Why the figures peddled by Scotland’s critics don’t add up

Next up in Britain's regional league table of state spending is London. The government, in all its guises, dished out £9748 for every man, woman and child there, not least because of its armies of civil servants and creaking, expensive and essential transport infrastructure.

Next we come to Scotland, which edges ahead of the north-east of England to take third place in the spending stakes. Scots account for an average of £9631 in state expenditure all kinds, vastly more than non-metropolitan counties of the south-east and east of England. There, state spending averages out at just £7544 and £7256 respectively per head, less than anywhere else.

Perhaps this should not be too surprising, considering that Scotland contains one-third of the British land mass, with its mixture of isolated islands and rural communities. It also has some of the most deprived communities in the UK, in cities such as Glasgow. The Barnett formula - which is used to work how much the Scottish Government should receive - is often cited as proof of disproportionate Scottish spending. Yet over time it is actually supposed to reduce spending in Scotland.

So where are today's numbers coming from? We can forget devolution and all of the complications over the way in which the Scottish Government is funded. These figures are a measurement of how total government spending, devolved or not, is distributed in the nations and regions.

They are based on something which economists call, affectionately, Pesa - the Public Expenditure Statistical Analyses.

Most of the money which is spent in Britain is what the government regards "identifiable". That means accountants know exactly what part of the country in which it was spent.

There are other funds that are a bit trickier, with "non-identifiable" spending - money that is hard to pin down to one part of the country or another. The numbers crunched here are how much "identifiable" cash was spent, added to an estimate, carefully calculated by consultants Oxford Economics, for how "non-identifiable" money is distributed.

Total "identifiable" spending in Scotland came to £41.7bn in 2005-06, including the £22.7bn spent by the devolved Scottish Government, according to Pesa. That compares with £344.7bn for England.

Myth 2: English taxes pay for Scotland's high spending
Fact: Scotland's big spending bills might sound high. But, at the last count, they were almost exactly the same as the government revenues raised in the nation.

Adding up how much tax Scots and Scottish businesses generate is far from easy.

But Oxford Economics, the consultants, did so earlier this year, based on Treasury figures for 2005-06. They found the tax haul from Scotland was £49bn, compared with total spending of £49.2bn. Scotland, in that year at least, was in the red - but not by very much and certainly within any margin of error.

Where does all this money come from? The big figure includes the UK's entire North Sea revenues of £9.7bn for 2005-06. That could be controversial: there is dispute about how much oil and gas is from Scottish waters. The exact size of Scotland's oil bonanza has always been open to question, a key battleground in the statistical war between Nationalists and Unionists.

How North Sea revenue might be divided is also questioned. There are extensive gas fields off the coast of north-east England. A split might mean 75% or even 95% of the total coming to Scotland. It should be borne in mind that the £9.7bn figure came at a time when Brent crude was trading at as much as $50 per barrel. Today it is more than $90.

Other revenues are also interesting. Aside from income tax, national insurance and VAT, Scots make a heftier than average contribution to the Exchequer on several core revenue sources.

Corporation tax runs slightly above the national per-capita average, at £3.51bn in total: not least, say economists, because of the healthy financial sector. That figure is far higher than most UK regions but little more than half as much as in London.

Heavy smokers push tobacco duty collections up to well above £1bn a year, out of a UK total of £8bn.

Scots do represent a far smaller proportion of some other revenues. Collection of stamp duty on home purchases adds up to a lot less than in London and the English shires, where house prices are far higher. London accounts for nearly 28% of total UK stamp duties.

So where is Scotland in a league table of contributors to the national UK coffers? Only Londoners contribute more, per capita. Revenues from the capital add up to £10,947 per head, nearly £1200 more than spending in the city. Scots pip residents of the south-east counties to come second, with total taxes, including North Sea oil, of £9593 per head. The north-east of England, for the record, contributes least, at barely £6000 per head, just a few pounds less than Northern Ireland. Both regions, along with the north-west of England and Wales, are considerable net beneficiaries of income transferred from the richer parts of the United Kingdom to the poorer.

Myth 3: Scots take more from the welfare state than anyone else
Fact:Scotland does have some pretty horrific areas of deprivation, by any measure. But the nation's overall bill for welfare and pension spending lags well behind Britain's most needy areas.

The UK's biggest outgoings on "social protection", says Pesa, are in the north-east of England and Northern Ireland, the two areas which - perhaps not coincidentally - contributed least in tax and other revenues.

The overall "social protection" spending item includes everything from unemployment and disability benefits to pensions, including those for former government employees.

In north-east England the payments averaged at £3284 in 2005-06, the last year for which there are official statistics. That was only slightly higher than the £3256 per head in Northern Ireland. Next in the welfare league table is Wales, where payments came to £3136.

Only then does Scotland feature, with an average dole and pensions bill of £3086, slightly ahead of the per-capita figure of £3066 in the north-west of England. Of the 10 areas of the UK with the lowest life expectancy, seven are in Scotland. Shorter lives mean less money spent on pensions.

London, despite severe pockets of poverty, was mid-table at £2876, with south-east England's home countries, by many measures the richest part of western Europe, the smallest recipient - at an average of just £2382 per head.

Overall, Scottish welfare bills were higher than the average for the whole of England, which was £2736.

So Scots received £15.7bn in social welfare and pension payments in 2005-06, up from £15.2bn the previous year. The bills topped £2.5bn for incapacity, injury and disability benefits; hit £3.6bn for child benefit, income support and family tax credits; and neared £1.4bn for housing benefits.

State pensions in Scotland amounted to £4.7bn, against £46.4bn in England.

Myth 4: Scots enjoy far better public services than the English
Fact:devolution dividend of better hospitals, schools and myriad freebies in Scotland have dominated some right-wing Fleet Street papers in the past year or two. So are our services marching ahead of England's? Most experts baulk at answering that one, muttering under their breath about "swings and roundabouts". It is certainly hard to find clear-cut evidence that English voters are right to feel resentful about the land of milk and honey north of the border.

The issue came to a head last month when an MP representing a seat in the north-west of England asked Gordon Brown why his constituents should pay for Scots to get free prescriptions.

Graham Brady's constituency in Sale, Greater Manchester, is in a region that benefits from far more net "subsidy" than Scotland. Net gain for the north-west of England, at £1732 per head, is 45 times higher than the modest £38 each Scot, according to Oxford Economics, gains from the rest of the UK.

There was another problem with Mr Brady's question. Scots don't actually get free prescriptions, at least not yet (the Welsh, however, do). The Scottish Government has said it believes medicines should be free.

But it is far from clear that First Minister Alex Salmond and his ministers will achieve their aim. After all, they don't have a majority in Holyrood.

But Mr Brady's sentiment was real, and the widely-held belief that Scots get free prescriptions is not the only myth about our public services bonanza.

Only this week, English-based newspapers or politicians have also claimed that children in Scotland get free healthy school meals and enjoy shorter waiting times for hospital appointments. Neither is true.

Scotland's critics have also highlighted one or two of the real big ticket successes of devolution, including much-vaunted (but still patchy) free personal care for the elderly, smaller class sizes and free bus travel for pensioners.

True, some NHS drugs are prescribed more quickly in Scotland than south of the border, but only because our regulation process is more streamlined. It works both ways, with pregnant women often receiving two free scans in England, a far better service than in Scotland.

Oddly, some of the multi-billion-pound investments in England, especially the south-east, seem to be forgotten. Crossrail, the scheme to improve commuter services to and across London, will cost an estimated £15bn. That would be enough to keep the entire Scottish transport budget going for seven-and-a-half years.

Myth 5: Scottish ministers and the public sector hand big ticket' projects to Scotland
Fact: dinburgh famously got Holyrood, one of the most notorious public building projects in recent decades. Critics north and south of the border watched as its costs mounted, ending at £414m, although that is less than previously estimated. But has Scotland really capitalised on the Westminster big-wigs who hail from the north?

The Scottish Parliament is at least up and running and doing the job it was built for. The same cannot be said of the Millennium Dome. By the time it closed, unloved, it had consumed £603m of lottery cash, £200m of it in rescue grants and top-ups.

London, too, has by far the most to gain from 2012 Olympics. The official budget for the Olympics, including lottery spending that would otherwise have gone to Scotland, Northern Ireland, Wales and the English regions, is running at £9.3bn. Few expect the final bill to come in on budget. Olympics Minister Tessa Jowell has admitted the government had still to do a "line-by-line analysis" of planned expenditure. The event could end up costing four times its original estimate, some analysts claim.

Lottery funds, of course, are not included in the distribution of government money. Neither is the way the BBC spends its licence fee. The corporation earlier this autumn opened a £180m HQ in Scotland.

However, it recently said it would triple spending north of the border to bring programme-making in line with Scottish contributions to the licence fee.