Fiscal Framework Review: FOI release

Information requested

1. What is the remit of the review of the Fiscal Framework announced on 22nd June 2022?

2. What methodology is being applied on how this review is to be conducted?

3. Will there be a request for external inputs and evidence to this review?

4. What is the timeframe for the completion of this review?

5. Will the review and all its associated documentation be published in full and if so how soon after it’s completion will this happen?

6. Will the two governments have the opportunity to amend or in any way change the contents of the review prior to its publication?

Response

The 2016 Fiscal Framework agreement states that a review of the framework should occur after a parliament's worth of experience, and that the review should be preceded by an Independent Report presented to both governments. On 27 June 2022, both governments announced that the Independent Report has been jointly commissioned. As this information is already in the public domain, it is exempt under the Freedom of Information Act 2000 paragraph 25(1). You can access the press release relating to the Independent Report here: First step to Fiscal Framework Review - gov.scot (www.gov.scot).

To respond to your questions in turn:

1. The remit of the Independent Report is to evaluate the block grant adjustment funding arrangements for tax and welfare devolution (detailed in the Fiscal Framework agreement) against the principles agreed by the Smith Commission. The associated press release gives further details - First step to Fiscal Framework Review - gov.scot (www.gov.scot).

2. The Independent Report will be co-authored by Professor David Bell (University of Stirling), David Eiser (Fraser of Allander Institute at the University of Strathclyde) and David Phillips (Institute for Fiscal Studies), who are leading experts and have published extensively on the Fiscal Framework. A detailed Terms of Reference for the report, setting out the underlying methodology is available here: Independent Report preceding the Fiscal Framework review: terms of reference - gov.scot (www.gov.scot).

3. A call for evidence from stakeholders, seeking views on the design and operation of the Block Grant Adjustment mechanisms, opened on 29 July 2022 and closes 28 September 2022.

4. The Independent Report is due to be submitted to both governments by the end of October.

5. It is expected that the Independent Report will be published, though this will be agreed by both governments as part of the wider review process.

6. Although both governments will have sight of a draft of the report before its completion, the governments will only be able to comment for the purposes of identifying factual inaccuracies. The final report will be fully independent.

With regards to the Fiscal Framework review itself, good progress has been made between the governments on the scope and underlying Terms of Reference. Wider arrangements are yet to be agreed, but we anticipate the review beginning later this year. Before the review begins, it is the intention of both governments to publish a Terms of Reference for the review, in which the scope will be detailed.

Gathering external stakeholder views will be an essential part of process for the review of the Fiscal Framework. In what form this will take is yet to be agreed between the governments.

There is no deadline by which the review of the Fiscal Framework must be concluded. The review will take the form of a negotiation between both governments. Following its completion, it is anticipated that the Fiscal Framework agreement will be updated to reflect agreements reached between the governments and will be published in full. The timescale for this publication is yet to be agreed and will be dependent on when the review itself concludes. Both governments will have influence on the review itself and the revised Fiscal Framework must be agreed to by both governments.

About FOI

The Scottish Government is committed to publishing all information released in response to Freedom of Information requests. View all FOI responses at http://www.gov.scot/foi-responses.