Q&A on the financial implications of independence


September 8, 2014 Comments (0) Views: 2060 SRS Research 2014

The NHS and Scottish Independence.

The SNP Government White Paper says little about the NHS.

Consideration of the subject takes up only 7 of its 649 pages, and only 16 of the 650 answers in the Q & A section are devoted to it. The message is that, in essence, nothing will change after independence.

It says that’ As NHS Scotland is already under the control of the Scottish Parliament, its values and priorities will continue on independence.’

On its establishment, the Scottish Parliament took full legislative control of the NHS in Scotland. But Scotland always has had administrative control over public policy making for health. The Department of Health for Scotland was established in 1928 and it moved into St Andrews House in Edinburgh in 1939.

A good example of its activities before, parliamentary devolution, is its work at the beginning of the Second World War. In 1940/41 it built and ran 7 brand new public hospitals.

Formula funding for the UK nations was established in 1888 with the Goschen Formula. For more than a century, Scotland has received more money from the Treasury per person than England.

The Barnett Formula was devised in the late 1970s, for devolved functions (primarily health and social services, education, and law and order)

Currently 10.03% of any increase in English spend in these areas comes to Scotland as a ‘Barnett Consequential’.

Barnett funding outcomes have always favoured Scotland. A Health Foundation/Nuffield Trust analysis has shown that healthcare spend per person in 2012/13 was £1,912 in England and £2,115 in Scotland.

Since 2001/2 it had risen by 115% in England and 99% in Scotland, which chose to use the Barnett Consequential increase in funding, from the massive increase in England, to pay for free personal care for the elderly. On a comparative population basis Scotland has more GPs, hospital medical staff and nurses and midwives than England.

The NHS in England is being protected. The 2014 Treasury Red Book shows an English NHS budget of £105.5 billion for 2013/14 and £110.4 billion for 2015/16.

But the ‘Yes’ campaign has chosen in the last few weeks to say that the NHS will be in danger if ‘No’ wins.

’NHS for YES’ says that ’the more Westminster politicians cut NHS spending the lower the Scottish Government’s NHS budget becomes’.

This is doubly wrong; the budget is not being cut, and the Scottish Government sets its own budget for health.

The sum of money that comes to Scotland via the Barnett formula is not ring-fenced; the Scottish government can spend it as it wishes. For example, there was no obligation for it to spend on transport the £500 million it got as a Barnett Consequential from the London Crossrail project.

The ‘Yes’ campaign is predicting that NHS privatisation in England and the introduction of new NHS charges there, will lead to a reduction in the funds that come to Scotland because of Barnett.

But no new NHS charges are planned for England. Their introduction would need parliamentary approval. It is a reasonable prediction that any politician who suggested them would face oblivion at the hands of their constituents.

Professor Allyson Pollock has studied NHS privatisation extensively. She does not favour it financially because it sometimes turns out to be more expensive than the public delivery of a service. The loser is the English taxpayer, because public funds pay for a privatised NHS activity, which is free to the user.

In essence this is good news for Scotland, because the increased NHS spend in England will mean more money coming north as a Barnett Consequential.

The most egregious statement so far in the debate about the NHS and independence was made by Dr Phillipa Whitford at A ‘Yes Clydesdale Women for Independence’ meeting at Strathaven on May 1st this year.

Her presentation was recorded by video; it has been viewed more than 68,000 times on YouTube and many ‘Yes” websites have links to it.

She said that gullet cancer surgery was in danger in Gateshead because of NHS policy developments in England. But the Queen Elizabeth Hospital at Gateshead doesn’t do this surgery because it is only 3km from the largest oesophago-gastric unit in Europe, one with a world- class reputation.

The Chief Executive of the Newcastle upon Tyne Hospitals NHS Foundation Trust, Sir Leonard Fenwick, described Dr Whitford’s claim as ‘codswallop’ and a ‘load of crap’.  

Elsewhere, Sir Leonard is on record as saying that ‘privatisation has a role to play, particularly within the care industry’. I note that the Chair of the pro-independence lobby group ‘Business for Scotland’, is Tony Banks, whose business is running private care homes, and that the Co-founder of ‘NHS for Yes’, Willie Wilson, owns a chain of private community pharmacies.

‘Westminster’ is the big ‘Yes’ bogeyman. ‘Privatisation’ is rapidly emerging as a rival. But the last word should be given to someone who has a vested interest in its acceptance.

John Myatt is the Strategic Business Director of SERCO. In August this year he wrote an article entitled ‘The NHS: 2023’. He said ‘ Will we see widespread privatisation of clinical service delivery? I don’t believe so. I can see some use of the private sector in community care and for elective care.’

However, in my view most health services in the UK will be publicly owned and state-run.

Hugh Pennington

Hugh Pennington qualified in medicine at St Thomas’s Hospital London, and after posts there and a post-doctoral fellowship at the University of Wisconsin, worked for 10 years at the Medical Research Council Institute of Virology, University of Glasgow before moving to the University of Aberdeen as Professor of Bacteriology (Dean of Medicine 1987-92, Emeritus Professor 2003). He chaired inquiries into food poisoning outbreaks for the Secretary of State for Scotland and the Welsh Assembly Government. He is a Fellow of the Royal College of Pathologists, the Royal College of Physicians of Edinburgh, the Academy of Medical Sciences and the Royal Society of Edinburgh, and was appointed CBE in 2013.

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