Examination of Witnesses (Questions 620
- 622)
FRIDAY 20 MARCH 2009
Mr Paul Griffiths, Mr Ian Carruthers and Ms Maria
Jones
Q620 Earl of Mar and Kellie:
If we are to persuade the Treasury to alter the way they do things,
it strikes me there are two things that we could do. One is that
we invite them to have an independent commission advising them
on a year-by-year basis as to how much to distribute round the
three countries; or alternatively—and the one I suspect
that is more likely—to go along with this they might do
one needs assessment of this type and then revert to the Barnett
Formula for a few years. Do you think that the latter could be
helpful—is in fact a re-jigging of an alteration of the
baseline and a fresh start, which I think the Treasury would probably
like because they have only got to do it once? Could that be helpful?
Mr Carruthers: I think you would come up against
the fact that if you try and move the baseline, then those that
will gain will support that change, and those that will lose will
not support it. It seems to me undeniable that if you want to
change the methodology, you have got to have a good look at the
alternative range of indicators, and needs, I think, has to be
one of those that you would want to look at. Then you are going
to have to look at the way in which you might balance it. I think
the Treasury would probably agree if it is not going to require
them to transfer any more resources than they already have to,
but it seems to me that inevitably you would have to have some
form of transition process, which indeed is the experience in
Australia; that you have to put more resources into the system
during the transition period in order to get people to buy into
that process. I think it is almost inevitable that to move people
from where they are to where you want them to be, there has to
be some kind of transition process. That may well be difficult
to achieve in times when public expenditure is under intense and
increasing pressure, as it will be over the next few years.
Q621 Earl of Mar and Kellie:
What I am really getting at is that, since I believe it will be
easier to persuade the Treasury to do this once as opposed to
doing it every year, if that is going for a one-off and then re-starting
the Barnett Formula—would that be at all helpful or would
that be just a waste of time?
Mr Griffiths: I wonder if what you are suggesting
is almost the norm in these needs-based systems, that you set
up a needs-based assessment and you then inevitably have a long
period of transition in implementing it. The only adjustments
you make annually to that needs-based assessment is any input
of fresh data, which is likely to be population data—so
it looks a bit like Barnett. What I believe most of them do, and
what we do in Welsh Local Government, is have a long-term planned
cycle of reviewing the framework, bit by bit and indicator by
indicator. You do not re-evaluate the whole thing each year. If
that is what happens elsewhere, it is not so different from your
proposition that you end up with a bit of a big bang with a transitional
taper, and then population adjustments subject to a long cycle
of review.
Q622 Lord Moser:
We all talk about possibly replacing Barnett by something else,
and the something else we describe in terms of different indicators:
can you think of a way—I have not—of expanding Barnett
into a Barnett type 2 formula which includes additional indicators,
which goes beyond just population but includes a few of the others
you have talked about. It becomes more sophisticated. I do not
know whether one can think along those lines—I am just asking.
Ms Jones: In our submission to the Committee
there was one suggestion in that vein, which was basically looking
at the comparable percentage increase year on year, basically
looking at the marginal increase year on year, which at the beginning
might not disrupt the baseline, but it might be an occasion where
consideration was given in a different format to how the comparable
percentage was allocated. Over a period of time that would then
overtake the baseline and re-establish over time that complete
baseline as a new Formula-based allocation or a needs-based allocation.
One of the issues there is that it might appear to be too prescriptive
in terms of the need to spend in different areas, and it may compromise
the ability to continue within the devolved environment, with
the ability to determine the local policy priorities.
Mr Griffiths: I would like to think through
what you have said and have a chance to come back.
Chairman: Could you give a piece of paper
setting out the thoughts when you have them? That would be helpful.
Can I thank the three of you very much for coming this afternoon.
We have had a fascinating session. As I said to somebody else,
from the point of view of people on this side of the table, this
commission is in some ways a great learning process, and you have
helped us in that learning process. Thank you very much.
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