Northern Ireland and the Barnett formula

“If the DUP gets this hard-headed negotiated, 2.5 billion, 2 billion, 2.5 billion that they are asking for, the Barnett Formula says that the other devolved powers are going to have to have their share, too. That's about 3 billion for Wales, about 8 or 9 billion for Scotland.”

Gina Miller, 22 June 2017

It’s not clear how any deal which results in new funding for projects in Northern Ireland will affect the rest of the UK.

The Barnett formula aims to make changes to funding for services in England have the same pound-per-person effect on the money which goes to Scotland, Wales and Northern Ireland for those services.

It’s not set out in law, and in practice the Treasury decides how to apply it. It can also be bypassed if the Treasury decides certain spending is outside the formula. If the devolved governments disagree they can argue the case.

The formula itself is basically: any change to UK government department budget multiplied by the percentage of devolved services in that area multiplied by the percentage population in that country.

So, if the Barnett formula is used the result would depend on which departments are affected. It only applies changes in the fixed budget of a department to the ‘block grant’ paid to the devolved governments. It doesn’t decide all funding.

How any additional funding for Northern Ireland might affect the rest of the UK will be decided by political negotiation.