Ministers denounce 'basic errors' in report of £76bn devolution subsidy

Published on Sunday 31 January 2010 21:32

SNP ministers have hit back at a claim that Scotland has received a £76 billion devolution dividend in the last decade.

The Scottish Government put out its own analysis of the report which suggested that Scotland is being subsidised from London ahead of publishing its referendum bill in the next few weeks.

It claims that the Scotland Office report missed vital details to "skew" its findings, including money raised from oil revenues, the fossil fuel levy, water charges and the TV licence fee north of the Border totalling 14bn.

And they have alleged that the report is full of "basic errors".

They also allege that the calculations that Scotland ran up a cumulative deficit of 23.5bn between 1981 and 2007 even with all the UK's oil revenue are wrong.

The Scottish Government riposte points out that over the same period the cumulative UK net borrowing was 462.6bn (627.7bn in constant prices). A per capita share allocated to Scotland would be 38.9bn.

"This means that the flow of resources is north to south, not the other way round," said a spokesman for SNP finance minister John Swinney.

The issue of Scotland's financial viability and strength outside the United Kingdom is seen as vital in the debate over whether Scots should be able to have their say in a referendum on independence, which is due to be blocked by the Unionist parties.

The Scotland Office report was published on Burns Night, the date the SNP originally planned to publish the referendum bill.

Mr Swinney's spokesman said: "The report from the Scotland Office – Expenditure and Revenue in Scotland, or ERS – is perhaps suitably named by its authors, as it is littered with basic errors and can only be politically motivated.

"The Scotland Office should be renamed the anti-Scotland Office, as its sole purpose these days appears to be to concoct dodgy dossiers on Scotland's finances."

However, the Scotland Office has maintained that it has based its findings on the Scottish Government's own figures.

There have been disputes over these as well with allegations that SNP ministers skewed the last Government Expenditure and Revenue Scotland (GERS) figures.

At the time it admitted Scotland had run at a deficit of 11bn but claimed that, with its share of oil money, it would have made a profit. However, this was achieved by taking out all one-off capital expenditure by the Scottish Government and, according to Labour, increasing Scotland's geographical share of oil and gas revenues by 10 per cent.

The Scotland Office report also stirred up anger from politicians south of the Border, especially in the Conservative Party, who believe that devolution has led to Scotland and Wales being over subsidised.

Although the UK government supports the Barnett formula which decides how much money Scotland gets, the report also fuelled calls for a formula based more on need which could mean Scotland getting less.