Appointed on the 10 Decemer 2008 the House of Lords Barnett Formula Select Committee has published its report today which can be accessed here.

The committee concluded that the Barnett Formula (BF) was "arbitrary and unfair" and should be replaced by "a system that recognises changing population levels and the differing economic needs of the devolved nations". The Chairman of the committee, Lord Richard, said:

"The Barnett Formula was a short-term fix which became established as the method of deciding how much money goes to Scotland, Wales and Northern Ireland over the last thirty years because it was easy to administer and convenient for Treasury ministers. After thirty years of increasing allocations year on year, and in the light of possible cuts in public spending, it is now time to scrap the Formula and replace it with a clear system of determining a grant of funds for each of the devolved administrations based on their actual needs".

One of the headline recommendations is that an independent body (UK Funding Commission) should be established to carry out an "assessment of relative need, undertake periodic reviews, and collect and publish information on an annual basis about the allocation of finance to the devolved administrations".

A treasury spokesperson commented that there were no plans to replace the formula: "It has proved to be a robust mechanism for allocating spending to the devolved administrations and has stood the test of time."