Scotland politics

Scottish independence: Prof Patrick Dunleavy says Treasury claims 'ludicrous'

Prof Patrick Dunleavy Image copyright LSE
Image caption Prof Dunleavy had looked at the cost of reorganising Whitehall departments

An academic has accused the Treasury of a "ludicrous" use of his research in its analysis of the impact of Scottish independence.

The Treasury claimed on Monday that research by the London School of Economics had put the cost of setting up an independent Scotland at £2.7bn.

It cited a study carried out by the school's Prof Patrick Dunleavy.

But Prof Dunleavy described the Treasury's claim as "crude misinformation".

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Media captionProf Patrick Dunleavy: "Every time I go to the Treasury, the staff seem to be aged about 23 or 24 and to not to know a great deal about the issues they are handling."

The Treasury had claimed Scottish ministers wanted to create 180 public bodies after independence, which it said led the LSE to a figure of £2.7bn, based on each new department costing £15m.

But Prof Dunleavy told BBC Radio Scotland his research had looked at the cost of reorganising Whitehall departments, with a particular focus on Tony Blair and Gordon Brown's Labour governments, when it came up with the £15m figure.

He added: "I can understand that ministers in Whitehall are getting a bit frustrated, they think that the SNP is being very coy about the costs of transition.

"But it is very important, if you are contributing to a public debate, to contribute accurate information and not, as in this case, I'm afraid, very crude misinformation.

"The figure that was quoted for our research was correct, but we have never claimed that the costs of setting up any public body in a new Scotland would be £15m.

"That is really taking our figure and making it ludicrous."

Whitehall departments

Prof Dunleavy said he believed the true cost of setting up all of Scotland's independent institutions would be closer to £150m or £200m, as many of the required public bodies already exist under devolution.

The main costs would come from setting up Scottish defence, foreign affairs, tax and benefits departments, he said.

In a media briefing, ahead of its analysis paper on the cost of independence, the Treasury used the £2.7bn figure as a "reasonable costing".

However, Chief Secretary to the Treasury Danny Alexander, when he unveiled the Treasury's full analysis paper on Wednesday, said Prof Dunleavy's work had not formed part of its final report.

He instead used a lower figure of £1.5bn as the estimated cost of setting up an independent Scotland, citing different research by Prof Robert Young of Western University in Canada as evidence.

Prof Young presented a paper in Edinburgh in 1996 which had looked at the potential costs of setting up a new state in Quebec if it voted for independence from Canada.

The professor told BBC Radio Scotland that the £1.5bn figure was "certainly at the high end of the range" that was included in his paper, and was based on the equivalent of 1% of GDP.

There were other estimates in his Quebec paper that were less than 0.5% of GDP, with the lowest being 0.38%, he added.

Prof Young added: "It is worth pointing out that there is a lot of politics in most of these estimates and the way they are deployed. And it is also worth pointing out that these costs possibly can be offset by greater growth.

"Secondly, these costs are just money - there are other possible costs and benefits from independence that may be less easily measured.

"The larger point is that it might be worth being £1,400 worse off if there are benefits that come with that, like a secure position in the European Union or the capacity to redistribute being able to achieve higher growth rates.

"Those are the real contestable elements. The transactions costs are short term."

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