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Unformatted text preview: , with Catalonia, Québec and Scotland being cited in this category (Keating,
1997). Further discussion on Scotland can be found in McCrone (1992) and McCrone et al. (1998).
There is much political sensitivity concerning how Scotland, Wales and Northern Ireland are described: nation; country; region; and many loaded
terms specifically used in respect of Northern Ireland. For that reason, this paper usually adopts the Treasury’s bland terminology of ‘territories’,
understood to refer to Scotland, Wales and Northern Ireland (which have had territorial Secretaries of State and now have devolution), but not usually
to England (which is managed by London-based departments which have a mixture of UK, GB and English responsibilities). Commission on Fiscal Imbalance London’s dominance over all aspects of British economic, political and cultural life reflects its role as business,
commercial, financial, governmental, political and scientific capitals; this combination of roles in a single city is one of the
differentiating aspects of the UK case.9
Nevertheless, it would be a fanciful view that contemporary developments represent a ‘long march of historical
inevitability’ towards Scottish devolution or restored independent statehood. In reality, recent history might have turned
out quite differently (Taylor, 1999). For example, until the death in a car accident of HRH Princess Diana on 31 August
1997 took over the news agenda, the Yes campaign in the Scotland referendum was looking vulnerable on the second
question of whether voters supported the proposal that the Scottish Parliament should have tax-varying powers (the
‘tartan tax’).10 Moreover, the carrying of the Labour Government’s proposals for Wales was still in doubt right up until the
declaration of the last local authority, in the referendum deliberately held one week after Scotland’s. Several of the
technical problems identified in this paper are much more easily understood if this context is taken into account. 3. DESCRIPTION OF THE DEVOLVED FUNDING SYSTEM There are many complexities to the UK devolved funding system, but the basic outline can be readily explained. First,
the devolved bodies are financed through an unconditional block grant (‘assigned budget’) from the Treasury paid via
the territorial offices (the Scotland Office, Wales Office and Northern Ireland Office) which, as UK departments, account
to the Westminster Parliament for the total. Accountability for the spending of the assigned budget rests with the
devolved Executives, accountable to the devolved Parliament and Assemblies, with the audit being undertaken by the
public official (Auditor General for Scotland, Auditor General for Wales and Comptroller & Auditor General for Northern
Ireland) who heads the respective territorial audit offices. Subject to the qualifications below, the devolved Executives do
not control budget size, but have total discretion over expenditure composition.
Second, changes to the levels of the assigned b...
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