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Last Updated: Sunday, 20 January 2008, 11:30 GMT
Does Scotland get its fair share?
By Lissa Cook
BBC 5 Live Report

Free university tuition, free personal care for the elderly, free prescriptions on the way. Has Scotland become the land of the free at the expense of Britain's other nations and regions?
Anna, Ruth and Annie
Two of these girls will graduate with at least 10,000 debt. One won't.

Ruth Olifant studies anthropology at Aberdeen University. She and her English friend Anna have to pay tuition fees capped at 3,000 per year, unlike their Scottish friend, Annie.

Ruth says: "It does feel a bit unfair sometimes. It's absolutely essential that I work so I can survive, really, because you have this extra burden, this extra debt."

Anna is more resigned: "Scotland is a separate country, it has separate powers. Obviously I'd like to not pay fees - that would be fantastic but you can't brew about it."

Barnett Formula

Since devolution, the Scottish Parliament has had control over its education policies - and rejected up-front tuition fees for Scottish students at Scottish universities.

They pay a "graduate endowment" at the end of their courses - which, at 2,289 for those who began studying in 2006/7, is by far the cheaper option.

And it's not only tuition fees. The elderly in Scotland also get free personal care and by 2011 the governing SNP want to abolish prescription charges.

What was a political fix over 30 years ago to keep ministers quiet is now being used to transfer huge quantities of money into Scotland when they're needed in the English regions
Graham Stringer

What angers MPs representing English regions is the system by which money is allocated to the Scottish Parliament - not by tax revenue but by something called the Barnett Formula.

The formula allocates a lump sum for Scotland, Wales and Northern Ireland, then for every additional pound spent in England - approximately 10p is allocated to Scotland, 5p to Wales and 3p to Northern Ireland, based on their populations.

London's 16bn Crossrail project will trigger an automatic payment to Edinburgh of almost 1bn.

"It's absurd," said Labour's Manchester Blackley MP Graham Stringer.

"What was a political fix over 30 years ago to keep ministers quiet is now being used to transfer huge quantities of money into Scotland when they're needed in the English regions."

'Clearly unfair'

He says money is not distributed according to need: "Edinburgh gets its trams. Manchester doesn't get its tram extension. The money flies over Manchester into Scotland on no rational basis."

Even Lord Barnett, who was Chief Secretary to the Treasury in 1978 when the formula was introduced, believes the formula should be scrapped.

"It made life a little easier for me and the constant problems I had in cutting public expenditure, to say 'they get a certain amount, leave me alone and you carry on'. I never anticipated that it would last very long".

What Scottish oil has delivered over the last 30 years is a very, very helpful resource to prop up the ailing finances of the UK
John Swinney

He blames its survival on successive prime ministers being too afraid of upsetting the Scots and the Welsh and says expenditure per head is now "clearly unfair" to parts of England.

But the SNP's Scottish Finance Secretary John Swinney says, in fact, Scotland suffers from a Barnett squeeze.

"The Barnett Formula far from being generous to Scotland is actually forcing the difference between public spending in Scotland and England together, simply because the Scottish population accounts for a much smaller proportion of the UK population that it used to in the past."

Means-tested care

A report last year from consultants, Oxford Economics, suggests that Scotland pays roughly as much in tax as it receives in public spending. Mr Swinney says Scotland is making an enormous contribution through the UK through oil revenues for which they get nothing in return.

"What Scottish oil has delivered over the last 30 years is a very, very helpful resource to prop up the ailing finances of the UK. And that's benefited prime ministers from Margaret Thatcher to Gordon Brown."

For individuals living south of the border, the rules have a real impact on their personal circumstances.

Brian and Viv Yates have sold their home and are spending their savings on luxuries like holidays and new cars. They are not reckless spendthrifts. They have learnt from the experience of Viv's mum who is 96 years old and was recently diagnosed with dementia.

Selling home

The family have been forced to sell her bungalow because elderly care is means-tested in England.

Had they lived in Scotland they would still have had to pay for a care home but she would have been entitled to 145 for personal care at home and if she needed nursing there would be another 65 available to her.

Brian said that might have made it possible for her to go back to her own home.

"She had a lovely bungalow," he said.

Viv added: "We paid for someone to come in at lunchtime and my older sister took care in the evening."

"If we could have paid for someone overnight that would have solved the problem".

The 5 live Report: Barnett Fair? is on Sunday 20 January at 19.30GMT or get the podcast at the 5 Live Report website. The programme is an All Out Production.

Q&A: English-only votes
30 Oct 07 |  UK Politics
Row over spending review figures
09 Oct 07 |  Scotland
Time for an English parliament?
03 Jul 06 |  UK Politics


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