If anyone thought that the public sector strikes were fading out, this week marks a resurgence, with Passport Office staff striking for five weeks – apparently on behalf of other civil servants whose absence might be less noticed – along with the National Education Union (NEU). The education union voted by a margin of 98 to 2 per cent for two days’ strikes on 27 April and 2 May. Pleas to save children further disruption to their education following months of school closures during Covid-19 appear to have fallen on deaf ears.
The NEU vote shows one thing which has been little commented upon during this round of strikes: the true cost of the Barnett formula. One of the factors behind the vote seems to be that Scottish teachers have recently settled a pay dispute with the Scottish government by accepting a 14 per cent deal – 7 per cent backdated to last April, a further 5 per cent this month and another 2 per cent next January. Next to that, the offer made to teachers in England might seem mean. In England, NEU members voted to reject a pay rise of 4.3 per cent plus a one-off payment of £1,000, as a well as a minimum salary for new recruits of £30,000.
Why has the Scottish government been able to be so generous? Certainly not because the SNP-Green government has managed the public finances better. The Barnett formula, established in the 1970s to set a formula for block grants to Scotland in the pre-devolution 1970s, offers the Scottish government a handsome bonus in terms of per capita spending. Over time, the disparity between public spending in England and that in Scotland, Wales and Northern Ireland was expected to narrow, but it has failed to do so.
This has quite a lot to do with faster population growth in England than in Scotland during the intervening years. For every pound spent on public services in England, Holyrood gets to spend £1.21 (a figure for the year 2018/19, calculated by the Institute for Government). True, there are isolated parts of the Highlands where demographics is always going to make it expensive to provide services such as education – small schools, long journeys from home to school etc. – but then again, living costs are also lower in Scotland than in the south of England.
If what happens in Scotland stays in Scotland the extra money available to spend on public services might seem a tad unfair, but if the Scottish government is going to use its extra to cash to fund hefty pay deals, and those pay deals are going to be used by public sector unions south of the border, we have an even bigger problem.
Trouble is, which Westminster government, trying to keep the union together, is going to risk reforming the Barnett formula? A House of Lords report in 2009 did propose reform, but nothing came of it. As a result, the UK government faces serious blowback in the form of higher wage demands in England as a result of extra money being made available to fund higher wages in Scotland. With the SNP government drifting leftwards as a result of Humza Yousaf’s election as first minister it is hard to see how this is going to be resolved in the near future.
Comments