IF the Institute of Fiscal Studies does not actually set out to be misleading about a topic, it manages to succeed nevertheless ("Scotland is '£1bn better off due to Barnett funding flaw'",The Herald, November 12).
They overlook the fact that the extra money Scotland has is not down to Barnett - it was poured into Scotland in the post-war years to thwart the nationalist threat. The outgoing Labour Government brought in the formula in 1978-79 associated with the 1979 devolution referendum.
We had a 20 per cent per capita advantage over England. It decreed that we would receive a straight 10 per cent population share of any year-on-year enhancement England received for inflation and so on. So, if Scotland spent £120, England spent £100. If England received five per cent, they would get £5, and we also received £5, but on our higher level of spending, that is worth only four per cent.
That is a one per cent squeeze on our block grant, currently £25 billion, so the annual squeeze is about £250m. Had the Conservative Government not put more in that Barnett allowed, our per capita lead would have been reduced to single figures over its 18 years.
The "flaw" the IFS has wakened up to was in the system from the start - when there are cuts in expenditure, the same arithmetical calculation applies, that is, we gain to the extent of one per cent, but we still lose considerable amounts through the cuts.
Its reference to "£400m funding hikes throughout the 2000s" is mystifying. If it means what came via Barnett then the figures would be more than that - presumably it means each year.
It is difficult to sympathise with the alleged plight of the English - it is the sums they bid for, and succeed in acquiring, that determine our Barnett "share", which is squeezed. The absolute figures for each country are meaningless on their own - it is when comparisons are made that the true situation is exposed: when the funding is increased, our funding, measured on per capita, shows a decrease, and when it is cut, our advantage shows up.
As for the twaddle about how well off we are supposed to be, I draw the attention of the IFS to the 2003 Labour example when England was funding its NHS reforms, which we were not doing, when National Insurance contributions were increased by one per cent for employees and employers, and our £800m annual Barnett "share", which we were paying for, came to the Labour-led regime at Holyrood as a windfall.
My guess is that, had the SNP been in power here, a different method of funding the English component to prevent the SNP getting their hands on it, which they did anyway when Labour lost control to them in 2007 and again in 2011. Effectively, that has helped fund many of the services usually described as " free".
Regarding the question of a needs-based formula, England has no grounds for concern - only their funding is "need" based, except it is not need that determines the amount, it is affordability -and I suspect that will never be out of the frame.
Douglas R Mayer,
76 Thomson Crescent,
Currie.
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