Budget 2024: Barnett formula switch risks devolved ag funding

Chancellor Rachel Reeves’ Budget has redefined agricultural funding for the devolved nations, consolidating it within each region’s broader block grant using the Barnett formula rather than maintaining separate, ring-fenced allocations.

This shift leaves agricultural support to compete with other regional priorities such as health and education, potentially impacting long-term funding and stability for farming in Scotland, Wales, and Northern Ireland.

In Scotland, the overall block grant will increase by £3.4bn, bringing it to approximately £47.7bn for 2025-26, the largest real-terms funding since devolution.

See also: Days numbered for ‘delinked payments’ in England after Budget

NFU Scotland’s (NFUS’s) director of policy, Jonnie Hall, acknowledged that while the £620m for farm support has been rolled over in this allocation, the removal of the ring-fence requires the Scottish government to prioritise agriculture voluntarily.

NFUS is calling for a five-year funding commitment to help Scottish farmers and crofters meet goals related to climate action, biodiversity, and rural community development.

Mr Hall and others are also pushing for the return of £46m in unspent funds to support Scottish agriculture further.

Sarah-Jane Laing, chief executive of Scottish Land and Estates (SLE), criticised the chancellor’s decision to move away from the Bew Review’s recommendation of ring-fencing agricultural funds, which had been allocated separately since 2021.

Ms Laing and SLE expressed concern that this may reduce the funds available specifically for agriculture, as those funds will now compete with other budgetary needs such as health and education.

Wales 

In Wales, the Welsh government will receive a record £21bn allocation for 2025-26, including a £1.7bn top-up.

CLA Cymru stressed the need for “tangible benefits” for rural investment from this additional funding.

NFU Cymru has called for an annual budget of just over £500m to keep pace with inflation.

Its deputy president Abi Reader said: “Our calculation shows that the agricultural budget must increase from £340m to £506m just to stand still.

“We need to be mindful that in the last two budgets, the rural affairs part has had the biggest cuts across all of the departments within Welsh government.”

However, Plaid Cymru’s shadow rural affairs minister Llyr Gruffydd MS warned Welsh government that freezing Wales’ agriculture budget at the same level it has been since 2014 would compromise Wales’ ability to address climate change and food security effectively.

The Welsh government will be making an announcement on the allocation of funding for farming in Wales in mid-December.

Northern Ireland

Meanwhile, the Ulster Farmers’ Union (UFU) expressed frustration at the absence of clear guidance for agricultural budgets.

UFU president William Irvine highlighted the challenge posed by stagnant funding amid inflation, which undermines the sector’s ability to focus on food security, efficiency, and environmental goals.