Forbes: Treasury business funding for Scotland ‘not new’

Finance Secretary 'surprised and disappointed' after Rishi Sunak said Scotland would receive a £375m funding boost.

Forbes: Treasury business funding for Scotland ‘not new’ Getty ImagesGetty Images

Treasury funding for Scotland of £375m announced on Tuesday is not new, the Finance Secretary has said.

Chancellor Rishi Sunak laid out plans for an extra £4.6bn in business support in England after a lockdown was announced this week.

As a result, the Treasury said, Scotland would receive a £375m funding boost.

However, Finance Secretary Kate Forbes said she was “both surprised and disappointed” the funding was not new and would form part of cash that had already been announced by Westminster.

The funding, according to the Scottish Government, is part of cash already guaranteed by the UK Government to the devolved administrations, expected to total £8.6bn for Scotland in this financial year, which has been previously announced and most of which has already been budgeted by the Scottish Government.

Forbes said: “We are both surprised and disappointed that the UK Government’s announcement of additional funding for businesses in England will not – despite the initial indications – generate further new funding for the Scottish Government or other devolved administrations.

“This is a blow to Scottish businesses, whose expectations had been raised by the announcement, and I will be writing to the Chancellor to raise the issue.

“We fully understand that while the tight new restrictions now in force are necessary to slow spread of the virus, they represent another blow for businesses.

“That is why we have allocated £570m since October to helping businesses, and this sum will rise due to the number of new businesses eligible for support under the latest lockdown restrictions.”

The Scottish Government will receive £375m, the Welsh Government £227m and the Northern Ireland Executive £127m.

Sunak said: “The new strain of the virus presents us all with a huge challenge – and whilst the vaccine is being rolled out, we have needed to tighten restrictions further.

“Throughout the pandemic, we’ve taken swift action to protect lives and livelihoods, and today we’re announcing a further cash injection to support businesses and jobs until the spring.

A press release sent out on Tuesday morning said the funding would be “on top of the increased funding which has already been guaranteed by the UK Government”. However, a post on the UK Government website said it would “contribute to the funding which has already been guaranteed by the UK Government”.

Scottish Secretary Alister Jack conceded the funding was not new, but urged the Scottish Government to use the £8.6bn made available from Westminster to support businesses north of the border.

He said: “As throughout this crisis, the UK Government’s priority remains to keep people safe and support jobs in all parts of the UK.

“The Chancellor has set out additional support for businesses in England. We hope the Scottish Government uses some of the £8.6bn we have provided to support struggling Scottish businesses similarly.

“This is on top of the direct UK Government support for people and businesses in Scotland – including our furlough scheme now extended to the end of April, self-employed support, business loans and procuring and paying for millions of doses of the Pfizer and Oxford vaccines.

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

Scottish Labour’s finance spokeswoman Jackie Baillie described the change as “an embarrassing U-turn”, adding: “It’s time for the UK Government to honour its original statement and provide the additional funds for devolved nations and regions on top of the UK-wide funding package.”

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