The Law and Concept of Fiscal Devolution in the United Kingdom

Abstract

Fiscal devolution is a multifaceted and evolving concept that plays a pivotal role in the governance of the United Kingdom, which is still under an ongoing development process. At the end of the 1990s the subnational governments achieved various stages of autonomy since the 1998 devolution acts, which ratified the administrative and fiscal devolution, provide the formal structure for revenue-raising and expenditure powers. The devolutionary process was facilitated after the Great Recession, assigning different income raising and welfare authorities to Scotland and Wales, while the same progress was dampened in Northern Ireland, because of the looming political instability. The system is complex, consisting of several essential elements that are closely linked to each other: devolution acts, fiscal frameworks, block grants, tax devolution, tax-varying powers, borrowing powers and the reserved matters. The results are not the same or uniform, each country has its own set of rules, negotiated with and enacted by the Westminster Parliament. It reflects the evolving nature of governance and the recognition that one-size-fits-all policies may not be suitable for a nation as diverse as the United Kingdom. It can be regarded as a testament to the adaptability of the constitutional and legal framework in response to changing political and social landscapes. The fiscal devolution experience in the UK underscores the need for a delicate balance between local autonomy and national cohesion. The legal and conceptual framework underpinning fiscal devolution has profound implications for economic policy, public finance, and intergovernmental relations and it is still subject of ongoing debates and reforms and not without complexities and challenges.