, stability and non-ring-fenced nature of Joel Barnett's formula has made it difficult to contemplate change. Currently, Northern Ireland has 126 per cent more funding per head than England.

One criticism is that the baseline figures used for Barnett have never been reviewed. Since 1981, there has been population growth of six per cent in Wales, nine per cent in England and 14 per cent in Northern Ireland, and a population decline in Scotland.

The Lords found that the formula "did not reflect today's population in the devolved administrations, and takes no account of the relative needs of any devolved administration" and recommended an "explicit assessment" of each region's need. The Lords Committee also recommended a funding commission to oversee allocations, rather than the Treasury.

A UK government response is required by November. The Welsh Holtham Commission's interim report warns that Wales will face significant under-funding through the current system. The Scottish Calman Commission recommends that devolved funding should be based on need, not population. Yet, on this most critical issue for devolved public finances, no response has yet been issued from the Northern Ireland Executive. Now why does that not surprise us?