Devolution faces 'toughest test'

28 May 10
Stringent public spending cuts present the devolution settlement in the UK with its toughest test to date, a think-tank says today
By Vivienne Russell

28 May 2010

Stringent public spending cuts present the devolution settlement in the UK with its toughest test to date, a think-tank says today.

A major study by the Institute for Public Policy Research, published today, argues that the prevailing economic climate poses a significant challenge to devolution. It says the administrations of Scotland, Wales and Northern Ireland cannot be protected from spending cuts if England is to be treated fairly, it concludes.

The report, Devolution in practice 2010, also notes that the devolved nations face a major political challenge in working with the new UK government because the Conservative-Liberal Democrat coalition lacks a strong mandate in both Scotland and Wales.

‘The new prime minister has gone out of his way in his early days in office to give a reassuring message to the people of Scotland, Wales and Northern Ireland through his “respect” agenda. But there’s no getting away from the fact that the Conservative mandate, in Scotland in particular, is extremely weak,’ said Guy Lodge, associate director of IPPR.

Lodge added that grant funding to the devolved nations would have to be cut as part of the deficit reduction programme. Deferring cuts until next year ‘risks a backlash from England – particularly those poorer areas that already look jealously at the funding those parts of the UK receive’.

Alan Trench, a research fellow at the University of Edinburgh and contributor to the report, added: ‘Devolution has had an easy ride so far, with Labour dominating all three governments in Britain and generous public spending allocations.

‘Now times are tough: not only is spending going to get very tight, but with different parties in office in Edinburgh, Cardiff and Belfast, party ties cannot help smooth intergovernmental relations in the way they did.’

The report recommends reforming the administration of the block grant that goes to the devolved administrations, to ensure decisions are fair and transparent. It also calls for reform of the Barnett Formula, which determines grants levels, and for the UK government to respond positively to the aspirations of the devolved nations.

This week’s Queen’s Speech confirmed that a Bill will be introduced in the autumn to give Scotland greater tax and borrowing powers. The coalition government will allow a referendum in Wales on greater law-making powers for the Welsh Assembly, but the prime minister has said this should not happen until next year.

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