Transitioning to a new Scottish state: immediate set-up costs, how the handover will work, and the long-run viability of Scottish government

The co-Director of Democratic Audit, Professor Patrick Dunleavy was asked by the leading Scottish newspaper, the Sunday Post, to write a report on the costs of transitioning to a new government in the event of a ‘Yes’ vote in Scotland’s independence referendum. The report argues that an independent Scotland would face immediate set-up costs of up to £200 million in creating new administrative structures that duplicate UK institutions, but could also streamline many public bodies. During the transition process, Scottish government could agree contracts or service deals with London to maintain existing back office support system (mainly involving IT) in collecting taxes, paying benefits and organizing complex defence systems. In the medium term (by 2018 to 20021) Scotland would need to build its own, new IT systems to allow policy control to be fully exercised from Edinburgh, in each of these areas. These tasks would certainly cost several hundred million pounds, but they would also be investments in modern systems, and not just “set up” costs. Significant policy savings may also accrue, and offset some of this burden. A key influence on Scotland’s costs would be the conduct of negotiations between Scottish ministers and the remaining UK (rUK) government. A hostile approach by London ministers would force rapid changes and greatly add to Scotland’s costs. A more careful, phased approach would make these costs a lot less. Every transition to a new state has some uncertainty and a degree of risk. But there are no bases for extreme anxiety about an independence transition in Scotland. The Scottish government’s record in public management is a good one, its published plans for transition are relatively specific and reasonable, and the long-run viability of a Scottish state looks strong. The main current uncertainties arise from the London government’s apparent reluctance to do any planning for, or to make clear to Scottish voters, how a transition to independence would be handled at their end. The report has already been covered extensively, including in the Scotsman, the Guardian, by the BBC, the Spectator and others.