Treasury gives Scottish Government further £1.1bn Covid funding boost

Scottish businesses and public services should receive a financial boost after a further £1.1bn to tackle the coronavirus pandemic was allocated by the Treasury to the Scottish Government.

Supply teachers have not been used to help with the move away from classroom to online learning, Scottish Labour claims.
Supply teachers have not been used to help with the move away from classroom to online learning, Scottish Labour claims.

The funding, which can be spent now or carried over to the next financial year, comes a month after Scotland’s councils warned they were facing a £1.1bn black hole as a result of the coronavirus pandemic.

The UK government said the latest money is in addition to the £8.6bn already provided this year through Barnett formula consequentials of public spending in England, bringing the total to £9.7bn.

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Scottish Secretary, Alister Jack said the money would provide “further certainty” to the Scottish Government and showed the “strength of the union”.

Chief Secretary to the Treasury Steve Barclay.

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The Scottish Government welcomed the cash injection but said its timing, coming more than a week after it had set its budget, underlined the “shortcomings of the devolved funding arrangements”.

Announcing the new finance, Chief Secretary to the Treasury Steve Barclay said: “From the outset of this crisis people and businesses in Scotland have been able to rely on the UK government.

“UK Treasury schemes such as furlough, support for the self-employed and business loans have helped to protect jobs and livelihoods. The UK government will continue to offer this support and to give the Scottish Government the resources and flexibility it needs to fulfil its responsibilities to the people of Scotland.

“I would urge the Scottish Government to make the full and best use of this funding as well as their devolved powers to support people, businesses and public services.”

The UK government is due to set its budget next month, but the Scottish Government revealed its plans on February 6 – two months later than in a normal parliamentary year. Finance Secretary Kate Forbes said at the time there was fiscal uncertainty around setting a Scottish budget.

Reacting to the news of the £1.1bn a Scottish Government spokesperson said: “This funding is welcome, however late the notification at this point in the financial year, and we will set out to Parliament in the coming days our proposals for allocating these amounts as part of our on-going response to the coronavirus pandemic.

“The process again demonstrates, however, the shortcomings of the devolved funding arrangements, where we are only informed of Barnett consequentials long after the UK Government’s associated policy decisions have been made.

“Moreover the Scottish Government cannot borrow at its own hand to fund spending in response to Covid-19 or support the economy in the way that countries around the world have done. It is clear that the review of the Fiscal Framework must give Scotland the powers and fiscal flexibilities necessary to support the delivery of a prosperous and green recovery and we will continue to press for these additional flexibilities.”

Scottish Secretary, Alister Jack said the money would provide “further certainty” to the Scottish Government.

He added: “This now brings our additional funding to Scotland to £9.7 billion this financial year on top of direct UK government support to people and businesses in Scotland.

“This includes supporting over 900,000 Scottish jobs through our furlough and self-employed income schemes, backing £3.4 billion in loans to Scottish businesses, helping thousands get back into work and investing millions in the development of and supplying vaccines.

“The strength of the union and support offered by the UK Treasury has never been more important.”

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