commission on fiscal imbalance 合集

Thirdly there is the curious situation when the

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: en if extended to England. There are many figures in circulation about potential costs, though the basis of calculation, the original source and even the time period are often not made explicit. For example, with regard to Scotland, £800 million has been cited for the McCrone proposals; £110m a year for Sutherland; and £50m a year for Cubie. Moreover, a huge amount of media attention has been attracted by the mismanagement and cost overruns of the buildings for the Scottish Parliament at Holyrood and for the National Assembly for Wales at Cardiff Bay. These overspends have to be met from within the assigned budget. Third, even where a Scottish policy initiative does not involve future expenditure commitments, the method of funding via the assigned budget means that the way in which the Treasury scores particular transactions can be highly technical 32 This discussion refers to the financial effects of horizontal policy spillovers, not to vertical financial spillovers. The published rules (Treasury, 2000a) for operating the devolved financial system specify that there would be adjustments to the assigned budgets in cases where devolved policy, for example higher council taxes or higher council house rents, leads to higher benefit payments from UK funds. 273 Commission on Fiscal Imbalance and immensely important. There has been newspaper coverage, probably leaked to damage the new First Minister, regarding negotiations between the Scottish Executive and the Treasury as to how the transfer of Glasgow City 33 Council’s housing stock to a housing association will be scored. Nevertheless, policy spillovers do not all run the same way. First, pressure has been put upon the devolved administrations because of the headlining, particularly at the times of the 1998 and 2000 CSRs, of the percentage increases awarded to health and education in England. Because of the operation of the Barnett formula, the devolved administrations could not match these percentages, without massively distorting internal priorities within their assigned budgets. The so-called ‘Barnett squeeze’ has been measured as the amounts Scotland, Wales and Northern Ireland have not received because the same percentage increase as in England was not applied to their own expenditure base (Cuthbert and Cuthbert, 2001). Although there is something bizarre in such calculations,34 the media and political attention they attract are undoubtedly causing problems for policy-makers in the devolved administrations.35 Second, there are considerable differences in the structure of government in the four territories of the United Kingdom, and in the conduct of central-local relations. Scotland now has a single-tier local authority system and, even before 1997, there has been considerably less conflict over education policy and schools management. Local government is highly marginal in Northern Ireland, with many functions, including schools, managed directly by the Executive or by quangos. In Engl...
View Full Document

This note was uploaded on 03/06/2013 for the course ECON 220 taught by Professor Paulo during the Spring '13 term at University of Liverpool.

Ask a homework question - tutors are online