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  • The Youth Vote UK

2021 UK Budget Breakdown: Devolved Nations

On the 3rd of March, the Chancellor of the Exchequer, Rishi Sunak announced the government’s 2021 budget. This budget consists of five key components: Economic recovery, protecting jobs and livelihoods, strengthening the public finances, COVID19 relief and devolved nations. Over the coming days, we will be looking at each of these components individually. This post will look at the budgets plan for devolved nations.

Chancellor Rishi Sunak in his 2021 UK Budget confirmed further financial support for Scotland, Wales and Northern Ireland. Here is a short summary of the most important points affecting young people in the devolved nations.

UK-Wide Financial Support

Individuals and businesses in Scotland, Wales and Northern Ireland will continue to be financially supported by the UK Government throughout the pandemic with the:

  • Coronavirus Job Retention Scheme (commonly known as ‘furlough’)

  • Self-Employment Income Support Scheme

  • Loan schemes

  • Cuts to VAT and business rates

Also, devolved administrations have received Barnett funding to provide support in areas of devolved responsibility.

What is Barnett funding?

Barnett funding is a fancy term that uses a formula to determine how much funding the Scottish government, Welsh government and Northern Irish executive get for public services like healthcare, education, transport etc. In 2019/2020 Barnett funding amounted to £32bn for Scotland, £16bn for Wales and £12bn for Northern Ireland. The quantities reflect population sizes and range of devolved public services.

In this Budget there is an additional £2.4bn for the devolved administrations for 2021-22 through the Barnett formula. This is an additional:

  • £1.2bn for the Scottish government

  • £740m for the Welsh government

  • £410m for the Northern Irish executive

On top of all this, devolved administrations will also receive £1.4bn of funding in 2021-22 outside the Barnett formula. The breakdown for this funding for each nation is as follows:


  • Three City and Growth Deals in Ayrshire, Argyll and Bute, and Falkirk to receive funding more quickly.

City and Growth deals are long-term agreements between the UK Government, Scottish Government, local authorities and private regional partners to bring regional economic improvements. These long-term deals can help young people as it creates thousands of new jobs and boosts local economies.


  • Three City and Growth Deals in North-Wales and Swansea Bay to receive funding quicker

Like Scotland, this investment should improve economic opportunities for young people. Swansea Bay will get an extra £5.4m per year for the next 7 years, which is expected to create 9,000 new jobs and add £1.1bn to the region’s economy. North-Wales will get an extra £4.4m per year for the next 9 years, thus creating 3,800 new jobs and boost the region’s economy by £2.2bn.

Northern Ireland

  • The Northern Ireland Housing Executive, which is Northern Ireland’s biggest landlord, will be exempt from corporation tax.

  • Nearly 50% of the £400 million New Deal for Northern Ireland funding has been allocated, subject to business cases to:

  • New systems for small traders and supermarkets to manage new trading arrangements

  • Developing improved resilience in medicine supply chains

  • Promoting Northern Ireland’s goods and services overseas

  • Supporting skills development

Exemption of corporation tax for Northern Ireland’s Housing Executive allows it to save about £10m a year. This money can be reinvested which will help about 84,000 tenants. Young people will benefit by getting quality and affordable housing, which in turn can improve local economies and employment prospects. Young people can also benefit from the investment into skills development.

Matthew Esam, Policy & News Associate

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