Tory government actions: “The effect is to circumvent not only the Barnett Formula but the devolved governments themselves.”
– concludes a new report from Fraser of Allander Institute and Institute for Fiscal Studies
Brexit and the UK Internal Market Act are key factors in the Westminster government making far reaching changes to the devolution settlement. Despite best efforts by Scottish Government ministers and some bloggers, the wider electorate in Scotland could be forgiven for being blissfully unaware of the extent of change underway especially if they consume their news only from the corporate media and BBC Scotland.
But the truth of the situation is very different. Just how different is revealed in a new report on government funding of the responses to the Covid pandemic in the devolved nations of the UK. And these insights come from a study undertaken by no less than the Fraser of Allander Institute and the Institute for Fiscal Studies.
Source: Bell, Eiser and Phillips (2021) Designing and funding the devolved nations’ policy responses to COVID-19. Fraser of Allander Institute report, 22 April 2021. (https://fraserofallander.org/wp-content/uploads/2021/04/Designing-and-funding-the-devolved-nations-policy-response-to-COVID-19.pdf )
We learn that the Tory government has established new funding streams including: (i) the Levelling Up Fund; (ii) the Community Renewal Fund; and (iii) the UK Shared Prosperity Fund (part-replacement for EU regional development funds). The authors state all this marks a significant change in fiscal relationships between the UK government and the devolved governments.
Crucially they explain: “… funds will ostensibly be allocated on the basis of ‘needs’, but the assessment of what constitutes ‘need’ has been developed by the UK government without consultation with the devolved governments. This approach has been made possible by the Internal Market Act which provides a new means for the UK government to allocate spending in the devolved territories to areas which had previously been thought to be the purview of the devolved governments.“
The authors are clear: “The effect is to circumvent not only the Barnett Formula but the devolved governments themselves.”
They note that it remains unclear how the main Shared Prosperity Fund itself will be allocated. However, the Community Renewal Fund and Levelling-up Fund “further extends the role of competitive bidding processes controlled by the UK government in the devolved nations and replace it with a transactional, deal-making approach to regional assistance in which local authorities across the whole of Great Britain compete for funding.” Given all that’s happening in Westminster politics nowadays, a ‘deal-making approach’ is hardly one to inspire confidence!
The report adds: “In the absence of co-operation agreements, the devolved nations may be anxious that this will undermine their activities and authority in economic development and associated policy areas, and potentially lead to overlaps or mismatches between schemes“ – this is to put it very mildly!
These are hardly the actions of a political party in government inclined towards federalism – or even towards more devolution of powers. These signal a political strategy – a political philosophy – based on aggressive Unionism!