An interesting side story to emerge from analysis of the latest GERS figures concerns where exactly Scottish spending per head of population is higher than for the UK as a whole.
The overall advantage in 2024-25 was 14%, i.e. for every £100 spent per person on UK public services the Scottish figure is £114. This degree of ‘advantage’ is well recorded and has been maintained over time, despite the Barnett Formula being geared to reducing it via the so-called eponymous squeeze.
Within this 14% figure, some Scottish public services spend is well above the UK average. For example, the advantage in terms of Housing & Community is 68%, for Recreation & Culture it’s 44%, Education & Training is 24%, Social Protection is 14% and Law & Order is 8%. Meanwhile, at the bottom of this league table lies Health spending, at only 2% higher.
Were a needs assessment to be done it would probably show that, for geographic reasons alone, Scotland’s relative health funding needs are well over 2% higher than the UK average. In other words, Scottish health is being underfunded vs the UK as a whole, despite the overall Scottish spending advantage.
Underfunded health spending
How did this come about? Its not entirely clear why the Health advantage has fallen from over 18% at the point of devolution – and still over 14% in 2007 – to only 2%. Successive Scottish Governments assigning the NHS only its Barnett consequentials would have done some of the work – simple maths, given a higher base figure. The rest is probably due to a mélange of reasons that have eaten away imperceptibly, rather than in big chunks, at the advantage. Hence, the lack of public and political furore on the issue.
Looking forward, things don’t look any rosier. The English NHS workforce plan implies big growth in staffing numbers in coming years while Scotland has no such plans in place.
Another aspect that would be good to have a greater insight on is where, within overall health spending, such relative austerity is being focussed? Is it NHS spending (unlikely) or is it on GPs, capital investment, training, dentistry? Such a level of analysis is not yet available, although Scottish GP representatives, including BMA Scotland, have complained in recent years about underfunding.
As GERS only looks at spending for Scotland and the UK, then, to gain a wider perspective on what is happening, you need to look at the HM Treasury-published Country and Regional Analysis (CRA) data. The two datasets are not exact matches but good enough to give us a clear steer.
The CRA data shows that the relative terms decline in health spending has been observed when compared to England, Wales and Northern Ireland. In 2008-09 the Scottish advantage was 15%, 7% and 7% respectively; by 2023-24 this had fallen to 2%, -5% and -8%. (Note: English regional data also suggest that spending per head is lower in Scotland than in the North East or North West of England.)
Given that the overall Scottish advantage over the UK average has barely changed over this period – showing a marginal decline from 15% to 14% – then which policy area has been winning at health’s expense? Here it’s important to recognise the scale of spending. So while, for example, the recreation & culture gap has grown, spending in this area is relatively small. The three big spenders are health, education and social protection.
Looking at education we see the Scottish spend per head advantage (2008-09 to 2023-24) growing from 9% to 19% vs England.
Meanwhile, for social protection, the Scottish advantage has grown from 11% to 14% vs England. This shift may be smaller in percentage terms, but social protection has the biggest spend per head of any public service.
It’s devo in practice
What might explain such shifts? In education, maybe the slower growth in school population in Scotland, also the higher spend on higher education to compensate for not introducing tuition fees? In social protection, perhaps the steady build up of devolved benefit payments?
Of course this is devolution in practice. Choose your own priorities and fund accordingly. Indeed it could be argued that higher spending on things like child benefit payments may be more effective, as a preventative health measure, than more spending on the NHS.
But is health really the public service that most Scots would want, or expect, to have the lowest priority in terms of being ’overfunded’ vs the UK? And to such an extent that it is effectively being funded to a level below the UK average? That seems very unlikely, but that is what is happening.
It is also worth noting that this analysis is not entirely new. GERS is published every year and the Institute for Fiscal Studies (IFS) published a very thorough ‘Healthcare spending, staffing and activity (in Scotland)’ paper in early 2024. But somehow the wider political world in Scotland has not picked up on it.
At face value, this does seem like another area where the Scottish Government is not being adequately held to account for its decisions. Doing so might throw up some difficult questions but at least there would be a more informed debate over what Scottish spending priorities really are.
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