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Chapter 21

Devolved administrations

The Spending Review provides a major boost to the public services in Scotland, Wales and Northern Ireland:

  • by 2003-04 provision in Scotland to invest in modern public services will be £3.4 billion higher than in 2000-01;
  • provision will be £2.0 billion higher in Wales including resources to fund Wales' Objective 1 needs; and
  • £1.0 billion higher in Northern Ireland.

Decisions on the use of this provision will be made by the Scotland, Wales and Northern Ireland administrations.

The extra money will allow the devolved administrations to improve public services and determine their own particular public expenditure outcomes in line with the needs and priorities of the people of Scotland, Wales and Northern Ireland.

Determining the budgets of the devolved administrations

21.1 The devolved administrations' budgets continue to be determined within the United Kingdom framework of public expenditure control. The devolved administrations have freedom to make their own spending decisions within the overall totals on functions under their control in response to local priorities. The devolved administrations will make their own announcements in due course about their detailed spending plans.

21.2 UK funding for the devolved administrations' budgets has been determined in the Spending Review alongside departments of the UK Government and in accordance with the established devolution funding arrangements. In general the changes in the devolved administrations' budgets have been linked to changes in spending plans of UK Government departments by the Barnett formula. The formula gives Scotland, Wales and Northern Ireland a population-based share of planned changes in comparable spending in England.

21.3 The Government will guarantee funding for the European share of Objective 1, 2 and 3 projects within departmental allocations. This is estimated to sum to a UK total of £4.2 billion for EU Structural Funds over the three years. This includes an extra allocation of £80 million in 2001-02, £90 million in 2002-03 and £102 million in 2003-04 to Wales to ensure funding of the European share of its Objective 1 needs, with resources for match funding provided for within the total spending settlement. The Government is also transferring management of the European Social Fund in Wales to the National Assembly for Wales. The costs of the Scotland and Wales Offices are met from within the total funds voted by the UK Parliament. The budget of the Northern Ireland Office has been determined separately; details are in Chapter 20.

Spending plans

21.4 Table 20.1 shows each devolved administration's Departmental Expenditure Limit (DEL). Other budgetary items, defined as Annually Managed Expenditure (AME), are set annually. As the devolved administrations have freedom to reallocate spending between capital and resource budgets, the split between these budgets is indicative and reflects the consequentials of the application of the Barnett formula to planned changes in UK departments' spending.

Table 21.1: Key figures

£ million
2000-012001-022002-032003-04
Total Scotland* 15047162311736918428
of which: Resource Budget12727135461438515187
Capital Budget2320268629843241
Total Wales*7758844791409788
of which: Resource Budget6910743279608464
Capital Budget848101511791324
Total Northern Ireland Executive*5307566759736294
of which: Resource Budget4529480450095234
Capital Budget7778639641061
* Departmental Expenditure Limit

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