Unformatted text preview: drive the territorial public expenditure relatives to 100: the territorial Secretaries of State understood that they
could call for a successor needs assessment to that published in 1979 (Treasury, 1979), should they feel it necessary.
Revealed preference suggests that they made a calculation that such a needs assessment would not be in their
interests. Furthermore, the longevity of the Barnett formula, initially seen as a temporary measure, is to be noted.
Although there is now much more detail about the operation of the Barnett formula in the public domain (Treasury, 1999,
2000a), it is still not possible to replicate the calculations. The crucial point is that there are no published data for
comparable English expenditure relative to the Scottish, Welsh and Northern Ireland assigned budgets. Because of
different functional responsibilities, three separate series of data are needed. The Treasury takes a proprietary view of
its public expenditure database and denies access to this even to the pre-devolution territorial departments and the postdevolution Executives. There has been so much recent change to the definition and measurement of public expenditure
aggregates that do-it-yourself calculations are likely to be misleading.
Third, the formula-driven assigned budget is the major, but not sole, part of the funding available to the devolved
Executives. Figures 4, 5 and 6 refer to Scotland, Wales and Northern Ireland, respectively. These Figures show that
there is a common structure to the funding system in the three territories. Moreover, they are also useful as lists of the
kinds of functional expenditure which are devolved. These are broadly the same, though with some important
differences: for example, Scotland alone has ‘Law and order’ (though this could be devolved to the Northern Ireland
Assembly should the security situation make this possible); and the Northern Ireland Assembly alone has responsibility
for the social security system (though this is best seen as an agency arrangement, as there is no policy discretion).
What is also highlighted is how the devolved bodies are integrated into the UK public expenditure system.13 When the
devolution funding scheme was determined in 1997, it was not known that the Treasury would, in 1998, revamp public
expenditure control aggregates or move to a biennial survey. Changes to the assigned budget are controlled by the
Barnett formula, with the costs of running the territorial offices top-sliced in the case of Scotland and Wales. The
assigned budget is classified as Departmental Expenditure Limit (DEL), as are certain other items of expenditure which,
for various reasons, are not formula-controlled. Examples are Hill Livestock Compensation Allowances and Welfare-towork (a programme financed out of the windfall tax on privatized public utilities). At the time of a Comprehensive
Spending Review (CSR), namely in 1998, 2000 and 2002, DELs are set three years ahead. In contrast, Annually
Managed Expenditure (AME) is set one year ahead, largely on the ground that these items are more difficult to control
and forecast. Examples of AME are Common Agricultural Policy expenditure and Local Authority S...
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