Fiscal Framework Agreement 2021-04-27
2021-04-27
TAGS
Response quality
Questions & Answers
Q1
Partial Answer
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Context
The adequacy of the existing fiscal framework agreement between the UK and Scottish Governments is under scrutiny, particularly regarding its effectiveness since its implementation in 2016.
What recent assessment has been made of the adequacy of the 2016 fiscal framework agreement between the Government and the Scottish Government?
The existing fiscal framework sets out arrangements for a review following the Scottish elections. This will allow a settlement based on a Parliament's-worth of experience, consistent with Smith commission expectations that there should be effective operation and no need for frequent ongoing negotiation.
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Assessment & feedback
The Minister did not provide a recent assessment of the framework's adequacy but discussed the review process post-elections.
Discussed Review Process Instead Of Giving An Evaluation
Response accuracy
Q2
Direct Answer
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Context
There is a perceived inadequacy in the Scottish Government's borrowing powers, hindering effective pandemic response measures.
The reality is that the powers of the Scottish Government are not adequate to deal with the pandemic. There are too many constraints on borrowing powers for the Scottish Government; the reality is that councils can borrow more easily under the prudential borrowing code. Does the Minister not agree that it is time the Scottish Government had more flexible borrowing powers?
The Smith commission set out conditions, and these already provide substantial borrowing powers. This includes up to £450 million of annual capital borrowing, £700 million in the Scotland reserve, and up to £600 million for resource borrowing related to forecast error, on top of the share of UK Government borrowing provided through the Barnett formula.
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Assessment & feedback
Response accuracy