Thatcher ordered report on cash cut for Scotland

Published on Sunday 15 February 2009 20:56

MINISTERS considered radical proposals to drastically cut government spending levels in Scotland, according to newly released Whitehall documents.

A report commissioned by former prime minister Margaret Thatcher, now released under Freedom of Information legislation, identified ways of cutting Scottish expenditure, as determined by the controversial block grant and Barnett Formula.

Written in 1986 by Brian Unwin, then deputy Cabinet secretary, the "Unwin Report" scrutinised spending levels in each part of the UK. Ministers were concerned that Scotland continued to receive disproportionate amounts of government cash despite a falling population.

Mr Unwin suggested reducing the Scottish block either by updating its "baseline" figure or revising the Barnett Formula to take account of changes in population since 1979. A one-off adjustment to the baseline would cut Scottish spending by more than 400 million from 1986-89.

Alternatively, Mr Unwin suggested, the Secretary of State for Scotland could take on extra responsibilities including the Scottish Arts Council and Scottish universities without an increase in provision.

Mr Unwin's recommendations were not immediately implemented. The Barnett Formula was recalculated in 1992, while responsibility for the Scottish Arts Council and Scottish universities were only transferred to the Scottish Office in the mid-1990s.