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Barnett Formula is diverting £2.6 billion from English councils

The Daily Telegraph reports that if the Barnett Formula was abolished then English local authorities would be paid an extra £2.6 billion. If the arrangement, where extra funding went to Scotland, was abolished then there "would be enough money to plug the current adult social care funding gap."

Cllr Sir Merrick Cockell, Chairman of the Local Government Association, has written to the paper on the matter.

In his letter he says:

SIR – Graeme Archer (Comment, December 31) is absolutely right to highlight the increasing inadequacies of that anachronism known as the Barnett Formula. The formula was just an over-simplistic way of settling the devolved governments’ budgets with a minimum of interdepartmental negotiation and fuss. But now its unfairness and plain illogicality mean it is time to move on.

Unlike every other part of the public sector, the Scottish, Welsh and Northern Irish governments get their money automatically. They don’t have to negotiate with the Chancellor as the Ministry of Defence or the NHS do. That is why, whenever an English department gets a change to its budget, the other countries of the Union get an automatic share, with no questions asked about whether they need it, or what they are going to spend it on.

Therefore Scotland got extra money this year because English councils were being paid to freeze their council tax – even though Scotland already had a council tax freeze. And both Scotland and Wales get money because Crossrail is being built in London, without their having to make the case for comparable local projects requiring special funding.

Now that overall state spending is being cut, the devolved governments actually get a smaller share of the cuts. English voters will get less spent on their services and, on top of this, will pay to exempt the devolved states from the same spending squeeze.

Lord Barnett himself never expected the formula to last more than a few months, let alone 30 years. It has become grossly unfair, divisive, and outdated. Let’s find a new formula in 2012 and put the inadequacies of Barnett behind us.

Sir Merrick Cockell
Chairman, Local Government Association
London SW1

I suppose nothing will be done about it on the grounds it would be "unhelpful" before a referendum on Scottish independence. But the union should be preserved on the basis of fairness not favours.


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