Gordon Brown has ended months of speculation by confirming the Barnett Formula will remain unchanged. The prime minister signalled last week that the Comprehensive Spending Review (CSR) would not include an alternative to the formula, which distributes spending across England, Wales and Scotland. Mr Brown said: ‘The Barnett Formula has lasted for almost 40 years. This is a formula that is well tried and tested. It has been used by all governments of all political colours.' He also confirmed the CSR would be in October, and The MJ understands Whitehall departments have been briefed by the Treasury to provisionally expect the announcement on 8 October. The big spenders which have yet to hear how much their budgets will be have now been given an outline indication for planning purposes. Local government minister, John Healey, already warned the sector faced a tough financial settlement which would be a real-terms reduction of 5%. Many of the key details are beginning to become clear. Chancellor Alistair Darling confirmed as part of the housing Green Paper that the DCLG would receive £8bn to spend on housing over the three years from 2009. And the Ministry of Defence was last week given its settlement with an annual budget of £34bn in 2008/9. With the Treasury already having set out its projections for government spending, finance chiefs in the departments still in negotiation will use this figure as part of their calculations. A senior Whitehall official told The MJ: ‘The only question now is now about how efficiencies will be delivered – whether through performance or budget cuts. What's new is that authorities will be expected to share funding with other agencies through Local Area Agreements.'
