Why the Barnett formula is NOT a subsidy for Scotland
I wrote this in response to unionist letter writer Martin O’Gorman in the January 16th edition of The Scotsman where he wrote, “thank God for the Barnett formula.” It was published in The Scotsman on January 18th.
Martin O’Gorman thinks the Barnett formula is a subsidy. To understand why it’s not, we need to understand the formula.
Scottish public sector revenues are sent annually to the UK Treasury. Every five years there’s a spending review that decides England’s budget and then the Barnett formula is applied. The formula gives Scotland the same revenue per person change in funding as the change in funding for similar English public services. From that, the UK Treasury allocates the Scottish government its block grant out of which it must fund the services for which it’s responsible. But the block grant doesn’t meet Scotland’s needs and is smaller than the revenues Scotland generates.
Take the example of health spending. If England’s NHS budget increases by 3.4%, Scotland’s health budget doesn’t increase 3.4% because the Barnett Formula doesn’t pass on the full amount. Scotland’s health budget has always been bigger than England’s so this produces a ‘Barnett squeeze,’ meaning the percentage premium of the block grant over equivalent UK government spending shrinks over time, lowering Scotland’s health spending until it reaches the same level as England’s.
The reason Scotland spends more on health is due to decades of Westminster-imposed deindustrialisation, a slower growing, ageing population and higher levels of poverty.
To make matters worse, Scotland has been subsidising the UK for decades. The bogus GERS accounts are how the UK dumps its debt onto Scotland. It explains why Scotland with just 8.3% of the UK population and possessing up to 34% of its natural wealth records a phony ‘deficit’. The UK has loaded onto Scotland over £150 billion in debt interest payments over the last 43 years. GERS also contains spending outside of Scotland which doesn’t benefit our economy and that we didn’t generate.
What will it take for the Scottish Government to wake up to this giant con and finally end it by leaving the failing UK?
This travesty will continue, and indeed become worse, Westminster intends to make the Scots as poor as possible, just as they have since 1707. Until our SNP government get up off their knees, and acknowledge that power is never given, it must be taken, we are going nowhere. It really is time for the people to get angry, and make our politicians lives uncomfortable.
Yes, the Barnett formula is most certainly not a subsidy to Scotland from the UK, but the very opposite.
On the Question of NHS funding Scotland at one time was the world leader in training doctors and so has a long tradition of training doctors and nurses and other NHS specialist staff. this has meant that because Scotland trains more NHS staff, than they retain many of such staff work elsewhere in the UK but Scotland carries the training cost on our NHS budgets.