Scotland funding deal agreed

The UK and Scottish governments have reached agreement in principle on the fiscal framework to underpin the devolution of new powers under the Scotland Bill. The UK government has announced that:

·       funding for Scotland will be at the same level as the Barnett funding set in the recent spending review;

·       the Scottish government will have new borrowing powers, allowing it to manage its budget effectively and invest up to £3 billion in infrastructure, while being accountable to the Scottish people for its decisions;

·       the Scottish government will receive £200 million to implement the new powers; and

·       a review following the UK and Scottish parliament elections in 2020 and 2021 respectively will make sure the deal is still delivering against all the Smith principles.

In a statement to the Scottish parliament, the First Minister Nicola Sturgeon said: ‘The fiscal framework will not include or assume the method for adjusting the block grant beyond this transitional period. The two governments will require to jointly agree that method as part of the review … In summary, the agreement we have reached on the block grant adjustment ensures that there is no detriment for the next six years and that there can be no default by the UK government after that to a funding model that would deliver detriment in the future.’

The Scotland Bill is currently in the House of Lords and is expected to pass through the UK parliament later in the Spring.