The decision by Boris Johnson to hypothecate the new levy on national insurance contributions to health and social care spending not just in England, but in Scotland, has sparked off another round of argument between the Scottish and UK governments.

In many ways, it is a non-story. The hypothecation of Barnett funding in this way will have little practical implication. The Scottish Government will receive slightly more in ‘hypothecated’ revenues than Scottish taxpayers will pay through higher national insurance contributions.

More importantly, if the Scottish Government wanted to spend less on health and social care than the UK Government is now budgeting for – which would seem highly unlikely – there is nothing to stop the Scottish Government diverting its own funding elsewhere.

But the principle of tying specific UK funding to a devolved area of responsibility is a marked shift and represents the latest in a series of steps that the UK Government is taking under the banner of a more ‘interventionist’ approach to devolution.

Politically, this must be seen in the context of ongoing debates over a second referendum. In the past, part of the UK Government’s strategy was often to promise ‘more powers’ to Holyrood. Instead, the strategy now seems to be to take a more direct role in the Scottish economy, whether the formal responsibilities are devolved or reserved.

From an economic point of view, it also perhaps reflects an increasing realisation by the UK Government that if it is to succeed on its ambitions around ‘levelling-up’, the ‘transition to net zero’, or its ‘plan for growth’ then it needs to take a more proactive role in all the different economies of the UK.

But we need both governments to work collaboratively and constructively. Unfortunately though, inter-governmental relations between Holyrood and Westminster remain at a low ebb, particularly post-Brexit. We have, for example, yet to see the detail behind the replacement for EU Structural Funds but all accounts suggest that the UK Government intends to use its new Shared Prosperity Fund to invest directly in local projects largely ‘bypassing’ the Scottish Government. At the very least there is little detail available for policymakers to plan for these new funds which should go live in just over six months.

In principle, it should be welcome that the UK Government is taking a proactive approach to Scotland’s economy. And this welcome should extend even to areas where legislative competence is devolved. If it leads to additional investment, and unlocks external funds, then why should anyone mind? But there is a risk that without effective coordination multiple tiers of government working in similar areas can lead to deadweight and inefficiencies. There is also the risk that each tries to out-do the other with grand but ultimately ill-judged projects. A bridge to Northern Ireland anyone?

Recent announcements on freeports versus greenports are another example in that, whatever your views on the strength of each government’s policy position, the fact that uncertainty surrounds a potential investment opportunity for Scotland is disappointing. Debates over ‘who does what’ at COP-26 are just as frustrating.

Seven years on from the 2014 referendum, a lot of our daily politics and policymaking is still viewed through the prism of the constitution. But it is vital that both governments work together in the interests of Scotland’s economy despite constitutional and political differences. That was a founding principle of devolution. Failure to do so risks investment drifting elsewhere.

The challenges from Covid-19, coming on the back of the headwinds that our economy was facing prior to the global pandemic, means that this collaboration should be the very least that we should expect of our politicians.

Graeme Roy is professor of economics at the University of Glasgow’s Adam Smith Business School