How does it work?
The Barnett formula dictates the level of public spending in Scotland, Wales and Northern Ireland and is based on the population of each nation and which powers are devolved to them.
They each receive greater public expenditure per head than England under the formula.
An extra £1,623 per head, or 19 per cent, is given to Scotland compared to England.
In 2013 Scotland got £10,152 per head, Wales got £9,709 and England got £8,529.
Why was it created?
The Barnett Formula was designed as a temporary measure but has lasted for 30 years.
Lord Barnett, then the Labour chief secretary to the Treasury, drew up a system for the division of public spending in 1978 partly to settle rows with other Cabinet ministers about spending allocations, and partly to allow for Scotland’s larger physical area, lower average incomes and its particularly acute needs in health care and housing.
Why is it controversial?
The formula was relatively uncontroversial at its origins, but friction has arisen as the wealth gap between Scotland and England has closed.
While the annual increase in Scotland’s allocation is falling, the historical disparity created in 1978, and Scotland’s increasing prosperity have meant the apparent generosity of the Treasury towards Scotland has persisted.
Public spending being 19 per cent higher in Scotland than in England has inevitably resulted in the formula becoming controversial.
Scotland’s minister screams for independence,what will the people feel when the TAX increases to fund it?