THE Barnett Formula “couldn’t bear the weight of an emergency,” according to former finance secretary Kate Forbes.
During an appearance in front of the UK Covid Inquiry, Forbes was asked whether she had concerns about how the Barnett Formula was applied during the pandemic.
She told senior counsel Jamie Dawson KC that the systems in place simply did not provide the Scottish Government with the guarantees required to plan their pandemic response in the most efficient manner.
“It continued to be the case that the UK Government would, understandably, inform us that there would be no additional funding and we would budget on that basis,” she said. “And then a weeks later, in some cases a few days later, there would be an announcement of additional funding.
“It would have aided planning considerably if we had known the full extent of the funding that we had available to access.
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“That wasn’t a question of personalities, I had very constructive relationships. But it was a question of the systems, where the systems were just not set up to give us the budget guarantee that we needed.”
Dawson then asked Forbes if she agreed with the analysis of Professor Paul Cairney, who described the Barnett Formula as a “political solution rather than a coherent financial solution”.
Forbes said: “I don’t necessarily follow the political point but I would say that it wasn’t a sufficiently flexible system for an emergency.
“From the very beginning my Welsh and Northern Irish counterparts and I all agreed that it couldn’t bear the weight of an emergency.”
She added that various flexibilities to the Barnett Formula had been proposed during the pandemic, including allowing the Scottish Government to carry forward budget funding into the next year.
“On the 15th of February 2021, the UK Government announced an additional £1.1 billion of Barnett, which obviously was hugely welcome.
“But that is six weeks away from the end of the financial year and we can’t carry money forward. So, that was an example of a flexibility that we asked for.”
In March that year, the Scottish Government was permitted to carry forward that £1.1bn of funding as a “one-off,” said Forbes.
She added that it stuck her as an “eminently sensible adaptation” to allow the Scottish Government to spend money across years that didn’t compromise the core principles of the Barnett formula.
The former finance secretary was also quizzed about a WhatsApp exchange with Alyson Stafford, the director general of the Scottish Exchequer, in which a Cabinet meeting was described as “awkward” and “embarrassing”.
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Messages showed Forbes discussing a Cabinet meeting where then health secretary Humza Yousaf had identified an additional £100 million for business support from the health budget – unbeknownst to both Forbes and then first minister Nicola Sturgeon.
Forbes wrote in the messages that it was “news” to her and to Sturgeon, and that she had never seen Sturgeon “this angry in all my cabinets”.
She also told Jamie Dawson KC she had been tasked with finding additional funding from any part of the budget for business support.
She said “surprises were never welcome” and that Yousaf was “trying to be helpful,” but the idea was not drafted in cabinet papers.
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