Margaret Thatcher ordered secret funding review

The so-called Barnett formula was an issue 30 years ago, papers reveal

A secret review of how Wales, Scotland and Northern Ireland were funded was carried out under Margaret Thatcher 30 years ago, newly-released cabinet papers reveal.

It was ordered amid concerns that public spending in Scotland was too high.

It focused on what is now known as the Barnett Formula - the way UK government funding for the nations is calculated.

The 1985 review found it was "unfair to England and Wales".

But the cabinet papers on the review have remained secret until now, when they were released by the National Archives.

The documents reveal Mrs Thatcher told the cabinet office to arrange "in strict secrecy" an urgent study of how public spending was shared out.

Her private secretary warned of the "sensitive" nature of a meeting held to discuss it.

Papers show Treasury official Sir Brian Unwin wrote in a note to the prime minister: "There appears to be ample evidence of substantial over-provision in Scotland; some over-provision in Northern Ireland but none in Wales."

In 1986, Mrs Thatcher chaired a meeting to discuss spending to see if there should be a fresh study of the formula - then known as the "Territorials Formula".

Her private secretary, Nigel Wicks, wrote: "Summing up the discussion, the prime minister said that the Cabinet Office should arrange, in strict secrecy, for an urgent study of the existing figures of public expenditure provision within the block in England, Scotland, Wales and Northern Ireland."

At the time, public spending per head was £1,632 in England, £1861 in Wales, £2,058 in Scotland and £2461 in Northern Ireland.

With spending in the countries outside England decided by the formula, Mrs Thatcher commented in her own hand-writing: "block provision - automatic and free from scrutiny".

Despite Mrs Thatcher ordering a review, and continuing claims that it favoured Scotland, it out-lived her and survives to the present day.

David Cameron's government promised after the Scottish referendum in 2014 to maintain the formula for Scotland.

Papers released by the National Archives also revealed the strength of the former Tory leader's opposition to regeneration of Cardiff docklands and the Cardiff Bay barrage project.

The releases also unveiled how the Welsh secretary at the time, Nicholas Edwards, urged the prime minister to to reject any plans to build a bridge linking England and France, based on his own experiences of using the Severn Bridge and the Cleddau Bridge in Pembrokeshire.

Finally, a gift of moon dust from the United States sparked official concern about when it should go on display in Wales, the archives disclosed.