Recent funding from the UK Treasury will give Scotland an extra £175m to spend now, First Minister Nicola Sturgeon said on Tuesday.
The First Minister told MSPs the entirety of this sum would go towards supporting businesses, bringing the total package for business support over the next three weeks to £375m.
Discussing the new restrictions for hospitality, which include a rule for table service-only in venues serving alcohol, she said: “I know how unwelcome this will be for everyone – but we believe these precautionary steps will help us navigate a difficult period more safely.
“I am also acutely aware that these decisions – and the advice we are giving the public – have significant financial implications for many businesses.”
The amount of UK Government funding Scotland will receive to tackle Covid has been doubled from £220m to £440m – a sum being provided to the Scottish Government on top of their autumn Budget 2021.
But Sturgeon said that she was checking whether the funding was indeed additional.
Meanwhile, UK Chancellor Rishi Sunak on Tuesday announced a £1bn support package to businesses hit by Covid restrictions.
That total includes £80m for the Scottish Government from the £220m advance earlier announced by the Treasury.
Sturgeon told MSPs that Sunak’s announcement “generates no further funding for Scotland”.
She said: “The Treasury has given approval for money – that would have come to us later – to be allocated now. As I have said, we had already budgeted for most of that money so we cannot allocate it now without causing significant shortfalls elsewhere including in the health budget – money simply cannot be spent twice.
“However, we estimate that the Treasury announcements do give us additional spending power now of £175m and I can confirm today that we will allocate all of this to business support.
“The Treasury has also announced additional funding for business. Unfortunately, it would appear that this announcement generates no further funding for Scotland and that any consequentials are already contained within previous announcements by the Treasury.
“I can, however, announced that the Scottish Government will allocate a further £100m from elsewhere in our budget between now and the end of the financial year – this will involve really difficult decisions but the impact of the current crisis on business is such that we consider it essential.
“So taken together this adds up to a fund of £375m that will help support businesses for the unavoidable impacts of our decisions over the next three weeks.”
“This is significantly more proportionately than the Chancellor has just announced elsewhere for businesses in the UK.”
Sunak came forward with additional help for the hospitality and leisure sectors in England following days of urgent lobbying from MPs, firms and industry officials.
It includes one-off grants of up to £6000 per premises for businesses in the affected sectors in England, which the Treasury expects will be administered by local authorities and to be available in the coming weeks.
The devolved administrations will receive around £150m of funding through the Barnett formula as part of the support announced, the Treasury said.
That is said to include around £80m for the Scottish Government, £50m for the Welsh Government and £25m for the Northern Ireland Executive.
Prime Minister Boris Johnson said of the new funding: “With the surge in Omicron cases, people are rightly exercising more caution as they go about their lives, which is impacting our hospitality, leisure and cultural sectors at what is typically the busiest time of the year.
“That’s why we’re taking immediate action to help with an extra £1bn in grants to these industries and reintroducing our Statutory Sick Pay Rebate Scheme.
“I urge people across the country to please get boosted now to secure vital protection for yourselves, your loved ones and your communities.”
Sunak added: “We recognise that the spread of the Omicron variant means businesses in the hospitality and leisure sectors are facing huge uncertainty, at a crucial time.
“So we’re stepping in with £1bn of support, including a new grant scheme, the reintroduction of the Statutory Sick Pay Rebate Scheme and further funding released through the culture recovery fund.”
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