Commons Sense

House of Commons · Ministers' Questions

Fiscal Framework Agreement

Tuesday 27 April 2021 · 2 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 1 Partly answered 1 Not answered 0

Key points

  • The existing fiscal framework includes a review following the Scottish elections to assess the agreement's adequacy.
  • The Smith commission set conditions that provide substantial borrowing powers to the Scottish Government.
  • The Scottish Government has access to up to 450 million in annual capital borrowing and additional funds through the Scotland reserve and resource borrowing.

Topics (select to filter)

Questions & Answers

Q1 Alan Brown SNP
Economy Scotland
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.

Question

What recent assessment has been made of the adequacy of the 2016 fiscal framework agreement between the Government and the Scottish Government?

Answer from Steve Barclay (Financial Secretary to HM Treasury)

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.

Partly answered

Not addressed: The Minister did not provide a recent assessment of the framework's adequacy but discussed the review process post-elections.

How: Discussed Review Process Instead Of Giving An Evaluation

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Q2 Alan Brown SNP
Scotland
Context

There is a perceived inadequacy in the Scottish Government's borrowing powers, hindering effective pandemic response measures.

Question

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?

Answer from Steve Barclay (Financial Secretary to HM Treasury)

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.

Answered
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