The legislation is based on recommendations given by the report of the Smith Commission, which was established on 19 September 2014 in the wake of the Scottish independence referendum.

However, according to some commentators, the act institutes a weak statutory mechanism, which does not stipulate provisions or guarantees for such a referendum, or makes duties of Crown ministers in this respect publicly answerable to the Scottish electorate.

[5] During the passage of the bill, almost a full year of negotiations took place between the Scottish and UK Governments concerning the fiscal framework that accompanied it.

This was necessary because of the intention to reduce the block grant given to the Scottish government by HM Treasury to take account of the additional income the Scottish government will receive through retaining a portion of the revenues from income tax that is generated in Scotland.

A Scottish government proposal was that future adjustment to the block grant should be based on the “per capita index”, which takes into account the growth in tax receipts across the UK, not just Scotland.