UKIP Manifesto: the Barnett Formula

“Replace the out-dated Barnett Formula with a fair funding formula based on need”

• Most of the spending by the devolved governments in Scotland, Wales and Northern Ireland is funded by grants from the UK government. The amount they get is largely worked out by the ‘Barnett formula’.
• When the UK government changes the funding for a service in England, the Barnett formula tries to achieve a similar change in funding per person in the devolved administrations. So population is the only ‘need’ that is taken into account.
• There have been many calls for a change in the Barnett formula.
• Some—such as the Calman Commission in Scotland—have criticised the formula for not funding the UK countries according to their needs. Others are unhappy with current differences in public spending per head across the UK countries, which are partly the result of using the formula over the years.
• Funds within England tend to be allocated based on indicators of need, such as demographic characteristics, deprivation and cost. The Holtham Commission found that Wales would receive more money if UK funds were allocated to Wales in the same way that English funds are allocated within England.