The Barnett Formula - Select Committee on the Barnett Formula Contents

Examination of Witnesses (Questions 360 - 367)


Mr Dave Moxham

  Q360  Lord Rowe-Beddoe: Can I just go back to this question of the regions in England which the Chairman has raised. I know this is outside our particular remit, but the whole question of the funding of these parts of England (if we do not call them regions for a moment) is a matter for England under this concept. We have a Barnett Formula. We are not entering into the political forum here and if it is accepted eventually to replace the Barnett Formula, it will be for the four constituents parts of the United Kingdom and Northern Ireland, to determine how they are going to allocate the grant. That is not satisfactory to you?

  Mr Moxham: I believe that there would be enduring difficulties in relation to the "felt fair" of the system across England, which is after all the significant part in size of the United Kingdom, and I believe there is certainly the risk under that approach that we would not end up with felt fair across the regions of England and therefore the stability of any future settlement would potentially come into question.

  Q361  Lord Forsyth of Drumlean: Why do you make that distinction between a future settlement and what we have now? I have now got the figures for what health spending is by region in England and the North East is actually one of the highest at £1,678 per head. The Scottish figure is £1,771, which is higher than all the other regions of England and Wales by quite a considerable margin. There is a big variation between the parts of England from £1,402 in the South East to £1,417 in the South West, right up to the figure I have given you for the North East, so within the existing distribution, which we are not concerned with, in England you have a big variation between the regions but all of them are considerably less than Scotland. Do you think that reflects need?

  Mr Moxham: It may well do but I would hesitate to say that it definitely does. It certainly reflects the increased cost of provision partially in relation to the geography, although I concede the North East would have some issues in relation to that, too, but we would need to then make a cross-comparison, in my view, with morbidity rates.

  Q362  Lord Forsyth of Drumlean: I think the money is distributed by the Department of Health within England on the basis of a formula which takes account of need, which is why you get that distribution between them, and I have no doubt that people argue—which is not our concern—about what the North East gets, but the argument which I thought you were referring to is the one that says why does Scotland get £1,700 and why is the overall level of expenditure on health higher in Scotland. The fact that it is not actually possible to point to a kind of needs-based assessment makes it very much more difficult to justify that relative to the English regions. Is that not the political difficulty?

  Mr Moxham: Yes, that is an accurate position.

  Q363  Lord Forsyth of Drumlean: It is not so much about the distribution between the English regions as about the overall provision relative to England and Scotland?

  Mr Moxham: Yes.

  Q364  Chairman: It is also a perception, is it not, that unless you have got a needs-based assessment which people broadly accept as fair, you still get this argument going on between, say, the north-east of England and Scotland about their respective allocations?

  Mr Moxham: Yes.

  Q365  Lord Sewel: I think there is one thing we can agree on, if we do move to a needs assessment of the type that you are advocating, it will take a fairly long period of time, as you have said, to introduce. Are there any aspects of the Barnett Formula as it operates at the moment which cause you concern and worry and you would like to see changed in an intervening period?

  Mr Moxham: We have not given specific thought to that. We are obviously aware that, in theory at least, over a period of contracting public expenditure, as we expect to happen now, that convergence would be slower. Taking into account the potential for rising inflation and wage costs to influence that, too, I think one of the clear problems that we have is that it is actually very difficult to predict where the formula will have us in five or ten years' time, and that is clearly a problem. I tend to think that any attempts to tinker would probably just produce further problems as opposed to clarifying the situation. To be honest, I would defer to people who have done more work on the operation of the mechanism itself rather than making specific suggestions.

  Q366  Lord Forsyth of Drumlean: Is that another way of saying it is politically too difficult?

  Mr Moxham: Yes, probably! I have yet to hear of anybody who has any confidence about what a future formula might look like.

  Q367  Chairman: Well, thank you very much indeed. You have made your views very clear. I think a large chunk of it I find myself in agreement with.

  Mr Moxham: It would be of some disappointment to me if I threw anything into the pot that was controversial. Thank you very much for listening to me.

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