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The Distribution of Public Expenditure across the UK Regions

Author

Listed:
  • Iain McLean
  • Alistair McMillan

Abstract

The distribution of UK revenue to the regional and territorial governments, administrations and authorities that spend the money is based on a hotchpotch of badly designed formulae. This is widely recognised. The Barnett formula, which allocates money to the devolved territories, has been attacked from all sides, its consequences described as ‘terribly unfair’ by its progenitor, Lord Barnett. The mechanism by which resources are distributed to local authorities within the English regions has been abandoned by the government, although its replacement has not yet been determined. This paper argues that a common basis for government spending across the regions and territories of the UK will be more equitable and efficient, and may even depoliticise the financial framework of the UK.

Suggested Citation

  • Iain McLean & Alistair McMillan, 2003. "The Distribution of Public Expenditure across the UK Regions," Fiscal Studies, Institute for Fiscal Studies, vol. 24(1), pages 45-71, March.
  • Handle: RePEc:ifs:fistud:v:24:y:2003:i:1:p:45-71
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    Citations

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    Cited by:

    1. Edgar Morgenroth, 2007. "The Regional Dimension of Taxes and Public Expenditure in Ireland," Papers WP195, Economic and Social Research Institute (ESRI).
    2. Nuria Boch Roca & Marta Espasa & Daniel Montolio, 2014. "Should Large Spanish Municipalities Be Financially Compensated? Costs and Benefits of Being a Capital/Central Municipality," Hacienda Pública Española, IEF, vol. 211(4), pages 67-91, December.
    3. Linda Ferguson & David Learmonth & Peter G McGregor & J Kim Swales & Karen Turner, 2007. "The impact of the Barnett formula on the Scottish economy: endogenous population and variable formula proportions," Environment and Planning A, Pion Ltd, London, vol. 39(12), pages 3008-3027, December.
    4. repec:rdg:wpaper:em-dp2007-48 is not listed on IDEAS
    5. Vassilis Monastiriotis & Yiannis Psycharis, 2011. "Without purpose and strategy? A spatio-functional analysis of the regional allocation of public investment in Greece," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 49, Hellenic Observatory, LSE.
    6. James Gallagher & Daniel Hinze, "undated". "Financing Options for Devolved Government in the UK," Working Papers 2005_24, Business School - Economics, University of Glasgow.
    7. Patrizio Lecca & Peter McGregor & Kim Swales & Ya Ping Yin, 2010. "Inverted Haavelmo Effects in a General Equilibrium Analysis of the Impact of Implementing the Scottish Variable Rate of Income Tax," Working Papers 1013, University of Strathclyde Business School, Department of Economics.
    8. K. Lisenkova & P. G. McGregor & N. Pappas & J. K. Swales & K. Turner & R. E. Wright, 2010. "Scotland the Grey: A Linked Demographic-Computable General Equilibrium (CGE) Analysis of the Impact of Population Ageing and Decline," Regional Studies, Taylor & Francis Journals, vol. 44(10), pages 1351-1368.

    More about this item

    JEL classification:

    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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