Chancellor Rachel Reeves is facing significant criticism from devolved governments for her decision to increase national insurance contributions for employers without adequately funding Scotland, Wales, and Northern Ireland. The Barnett formula used for allocating funds does not consider the larger public sectors in these areas, resulting in substantial financial shortfalls. Wales is looking at a £72 million gap, Scotland faces a £700 million shortfall, and Northern Ireland is short by £200 million, raising concerns about fairness and adherence to the funding policies that govern allocations across the UK.
"We have made our position very clear with the Treasury that using the Barnett formula in this instance is a breach of the rules," Drakeford said.
"Although the formula adjusts funding based on population size, it does not account for the significantly larger public sectors operated by Cardiff, Edinburgh and Belfast."
#national-insurance-contributions #devolved-governments #funding-shortfalls #barnett-formula #public-sector-funding
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