Professor David Bell of Stirling University has analysed the impact on Scotland of the Welsh Assembly's Holtham Commission report into a needs-based funding formula to replace the Barnett Formula.

Writing in The Scotsman Prof Bell warns that a move to a needs-based formula could lose Scotland £4.5 billion a year of Treasury funding.

"If its calculations were put into practice, it would have dramatic effects on the Scottish budget," Prof Bell says. "The size of the block grant from Westminster to Holyrood would shrink substantially. Instead of the Scottish grant being 20 per cent higher per head than in England, the margin would shrink to 5 per cent.

"At current spending levels, this would mean a cut of around £4.5bn in Scotland's annual grant from Westminster."

During the House of Lord's Select Committee on Barnett, former Conservative Secretary of State for Scotland (1995 to 1997), Lord Forsyth, revealed that in order to guard Scotland's interests he was counselled against a needs-based formula.

Can I tell you what advice I was given when I was Secretary of State. The advice I was given when I was Secretary of State is do everything you can to avoid a needs-based assessment being implemented by the Treasury because the Treasury believe that it will enable them to reduce Scotland's budget by between £2.5 and £4 billion.

Given the possible implications for Scotland, what is the likelihood of a future Conservative Government implementing a needs-based replacement of the Barnett Formula?