MSPs told Westminster ‘hostile to Barnett formula’

THERE is “generalised hostility to the Barnett formula” in Whitehall and Westminster over the “excessive levels” of public spending it provides Scotland, a leading academic has told MSPs.

By ANDREW WHITAKER Tuesday, 24th June 2014, 1:04 am

MSPs were told of resentment of the formula ahead of Professor Heald's evidence tomorrow. Picture: Neil Hanna

Professor David Heald issued the stark warning about the controversial formula, which sees Scotland given £1,400 of extra funding per person compared to the rest of the UK, in a submission to Holyrood’s finance committee.

The Aberdeen University professor of accountancy also said that having a Scottish MP of cabinet rank at the Treasury since 1997 had “protected Scotland’s political clout” in the UK government over its funding deal.

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David Cameron has said there are no plans to change the Barnett formula, with the Prime Minister stating that reform of the arrangement is “not on the horizon”.

However, the SNP has warned that Scotland’s public spending could be cut by £4 billion in the event of a No vote in the referendum on 18 September.

Prof Heald said there was widespread hostility at Westminster and in the UK civil service about the Barnett Formula delivering extra cash to Scotland and Northern Ireland, in his submission to MSPs ahead of a finance committee hearing on Tuesday.

He said: “Since 1997, there has always been a Scottish MP of cabinet rank at the Treasury and this has protected Scotland’s political clout.

“There is generalised hostility to the Barnett formula in Whitehall and Westminster, on the basis of what is perceived as excessive levels of public expenditure in Scotland and Northern Ireland.”

However, Prof Heald claimed the formula had survived since the 1970s as there is “no compelling support for an alternative” funding arrangement within the UK.

The committee also heard objections from other parts of the UK to the Barnett Formula, with a Welsh finance expert suggesting that it shortchanged other devolved administrations.

Gerald Holtham, an adviser to the Welsh Finance Minister, also claimed that the formula was “entirely arbitrary and without any reasoned justification” as he stated that a shake-up of the arrangement would be “appropriate” in a submission to the committee.

Mr Holtham, who is also a visiting professor at Cardiff Business School, went on to state that the formula is “democratically invalid” with growing numbers of people across the UK aware of its “existence and operation”.

SNP MSP John Wilson said the claims at the finance committee showed Scotland would face cuts to its funding if independence is rejected.

He said: “Once again it clearly gives an indication of Westminster’s intention to reduce the Barnett Formula and Scotland’s finances.

“Scotland punches above its weight in financial terms and these interventions highlight the consequence of a No vote on 18 September.”