Scotland should lose billions of pounds of financial support from the Treasury, according to the man behind the current public spending system. In a frank television interview, Baron Joel Barnett reiterated his claim that his system for dividing public spending – the Barnett Formula – should be scrapped. He said: ‘It’s quite wrong and I’ve said so in a debate which I initiated in the House of Lords. It clearly should not be based on per head expenditure but instead based on the needs in particular areas. At present, the amount of money going to Scotland on a needs basis by comparison, say, with my own North West or the North East, is far higher than it should be. So it should be changed. He added that ‘very large sums’ could be lost from the current allocation to Scotland. Devised in 1978 by Lord Barnett, the-then chief secretary to the Treasury, the formula roughly distributes every £1 the UK Government spends in a ratio of 85% to England, 10% to Scotland and 5% to Wales. But critics, including its author, claim the formula takes no account of the needs in different areas or different amounts of tax paid. A Treasury spokesman said: ‘We are continually looking at ways to divide things but are happy with the Barnett Formula.’
