Magazine article Public Finance

New Funding Formula Could Be 'Straightforward'

Magazine article Public Finance

New Funding Formula Could Be 'Straightforward'

Article excerpt

Replacing the Barnett Formula with a needs- based system would be 'relatively straightforward', according to the Independent Commission on Funding and Finance for Wales.

The commission published a working paper on reform of the Barnett Formula on December 3. This followed an initial report in July, which concluded the formula was arbitrary and in urgent need of reform.

Economist Gerald Hoitham, who chairs the commission, said it had been suggested that a needs-based formula would be extremely complicated and prohibitively difficult to devise.

Our analysis suggests that is not the case - a needs-based replacement for Barnett could be relatively straightforward.' The replacement could preserve the simplicity and automatic nature of the Barnett Formula, which had been its main justification, Hoitham added.

A study had shown it was possible to replicate very complicated needs-based formulas using a few major indicators. …

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