- Identifiable public spending per head in England is £7,535 pa (2007-08). But in Scotland it is 22 per cent (£1,644) higher, Wales 14 per cent (£1,042) higher, and Northern Ireland an extraordinary 30 per cent (£2,254) higher.
- Just over the last two decades (since 1985-86), higher spending in the three devolved territories has cost UK taxpayers a cumulative £200 billion (£102 billion in Scotland; £43 billion in Wales; £57 billion in Northern Ireland).
- North Sea Oil has not funded the Scottish spending gap, despite Scottish Nationalist claims to the contrary. In only five of the last 23 years have North Sea Oil receipts exceeded the cost of higher funding paid to Scotland. Even with current high oil prices, the income from the Scottish share of North Sea Oil only just covers the spending gap, and North Sea Oil output is projected to fall by 50 per cent by 2020.
So in only five of the last 23 years has North Sea Revenue exceeded the Scottish grant from the Treasury.
But the biggest scandal is the way the Barnett Formula actually works. It's not based on the needs of Scotland or Wales or Northern Ireland. It is calculated according to what is spent. So if the government spends £1 billion on a capital project in London, Scotland automatically receives £150 million, whether it needs it or not. It does not work the other way around though. Crazy.
English taxpayers want an end to subsidising Scotland, and the Scottish Government wants financial control devolved to Holyrood, so now is the ideal time to consign the Barnett Formula to history.
Hear hear to that. Even Lord Barnett himself now considers his own formula an anachronism. Yet the trouble is that neither Labour nor the Tories will have the guts to do what their brains must tell them is the right thing to do. If Brown announced the abolition of the formula he would be doing just what Alex Salmond wants him to do, and consign even more Labour MPs to defeat at the next election in Scotland. ConservativeHome outlines four reasons why David Cameron will also tread carefully in this political minefield.
So sadly, it is unlikely we will see a complete end to the arrangement by which £200 billion of English taxpayers' money has gone to Scotland, Northern Ireland and Wales over the last twenty years. Instead, there will probably be some minor tinkering. It may be better than nothing, but the lack of action to tackle a problem which everyone recognises exists is further evidence of a lack of radicalism among our political leaders.
Read the fill report HERE.
UPDATE: Mike Denham responds to the points made in the Comments HERE.