Treasury 'double' Covid funding to £440m for Scottish Government

The likelihood of additional restrictions being introduced in Scotland to fight the Omicron variant has increased after the Treasury announced more money would be sent to the Scottish Government.

Chancellor of the Exchequer Rishi Sunak who has announced a 'doubling' of Covid funding for Scotland.

On Sunday, Rishi Sunak announced he was doubling the amount of money being provided early to the devolved administrations to a total of £860m, with £440m coming to Scotland.

This is, the Treasury say, to help the nations plan effectively over the coming weeks.

It follows a week of demands from the First Minister for additional funding to help tackle Omicron.

Nicola Sturgeon has regularly said she requires more money to help mitigate the impact of further restrictions which would most likely fall on high risk venues such as pubs, bars, restaurants and the events industry.

The funding announcement also suggests the UK Government may be set to announce new restrictions in England to tackle Omicron and requires its own additional funding to help businesses ride them out.

Announcing the extra money, the chancellor Rishi Sunak said: “Following discussions with the devolved administrations, we are now doubling the additional funding available.

“We will continue to listen to and work with the devolved administrations in the face of this serious health crisis to ensure we’re getting the booster to people all over the UK and that people in Scotland, Wales and Northern Ireland are supported.”

However, the money is in effect an advance on the expected Barnett consequentials which the devolved administrations receive following the ‘supplementary estimates’ procedure in Whitehall.

This is when the UK Government increases the budget for its departments, triggering the payment of consequentials.

The Treasury said if the amount due to Scotland as part of this is lower than the £440m the Scottish Government will receive, the difference will have to be paid back over the period of the 2022/23 budget.

If the amount due through the Barnett consequentials is higher than the £440m, any extra money will be kept by the devolved administrations.

The Scottish Government had said it had factored in £268m into its spending for next year as part of this process, meaning it could now be forced to pay back £172m to the Treasury in the next financial year.

Reacting on Twitter, Nicola Sturgeon said she was seeking confirmation the cash is “additional”, and said it would all go to businesses and the “overall Covid effort”.

She said: “Before we get spin on ‘doubling’. 1) The additional £220m announced last week was NOT new or additional (it was actually £48m less than we had been expecting).

"Seeking confirmation if this new £220m is additional (tho if so £48m will just make up last w/k loss) and if it has to be repaid.

"2) To the extent it is new/additional, Scottish Government will make sure it goes in full to helping business and the overall Covid effort.”

The Scottish Conservative’s finance spokesperson, Murdo Fraser, welcomed the news and called for the money to be paid out by Christmas.

He said: “This is very welcome news from the UK Government. This money will provide vital support to Scottish businesses – especially those in the hospitality sector – that have badly hit by the Omicron variant.

“It is now up to the SNP Government to get this cash out of the door before Christmas to those struggling businesses who need it most.

“The SNP Government need to step up and start delivering, especially when there are businesses on the brink of closure and Scottish jobs on the line.

“This announcement once again demonstrates the benefits Scotland derives from being part of a strong United Kingdom.”

The Scottish Government has been contacted for comment.

A message from the Editor:

Thank you for reading this article. We're more reliant on your support than ever as the shift in consumer habits brought about by coronavirus impacts our advertisers.

If you haven't already, please consider supporting our trusted, fact-checked journalism by taking out a digital subscription.