Tories slam ‘funding discrepancy’ between Scotland and England

Tory MPs have slammed the ‘funding discrepancy’ between Scotland and England after official statistics showed public spending per person north of the border is almost £2,000 more than the UK average. 

Conservative backbenchers in Westminster said that if the SNP government in Holyrood believed in independence then it should refuse to accept English taxpayers ‘subsidising their services’. 

They claimed that Nicola Sturgeon and her party ‘berate everything that comes out of Westminster – apart from the money’. 

Numbers published yesterday showed that total public sector expenditure for the benefit of Scotland, including both UK and Scottish government spending, has increased by just over three per cent to £81 billion.

That is equivalent to £14,829 being spent on public services per person in Scotland, some £1,633 per person greater than the UK average. 

The spending gap has been largely blamed on the Barnett Formula which is used by the UK Government to figure out how much funding should be given to the other home nations when it decides to spend more or less on something in England. 

The numbers, published in Holyrood’s annual Government Expenditure and Revenue Scotland report (Gers), have reignited long-running calls for the discredited formula to be overhauled. 

However, while Tories in Westminster have been left fuming, their colleagues in Edinburgh said the so-called ‘Union dividend’ had dealt a ‘hammer blow’ to Ms Sturgeon’s independence hopes. 

Tory MPs have claimed Nicola Sturgeon, pictured in Holyrood yesterday, and the SNP ‘berate everything that comes out of Westminster – apart from the money’

Conservative backbenchers are calling on Boris Johnson to overhaul the Barnett Formula which is used to calculate spending levels

Conservative backbenchers are calling on Boris Johnson to overhaul the Barnett Formula which is used to calculate spending levels 

What is the Barnett Formula and why is it so controversial?

What is the Barnett Formula? 

It is a system used by the UK Government to figure out how much funding should be given to the other home nations when it decides to spend more or less on something in England. 

It was devised by the former Labour Chief Secretary to the Treasury Joel Barnett back in 1978. 

While it has no standing in law it has now been used by the Treasury for more than 40 years to calculate funding figures. 

Why is it so controversial? 

The amount of money handed out to Scotland, Wales and Northern Ireland in the form of a block grant from Westminster is calculated based on population and what powers have been devolved Whitehall.

This should mean that in theory spending should go up and down equally.    

But the calculations are complicated and Scotland started with higher spending per head when the formula was first used which means that discrepancy is baked into the system. 

The formula was only ever supposed to be temporary and even its architect said in 2014 that it was ‘unfair and should be stopped’.  

Just how different is public spending in the four home nations? 

The latest available figures which relate to 2019 show that Northern Ireland has the most spent on public services per head at £11,590. 

Scotland was at second place with £11,247 while Wales was ay £10,656.

In England the level of public spending stood at £9,296 per person.      

One Tory MP told MailOnline: ‘The discrepancy in funding is unfair and the average may be almost £2,000 but if you look at other areas of the country it will be even greater.

‘It drives my constituents mad. They are paying their taxes to then see almost £2,000 per person being sent to Scotland, even when services are struggling here.

‘If we were not in a coronavirus crisis this is the sort of thing the Government should be looking at. It is wrong. Why do we pay the same taxes and finish up out of pocket?

‘It is quite extraordinary that the SNP want to go for independence but they are quite happy that the English taxpayers are subsidising their services.

‘Why aren’t they standing up and saying “we don’t want that money”?. That is what they should be doing.’

Another Tory MP said the numbers highlighted the need for ministers to finally reform the Barnett Formula. 

They said: ‘There has always been dissatisfaction that Scotland does so much better out of this. 

‘The problem with the Barnett Formula is it is very difficult to think about what could replace it. It would cause such political ructions and normally governments don’t want that unless everything else is in balance. 

‘At some stage we will not be doing Brexit and we will not be dealing with a pandemic and certainly then the Government will want to think about it.’

They added: ‘At some stage there is going to have to be a reassessment. That has been recognised for years but it has always been in the “too difficult” box.

‘They [the SNP] berate everything that comes out of Westminster – apart from the money.’  

The Scottish Conservative finance spokesman Murdo Fraser suggested yesterday that the figures were persuasive of the case for the Union even though they do not take into account the recent ‘blockbuster support’ from the UK Government, such as the furlough scheme.

He said: ‘This is a hammer blow to the SNP and a massive setback for separation.

‘Nicola Sturgeon would have to throw away Scotland’s entire NHS, every nurse and doctor, just to come close to balancing the budget in her separate state.

‘It’s beyond dispute that the economic case for independence has never been weaker.

‘Separating would cost Scotland £15 billion a year that we need for our schools and hospitals.’  

The official figures showed Scotland’s fiscal deficit grew to 8.6 per cent of GDP in the 2019/20 financial year, with government spending £15.1 billion more than is received in revenues.

The deficit rose from 7.4 per cent the previous year, while the UK’s deficit stood at 2.5 per cent compared to 1.9 per cent last year.  

While the figures incorporate the early stages of the coronavirus pandemic, the Gers report notes the impact will be greater in the next financial year.

The SNP claimed the figures showed the current ‘status quo’ between Westminster and Edinburgh needed to change. 

Finance Secretary Kate Forbes reiterated her call for the Scottish Government to be given further financial powers. 

She said: ‘Although Gers is not the Scottish Government’s budget and reflects the current constitutional arrangements whereby another government’s policy choices are allocated to Scotland, the publication sets out the context for why the status quo and the present constitutional arrangements are unsustainable.’

Ms Forbes said it was ‘incredibly frustrating’ that Scotland could not borrow to invest in recovery.

She added: ‘Gers reflects the current constitutional position, there are perfectly legitimate questions to ask about these figures, but based on these figures nobody can or should defend the status quo of the current constitutional arrangements.

‘Instead, this publication once again strengthens calls for additional fiscal and economic powers to manage our public finances in a sustainable way and invest in recovery.

‘Scotland simply cannot afford not to have the powers of a normal independent country.’