UK Government guarantees £3.7bn funding for devolved administrations

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The Scottish Government wants the ability to borrow up to £500 million

By Laura Paterson, PA Scotland

The UK Government has guaranteed the devolved administrations will receive a minimum of £3.7 billion in additional coronavirus funding this year.

Chief Secretary to the Treasury Stephen Barclay made the announcement ahead of a visit to Edinburgh.

He said the £1.9 billion for Scotland, £1.2 billion for Wales and £0.6 billion for Northern Ireland would help provide for their future coronavirus response planning.

The Treasury said the guaranteed funding takes the total given to the devolved administrations to at least £12.7 billion for 2020/21 to support coronavirus recovery.

Prime Minister Boris Johnston 

Speaking ahead his visit Mr Barclay said: "At the start of the coronavirus pandemic, we said we would do everything we could to support the whole of the UK, whether that's saving jobs or ensuring our vital NHS has the equipment it needs.

"And that is exactly what we have done.

"Today we go one step further by giving the devolved administrations in Scotland, Wales and Northern Ireland the additional certainty they need to plan their own support schemes over the next few months.

"This is yet another sign of our support for the union and commitment to securing an economic recovery for the whole of the United Kingdom."

Meanwhile, Scotland's Finance Secretary Kate Forbes will use a meeting with Mr Barclay and her counterparts in Wales and Northern Ireland to call for an urgent decision on new financial powers for Scotland.

The Scottish Government wants the ability to borrow up to £500 million, with repayment periods extended to a maximum of 10 years from five years.

It has also requested powers to reallocate capital underspend on day-to-day spending and more flexibility on drawing down reserve money 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 stands at more than £52 billion, up from an earlier estimate of £49.25 billion.

Ahead of the meeting, she said: "The temporary powers we are currently seeking are essential, given the scale of the economic risks we face and the operational need.

"It is not an unreasonable ask and it secured cross-party support in the Scottish Parliament.

"Our working relationship with the Treasury is good but we are reaching the point where concrete proposals are required.

"As it stands, we are trying to repair the economic damage wreaked by a global pandemic with a half-empty tool box."

Ms Forbes added: "We welcome the increased funding package provided by the UK Government while recognising that, unlike the Scottish Government, they have access to the borrowing powers that are required to respond to a crisis like coronavirus.

"This will provide vital support in order to combat the impact of Covid-19 on Scotland.

"However, we still need urgent agreement on fiscal flexibilities in order to provide further much-needed funding to support the dual economic impact of Covid and the end of the EU transition period."

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