Public spending in the North-East still remains well behind that of Scotland, according to the latest Government statistics.

This reinforces demands to scrap the Barnett Formula - the controversial 1970s settlement which underwrites higher spending north of the border.

However, the signals are confusing as to whether the gap in funding is actually closing.

The Treasury's figures show that spending per head in the region in 2000/2001 was £5,148, compared with £5,558 in Scotland, a difference of £410.

Last year, the difference was £428 - showing a narrowing of the gap.

Despite this, spending actually increased in Scotland by a higher amount over a two-year period.

Spending in the North-East increased by £311 per head between 1998 and 1999, yet was down to only £308 the following year.

Yet the increase in Scotland over the same period went up from £223 to £268.