Scottish independence: Scots given £1,594 more than the English, reveals Treasury

Danny Alexander claimed the figures demonstrate 'real financial benefit' to Union
Danny Alexander claimed the figures demonstrate 'real financial benefit' to Union
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UK ministers last night sought to claim Scotland was benefiting from the Union, as new figures revealed a widening gap in government cash spent on Scots compared to people in England.

Treasury documents published yesterday showed that while government spending per head dropped everywhere in the UK in 2011-12, it fell nearly twice as quickly per head in England as in Scotland.

While Scots saw an average of £10,088 being spent on them – a £117 fall from 2010 – people in England made do with just £8,491 – a drop of £224 per head. It means the per person gap in spending between Scotland and England is now £1,597.

Chief Secretary to the Treasury Danny Alexander claimed last night the figures demonstrated that Scots continued to see a “real financial benefit” from being part of the UK.

That was given short shrift by the Scottish Government, however, which pointed to other official figures showing how Scotland paid a larger percentage of UK tax revenue than the share of UK expenditure it received back.

The figures mark the first occasion Scotland’s spending advantage has increased over England in recent years – a quirk caused by the workings of the Barnett Formula, used to divide up government funding to different parts of the country.

That system, calculated on 30-year-old population shares, has long handed Scotland a spending advantage, but that gap has reduced in recent years, as Scotland is given a lower share of spending increases.

However, last year, that system of convergence went into reverse as, instead of spending increases, real-terms spending cutbacks were implemented.

That led to some huge anomalies on spending around the country, with people in London suffering a £400 per head drop in spending in 2011-12, nearly four times the cutbacks experienced in Scotland.

It now means that Scotland is second only to Northern Ireland in the league table on government spending per head, which counts both the £30 billion spent by the Scottish Government and UK government spending such as unemployment benefits and pensions.

Mr Alexander said: “These new figures show that the people of Scotland continue to see a real financial benefit from being part of the UK.

“The UK is an incredibly successful economic union and long may it continue.”

Ken Macintosh, Labour’s shadow finance spokesman, added: “These figures clearly show Scots not only get higher levels of public spending than the rest of the UK, we also are seeing it decline at a slower rate. It just goes to show that what the SNP and anti-UK parties have to say on Scotland’s finances is just a bunch of hocus-pocus.”

A Scottish Government spokesperson said: “These figures represent just one part of one half of the balance sheet, and ignore the large contribution Scotland makes in tax revenue. The most recent analysis shows Scotland generates 9.6 per cent of UK revenue in return for 9.3 per cent of UK spending – which means that Scotland was in a stronger financial position than the UK as a whole to the tune of £2.7bn in 2010-11, which equates to over £500 per person.”