Formula for the future?

Gareth at the Campaign for an English Parliament blog has spotted a Scotsman article which illustrates some of the tensions inherent in the current devolution setup.

The Executive has been receiving automatic increases in its subvention from the Treasury, through the Barnett Formula. But two factors will close off this funding just as Scotland’s ageing population begins to make its biggest call on "free" care.

First, the Treasury will have to cut expenditure, as it is already borrowing too much. Second, the Barnet Formula will eventually reduce Scottish public spending per capita into line with the English – and the Treasury has pointedly refused to introduce "free" care south of the Border precisely because of its financial implications.

Perhaps the fairest solution to these kind of problems is full fiscal autonomy, with England and Scotland setting their own taxes and spending accordingly. That is the solution suggested by Professor Iain McLean in a Sunday Herald article last year.



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