Nicola Sturgeon announces deal has been reached on the fiscal framework
The First Minster, Nicola Sturgeon, has announced that an agreement has been reached this afternoon with the UK Government on the fiscal framework.
“There is now an agreement in principle that I believe we can recommend to parliament,” she said.
The draft agreement will be published by the end of this week for MSPs to scrutinise.
John Swinney and David Mundell quizzed over fiscal framework progress
Scotland’s block grant is the one key issue governments are at loggerheads over in fiscal framework negotiations, says John Swinney
Sturgeon promised the agreement would see “not a single penny of detriment” to the Scottish Government.
The Scottish Government’s preferred per-capita indexed deduction model will be used to calculate the block grant for the next six years to March 2022.
During 2020 and 2021 there will be an independent review of the funding model with a report to be published by the end of 2021 recommending the method used to calculate the grant from then on.
The two governments have agreed the method adopted would have to deliver results consistent with the Smith Commission’s recommendations, including the principles of taxpayer fairness, economic responsibility and no detriment.
"We have secured no detriment now, for the next six years and we have ensured there can be no detriment forced on Scotland in the future," Sturgeon said.
MSPs from across all parties welcomed the announcement.
Questioned by the Scottish Liberal Democrat leader Willie Rennie on whether it would be harder to negotiate a change from the Treasury model in 2021, the First Minster answered: “We have not allowed the Treasury model, any model, to become the default position.”
The First Minister assured parliament that there was no default model in place that would determine the method for calculating the block grant from 2021.
She added that no default model and no detriment were the tests she used before deciding to accept the deal.
Chief Secretary to the Treasury Greg Hands said: “I am delighted that we have agreed a new fiscal framework that is fair for Scotland and fair to the rest of the UK, now and in the future.”