Budget money for devolved nations ‘fails to offset economic pressures'

Asia's Tech News Daily

Rishi Sunak has been accused of failing to meet significant financial challenges in Scotland and Wales despite unveiling record funding for the UK’s devolved governments.

The chancellor said Treasury grants for the Scottish, Welsh and Northern Irish governments would reach the highest levels since devolution over the next three years to £75.2bn, with £8.7bn in extra funding a year, a real-terms increase of 2.4%.

Saying this money would strengthen the UK’s “family” of nations and regions, Sunak also unveiled a swathe of UK government-funded projects that might trigger further conflicts over bypassing devolved parliaments.

Related: Millions will not benefit from Sunak’s ‘tax cut for low paid’, say activists

UK-wide programmes, with some billed as replacements for EU projects, include £350m for British Business Bank hubs for firms in the three nations and regions; £342m for Scotland, Wales and Northern Ireland from the levelling-up fund; at least £24m for community ownership projects; and funding from the UK-wide Multiply numeracy improvement programme.

Those will support: an Extreme E electric vehicle race in the Hebrides; up to £3m for the new Burrell Collection museum in Glasgow; refurbishing the Pontcysyllte aqueduct and canal world heritage site in north-east Wales; and £15m for tackling paramilitary violence in Northern Ireland over the next three years.

The chancellor alluded to Nicola Sturgeon’s threat to stage a fresh independence referendum in 2024, and a growth in support for Welsh independence and Irish reunification post-Brexit, by asserting the increase in funding showed the “indisputable benefits of remaining in the UK”.

Douglas Ross, the Scottish Conservative leader, said it was an “outstanding” budget for Scotland. It included extra money for roads, money for the Artizan shopping centre in Dumbarton; regenerating Aberdeen city centre; and a zero carbon project for Inverness castle – all areas normally overseen by Scottish ministers.

Political and business leaders said the funding was useful but there were “clear gaps” in key areas. They said Sunak had yet to meet the UK government’s promise to fully replace EU structural funds post-Brexit.

Rebecca Evans, the Welsh finance secretary, said Sunak had ignored Cardiff’s requests for funding to remediate Wales’s environmentally challenging coal tips or provide significant funds for new rail infrastructure.

“While the spending review does give us some medium-term financial certainty and some additional investment, it is more than offset by the inflationary and system pressures that we are facing,” Evans said. “The budget fails to meet the scale of the challenge that families, public services and the wider economy are still facing as a result of the pandemic.”

The Federation of Small Businesses and Scottish Retail Consortium said there were “slim pickings” for Scottish businesses in the budget given Sunak’s forecast of a 4% increase in inflation. Many benefits, such as freezing alcohol and fuel duties, were offset by increases in national insurance contributions and soaring energy costs.

The significant increase in Treasury funding will, however, offer ministers in the devolved governments the chance to introduce their own policies tailored for local voters and their different political agendas.

Kate Forbes, the Scottish finance secretary, said the budget did contain welcome announcements but she was disappointed Sunak had “pushed ahead with his centralised approach to levelling up, ignoring the views of governments in Scotland, Wales and Northern Ireland”.

“It means money Scotland would have previously received under the seven-year EU programmes to spend according to its own needs will now be distributed annually according to a UK government agenda. This approach potentially leaves Scotland worse off, raises value for money concerns and undermines devolution.”

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