New Barnett formula is not the answer

The best way to increase funding for local authorities is for voters to demand it – if that’s what they want

Joel Barnett is probably not a name that many people would recognise today. It is only when the word “formula” is added to the former Chief Secretary to the Treasury’s surname that people will recognise his lasting legacy in the history of Scotland.

When it was introduced ahead of his Labour government’s 1979 general election defeat, it was meant to be only a temporary means of determining the allocation of funding to the UK’S nations but has remained in use, despite criticism, ever since.

Now the Conservatives and Labour are calling for a similar arrangement for Scotland’s councils with both parties accusing the SNP of presiding over historic funding of local authority budgets.

While a motion proposing the Barnett formula-style solution for local authority funding was rejected by MSPS yesterday, the idea is unlikely to go away. Between 2013 and 2020, council settlements fell by £276 million in real terms and this year they face a staggering budget shortfall of £511m because of the Covid crisis. In the corridors of local power, the phrase “SNP austerity” is often said with considerable feeling by councillors of other parties.

The result has been substantial cuts to local services, with social care and sporting facilities often bearing the brunt of the need to economise.

Furthermore, the SNP in government has a reputation for a centralising instinct that is at odds with the idea of keeping decision-making as close to the people affected by those decisions as possible.

So setting up a Barnett-style formula might seem attractive to some. However, there are other issues to consider. Setting up a legal requirement to give each council a certain amount would be a long, complicated process and would necessarily involve an almighty row with every council attempting to make sure their starting grant was as high as possible.

And this would then tie the hands of future democratically elected Scottish governments when they come to weigh their spending priorities, particularly if significant cuts had to be made to balance the books.

The formula for better council funding should instead remain in the hands of voters. If that is what the people want, they need to make this crystal clear to their elected representatives, who are rarely shy of a U-turn if they fear their political aspirations and futures are at risk.