The Barnett Formula is the mechanism devised in the late 1970s that decides how much cash will be doled out to each nation of the UK on the basis of population and which powers have been devolved.
Ukip's manifesto launched today vowed to replace the system saving £5.5bn. The section of the Ukip manifesto focusing on the economy said:
Ukip believes the Barnett Formula has passed its sell-by date. Spending has become increasingly unfair, with Scotland receiving a considerably higher per capita spend, despite moving towards further tax-raising and spending powers of its own.
Speaking to the BBC News Channel, Sturgeon shot back at the claim that other UK taxpayers were being short changed. The SNP leader said Scotland paid more per head of population in tax than any other nation in the UK, so there was no need to scrap the Barnett Formula.
But the Sturgeon added that if Scotland claimed full fiscal autonomy the situation would change, and the SNP would be able to pursue a different economic strategy. "We offer an alternative to austerity – we don’t think our public services, our economy and the most vulnerable in our society can afford more years of even deeper austerity,” said Sturgeon.
In 2013, Scotland scooped £10,152 per head while England received £8,529. The Barnett Formula is not based on need and takes no account of different costs across the nations or the amount of tax paid.