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The Strathprints institutional repository is a digital archive of University of Strathclyde's Open Access research outputs. Strathprints provides access to thousands of Open Access research papers by University of Strathclyde researchers, including by researchers from the Department of Computer & Information Sciences involved in mathematically structured programming, similarity and metric search, computer security, software systems, combinatronics and digital health.

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The impact of the Barnett formula on the Scottish economy: endogenous population and variable population proportions

Ferguson, Linda and Learmonth, David and McGregor, Peter G. and Swales, J. Kim and Turner, Karen (2007) The impact of the Barnett formula on the Scottish economy: endogenous population and variable population proportions. Environment and Planning A, 39 (12). pp. 3008-3027. ISSN 0308-518X

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Abstract

The Barnett formula is the official basis upon which increments to public funds are allocated to the devolved regions of the UK for those parts of the budget that are administered locally. There is considerable controversy surrounding the implications of its strict application for the relevant regions. The existing literature focuses primarily on the equity of the spatial changes to government per capita expenditure that would accompany such a change. In contrast, in this paper we attempt to quantify the system-wide economic consequences-the real, relative resource squeeze that accompanies the financial relative squeeze-on one devolved region, Scotland. The analysis uses a multisectoral regional computable general equilibrium modelling approach. We highlight the importance of population endogeneity, particularly since the population proportions used in the formula are now regularly updated.