The proposed devolution of powers to Scotland is increasingly making the Barnett formula no longer ‘fit-for-purpose’, a new briefing argues.
CIPFA, the Chartered Institute of Public Finance and Accountancy, has reiterated its calls for a new funding allocation model to be created for the UK. It says powers should be devolved to the lowest local level possible, with regions being allowed to make their own tax and spending decisions.
Rob Whiteman, chief executive of CIPFA, said: ‘With the significant increase in tax raising and spending powers in Scotland we must accept that if we are to see transparent and sustainable funding for all parts of the UK the formula will need replacement.
‘Only by replacing it with a fair and equitable system that represents the varying needs of different areas and communities across the country will we be able to provide for the long-term sustainability of our public services.’
CIPFA says any new funding system should be underpinned by four principles: need, equity, accountability and transparency.
