Fiscal framework a ‘good deal’, says top economist Anton Muscatelli

A leading economist who warned a poor funding arrangement for Scotland would have been “disastrous” for public services has welcomed the new agreement between the Scottish and UK governments announced yesterday.

In a lecture at Glasgow University tonight, Professor Anton Muscatelli, the university’s principal, will say the deal is a good one for both Scotland and the UK.

Previously he had warned slower population growth in Scotland would suffer if the deal was centred on UK tax take rather than population.

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However yesterday Nicola Sturgeon announced the agreement had assured a per-capita indexed deduction model will be used to calculate the block grant for the next six years to March 2022. There will then be an independent review to ensure there will be ‘no detriment’ in future settlements.

Tonight Muscatelli is expected to say: “I believe that the deal now secured is a good one for both the UK and Scottish taxpayers. It will ensure a sound basis for the future funding of the things that we all rely upon, such as the NHS, schools and the police.

“The UK and Scottish Governments were right to take time to work through the detail. They were right to look at every aspect of a deal that will now make the Scottish Parliament one of the most powerful devolved institutions in the world. And they were right to ensure that the Fiscal Framework gives clarity to the Scottish Parliament for the next parliamentary term.

“The Smith Commission no-detriment clauses are complex and required much detailed and technical discussion. It is a very good outcome to see a considered resolution by the two Governments which addresses these formal requirements without exposing Scotland to unacceptable additional demographic risks.”