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Fiscal Framework Agreement

Volume 693: debated on Tuesday 27 April 2021

What recent assessment he has made of the adequacy of the 2016 fiscal framework agreement between the Government and the Scottish Government. (914810)

The existing fiscal framework sets out the arrangements for a review following the Scottish elections. This will allow a settlement in the light of a Parliament’s-worth of experience, which is consistent with the Smith commission’s expectations that there will be effective operation of the fiscal framework and that it should not require frequent ongoing negotiation.

The reality is that the powers of the Scottish Government are not adequate to deal with the pandemic. There are too many constraints on borrowing powers for the Scottish Government; the reality is that councils can borrow more easily under the prudential borrowing code. Does the Minister not agree that it is time the Scottish Government had more flexible borrowing powers?

The Smith commission set out the conditions, and they already give substantial borrowing powers. That is why there is up to £450 million of annual capital borrowing, £700 million in the Scotland reserve and up to £600 million for resource borrowing in relation to forecast error, and of course that comes on top of the share of UK Government borrowing provided through the Barnett formula.