How does the Barnett Formula actually work?

A simple explanation of how the Barnett formula works both in principle and in practice.

The Barnett formula: an often argued but little understood part of the UK’s uncodified constitution. It seems unlikely that even Joel Barnett, the minister who invented it purely as a temporary measure in 1978, could have foreseen the nature of its impact on devolved spending when applied for such an extended period.

Simply put, when public spending changes, up or down, HM Treasury uses the Barnett Formula to determine how the majority of public spending is spread across England, Scotland, Wales and Northern Ireland - the so-called ‘Block Grant’.

This ‘Briefing’ will look only at how the Formula works and not the other ways devolved administrations are financed nor whether it is a ‘fair’ system.

• Primary Source

Wikipedia: Barnett formula https://en.wikipedia.org/wiki/Barnett_formula

BBC News, 23.11.16: What is the Barnett formula? http://www.bbc.co.uk/news/uk-northern-ireland-38077948

Blog: Devolution Matters: The Barnett formula and the financing of devolution (26.11.15) https://devolutionmatters.wordpress.com/the-barnett-formula-and-the-financing-of-devolution/

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