Devolved Administrations: Financial Flexibility

Baroness Hollis of Heigham Excerpts

Tuesday 8th November 2011 Lords Chamber

[Lord Sassoon]

My Lords, would I ever be so bold as to criticise the Barnett formula? The Barnett formula has been widely questioned, not least by the noble Lord, Lord Barnett, himself. However, the Government’s priority has to be stabilising the public finances. If, in due course, the formula is to be superseded, the challenge is that there is no consensus on how to measure needs, which would be required to bring in some needs-based formula.

[Baroness Hollis of Heigham]

My Lords, on the contrary, I would suggest to the noble Lord that there is plenty of research on how to bring in a needs-assessed formula, given that both devolved Administrations distribute their money down to local authorities on precisely that basis. Would the noble Lord therefore accept that Wales is indeed underfunded, that the Barnett formula effectively misspends and overspends by £4 billion and that a rectification of that would surely help the Minister to address the deficit?

[Lord Sassoon]

My Lords, what I said was that there was no consensus. Of course there is plenty of research but there is no consensus, and that is what is needed in this area.