Explainers

Block Grant

The Block Grant is the main source of funding and the largest transfer of funding from the UK Government to the Scottish Government. It is split into two parts: Barnett and non-Barnett funding.

Barnett funding is by far the largest of the two. It is updated every time the UK Government changes its spending plans for departments delivering devolved public services such as health. The Barnett formula is applied to the change in spending to provide the Scottish Government with a population share of changes in UK spending.

The Block Grant is set before the start of each financial year based on the most recent UK Government spending allocations. If the UK Government changes this planned spending, funding for the Scottish Budget is adjusted accordingly using the Barnett formula. These adjustments are known as Barnett consequentials.

There have been instances of Block Grant funding being provided which has not been calculated using the Barnett formula. We refer to this as non‑Barnett funding. For example, in the Spending Review of 2021, separate funding was agreed to replace agricultural EU subsidies and to pay for Network Rail. However, since 2025-26 both EU replacement agricultural funding and Network Rail funding are part of Barnett funding.

Watch the “How is the Scottish Budget funded?”  video to find out more about the other sources of funding here: