Scottish Affairs Committee

Revising Scotland's fiscal framework inquiry

Inquiry status: open

Report published 11 February 2016. Awaiting Government response.

Scope of the inquiry

The Smith Commission recommended that more powers be devolved to the Scottish Parliament. While many of these powers are set out in the Scotland Bill that is currently before Parliament, the financial mechanism that will underpin the transfer of responsibilities is being negotiated separately by the UK and Scottish Governments.

Known as the ‘fiscal framework’, this mechanism is arguably the most important, and complex, part of the latest round of devolution. The fiscal framework will determine how much the block grant, Scotland’s primary source of funding, will be affected by the revenue and spending powers that are being devolved under Scotland Bill. It will set out the borrowing limits for the Scottish Government and ensure that the actions of one Government will not cause financial detriment to the other.

Terms of reference: Revising Scotland's fiscal framework

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