Blow to UK Treasury as senior academic describes its figures as “misleading”

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  By Lynda Williamson

A senior academic from the London School of Economics has said that the UK Treasury’s analysis of an independent Scotland’s start-up costs “badly misrepresents” the LSE’s research.

In the analysis paper, to be published this week, HM Treasury claims that Scotland would require 180 government departments when the UK itself has only 24. It uses the LSE research to extrapolate the costs of initial setup of these bodies and arrives at a figure of £2.7 billion.

However, the analysis fails to take into account the fact that much of the departmental infrastructure needed by an independent Scotland exists already and also confuses public bodies with ministerial departments.

Commenting, Professor Dunleavy explained that his estimate of costs applied to the “chaotic” way in which the last Labour government set up new departments and that setup costs could be reduced by careful planning and orderly transition.  He estimated that the true figure would be closer to £150 million – £200 million, less than one tenth the figure claimed by the Treasury.

Patrick Dunleavy, politics professor at the London School of Economics, told the Financial Times the Treasury had manipulated his research to make the one-off costs of setting up a new government look ten times larger than they were likely to be.

Speaking to the Financial Times, the academic said: “The Treasury’s figures are bizarrely inaccurate.  I don’t see why the Scottish government couldn’t do this for a very small amount of money.”

On his Twitter account he also expressed astonishment that the Treasury would make such a mistake saying: “Could they be this crude?

“Phone call from Treasury guy later confirms: Yes, they had been”

The accusations by the respected academic are a significant blow to the UK Government’s economic case against independence and come one day before UK Treasury Chief Danny Alexander officially unveils the coalition’s estimate on what they will claim are the costs of independence.

Following Professor Dunleavy’s comments, First Minister Alex Salmond has called on the Treasury to apologise to the LSE and withdraw the figures:

“This is a devastating verdict on the Treasury’s figures from one of the authors of the report they have been using to base their work on.

“And it totally undermines everything they have to say this week about the finances of an independent Scotland.

“The Treasury have been caught red-handed trying to cook the books – they should now apologise to the LSE and the authors of the work involved, and withdraw these bogus figures.

“This leaves the Treasury claims about Scotland’s finances without a shred of credibility.

“The reality is Scotland is one of the wealthiest countries in the world, more prosperous per head than the UK, France and Japan, but we need the powers of independence to ensure that that wealth properly benefits everyone in our society.

“These were figures presented publicly by Treasury officials and presumably signed off from the top, so serious questions now need to be answered, including whether this work was approved by the Treasury’s permanent secretary.”

A UK government spokesman however claimed that:

“This is an own-goal by the Scottish Government. Their own White Paper says an independent Scotland will need 180 public bodies. The analysis simply reflects that.”