Finance and Public Administration Committee
Fiscal Framework Review - Scottish Government update
Letter from the Cabinet Secretary for Finance and the Economy to the Convener and the Convener of the Social Justice and Social Security Committee of 21 December 2021
Dear Kenneth and Neil
As we approach the end of the year, I would like to update you on progress with the Fiscal Framework Review, the preceding independent report, and operational matters.
Fiscal Framework – Independent Report
As you know, agreement has been reached on the scope of the independent report which will focus on the Block Grant Adjustment arrangements only. In return, CST has agreed this will inform a review that will be wider in scope. This should ensure that the current arrangements are thoroughly assessed and options for reform considered. In addition, stakeholder views will be sought as part of both the report and the review process.
Officials continue to work closely to finalise the details for commissioning the independent report, but we will not be able to meet the original timescales detailed in the Fiscal Framework Agreement, which outlined that the report should be submitted to both governments by the end of 2021.
However, I can assure you that progress has been made on the Terms of Reference for the report, as well as identifying potential authors with the necessary expertise.
The Scottish Government continues to press that the review should commence as early in 2022 as possible.
We are working towards a Joint Exchequer Committee meeting in the new year, which will focus on finalising the scope of the review itself.
Final Reconciliations and Cold Weather Payment BGA
Following publication of final outturn data, I can confirm that the final reconciliation applying to the Scottish Budget 2022-23 is negative £14.7 million, as detailed in the Scottish Budget document.
In addition, and as outlined in the Medium-Term Financial Strategy (MTFS), executive competence for Cold Weather Payments (CWP) will transfer to the Scottish Government in 2022-23 and BGAs were agreed for CWP for the first time alongside the 2022-23 UK Budget, which will provide funding for the Scottish Government’s replacement benefit, Low Income Winter Heating Assistance. Further details on the CWP BGA can be found in Annex B of the MTFS.
I welcome your continued support and I look forward to continued engagement with both the Finance and Public Administration and Social Justice and Social Security Committees further on these matters in the coming months.