The Barnett Formula - Select Committee on the Barnett Formula Contents


Examination of Witnesses (Questions 340 - 359)

FRIDAY 27 FEBRUARY 2009

Mr Dave Moxham

  Q340  Lord Forsyth of Drumlean: The system has operated where there have been huge amounts of extra money sloshing into the system, and on health the formula consequentials have not been sufficient. We had evidence this morning from Mr Swinney and he said what they had got in health had not been sufficient to cover this and they had been able to vire from other areas, which you can do in a period where there is more availability of cash, but are you not concerned that as we enter into a period of restraint that the failure to actually make the case for some kind of needs-based approach and just relying on the population approach might do real damage to the Health Service?

  Mr Moxham: Essentially I agree with you. Our position is that there needs to be a needs-based analysis at some time in the future for the UK as a whole. Our concern would be that that is done with due diligence over a reasonable period of time and that what we do not have is a rush away from Barnett onto a per capita basis which would be different but still done on that basis. We have no opposition whatsoever to a proper needs-based assessment of funding across the UK.

  Q341  Chairman: We need a bit more than just an analysis of needs assessment. We need some kind of mechanism that actually distributes on the basis of need.

  Mr Moxham: Indeed.

  Q342  Chairman: Somehow it has got to be done that way?

  Mr Moxham: Yes, and if we are assuming the current Scottish spread of spending, that is to say the provision of services essentially by the Scottish Parliament and the provision of welfare transfer by the UK Government, that system must take into account the cost of providing those services rather than simply be based on the economic indicators in terms of relative wealth.

  Q343  Lord Sewel: I suppose the difficulty is how to get there, is it not?

  Mr Moxham: Indeed.

  Q344  Lord Sewel: Who would carry it out and over what period of time would we start introducing a needs-based assessment? Have you got any views on that?

  Mr Moxham: I suppose you might consider this to be a defensive view, but I would reiterate our position which is not quickly, because we do not think it is something that could be easily undertaken and we would have concerns about it being undertaken outwith an overall assessment of funding across the UK, including within the English regions. We are quite aware of the comparisons that are made specifically between Scotland and the north of England, for instance, in terms of funding. We would want to see an assessment made in relation to the relative funding of all of the regions as well. I am certainly not going to suggest that any formula or any new mechanism would be easy. However, I suppose one of the advantages is to look at where the vast majority of Scottish spending is undertaken, which is essentially in the areas of health, education, care, and to some extent transport, and that provides it seems to me, a reasonable basis upon which to proceed. There are obviously other budget headings but, from memory, those would make up over 80 per cent of Scottish Government spending, so it seems to me the cost of providing those, taking into account geography, taking into account measures of health as opposed to simply measures of income, would be the very basic methodology that we would want to see followed.

  Q345  Lord Sewel: One of the problems clearly is that everybody has got to have confidence in the system, have they not, and they have to feel that it is not being manipulated or that there has been cheating going on to satisfy any particular group or area? I suppose one of the advantages of Barnett is that at the margin it is a population-driven formula, so it is not open to that much abuse, where if you go to needs you always have a degree of, it has been put to us today, subjectivity on how you measure needs, how it is assessed. Do you see the need to set up some sort of independent body to carry out the assessment?

  Mr Moxham: Our organisation has not specifically thought about how that would happen, although that seems to be a sensible suggestion. I suppose in broad terms one would look at the creation of a new baseline of need. It does not seem to me to be impossible that between that and possibly a reassessment of that, let us say on the basis of a Census or a decade-by-decade basis, that in between that time the formula would not operate on a population basis. It seems to be me the importance is to establish independently and effectively what the baseline should be.

  Q346  Lord Sewel: To pay particular attention to the independent assessment of need. Then your view is that there would have to be a fairly long transition process if there were significant swings?

  Mr Moxham: I think so. I am speaking entirely hypothetically. One might suggest, for instance, that the cost of providing education in Scotland per capita is not sustainable. Were we to pull 10 per cent funding from the Scottish education system it would collapse. I am not necessarily suggesting that. My educational colleagues would hang me up if I was suggesting that that was a fair settlement. However, it is possible to hypothesise that even in the case that unfairness were found, because education, justice and a range of other functions within Scotland have built up in a different way, that the withdrawal of a significant amount of funding from them would cause problems far beyond the proportion of the reduction that they might receive.

  Q347  Chairman: Can I just go back to one thing you said to us a little while ago. You said that you want the assessment process to include an assessment of the English regions. Do you mean that? In other words, this assessment body that was going to look at expenditure between the four parts of the UK should actually get down to looking at expenditure between the north-east of England, the South West, the South East and Lancashire? If you did mean that, would you not have to do the same exercise with the Scottish regions? I think that is an enormous task.

  Mr Moxham: I hear what you say but I think to some degree size matters. If you take any given region of England, you would find that in broad budgetary terms the type of sums of money we are talking about are similar. I am not specifically aware of how big the North East budget is but it is not of a completely different character to the Scottish or Welsh settlement.

  Q348  Chairman: The North East does not have a specific budget.

  Mr Moxham: It does not have a budget but it is possible using the same criteria as we use for judging spending in Scotland.

  Q349  Chairman: You can get a rough ball-park figure?

  Mr Moxham: You can give a rough ball-park figure. The role of the South East and the east of England essentially as exporters of productivity of or as transferers of income is obviously very well-established and has a very major effect upon the UK average when we are talking about the baseline figure of 100 per cent capita for funding. I forget the figures but I think the figures suggest that spending in the South East compared to GDP is something like 87 per cent. If we look across Europe and some of the big city regions of Europe, the pattern is quite similar. Interestingly enough, Catalonia, almost by a process of reversal, is a fairly large transferer of resources but similar patterns can be picked up if we look at the le de France and other areas. My point being without taking a view about the South East's and the East's position in relation to the rest of England, it is difficult to arrive at what a suitable baseline per capita figure is for funding on the basis of need.

  Q350  Chairman: Surely you do not want Glasgow to be compared with London?

  Mr Moxham: I do not want Glasgow to be compared with London but I am content for the north-east of England who, as you will be aware, are regularly compared to Scotland in terms of funding per capita for those services which can be compared, to be reassessed along with Scotland.

  Q351  Chairman: It seems to me that what you are saying now is that the needs assessment process you are contemplating is infinitely wider and in effect it is assessing the needs of the four different parts of the UK and letting them decide where the money goes.

  Mr Moxham: Essentially that is the case.

  Q352  Chairman: You want a major one to look at all the regions of the United Kingdom, England, Scotland, Wales and Northern Ireland, and actually compare those regions and have needs assessment in relation to each of them?

  Mr Moxham: Figures have been produced. I could not vouch for their absolute accuracy, but there is already a view abroad from the work that has been done on the relative funding of the English regions and clear comparisons have been made, in fact quite political comparisons have been made between that proportion of expenditure and those undertaken in Scotland. If you look at some of the key comparators between, for instance, the North East and Scotland, you find very similar levels of economic inactivity and levels of welfare transfer. Certainly if I were in the north-east of England I would be arguing that I want to be part of such as assessment.

  Q353  Lord Forsyth of Drumlean: Is this not a different argument because I do not know the numbers now, I am out-of-date, but spending per head on health in the north-east of England will be considerably less than spending per head on health in Scotland.

  Mr Moxham: Indeed.

  Q354  Lord Forsyth of Drumlean: That is the political difficulty, but if you take spending on health in Scotland and you compare Glasgow to the north-east of Scotland, there will also be a differential.

  Mr Moxham: Indeed.

  Q355  Lord Forsyth of Drumlean: So are we not confusing two things here, which is really the Chairman's point?

  Mr Moxham: I do not because I believe that the sums of money involved particularly the role of, as I say, the South and the East in essentially affecting the calculation of Scotland's baseline requires an examination of whether the settlement within England and the costing of delivery of services within England is fair as well.

  Q356  Chairman: I do not follow that. I really do not follow that because it seems to me that what we need is a mechanism which is there in order to distribute resources between the four constituencies of the UK and that the way in which Scotland, for example, would then deal with its own money and its own people is a matter for the Scots, the same with the Welsh and Northern Irish and the English. Do we need to go further than that?

  Mr Moxham: My view would be that it is important in terms of the integrity of the United Kingdom as a whole, and to ensure reasonably well-shared values of social citizenship, for want of a better term, that those in the various regions of England were able to say with some certainty that the criteria which were being applied to them were the same as the criteria which were being applied to the people of Scotland.

  Q357  Lord Rowe-Beddoe: I was going to ask you is one of your concerns here the transparency of what is currently the system that allocates these funds?

  Mr Moxham: I think there must be a problem with transparency when it is so little understood and so often misquoted. I suppose one of my concerns is that the most frequent comparison that those of us who attempt to defend levels of public spending in Scotland are forced to make is with the regions of England.

  Q358  Lord Rowe-Beddoe: The thing about the regions of England is that they do not formally exist. We hear a lot and the press give us a lot about the North East. Can I ask you a slightly different question. Obviously you represent the trade union movement in Scotland. Do you find that this question is a question that concerns your membership, that you have discussions about it, or it is raised, as it were, during the year, or is it left to people in your position to be concerned about it?

  Mr Moxham: I think it is fair to say that the discussion around the operation of the formula specifically has become more current and more widespread since the wider discussions prompted by Calman and the National Conversation about Scottish funding generally.

  Q359  Lord Rowe-Beddoe: More of an awareness?

  Mr Moxham: More of an awareness. I would say not necessarily a full understanding. I am also aware—and you will probably have guessed I am not Scots by birth—from my frequent visits to the South East of England that the level of discussion and debate there has increased quite significantly as well. Our annual Congress will hear 104 different motions later in April and there is not one on the Barnett Formula or the operation of it, so I would not try and pretend that it is an issue of enormous currency. However, I think the general funding relationships are of more interest and, in particular, people are beginning to hear the mood music of the discussion that is going round in some of the newspapers down south and beginning to become aware that it is an issue that we are going to have to discuss.


 
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