Clarity needed on Barnett consequentials
During yesterday’s session of the Joint Executive Committee (JEC) with the Chief Secretary to the Treasury Simon Clarke, Finance Secretary Kate Forbes outlined some of the challenges needing to be addressed as part of the forthcoming joint review of the Scottish Fiscal Framework.
Chairing the meeting in London, Ms Forbes highlighted the need for further collaboration on fiscal flexibility, including consideration of further financial powers as part of the forthcoming Fiscal Framework review.
The meeting follows the UK Government’s Council Tax Energy Rebate announcement and the consequential funding for the Scottish Government.
The Spring Budget Revision has also been published showing that the Scottish Government has spent almost £15 billion on measures to respond to COVID-19 since the beginning of the pandemic. It represents the final decisions made in the Scottish Government budget allocations for this financial year despite the challenges due to late notification of consequentials.
Speaking following the JEC, Ms Forbes said: “I have had a constructive conversation with the Chief Secretary to the Treasury this afternoon, where there was a frank exchange of views on what is quickly required from the Fiscal Framework Review and the need for further fiscal flexibility for Scotland.
“Our experiences of dealing with both the health and economic impacts of the pandemic and supporting those struggling with the cost of living crisis clearly demonstrate how difficult it is to take actions we deem vital without sufficient fiscal powers and often with late notice or lack of engagement when further funding is coming.
“This has been proven once again today. Whilst I will always welcome funding, the net change to our budget isn’t clear yet – we are awaiting urgent clarity on this from the Treasury and how it will impact our final settlement for the current year.
“As the First Minister has said, we will pass on the full consequential funding to support people struggling with the current costs of living. Council Tax is already lower in Scotland and our current support such as the single Council Tax Reduction Scheme protects 470,000 lower income households.”
And the UK Government’s take on yesterday’s meeting:
Chief Secretary to the Treasury Simon Clarke held talks with the Scottish Government’s Cabinet Secretary for Finance and the Economy Kate Forbes yesterday to discuss the upcoming review of the Scottish Government’s Fiscal Framework.
The ministers agreed they were close to finalising arrangements for an independent report on the Scottish Government’s Block Grant Adjustment arrangements which will inform the review.
They shared the ambition to get this first stage launched as soon as possible.
The Chief Secretary and Cabinet Secretary also agreed that the Fiscal Framework review should be guided by principles set out in the Smith Commission agreement. They discussed the importance of several principles, including fairness and consistency, as well as the need to have a framework that is implementable, sustainable and operates effectively in practice.
Both ministers expressed a desire to avoid unnecessary delays to starting the Fiscal Framework review, and agreed to continue a dialogue and joint preparations for the review while the independent report is underway.
Ministers also discussed financial impacts relating to the income tax personal allowance.
Chief Secretary to the Treasury Simon Clarke said: “Today was an enjoyable and productive meeting. We are working closely with the Scottish Government and engaging in regular discussions on the Fiscal Framework review, making good progress on our approach to the Scottish Government’s future finances.”