Alex Salmond wins first round of cash battle

SCOTLAND has secured an additional £182 million in funding from the UK government as the SNP's cordial relationship with the new Westminster administration bears fruit.

• From second left: Martin McGuinness, Richard Bullick, Peter Robinson, Alex Salmond and JohnSwinney at Downing Street yesterday to meet with David Cameron. Picture: PA

After years of conflict with Labour ministers, the Conservative-Liberal Democrat coalition government is set to hand over a pot of money to Scotland – known as the fossil fuel levy – that can be invested in renewable energy projects. Labour consistently refused to hand over the cash despite claims that it was Scotland's money.

In a further boost, First Minister Alex Salmond last night claimed that he was also confident about securing 190m for Scotland, calculated as a share of the spending on the London Olympics.

The news came as Chancellor George Osborne warned voters that slashing billions of pounds off spending would be a "national challenge" as he outlined the government's approach to the looming Comprehensive Spending Review.

While Scotland received some positive news on spending, it was clear that the additional funds were "only a drop in the ocean" compared with the hundreds of millions which could be shortly disappearing from the Scottish budget. The Centre for Public Policy for Regions, based at Strathclyde University, has estimated that those cuts could be worth up to 1.9 billion next year alone in real terms.

Mr Salmond made his case to Prime Minister David Cameron yesterday at the first session of the joint ministerial committee (JMC) since the election. The committee is made up of ministers from the UK and devolved governments.

The JMC is an opportunity for UK and devolved administration ministers to discuss issues of concern. The meetings have taken on new significance since the election because neither the Tories nor Lib Dems are in government in Edinburgh, Belfast or Cardiff and are faced with a potential five-party front of the SNP, Plaid Cymru, Welsh Labour, the DUP and Sinn Fein.

The First Minister has called for a new statement of financial policy and more flexibility in capital allocations from the UK government covering the three-year period of the upcoming spending review, as well as greater spending powers. Together he believes the measures would help Scotland's economic recovery after the recession.

Following the meeting at Downing Street, an upbeat Mr Salmond said he "very shortly" expects an announcement on a disputed pot of money for spending on renewable projects that for the last few years the Treasury has effectively blocked the Scottish Government from accessing.

He added that he was also optimistic about other areas of dispute with the previous Labour government on "Barnett consequentials" for Olympic Games spending in London, which had been withheld from the devolved administrations in Scotland, Wales and Northern Ireland as well as borrowing powers for Scotland, which should be part of a new Scotland Act bringing new powers to Holyrood, due to be tabled in the autumn.

However, in an early sign of the conflicts to come, Mr Salmond made it clear that he and the leaders of the other devolved administrations would fight the new coalition government on slashing public spending and disagreed with the "speed and depth" of the proposed cuts.

Critics claimed he was simply preparing his pitch for the Holyrood elections next year.

Mr Salmond said he was pleased that the new coalition was committed to the JMCs as a means of bringing forward the "respect agenda" outlined by Mr Cameron. This will include allowing Scottish and other devolved administration ministers to shape UK policy on areas of interest such as fishing, where the Holyrood minister will also be guaranteed a place in the UK negotiation team. Holyrood ministers and Scottish Government officials will also have a role in discussing the next comprehensive spending review.

Mr Cameron will chair the main JMC meetings himself, while his senior Cabinet ministers will chair the domestic, foreign and finance JMCs.

Mr Salmond said the "respect agenda will always be judged by actions not words" but added it had got off to a good start.

"It is better to have a respect agenda instead of a disrespect agenda," he said, alluding to the less co-operative positions often taken by the previous government.

He added: "I look forward to the respect dividend bringing benefits of EU meetings across subjects such as fisheries, agriculture, justice, energy, culture and the great many other areas where Scotland has real expertise and valuable contributions to make."

The meeting came just a week ahead of new Lib Dem Scottish Secretary Michael Moore becoming the first holder of his post to address a full session of the Scottish Parliament to explain the thinking behind the Queen's Speech.

Mr Moore said: "It is surprising that a Secretary of State for Scotland whose job is to make devolution work as well as possible has not appeared formally at Holyrood before now."