The Barnett formula does not entitle the Scottish Government to consequentials that are raised under reserved powers. Block grant changes are calculated with reference to the UK Government spend in devolved areas.

The UK Government had previously indicated the VAT revenue would be ring fenced and applied to the Department of Education budget to increase teacher numbers in England. His Majesty’s Treasury has now advised that there will be no ring fencing of that revenue. Although the autumn budget contained additional funding for the Department for Education, which led to Barnett consequentials, I am not able to confirm the proportion that was funded by VAT on school fees.