Explainers

Block Grant

The Block Grant is the main source of funding and the largest fiscal transfer from the UK Government to the Scottish Government.

It is split into two parts:

• Barnett funding. It 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 healthcare. The Barnett formula is applied to the relevant change in spending to provide the Scottish Government with a population share of it.

• Non‑Barnett funding. There have been instances of funding being provided which was not calculated using the Barnett formula. 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 have been brought into Barnett funding.

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 these during the year, for example at Supply Estimates, funding for the Scottish Budget is adjusted accordingly using the Barnett formula. These adjustments are known as Barnett consequentials.

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