Executive Summary: A fracturing union?
Summary of Conclusions and Recommendations
The Financial devolution settlements
Problem 1: ‘Nobody knows what is going on’: The absence of the fiscal framework
Problem 2: Funding of devolved administrations in the UK
The Barnett Formula
Problem 3: Adjustment of the block grant to reflect devolved income tax receipts
Method 1: fixed percentage change to the block grant adjustment
Method 2: index deduction to changes in rest of UK revenues
Method 3: index deduction to changes in rest of UK revenues per head
Which method is preferable?
Problem 4: The second ‘no detriment’ principle
Application in selecting a method for adjusting the block grant to reflect devolved powers of taxation
But otherwise unworkable?
Problem 5: Choice of devolved taxes
Problem 6: Borrowing Powers
Questions about borrowing powers for Scotland
Problem 7: Transparency and Scrutiny
Scrutiny prior to devolution
Annex 1: Devolution in the UK
How did we get here? The Evolution of Devolution in the UK
Annex 2: Tax devolution: principles and practice
Principles: which taxes are best to devolve?
Practice: rationale for current tax devolution
Assignment of Value Added Tax
Annex 3: The Block Grant and the Barnett Formula
Expenditure per head in the UK by country and region
History of funding for Scotland, Wales and Northern Ireland
The Barnett Formula—an example
Should the Barnett formula be replaced?
Support for the Barnett formula
Annex 4: Adjusting the block grant to reflect devolved revenue raising powers
The three methods for adjusting the block grant to reflect devolved powers of taxation to Scotland
Link to the second no detriment principle
Annex 5: Borrowing Powers
Devolution of borrowing powers
Additional borrowing powers for Scotland and Wales
Support for further borrowing powers
Extent of further borrowing
No bail-out rule
Appendix 1: List of Members and Declarations of Interest
Appendix 2: List of witnesses
Appendix 3: Call for Evidence
Evidence is published online at http://www.parliament.uk/devolution-of-public-finances and available for inspection at the Parliamentary Archives (020 7219 3074).
Q in footnotes refers to a question in oral evidence.
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