Barnett Formula: Needs must
Back in July I wrote to Jonathan Shaw about his role as a regional minister, keen to know what it entailed and what powers he actually had. As it turned out he didn’t really have any, but the reply I received was interesting for the fact that it made the claim that the Barnett Formula is a needs-based equation:
You also mentioned the allocation of government funding to different parts of the UK. Under the Barnett Formula, revenues are pooled centrally and funding is allocated to UK Government departments according to the Government’s judgement of relative needs and priorities.
The statement had echoes of what Gordon Brown told Parliament (19th March 2008) when he said:
“The allocation of funds in the UK is based on a needs assessment that started more than 30 years ago, has been agreed by all parties subsequently and has been followed by every government since.
It is based on the idea we should allocate resources in the UK on the basis of need. That is the basis on which the Barnett Formula exists.”
As far as I am concerned the Barnett Formula is a population-based formula that determines the spending available to Scotland, Wales and Northern Ireland as a proportion of what is spent in England.
Though it is a common enough claim that the Barnett Formula has something to do with relative need, for example Hansard (5 June 2008) quotes Dr Richard Simpson MSP as saying:
“The geography of Scotland is one reason for the Barnett formula, as we need additional funding to support necessary services in remote and rural areas.”
How does the Barnett Formula calculate Scotland’s need; and where can I obtain the costings for the extra funding that is required for the delivery of services in Scotland, over and above the costs of delivery of those same services in England? Anyone?
Kev recently asked for information on how exactly politicians can claim that the Barnett Formula is a needs-based formula. The response pointed to the Statement of Funding Policy (pdf) which right at the start informs us that:
Under the Formula, Scotland, Wales and Northern Ireland receive a population-based proportion of changes in planned spending on comparable United Kingdom Government services in England.
In other words it’s a population-based formula and Gordon Brown is a liar.
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Brown shamelessly repeated this falsehood during PMQs on 21 November 2007, in answer to a question from Ronnie Campbell MP for Blyth Valley:
Ronnie Campbell: Can you tell me why the Barnett Formula can’t be applied to the English regions? [Noise, laughter].
Gordon Brown: Mr Speaker, the Barnett Formula is for the whole of the United Kingdom, and I have to tell him the Barnett Formula is not for one part of the United kingdom – it covers all areas of the United Kingdom, and the Barnett Formula is based on the needs of each different part.
——-
That afternoon was the occasion of Graham Stringer’s debate on the Barnett Formula in Westminster Hall, in which he made the following comment:
Stringer: Having tabled early-day motion 402, I found out that an official from No.10 Downing Street was going round to signatories and, without telling me, was asking them to withdraw their names from the motion because of the sensitivity of the issue. That was a profoundly wrong way for No.10 officials to behave; such issues are better aired in public debate.
October 27th, 2008 at 12:26 amBarnett formula originator Joel Barnett has for many, many years insisted that the formula is based upon population and not ‘needs’.
This excerpt from a report of his recent appearance in front of the Justice Committee….
(the final paragraph is particularly pertinent).
‘But Lord Barnett said English voters were coming to realise their spending levels were considerably lower than those in Wales and Scotland, and wanted change.
He told MPs on the Justice Committee, “It’s very worrying. There is an indication of it in the media now, people all over England are getting very worried.
“If you ask people anywhere if they want another £1,500 per head spent on them, they will say yes.
“I am worried about it, I think there is a serious problem. That’s why I think there is a need for a review on the formula urgently.”
Since he drew up the formula Lord Barnett has become a vociferous campaigner for it to be changed.
“I didn’t expect it to last long at all,” he said. “If I had stayed there, in that job, I would have changed it to a system based on need. That is what I’ve been pressing for.”
October 27th, 2008 at 12:27 pmIt is also nationally based.
Needs do not and never have come into it.
Ask Joel Barnett.
November 5th, 2008 at 1:13 pm