SNP cry foul on funding change

Around £1bn was allocated on a needs-based formula to English regions, with the remaining £600m being distributed to communities across the UK through a bidding process.

It was widely criticised as a “bung” aimed at wooing Labour MPs in Leave-voting areas.

The Treasury has now confirmed the Barnett formula used to boost devolved funding is unlikely to be applied to the money, depriving Scotland of an estimated £158m.

Instead, Scotland will be offered an unpredictable share of the £600m bidding pot.

Asked after the Chancellor’s spring statement if any Barnett money would flow from the Initiative, a Treasury spokeswoman said: “The process is ongoing, that’s why you don’t have a clear answer about it. But we think, though it’s not done yet, making the £600m biddable is the way that those regions can be funded.”

Pressed on the lack of guarantee of any Barnett funds being passed to the Scottish Government, the spokeswoman said the aim was to make sure Scottish councils were “able to access that money”, rather than the Scottish Government, which gets Barnett money.

Glasgow MP Alison Thewliss, the SNP’s Treasury spokesperson, said circumventing Barnett would be “an outrageous Tory power grab on the Scottish Parliament, which would roll-back devolution and could short-change the Scottish budget by more than £150m”.

The Treasury has already been accused of abandoning the Barnett formula when it gave more than £1bn to Northern Ireland to please the Tories’ political allies, the DUP.

Mr Thewliss said: “Yet again, Westminster is proving it simply cannot be trusted to act in Scotland’s interests.

“Any attempt by the Tory government to take control over the Scottish Parliament’s spending decisions will be resisted in the strongest terms.

“By seeking to ride roughshod over devolution, and put these powers in the hands of remote Tory ministers with no mandate in Scotland, the UK government is making the case for independence.”

Shadow Scottish Secretary Lesley Laird added: “It is in no way surprising that Scotland was an afterthought for the Tories.

“We saw their disdain for the devolution settlement during the EU Withdrawal Act, we saw they’re lack of understanding of Barnett consequentials when they gave the DUP their £1bn bung and now we find out that they are discarding the Barnett formula for this money.

“For a party that claims to stand up for the UK, their actions suggest otherwise.”

The SNP Government said it would press the UK Government to ensure Scotland got its “fair share” of any extra funding through Barnett.

There was also a row over funding levels for the Borderlands Initiative designed to boost economic activity in councils along the border.

SNP ministers had offered £85m over 10 years Dumfries & Galloway and Scottish Borders and urged Mr Hammond to match it.

However the Chancellor announced £65m for Scotland as part of a £260m deal.

Labour MSP Colin Smyth said: “The Tories are short changing the south of Scotland.

“This funding is less than the amount requested by the Borderlands partners. Had our area been treated the same as other growth deal areas we would have received between £472m and £865m from both the UK and Scottish Governments.”

Berwickshire, Roxburgh and Selkirk Tory MP John Lamont said: “The SNP may not like it, but the truth is the border is just a line on the map and the economic health of the Scottish Borders is closely linked to the health of Northumberland, Carlisle and Cumbria.”

Andrew McRae, of the Federation of Small Business, said: “Smaller firms in the south of Scotland will warmly welcome support for the Borderlands scheme from governments in Edinburgh and London. This programme of potentially transformational projects must boost local firms and neighbourhood economies.”