Barnett Formula

The Barnett formula is a mechanism used by the Treasury in the United Kingdom to automatically adjust the amounts of public expenditure allocated to Northern Ireland, Scotland and Wale. The formula applies to a large proportion, but not the whole, of the devolved governments' budgets − in 2013–14 it applied to about 85% of the Scottish Parliament's total budget. The main criticism of the Barnett Formula is that apart from making some dubious assumptions it is purely based on convention and the rules could be absolutely anything, depending on the whim of the UK Treasury. Without taking the differing needs into account the allocation of money ties the hands of the devolved administrations stopping them from making more effective use of the budgets.