The Barnett Formula - Select Committee on the Barnett Formula Contents


Examination of Witnesses (Questions 412 - 419)

WEDNESDAY 11 MARCH 2009

Ms Helen Bailey, Ms Helene Radcliffe, Mr Mark Parkinson and Mr Jim Gallagher

  Q412  Chairman: Good afternoon and thank you for coming, and thank you for submitting some documents to us which we have read with interest, but I have to say with a certain disappointment which no doubt that will emerge in the course of the afternoon. I am sure you have all given evidence at these sessions before but I perhaps ought to remind you that evidence sessions are broadcast live on the internet and a full transcript is going to be taken. You will have an opportunity to make small corrections to the transcript but you will not be able to alter any of the sense of what you have said. I think perhaps I ought to make it clear right at the outset to you that you it is open to you supply the Committee with any additional evidence if there is some additional evidence you feel you ought to supply, and in return the Committee is in a position to ask you to supply additional evidence if we do not think that we have sufficient evidence. I wonder if you would be kind enough to introduce yourselves and tell us what you all do and then we can perhaps ask you questions.

  Ms Bailey: Thank you very much for that introduction. This is actually the first time certainly that I have given evidence before a select committee so I am grateful for the advice you have given, Chairman. We are very pleased to be here at the behest of Treasury ministers. We represent Her Majesty's Treasury, which is—and I think this is just worth saying in this context—a UK-wide government department concerned with fiscal policy and with public spending across the United Kingdom as well as with the wider economic matters which have featured recently in the public press. Our role is to answer questions on both the written evidence we have already supplied to you, to which you have alluded, and to attempt to deal with factual matters in relation to the operation of the Formula and in relation to the Treasury's work in that respect. Let me introduce my team. I have got on my right Helene Radcliffe, who is the Team Leader of the devolved administrations unit in the Treasury, and Mark Parkinson, who is an acknowledged expert on the operation of the Barnett Formula. I am Helen Bailey and I am a Director in the Public Services and Growth Directorate at Her Majesty's Treasury, and we look very forward very much to being able to assist you in any way we can this afternoon.

  Mr Gallagher: I would like to introduce myself, Chairman. My name is Jim Gallagher and I am the Director General for Devolution in the Ministry of Justice and I work with Treasury colleagues.

  Q413  Chairman: Thank you very much indeed. Perhaps I could ask the first question, which I hope is relatively clear. Does the Treasury think that the Barnett Formula treats all four parts of the UK fairly?

  Ms Bailey: We think in the Treasury that the advantages of the Barnett Formula are that it gives an absolute increase in spending for every part of the United Kingdom which is the same when a spending decision is made by the UK Government. It has the merits of longevity, transparency and of familiarity.

  Q414  Chairman: That was not quite what I asked you actually, with respect. Do you think it has the advantage of fairness?

  Ms Bailey: In that it provides an absolute similar amount of money to each devolved administration, that speaks to its fairness. I think fairness is always a subjective issue and I think as officials we would wish to leave that there. It is perhaps worth saying that there is a dispute resolution mechanism built into the Formula, which can be triggered and which would take place in the form of a joint ministerial committee, and it may be significant to point out that that has never yet been triggered.

  Q415  Chairman: I am sorry, I am trying to follow. Are you saying that you are not prepared to tell us whether the Treasury thinks that it is a fair formula, or are you saying that in your view it is a fair formula because it is clear, relatively simple and has operated for a long time?

  Ms Bailey: I think we are saying, as you have just said, that it has the advantages of being clear and very well understood and it is fair in that it provides an absolute comparable level of increase in funding to each of the devolved administrations. Whether in any wider sense it was perceived to be fair or not I think is a matter for committees like yourselves to provide evidence to Government on.

  Q416  Chairman: Well, not entirely because the Treasury has done these fairness exercises, has it not? You did one in the seventies and you did one in the eighties.

  Ms Bailey: Indeed.

  Q417  Chairman: You assessed the fairness, or otherwise, of the allocation of resources.

  Ms Bailey: The work which was undertaken would inform the operation of the Formula in very different circumstances. Since the publication of the Funding Statement in 1999 we have kept the Formula under review at every Comprehensive Spending Review but we have not undertaken a needs assessment since then.

  Q418  Chairman: You have not undertaken a needs assessment upon which there was agreement, but are you telling us that the Treasury has not undertaken any kinds of needs assessment between the four parts of the UK? Surely not? It must have done.

  Ms Bailey: The Treasury looks at the way in which we apportion funding every time we do a Comprehensive Spending Review, so we did in 2004 and we did in 2007. We have not undertaken any wider full needs assessment.

  Q419  Chairman: When you look at the allocation of spending between the four parts of the UK, does the fairness of the spending enter into the Treasury's calculations at all?

  Ms Bailey: I think I would have to press you on what you meant by "fairness".


 
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