20 January 2008

Is public spending per head in London higher than in Scotland?

I’m not sure that it is productive to compare a country with a region but let us examine the per capita public spending as set out in the annual public expenditure statistical analyses (PESA) documents published by the UK Treasury. The outturn figures for 2005/06, the latest outturn figures presently available, are Scotland
£8 179 and London £8 164. That’s London less than Scotland.

The 2006/07 planned identifiable expenditure gives figures of Scotland £8 623 and London £8 404. London again less than Scotland. The outturn figures may be different of course.

In fact in the five years since 2001/02 for which outturn figures are known, London has had a larger per capita spend than Scotland only in 2004/05.

You can read all the statistics here on the Treasury website at table 9.2. The introduction to the document has some useful technical comments about the statistics.

The table also shows clearly that per capita public expenditure in Scotland (and Wales and Northern Ireland) is higher than in England, which includes Cornwall; and that the proportion going to Scotland, after a dip in 2004/05, is not significantly declining.

Incidentally, there are no separate PESA figures for Cornwall but the south west per capita outturn figure for 2005/06 was £6 398. How odd that nationalists here complain about perceived underfunding for Cornwall but never raise the issue of per capita public spending across Britain. Why is that?

For 2006/07 the Scotland figures are probably about £5 overstated, ie the per capita figure should be about £5 less than given; previous years have a per capita overstatement of about £1. With this correction Scotland still exceeds London. The correction is noted here – scroll down to Revision to chapters 9 and 10. There will be a correction in the next PESA.

These per capita public spending figures are contended as this article in the Guardian for 3 November 2007 shows.

Perhaps here is a good place to point out that the latest available government expenditure and revenue figures for Scotland (GERS), for 2004/05, show that Scotland receives about £11.2 billion more in public spending than it contributes to the UK excluding North Sea oil; including the oil revenues, the difference drops to about £6 billion. Read it here .

I think that UK public expenditure should be redistributed across Britain on the basis of the need of the individuals and communities wherever they live and, where given to communities, to the smallest feasible units rather than large units though devolution has complicated that. In terms of need does it make the best sense to redistribute on a country or even regional basis if we can target more precisely than that? Given the controversy and even ill-will that the present distribution causes, along with the disputes that surround the data, it is time the government looked again at the population-based Barnett formula and at need, and looked again at the collection of the relevant data, so that we can consider what sort of redistribution we want.