What is the barnett formula?
The Barnett formula is the method the UK Treasury uses to adjust funding for the Scottish, Welsh and Northern Ireland governments. When spending on a devolved service in England changes, each nation gets a population-based share of that change. It has been used since 1978 and was never put into law.
The formula is named after Joel Barnett, a Treasury minister in the late 1970s. It was meant as a short-term fix but has lasted almost fifty years. It does not set the whole block grant. It only adjusts it, based on changes to comparable English spending and relative population. For example, if spending on English schools rises by £1 billion, Scotland's grant rises by roughly its population share of that sum.
Because the starting budgets were historically higher per person in Scotland and Northern Ireland, public spending per head there remains above the UK average. Wales argued it was underfunded. Since 2018 a needs-based floor has kept its funding per head above a set level relative to England.
The devolved governments decide for themselves how to spend their block grant. Scotland and Wales also raise some taxes, and their grants are reduced to reflect that. Critics in England say the formula is generous to Scotland. Critics in Wales and Northern Ireland say it ignores real need. Most experts agree it is overdue for review, but changing it is politically fraught.
Many on the left want a needs-based system that sends money where poverty and ill health are greatest.
Some on the right argue the formula is unfair to English taxpayers, while others defend it as part of keeping the Union together.
Britain is split. Now you decide.
Run Scotland as First Minister in Population Decides and make your block grant stretch across health, schools and tax choices.
Play Population Decides freeCommon questions
Does Scotland get more money per person?
Yes. Public spending per head in Scotland is higher than in England, partly because of how the formula started.
Is the Barnett formula law?
No. It is a Treasury convention set out in its Statement of Funding Policy, not an Act of Parliament.
Who invented the Barnett formula?
It is named after Joel Barnett, Chief Secretary to the Treasury in 1978.
What does the Barnett formula decide?
How changes in England-only spending affect funding for the other nations. It decides how changes in spending on England-only services feed into block grants for the other nations.
When was the Barnett formula created?
The late 1970s. The Barnett formula dates from the late 1970s.