Block Grant funding
Block Grant funding forms an important part of the Scottish Budget, and can be split into two parts: Barnett funding and non-Barnett funding.
Barnett funding is the largest of the two and is generated when the UK Government allocates funding to departments in the rest of the UK, to be spent on areas which are devolved to the Scottish Government, for example health. The Barnett formula is applied to this UK Government funding allocation to calculate a corresponding portion of funding which is transferred to the Scottish Government.
Non-Barnett funding refers to a small portion of funding (around 1 per cent of the Scottish Budget) which is transferred between the UK and Scottish Governments outside the usual Barnett arrangements. Block Grant funding is set before the start of each financial year based on the most recent source of UK Government spending allocations. If the UK Government increases or decreases this planned spending, funding for the Scottish Budget is adjusted accordingly. These adjustments are called Barnett consequentials.