Allocating Grant to the UK's Devolved Territories by Needs Assessment: Lessons from School Funding Formulae in England and Scotland

The UK's devolved governments (DGs) receive block grants to finance almost all their expenditure. The Barnett formula used to calculate these grants is often criticised because it does not consider the DGs’ spending needs. However, the feasibility of allocating block grants by needs assessment is often questioned, given the contestability of spending needs. This paper compares the formula used within England to assess the education spending needs of local authorities there with the equivalent Scottish formula, by using each formula in turn to calculate the relative spending needs of the UK territories. The rationale is to consider how similar the two formulae are in how they estimate the territories’ relative spending needs for education, a major responsibility of the DGs. The results show that the English and Scottish education allocation formulae produce similar estimates of the territories’ relative education spending needs. This suggests that it may be more feasible to allocate education resources to the UK's devolved territories based on needs assessment than some have suggested. The results also suggest some inequity in current patterns of education spending across the UK.     

Higher Education Finance in the UK*

The introduction of top‐up fees for home‐domiciled undergraduate tuition in England from 2006–07 – and their planned increase in 2012–13 – raises important issues for university funding in Scotland, since it abolished tuition fees for Scottish and EU students in 2000–01. This paper focuses on what the increase in resources directed at English universities arising from top‐up fees means for the relative funding of English and Scottish undergraduates. Widely‐used funding‐per‐head figures do not provide an accurate picture of home‐ and EU‐domiciled undergraduate funding, as they include funding for research, postgraduate degrees and overseas students. The empirical work of this paper focuses on creating a consistent series of funding per full‐time equivalent undergraduate over time for England and for Scotland, stripping out funding for research, non‐EU students and postgraduate degrees to create a more accurate picture of the funding gap between the two countries. It also takes into account the different composition of undergraduate degree subjects taken in England and Scotland. The findings indicate that the apparent historical advantage in funding per head in Scottish institutions compared with English ones has been largely driven by compositional differences: Scotland has a high proportion of medical, science and engineering undergraduates – subjects that command greater funding due to their relative complexity to teach. The top‐up fee introduced in 2006–07 brought funding per head in England to a level similar to that experienced in Scotland, and the future increase will result in funding per head in England outstripping that in Scotland by some magnitude. This suggests that the funding of Scottish students will fall significantly behind that of English students unless additional new sources of public or private funding for nScottish universities are found.     

Nationalism,governance and policymaking in Scotland: The Scottish National Party (SNP) in power

This article explores policy development under the Scottish National Party (SNP) government, focusing on education policy. As a minority government the SNP needs to govern on the basis of co-operation and consensus. It has presented itself as a party with capacity for government but limited by the restricted autonomy of devolution. The ability to pass large amounts of legislation is more challenging for a minority government. Building new relationships with partners has been a key part of the SNP's approach to governing. This marks a shift in governing style in Scotland highlighting the importance of ‘discourse’ where texts (including speech) are used to promote policy aims and agendas.     

The Politics of Needs Assessment: The Treasury Select Committee and the Barnett Formula

Parliamentarians' interest in Scottish public expenditure has been rising since 1987, when the electoral results left the Conservatives vulnerable in Scotland. Southern English MPs described the Scottish Office budget as a 'slush fund', and argued that Scots were being 'force-fed' with public expenditure. This interest has deepened as a direct result of the public debate over devolution (Midwinter, 1989). Although the author focuses here on developments in Scotland, many of the issues are relevant to devolution proposals in Wales, Northern Ireland and perhaps the English regions also.     

The New Politics of Local Spending: Central–Local Financial Relations under Scottish Devolution

This article focuses on the Scottish Executive's strategy and practice over local authority current expenditure since devolution. Since the introduction of the community charge in 1989, central government has provided more than 80% of local authority public expenditure in Scotland. The Scottish Executive has been able to control spending through its grant mechanisms, while still permitting local diversity. Scottish councils have delivered reasonable increases in council tax levels since devolution. This approach is consistent with the statutory basis of local government—much of which is permissive and facilitates local discretion.     

House Prices and Local Taxes in the UK

In this paper, estimates of the effects of local domestic property taxes (rates) on local house prices are presented, and the effect of local taxes on owner-occupied dwelling prices is calculated for a number of English cities for the period up to 1990. The methods used enable estimation to be made of the effect of the introduction, during 1990, of the Community Charge or poll tax in England, when the local tax base was moved from housing consumption onto individual residency. It is estimated that the reform could have increased house prices by around 15 per cent and contributed substantially to house price inflation.     

The implementation of a strategic state in a small country setting—the case of the ‘Scottish Approach’

ABSTRACT

This paper is a case study of the establishment of the Scottish Approach to Public Services. This strategic approach to public services was developed through three key activities: reorganization of the Scottish Government; creation of Scotland Performs and the National Performance Framework; and significant investment in leadership development. The research comprised of 11 élite interviews with both current and former civil servants within the Scottish Government. Interviews sought to develop an understanding of the nature and rationale for the Scottish Approach, to explore implementation of the Scottish Approach, and to posit what lasting impact may result from this form of ‘strategic state’ in Scotland. There is a major gap in the academic literature in terms of empirical studies of the strategic state and this paper addresses this gap by presenting the context and background to implementation of a strategic state in a small country setting.     

Class,social deprivation and accounting education in Scottish schools: Implications for the reproduction of the accounting profession and practice

This paper investigates the links between class, deprivation and subject choice in the area of business studies, including Accounting and Economics, in Scottish secondary schools. Given the paucity of prior research, this study is necessarily exploratory but its findings will provide a basis for future research in Scotland and elsewhere. First, the literature on the link between deprivation and education is reviewed. Pierre Bourdieu's conceptualisiation of habitus, field and capital are introduced and provide the theoretical framework for the ensuing discussion. Second, the implications for accounting education at both school and university, and for the accountancy profession are examined. Third, the results of interviews, analysis of statistical data provided by the Scottish Government and the Scottish Qualifications Authority and two questionnaire surveys, one of Heads of Departments of Scottish secondary schools and the other of first year accounting students at Scottish universities, are reported in order to explore whether there are any indications of links between class, deprivation and subject choice in the area of business studies in Scottish schools. Finally, the implications of the research findings are discussed and conclusions offered.     

Dysfunctional Effects of League Tables: A Comparison Between English and Scottish Primary Schools

League tables based on Key Performance Indicators (KPIs) have become an important part of the management of the UK's education system. While the performance measured by KPIs has apparently improved, concerns have been raised that they may have unintended or dysfunctional effects. This article compares English with Scottish schools. The authors found that English primary schools perceive their KPI systems (with league tables), as being significantly more dysfunctional than those of their Scottish counterparts (without tables). The article provides empirical evidence to support the many arguments that high-stakes single proxy indicators can have significant dysfunctional effects.     

Performance, Productivity and Innovation in Health Care Organisations: Comparing England and Scotland

The political reforms of the public sector, termed "new public management" (NPM), now have a 20-year history. This paper looks at local differences between England and Scotland over a particular dimension of NPM — performance management in health care. In the context of the dynamic reform agenda in the UK, it is expected that these "local" lessons will have some global relevance. This paper elaborates on these inter-country differences and proposes how the approaches in England and Scotland may affect productivity and innovation in health care delivery. It does this by exploring research into the behaviour of the most powerful of health care providers, the senior clinicians in hospitals.     

Forgiving our debtors: a Scottish perspective on a fresh start for debtors

Against a background of rising debt levels, this article examines the range of solutions available to a debtor in financial difficulty in Scots law and the recent proposals for reform of bankruptcy law in Scotland brought forward by the Scottish Executive as part of its new approach to debt management and enforcement in Scotland and considers the extent to which they may accord an over‐burdened debtor the opportunity for a fresh start. It concludes that while the emphasis on providing appropriate solutions for over‐burdened debtors with a view to enabling them to make a fresh start evidenced by these proposals is to be welcomed, they may not yet have struck quite the right balance in this respect. Copyright © 2004 John Wiley & Sons, Ltd.     

Best Value Audits in Scotland: Winning Without Scoring?

Best Value audits have encouraged improvements in the corporate capacity of Scottish local authorities. They are seen by local government as credible and, in contrast to Comprehensive Performance Assessments in England, are applauded for taking account of local priorities and contexts. However, there are some concerns about the consistency and transparency of the process, and reports have failed to attract public interest. In future, the Best Value audit process will need to pay more attention to the importance of partnership working between councils and other local agencies.     

The Income and Consumption Effects of COVID-19 and the Role of Public Policy*

We provide empirical evidence on the labour market impacts of COVID-19 in the UK and assess the effectiveness of mitigation policies. We estimate the relationship between employment outcomes and occupational and industrial characteristics and assess the effects on consumption. Seventy per cent of households in the bottom fifth of the earnings distribution hold insufficient assets to maintain current spending for more than one week. We compare the effectiveness of the UK's Coronavirus Job Retention Scheme and of Economic Impact Payments in the US. The EIPs are more effective at mitigating consumption reductions as they have full coverage, depend on household structure and are higher for low-income workers.     

Local fiscal equalisation based on fiscal capacity: the case of Austria

This paper deals with local fiscal equalisation in Austria. The system of intergovernmental relations in Austria includes different regulations in order to equalise differences in the fiscal capacity of the municipalities. This leads to so‐called ‘compensation effects’, because additional revenues from a local government's own tax are (at least partly) compensated by losses from equalisation grants. This paper carries out a detailed analysis of these compensation effects. It is shown that they create strong fiscal disincentives for the local governments: on average, 55 per cent of additional revenues from the communal tax (which is the most important of a local government's own taxes) are compensated by losses of equalisation grants. In extreme cases, local governments can lose up to 144 per cent of the additional tax yields collected. These local governments would be better off if they made no effort to increase their tax base.     

Has Devolution Improved Public Services?

Since devolution in 1999, the Welsh assembly government claims to have developed an approach to public services reform which is better suited to the needs of Wales than the English model which relies on a combination of targets, inspection, choice and contestability. Analysis of statutory performance indicators covering a range of services shows that the Welsh approach has not yet delivered significantly better performance in public services to that achieved in comparable areas of England—in many cases services in Wales have performed less well and improved more slowly.     

More long-term care for better healthcare and vice versa: investigating the mortality effects of interactions between these public sectors

Public healthcare (HC) and long-term care (LTC) sectors coexist in several OECD countries. Economic interactions between these two sectors have been found to occur even in the absence of formal integrated care arrangements. We investigate whether and how interactions between the HC and LTC sectors impact mortality. We analyse data on English local authorities in 2014–15 and employ a sequence of cross-sectional econometric specifications based on instrumental variables to identify the effect that LTC expenditure has on mortality through its interactions with HC services, and vice versa. Our findings suggest that any effect of LTC expenditure on mortality is likely to run through the HC sector by allowing the latter to reallocate resources from less to more effective services. A 10 per cent increase in LTC expenditure per user can indirectly save, on average, about three lives per million individuals. In addition, on top of the known HC direct mortality effects, we find that investing an extra £42 million in the HC sector – equivalent to a 10 per cent increase in HC expenditure per capita for the average local authority – can decrease the use of LTC services, producing around £7.8 million of savings. These can generate mortality effects if invested in services having an impact on mortality.     

Shunning careers in public accounting firms: The case of Indonesia

A rapidly growing emerging economy such as Indonesia has an increasing need for qualified accountants to service the many needs of business. However, the current dearth of qualified accountants is becoming critical, and this situation will only get worse as Big 4 firms, mid-tier firms and local firms struggle to recruit enough trainees to qualify as professional accountants. This study examines the plight of the Indonesian accounting profession by investigating why accounting students are shunning the profession, possibly leading to the demise of the Indonesian profession as we know it today.The study shows that although career intention constantly changes as new experiences are encountered, background factors matter. Ethnicity, living in an urban or rural environment, and where one is educated all matter to career intention. Further, one's own self-efficacy, such as English language ability, and other people's views are all influential in where we want to work.To address this looming crisis in the profession the Indonesian government needs to implement policies that ensure that the education curriculum addresses English language literacy, especially in rural areas; and the profession needs to engage more with remoter universities in rural locations to recruit high achieving students to provide greater diversity in the profession.     

The neoliberal project—Local taxation intervention in Scotland

This paper is concerned with one of the central economic aspects of neoliberalism namely taxation. The shifting of the burden of taxation from the rich to the poor has been one of the raft of neoliberal economic reform policies. However, there has been a growing social movement in the UK against such a regressive form of taxation. This was led by a socialist political party in Scotland.¹ This party devised a new taxation system which was specifically designed to reverse some of the economic inequalities brought about by the neoliberal turn. The new form of taxation, the Scottish Service Tax formed a bill (the Council Tax Abolition and Service Tax Introduction (Scotland) Bill) which was put before the Scottish Parliament in February 2006. This paper, taking a political-economy perspective, sets the possibilities presented by the bill within the context of neoliberalism.     

The Value of Teachers' Pensions in England and Wales*

The paper examines in detail the value of pension provision to teachers in the public sector in England and Wales, comparing pension accrual under both the pre‐ and the post‐2007 schemes. We find that, at the median, pension accruals under the old scheme rules were worth 14.7 per cent of current salary to members, while if the new scheme rules were applied to all current members this would fall to 11.2 per cent. We find that this reduction in generosity is more than sufficient to offset the increase in generosity implied by rising life expectancies over the last quarter of a century. In addition, we show how the estimates depend on both the shape of the underlying age–earnings profile and the headline pay award. We find that the value of the new scheme rules to Teachers' Pension Scheme (TPS) members is similar to the value of the defined contribution pension offered to civil servants, but worth more than a simple, example, private sector defined contribution scheme.     

From growth to basic needs

Despite growing hostility and basic misconceptions, the concept of "basic human needs" has superseded former approaches, including concentration on growth, creation of employment, and redistribution of benefits to the poor, as the approach by which mass deprivation may be reduced. The new approach can be defined briefly as one which is designed to improve, first, the income earning opportunities for the poor; second, the public services that reach the poor; third, the flow of goods and services to meet the needs of all members of the household; and fourth, participation of the poor in the ways in which their needs are met. All four pillars must be built on a sustainable basis. In addition, basic needs must be met in a shorter period and at a lower level of earned income per capita than has generally been true in the past, or than would have been achieved via the income expansion associated with growth alone. The basic needs approach is concerned with particular goods and services directed at particular, identified human beings. Another advantage of the basic needs approach is that it is a more positive concept than the double negatives of eliminating or reducing unemployment, alleviating poverty, or reducing inequality. The basic needs approach spells out in considerable detail human needs in terms of health, food, education, water, shelter, transport, simple household goods, as well as non-material needs like participation, cultural identity, and a sense of purpose in life and work, which interact with the material needs.