UK report on Yes costs ‘misrepresents my research’

SCOTTISH INDEPENDENCE: The Treasury has misled Scottish voters over how much it would cost to establish a fully independent administration in Scotland after a Yes vote, according to a professor whose figures Westminster has used as the thrust of its report.

The UK Treasury has been accused of 'badly misrepresenting' research by inflating the estimated cost of setting up new government bodies after independence. Picture: TSPL

Professor Patrick Dunleavy from the London School of Economics said that the Treasury analysis on the cost of independence “badly misrepresents” his research.

The Whitehall report states that the Scottish Government would need as much as £2.7 billion to establish 180 public departments after a Yes vote.

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But in a tweet published shortly before Danny Alexander, Chief Secretary to the Treasury, outlined why Scottish voters would be £1,400 better off remaining in the Union, Dunleavy said: “UK Treasury press release on #Scotland costs of government badly misrepresents LSE research [sic].”

He then tweeted: “Appears to take minimum Whitehall reorganization cost of £15m and multiply by 180 agencies to get £2.7bn. Overstates maybe 12 times?”

Prof Dunleavy also told the Financial Times: “The Treasury’s figures are bizarrely inaccurate. I don’t see why the Scottish government couldn’t do this for a very small amount of money.” He estimates that the one-off costs of independence in relation to launching new organisations would be up to £200 million.

The professor pointed out that the Treasury’s estimated costing assumed that all 180 departments would be major bodies. He also said that the figure used in his analysis of how much it would cost to set up a single UK government department - £15 million - was based on the way in which the last Labour administration established new bodies up until 2010, which he branded “chaotic”. In addition, he said some of these bodies already exist in Scotland, and would merely need to be expanded. He said an independent Scotland would only need the addition of four major departments: defence, foreign affairs, a reorganised tax and revenue office and a Scottish equivalent of Department for Work and Pensions.

In the wake of Prof Dunleavy’s complaint, First Minister Alex Salmond claimed that the Treasury had been “caught red-handed trying to cook the books”.

He said: “This leaves the Treasury claims about Scotland’s finances without a shred of credibility.”

Finance Secretary John Swinney told BBC Radio Scotland’s Good Morning Scotland programme: “The Treasury were citing Prof Dunleavy’s research in the material they sent out to journalists in Scotland on Friday, it’s in a Treasury press release I have in front of me.

“What we can deduce from that is the UK Government has been caught fiddling the books as they have tried to undermine confidence in Scotland about the steps that we can take towards independence.”

Mr Alexander insisted that Prof Dunleavy’s work “doesn’t form part of the building blocks of the analysis we are publishing today”.

The Treasury has insisted that the £2.7 billion figure was not its “official calculation”, saying a £1.5 billion estimate from Robert Young, a professor at the University of Western Ontario, formed the basis of their report. The figure is taken from the upper echelon of estimates based on how much it would cost for Quebec to become independent from Canada. The lowest estimate for this separation was £600 million.