Greater Scottish autonomy might mean 'poorer services'

Published on Monday 17 November 2008 21:40

A PANEL of experts looking at tax-raising powers for the Scottish Government has warned that the price of greater self-rule might be worse services.

In its report for the Calman Commission on the future of devolution, the panel, chaired by Professor Anton Muscatelli, also concluded that the Barnett Formula, which governs Scotland's financial allocation, has serious deficiencies.

It called for another investigation into what to do with oil revenues, pointing out that if Holyrood received a share of the revenues, it would have to pay a part of the decommissioning costs, expected to be 19 billion by 2040.

The report looked at different means of devolved finance in countries such as Spain, Germany, Canada and Australia.

However, Prof Muscatelli and his colleagues, having "laid out the landscape" the Calman Commission needs to look at, refused to make any recommendations. They concluded there was "no ideal solution". Prof Muscatelli said the advantage of the Barnett Formula was its stability and predictability. And he added that there "might be a trade-off" on services and revenue with greater autonomy.

"For example, there is a shared, common social security system throughout the UK," he said. "And a broad parity of public service provision north and south of the Border.

"If it was considered important to maintain some degree of equality, then there would need to be some connection maintained between the Scottish Parliament's budget and spending by the UK."

Iain Gray, the leader of the Scottish Labour Party, said the document undermined the case for independence by pointing out that volatility of oil prices meant it was not a stable source of revenue.

The SNP attacked the report for rejecting full fiscal autonomy. Alasdair Allan, an SNP MSP, said the report and the UK government's lack of support for change showed that the Calman Commission was redundant.