Fiscal framework inquiry to begin in new year

A review of the fiscal framework for Scotland is to begin early next year, the House of Commons Scottish Affairs Committee has announced.

Committee chairman Pete Wishart said the framework was of “huge importance” because different arrangements could mean a difference of hundreds of millions pounds of funding.

While “less heralded” than the Scotland Bill, the fiscal framework is just as important for setting out how Scotland will operate in future, he said.

“The effectiveness of the revenue and spending powers that are to be devolved are, to an extent, dependent on the funding mechanisms that will be established alongside them,” he explained.

“This is why, as the bill makes its way through Parliament, we need to continue to scrutinise the government’s intentions so the full financial implications are understood.”

Fairness has to be central to the framework, the SNP MP added, so there was “no inbuilt financial disadvantage” caused by the settlement.

The fiscal framework is was originally scheduled to be published this autumn, but an agreement has not yet been reached.

According to a recent statement by Nicola Sturgeon, both the Scottish and UK governments aim to reach a deal by February.

This leaves very little time for scrutiny of the fiscal framework if the Scotland Bill is to be approved before the Scottish Parliament dissolves in March.

Wishart expressed concerns about the pace of the discussions over the mechanism for funding Scotland’s new powers and the closed nature of the negotations.

“We recognise that this is complex work, but the negotiations are behind schedule and are being carried out behind closed doors,” he said.

“This lack of transparency is not good enough. Through our inquiry we hope to shed some light on the process of putting together the fiscal framework, what problems have been overcome and which remain to be resolved.”

The committee will hear from economists and ministers from both the Treasury and the Scottish Government as part of its inquiry.