From: <Saved by Microsoft Internet Explorer 5>
Subject: Guardian Unlimited | Special reports | Northern slights
Date: Sun, 9 Nov 2003 18:47:35 -0000
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l">Gritty=20
            city wins the boho crown</A></FONT><BR><BR></TD></TR>
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href=3D"http://www.guardian.co.uk/northsouth/article/0,2763,889739,00.htm=
l">Leader:=20
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l">Why=20
            is Manchester so bad for your =
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size=3D1><A=20
            =
href=3D"http://www.guardian.co.uk/northsouth/article/0,2763,682931,00.htm=
l">North-south=20
            gap likely to widen, warn =
researchers</A></FONT><BR><BR></TD></TR>
        <TR vAlign=3Dtop align=3Dleft>
          <TD align=3Dleft><FONT face=3DGeneva,Arial,sans-serif =
size=3D1><A=20
            =
href=3D"http://www.guardian.co.uk/northsouth/article/0,2763,683417,00.htm=
l">Figures=20
            reveal north-south divide</A></FONT><BR><BR></TD></TR>
        <TR vAlign=3Dtop align=3Dleft>
          <TD align=3Dleft><FONT face=3DGeneva,Arial,sans-serif =
size=3D1><A=20
            =
href=3D"http://www.guardian.co.uk/northsouth/article/0,2763,662612,00.htm=
l">Analysis:=20
            Housing policy needs radical =
overhaul</A></FONT><BR><BR></TD></TR>
        <TR vAlign=3Dtop align=3Dleft>
          <TD align=3Dleft><FONT face=3DGeneva,Arial,sans-serif =
size=3D1><A=20
            =
href=3D"http://www.guardian.co.uk/northsouth/article/0,2763,662716,00.htm=
l">Flat=20
            cap gets ahead by beating all comers in games uniform=20
            contest</A></FONT><BR><BR></TD></TR>
        <TR vAlign=3Dtop align=3Dleft>
          <TD align=3Dleft><FONT face=3DGeneva,Arial,sans-serif =
size=3D1><A=20
            =
href=3D"http://www.guardian.co.uk/northsouth/article/0,2763,614285,00.htm=
l">Doctor's=20
            behaviour to nurses improper</A></FONT><BR><BR></TD></TR>
        <TR vAlign=3Dtop align=3Dleft>
          <TD align=3Dleft><FONT face=3DGeneva,Arial,sans-serif =
size=3D1><A=20
            =
href=3D"http://www.guardian.co.uk/northsouth/article/0,2763,374389,00.htm=
l">North-south=20
            social divide still marked, official figures=20
          show</A></FONT><BR><BR></TD></TR>
        <TR vAlign=3Dtop align=3Dleft>
          <TD align=3Dleft><FONT face=3DGeneva,Arial,sans-serif =
size=3D1><A=20
            =
href=3D"http://www.guardian.co.uk/northsouth/article/0,2763,358744,00.htm=
l">Glasgow=20
            tops list for the highest death rate in=20
        Britain</A></FONT><BR><BR></TD></TR>
        <TR vAlign=3Dtop align=3Dleft>
          <TD align=3Dleft><FONT face=3DGeneva,Arial,sans-serif =
size=3D1><A=20
            =
href=3D"http://www.guardian.co.uk/northsouth/article/0,2763,358111,00.htm=
l">Analysis:=20
            The North needs regional assemblies not just=20
          money</A></FONT><BR><BR></TD></TR></TBODY></TABLE><!-- /End =
auto trailblock ---><BR></TD>
    <TD></TD>
    <TD vAlign=3Dtop=20
      height=3D1><!-- Vignette V/5 Sat Nov 08 16:54:30 2003 --><FONT=20
      face=3DGeneva,Arial,sans-serif size=3D2>Analysis </FONT><BR>
      <HR noShade SIZE=3D1>
      <FONT face=3Darial,helvetica,sans-serif size=3D5><B>Northern=20
      slights</B></FONT> <BR><BR><FONT face=3Darial,helvetica,sans-serif =

      size=3D3>Scotland, which may seem to be the poor relation of the =
wealthy=20
      south-east of England, actually spends more than the hard-pressed=20
      north-east<BR><BR><A=20
      href=3D"http://www.guardianunlimited.co.uk/northsouth">North-south =
divide:=20
      special report</A></FONT> <BR><BR><FONT =
face=3DGeneva,Arial,sans-serif=20
      size=3D2><B>David Walker<BR>Thursday June 22, 2000<BR><A=20
      href=3D"http://www.guardian.co.uk/">The Guardian</A></B>=20
      <BR><BR></FONT><FONT face=3DGeneva,Arial,sans-serif size=3D2>Three =
people=20
      understood the Schleswig-Holstein question, Palmerston once said. =
"One=20
      died, one went mad. I'm the third and I've forgotten." So with the =
arcane=20
      methods by which money gets distributed from the centre of =
government to=20
      its periphery. One is the "standard spending assessment" which =
gives=20
      English councils their money. Another is the "Barnett formula" =
used by the=20
      Treasury since 1978 to parcel the budget to Scotland and Wales. =
Today at=20
      an Institute for Public Policy Research (IPPR) conference its =
author, Joel=20
      Barnett, chief secretary in Jim Callaghan's Labour government, =
will set=20
      the cat among the pigeons by saying he only meant it to be a =
stop-gap and=20
      that he is not at all happy with the way it works, especially =
since=20
      devolution.=20
      <P>The formula is not so complicated. It apportions increases in =
spending=20
      pro rata to Scotland and Wales on the basis of their population as =
a=20
      proportion of the British total. It is not even original - it is a =
revamp=20
      of a scheme devised by a bewhiskered Victorian chancellor called =
George=20
      Goschen. The Barnett formula throws an anorak around an old =
political ploy=20
      - buying off political trouble. For 22 years it has protected =
levels of=20
      spending in Scotland and Wales that are higher than an objective=20
      assessment of their needs suggests they should get. Which is no =
accident.=20
      Subsidising the periphery is the price you pay for political union =
when=20
      nationalists bark. The trouble is, devolution has made the whole =
thing=20
      more transparent and the anomalies bulk large.=20
      <P>We do not in all truth know that much about where public =
spending ends=20
      up. At least =A334bn of UK annual spending is "non-identifiable": =
no one has=20
      ever traced the geographical incidence of spending on defence, =
scientific=20
      research or MI5. Regional statistics have not always been =
reliable. Until=20
      recently, the Inland Revenue could not allocate 12% of its tax =
records,=20
      which under-counted the wealth of the south-east relative to other =
regions=20
      - with malign effects on the distribution of EU money (this is =
written up=20
      in the Economic Journal, <A=20
      =
href=3D"mailto:gavin.cameron@economics.ox.ac.uk">mailto:gavin.cameron@eco=
nomics.ox.ac.uk</A>).=20

      <P>What is known is that spending bears only a loose relationship =
with=20
      need. The "neediness" of Scotland as a whole has diminished; GDP =
per head=20
      is now about 4% below the UK average. That might not lessen the =
case for=20
      higher spending, for example meeting the cost of services in=20
      sparsely-populated Sutherland. Someone has got to pay for the =
historic=20
      failure of Scots to eat properly, which results in poor health. =
Better-off=20
      Scots, for example: we certainly need a more precise calculation =
of where=20
      in Scotland the poor and sick live.=20
      <P>Not long after the Barnett formula was put in place, the =
Treasury did=20
      try to measure the needs of the different parts of the UK. What =
the=20
      exercise showed was that if Scotland's needs at the end of the 70s =
were=20
      about 16% above England's, Scotland's spending was 22% higher. At =
the end=20
      of the 90s, Scotland was spending 7% more per head than it needed. =
The=20
      imbalance is greater in Wales, where there is an 11% gap between =
need and=20
      spending.=20
      <P>It is wrong to blame a formula for this. Forget the arithmetic, =
says=20
      Iain Maclean of Nuffield College, Oxford in a paper in the journal =
New=20
      Economy (<A href=3D"http://www.ippr.org.uk/"=20
      target=3D_NEW>http://www.ippr.org.uk/</A>), the sole rule is what =
is=20
      politically acceptable. But if that is right, there is not much =
scope for=20
      moving spending allocation to a more objective basis, perhaps =
taking it=20
      out of ministerial hands. The Department for Environment, =
Transport and=20
      the Regions has been toying with an independent commission to =
oversee=20
      council grants - something like this exists for federal grants in=20
      Australia.=20
      <P>Instead, all the signs are that the distribution debate is =
going to get=20
      more fraught. It is not the difference between England and the =
other=20
      countries in the UK - English political consciousness continues, =
despite=20
      Charleroi, to be the dog that doesn't bark - but between Scotland =
and=20
      needy regions of England. Especially the north-east. Here is an =
area which=20
      has suffered all the torments of de-industrialisation experienced =
by=20
      west-central Scotland, where poverty is rife and the health record =
is none=20
      too good. In 1997 GDP per head in the north-east was some 13% =
below=20
      Scotland's. But government spending is less than in Scotland, on a =
per=20
      capita basis nearly 20% less. Take death (standardised mortality =
rate) as=20
      an index of ill health. Scotland's is 5% higher than the =
north-east's.=20
      That justifies higher health spending. Scotland, however, spends =
23% more=20
      per head on health than the north-east. The chart captures other =
areas in=20
      which Scotland does better - in Glasgow pupil-teacher ratios are =
about a=20
      fifth lower than in Middlesbrough. The differences do not stop =
there.=20
      Locate in Scotland has just secured a record number of jobs while =
a new=20
      academic study of business networks shows the competitiveness of =
the=20
      north-east (along with Yorkshire and the Midlands) is falling =
relative to=20
      other parts of England. Yet spending on trade and industry is =
again less=20
      in the north-east.=20
      <P>Such figures will remain of academic interest unless they =
become the=20
      subject of political mobilisation. Unless, in other words, there =
is a=20
      "Geordie rebellion" similar to that in the late 70s, differences =
will not=20
      be addressed. Perhaps the stirrings in Labour's heartlands and the =

      attention being paid to a new regional structure in England =
presage=20
      changes in distribution of funds. Now is the time to get it =
sorted, says=20
      the IPPR's Peter Robinson. After the election, a Labour government =
with a=20
      reduced majority could be held hostage by northern MPs.=20
      <P><A=20
      =
href=3D"mailto:david.walker@guardian.co.uk">david.walker@guardian.co.uk</=
A>=20
      </FONT><BR><!-- Vignette V/5 Sat Nov 08 16:54:31 2003 --><!-- =
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