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Financing Options for Devolved Government in the UK

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  • James Gallagher
  • Daniel Hinze

Abstract

This study provides a comprehensive overview of the financing options for devolved government in the UK. Starting with a discussion of the present situation, the consequences and the possible future of the Barnett formula, the key economic and political principles for devolution finance are examined and then applied to possible financing options. The conclusion draws together the main points of the analysis and comments on the alternatives for funding the devolved administrations. While currently there appears to be considerable cross-party support for the Barnett system, it continues to be a contentious arrangement, with some observers even talking of a “fiscal crisis” (McLean (2005)). The paper therefore reviews the strengths and weaknesses of the present system, together with suggestions for possible changes.

Suggested Citation

  • James Gallagher & Daniel Hinze, "undated". "Financing Options for Devolved Government in the UK," Working Papers 2005_24, Business School - Economics, University of Glasgow.
    • Handle: RePEc:gla:glaewp:2005_24
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    File URL: http://www.gla.ac.uk/media/media_22218_en.pdf
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    References listed on IDEAS

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    Cited by:

    1. Alex Christie & J. Kim Swales, 2010. "The Barnett Allocation Mechanism: Formula Plus Influence?," Regional Studies, Taylor & Francis Journals, vol. 44(6), pages 761-775.
    2. Patrizio Lecca & Peter McGregor & Kim Swales & Ya Ping Yin, 2010. "Inverted Haavelmo Effects in a General Equilibrium Analysis of the Impact of Implementing the Scottish Variable Rate of Income Tax," Working Papers 1013, University of Strathclyde Business School, Department of Economics.

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