Scottish Government seeks new financial powers from Westminster in covid battle

The Scottish Government has formally requested new financial powers from the Treasury, saying they are "critical" to securing a recovery from the coronavirus crisis.

Finance Secretary Kate Forbes has written to Stephen Barclay, Chief Secretary of the Treasury, seeking temporary changes to funding arrangements.

These include the ability to borrow up to £500 million this year to deal with Covid-19 and flexibility to switch unused capital budget to other spending.

Sign up to our Politics newsletter

Sign up to our Politics newsletter

Ms Forbes said the crisis makes the need for a "robust" review of funding arrangements clear.

Kate Forbes has written to the Treasury requesting the move

Read More

Read More
Read more: Scotland gets back to business as route out of lockdown revealed

The letter was sent ahead of a meeting of finance ministers from administrations in Wales, Northern Ireland, Scotland and the UK Government on Friday.

Ms Forbes said: "To be clear, this request is not about permanently revising the existing framework.

"Rather, it is about providing enabling relatively minor flexibilities given the extraordinary pressures that the devolved governments are currently under, to ensure that our fiscal powers are commensurate with the risks we face.

"However, our fixed budget could respond more effectively with some relatively minor fiscal flexibilities.

"I cannot emphasise how critical these are to our ability to support recovery. "

The letter makes three key requests, including the ability to reallocate capital underspend on day-to-day spending.

It also asks for the ability to borrow up to £500 million, with repayment periods extended to a maximum of 10 years from five years.

There should also be more flexibility on drawing down reserve money, it says, with the limit increased to £220 million.

Due to increased spending to tackle Covid-19, the Scottish Government's overall budget for the 2020-21 financial year currently stands at more than £52 billion, up from an earlier estimate of £49.25 billion.

Ms Forbes' letter adds the Covid-19 crisis shows an upcoming review of funding arrangements should be "robust".

She said: "I would welcome a discussion with you in due course on how our governments can work together to deliver this robust review.

"I recognise that the UK Government will expect us to consider all options to use our budget as effectively as possible to respond to the cost pressures of Covid-19.

"We are fully committed to doing that, and indeed have already identified significant reprioritisation to support our response."

A message from the Editor:Thank you for reading this story on our website. While I have your attention, I also have an important request to make of you.With the coronavirus lockdown having a major impact on many of our advertisers - and consequently the revenue we receive - we are more reliant than ever on you taking out a digital subscription.Subscribe to scotsman.com and enjoy unlimited access to Scottish news and information online and on our app. With a digital subscription, you can read more than 5 articles, see fewer ads, enjoy faster load times, and get access to exclusive newsletters and content. Visit https://www.scotsman.com/subscriptions now to sign up.

Our journalism costs money and we rely on advertising, print and digital revenues to help to support them. By supporting us, we are able to support you in providing trusted, fact-checked content for this website.

Joy Yates

Editorial Director

 0 comments

Want to join the conversation? Please or to comment on this article.