Scottish councils: ‘UK isn’t playing by rules’ with Stronger Towns Fund

Scotland’s local authorities have accused the UK government of “not playing by the rules” by proposing to bypass the Barnett formula with a new £1.6 billion for local councils.

Cosla president Alison Evison said there were “clearly established responsibilities under devolution which must be upheld” after The Scotsman revealed the Treasury is preparing to allow Scottish councils to lodge bids directly with Whitehall for the new funding.

A new £1.6bn Stronger Towns Fund designed to pump investment into economically depressed communities will invite bids directly from local councils, including in Scotland.

A £1bn pot from the fund will be ring fenced for communities in England, with most of that money already earmarked for areas of the north that voted for Brexit. It prompted claims from critics the fund is a “bung” for Labour MPs to back Theresa May’s deal.

SNP treasury spokeswoman Alison Thewliss MP. Picture: TSPL

Additional local government spending in England normally results in a windfall for devolved administrations through the Barnett formula, which calculates the Scottish Government’s budget based on population.

However, a Treasury spokeswoman said the government believes “making the £600 million biddable is the way that those regions can be funded”. The spokeswoman said the priority was “to make sure that [Scottish local authorities] are able to access that money”.

Responding to the report in The Scotsman, Ms Evison – a Labour councillor in Aberdeenshire – said: “We have clearly established responsibilities under devolution which must be upheld.

“We also have clear systems of distribution to local authorities and a key role for Cosla which must be respected. The UK government is not playing by the rules.”

The SNP’s Treasury spokeswoman, MP Alison Thewliss, said that “control over the Scottish Parliament’s spending decisions must be made in Holyrood, not “stolen and hoarded” by a detached Tory government in Westminster”.

Professor James Mitchell, a leading public policy academic at the University of Edinburgh, warned the government had “undermined” the “Vow” made by Unionist leaders including prime minister David Cameron during the 2014 independence referendum to protect the Barnett formula. Murray Foote, the ex-Daily Record editor who published the “Vow” on the newspaper’s front page, said yesterday that “if the Tories are intent on bypassing Barnett, prepare for a rush to man the barricades”.

At First Minister’s Questions yesterday, Nicola Sturgeon also commented on the growing row over the future of the Barnett formula.

She was asked about reports that another fund designed to replace hundreds of millions of pounds of EU investment after Brexit would be administered from Whitehall, rather than being distributed by the Scottish Government as it is currently.

“It is crucial that the UK government urgently commits to replacing all funding streams in full and that we ensure our fair share of this to ensure that decisions can be taken in the best interests of Scotland,” Ms Sturgeon told Holyrood. “Funding decisions currently being made by Scottish ministers should continue to be made by Scottish ministers.”

Liberal Democrat leader Sir Vince Cable joined calls for the Barnett formula funding to be protected, saying: “Anything that moved towards centralisation within the UK or even within England would be a thoroughly retrograde step.”