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The Barnett formula is a mechanism used by the Treasury in the United Kingdom to automatically adjust the amounts of public expenditure allocated to Northern Ireland, Scotland and Wales to reflect changes in spending levels allocated to public services in England, Scotland and Wales, as appropriate. The formula applies to a large proportion, but not the whole, of the devolved governments' budgets − in 2013–14 it applied to about 85% of the Scottish Parliament's total budget. The formula has been adjusted in recent times to take account of increased tax and welfare powers being devolved, particularly in Scotland, to take account of greater control over revenue raised from devolved taxes being allocated to public spending. By July 2025, around 50% of Scottish Government spending is generated through devolved taxation in Scotland in contrast to the main source of revenue for public spending in Scotland in 2013–2014 coming from Barnett formula allocation.
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