Scottish independence: Prof Patrick Dunleavy makes £200m start-up claim

Professor Patrick Dunleavy

An independent Scotland would face £200m of immediate start-up costs, it has been claimed.

Prof Patrick Dunleavy gave the figure in a report commissioned by The Sunday Post.

A spokesman for the First Minister said the UK Treasury's previous £2.7bn figure had been "blown out the water".

A UK Treasury spokesperson said the Scottish government was "refusing to come clean" on the cost of independence.

Prof Dunleavy, from the London School of Economics, said an independent Scotland could have to spend between £150m to £200m on new administrative structures to replace existing UK bodies.

Although an independent Scotland could share UK bodies during the transition to independence, it would have to build its own systems by 2021 to the cost of hundreds of millions of pounds, he claimed.

However, he added that a hostile approach from the UK government in post-Yes negotiations could "greatly add" to the cost.

The key points from the paper include:

  • Immediate set up costs of up to £200m to create new versions of existing UK bodies
  • The total would increase if UK ministers take a "hostile stance" in post-Yes negotiations
  • The costs could be offset due to Scotland having a "smaller government machine", spending less on areas such as defence
  • The initial expenditure should be seen as an investment which will save on future running costs
  • The long-run viability of an independent Scotland is "generally high"

Prof Dunleavy's latest work comes after he dismissed the UK Treasury's use of his research to calculate £2.7bn of start-up costs as "ludicrous".

'Utterly demolished'

A spokesperson for the First Minister said Prof Dunleavy's findings "totally vindicate" the Scottish government's position.

He said: "Their figure of £2.7bn has been blown out of the water by Prof Dunleavy.

"The Treasury estimate has been exposed as a total and utter fabrication, and we now demand an immediate retraction.

"The No campaign's arguments have been totally and utterly demolished, and we now need a retraction both from the Treasury and the No side."

He added: "The set-up costs, which Prof Dunleavy estimates at £200m, would be offset against the scope that he has pointed out for efficiencies from better delivery of services."

'Come clean'

However, a Treasury spokesperson said the Scottish government was "refusing to come clean" on the cost of independence.

The spokesperson said: "Prof Dunleavy accepts there may be over a billion pounds in additional costs to Scotland at a time when the economy and our national finances are recovering.

"In addition, independent estimates show that setting up a new tax system is costing £750 million in New Zealand, and research from the Department of Work and Pensions says that a new welfare and pensions IT system alone would cost between £300 million and £400 million.

The spokesperson added: "The Scottish Government has refused to come clean with its own number on the cost of independence and only the UK Government is providing the facts."

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