Scotland's health – at the heart of the debate

Deputy First Minister of Scotland Nicola Sturgeon backing the Yes vote Image copyright Danny Lawson/PA

As the referendum debate enters its final crucial stages, health has moved to centre stage. The future of Scotland's NHS after next week's vote has generated sometimes stormy arguments.

Health professionals are divided over whether independence or remaining in the UK would be better for the nation's health.

A campaign group, NHS for Yes, has argued that the health service is under threat if Scotland stays in the UK.

Future austerity imposed by a Westminster Government with possible reductions in health spending, its claimed, would result in a poor deal for Scottish health funding.

The Yes campaign has also alleged that a trend towards privatisation in the NHS in England will inevitably drag Scotland down the same route. Contracting out some health provision, the argument goes, will result in lower public spending which in turn will affect Scotland's allocation.

Better Together has accused the Yes campaign of scaremongering over privatisation, pointing out that the Edinburgh government has control of health spending and the structure of the NHS in Scotland. The Scottish health system, its argued, has been run in a different way from England's for many years. There is for example no split between commissioners and providers of health care.

Image copyright ANDY BUCHANAN/AFP/GETTY

The polls suggest that the claims and counter-claims over health have struck a chord with the electorate. Yes campaigners believe they can capitalise on what they claim are worries over the future of Scotland's health service in the UK. Better Together wants to dismiss what it considers to be scare stories.

NHS budget

Central to this debate is what will happen to health funding. Under the so-called Barnett formula (named after a Labour minister in the 1970s), Scotland and Wales receive block grants from Westminster calculated as a proportion of what the Government at Westminster has decided to spend in England. Its then up to the administrations in Edinburgh and Cardiff to distribute funds as they see fit.

The Barnett formula tends to result in a spending pattern for Scotland which falls more slowly than England's. The Institute for Fiscal Studies has calculated that over the period from 2009/10 to 2015/16, England's departmental spending will fall by 13% in real (inflation-adjusted) terms. Scotland's over the same period will come down by 8%.

Health spending in England has been "protected" by the Government from cuts. This helps underpin the overall budget calculated for Scotland via the Barnett formula. But the Yes campaign says because the "protection" of England's health finances is not guaranteed in the next parliament there can be no certainty over future funding for Scotland.

Having received the overall funding settlement, the Scottish Government decides what to spend on health and other devolved areas like education. Figures published by the Nuffield Trust show that over the five years to 2012/13, health spending per head in England rose by 5% after accounting for inflation, most of it under the Labour Government. But over the same period the Holyrood administration kept health spending per head broadly unchanged. In other words, the Scottish Government chose not to follow England's lead on higher health spending but instead to allocate the funds elsewhere. Better Together note that the SNP have been in power during this period.

And what of the privatisation argument? Around 1% of Scotland's health budget is spent on private provision, for example operations in private hospitals. This proportion has been growing as health chiefs strive to bring down waiting lists. The equivalent figure for England is just under 6%.

The unanswered question is whether England will see increasing levels of commissioning of private health care. Defenders of the process argue that it still involves public money. But the trend has not gone unnoticed in Scotland as the referendum draws nearer.

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