Overview

This bill mandates the Chancellor of the Exchequer to propose a replacement for the Barnett Formula, which currently determines how public spending is allocated to Scotland, Wales, and Northern Ireland. The proposed replacement would use a statutory scheme based on an assessment of relative needs.

Description

The Barnett Formula (Replacement) Bill requires the Chancellor to create and present to Parliament within three months of the bill's passing, proposals for a new system to allocate public funds to Scotland, Wales, and Northern Ireland. This new system will replace the current Barnett Formula. The replacement will be a statutory scheme, meaning it will be legally enshrined, and it will distribute resources based on an assessment of relative needs across the devolved administrations. The bill applies to the whole of the UK.

Government Spending

The bill itself doesn't directly impact government spending. It mandates a review and potential reform of the mechanism for allocating existing spending. The financial implications will depend entirely on the proposals for a replacement system developed by the Chancellor. Therefore, no figures on government spending are available at this time.

Groups Affected

The bill directly impacts:

• The devolved administrations of Scotland, Wales, and Northern Ireland: Their funding levels will be significantly affected by the change from the Barnett Formula to a needs-based system.
• The UK Government (Treasury): Responsible for drafting and implementing the replacement system.
• Parliament: Will scrutinize the Chancellor's proposals.

Indirectly, the bill may affect all citizens in the UK depending on how the new allocation system changes funding for public services in Scotland, Wales and Northern Ireland.

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