BARNETT FORMULA Meaning and
Definition
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The Barnett formula is a mechanism used in the United Kingdom to determine changes in the amount of public spending allocated to each of the devolved administrations – Scotland, Wales, and Northern Ireland. Named after Joel Barnett, who introduced it in 1978 as a temporary measure, the formula aims to distribute funds fairly and proportionately while considering the needs of each region.
Specifically, the Barnett formula calculates the annual changes in the block grant given to each devolved administration based on changes in public spending in England. Whenever the UK government increases or decreases public spending in England, a proportionate amount is adjusted in the block grant for Scotland, Wales, and Northern Ireland.
The Barnett formula operates on the principle of maintaining the relative levels of public spending across the regions. However, it is often criticized for being outdated and arbitrary, as it does not necessarily reflect the true needs or priorities of the devolved administrations. Some argue that it benefits regions with smaller populations, as any increase in funding is maintained year after year.
Despite its criticism, the Barnett formula has remained in place for several decades due to its political sensitivity. Attempts to reform or replace it have been met with challenges and disagreements between the devolved administrations and the UK government.
Etymology of BARNETT FORMULA
The term "Barnett formula" is named after Joel Barnett, a British politician who served as Chief Secretary to the Treasury in the late 1970s. The formula was devised by Barnett in 1978 as a way to determine the allocation of public spending between different regions of the United Kingdom, specifically Scotland, Wales, and Northern Ireland. It was implemented as a result of the devolution of powers and the need to distribute funds fairly among the constituent nations of the UK. Although it was intended to be a temporary solution, the Barnett formula has remained in use for decades, despite considerable debates and calls for reform.
