“We’ve protected Scotland’s NHS from the Tories’ cuts.”
The yes campaign says independence is the best way to protect the NHS in Scotland.
But confidential documents passed to the BBC by a senior whistle-blower suggest there is a £400m funding gap on the horizon and the devolved health service will need sweeping reforms to cut costs after the referendum.
The claim has forced the Scottish government to defend its record on running the devolved NHS.
Health Secretary Alex Neil said: “We’ve protected Scotland’s NHS from the Tories’ cuts, and with independence we can ensure that it is never again under threat from Westminster’s dangerous obsession with austerity.”
Let’s remember the fundamentals. Westminster gives Scotland a block grant – a lump sum to spend on public services as Holyrood sees fit.
London can and has cut this block grant, leading to overall reductions in the Scottish government’s spending power since 2009/10.
But NHS spending in England has gone up in the same period (slightly) and the Barnett formula means that more spending in England equals more spending in the devolved regions too. It’s up to Scotland how it spends the money that arises from the Barnett system.
The Scottish government says it has protected the NHS budget. Is that true? Well, spending has gone up in cash terms, but not in real terms.
Mr Neil actually switched cleverly between the two in one sentence today when he said: “Despite Scotland’s budget being slashed by 7.2 per cent by George Osborne between 2010/11 and 2015/16, our increases in health spending means that the NHS is receiving record high funding, with a budget increase of over £1bn between 2010/11 and 2015/16.”
The 7.2 per cent cut (to the block grant) is in real terms, but the £1bn increase is in cash, and £1bn over five years is eaten up by inflation.
Last week the Institute for Fiscal Studies said that NHS spending in Scotland fell by 1 per cent in real terms between 2009/10 and 2015/16. In England it went up by 4.4 per cent.
But it’s true the total amount of money allocated to Scotland in the block has gone down, so perhaps the Scottish government had no choice but to cut health spending slightly, given all the other pressures on its budget?
First, Scotland has suffered less from austerity cuts than England: “Over the same period the vagaries of the Barnett formula mean that Scotland will have had to cut overall public service spending by less — by about 8 per cent rather than 13 per cent. But the Scottish government has chosen to protect the NHS in Scotland slightly less than it has been protected in England.”
And the trend of spending less money on Scotland’s NHS than the Barnett formula allows pre-dates the era of austerity:
“This is not a new pattern. Between 2002-03 and 2009-10 – years of plenty for public services rather than cuts – real-terms health spending per person grew by 29 per cent in Scotland compared with a 43 per cent increase across the UK as a whole.
“This was despite overall public service spending per person growing by a very similar amount in Scotland (26 per cent) and the UK as a whole (28 per cent).
“So it seems that historically, at least, Scottish governments in Holyrood have placed less priority on funding the NHS in Scotland (and more on funding other services) than governments in Westminster have for England.”
Other independent research backs this up. This Nuffield Trust-funded study also found that Scottish governments spent less on health than England between 2000/01 and 2012/13, building up a surplus of about £900m to spend on other services.
The idea that the Scottish government has bravely struggled to protect the NHS budget under intolerable pressure from Westminster is contradicted by independent research.
The reality is that Scottish governments have for some years chosen to increase health spending by less than it went up in England.
On the other hand, it remains the fact that without independence, Scotland is at the mercy of politicians in London if they want to cut the overall budget for public spending north of the border.
Perhaps the fairest way to sum this up is that there are risks attached to staying in the union and to becoming independent.
The IFS and many others have said that an independent Scotland will face tough spending decisions in the future, thanks to falling oil revenues and an ageing population.
But we know that there are more cuts to Scotland’s block grant on the way under the coalition, and Labour have made a commitment to continuing with a programme of austerity if elected.
By Patrick Worrall