Mike Denham

An alternative to the Barnett Formula

Many thanks to Mike Denham – the author of a Taxpayers’ Alliance report on the Barnett Formula, released today – for the following post…


In the last week, the allocation of money between England and Scotland has been in the news with the Scottish National Party planning to abolish council tax in Scotland, replace it with a local income tax and have English taxpayers foot a part of the bill.  The Government’s Calman Commission, set up to review devolution, is mandated to investigate whether fiscal devolution would be a good idea. 

Disputes over the distribution of taxpayers money between Scotland and England aren’t new, but those disputes have rarely been well informed. Today’s report aims to remedy that situation by providing a comprehensive analysis of how the various mechanisms to disburse money to the different regions have operated.

For the last 30 years the Barnett Formula has been used to allocate British taxpayers’ cash between England, Scotland, Wales, and Northern Ireland.

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