NEW analysis has found that the Scottish Parliament will get more than £900m in new money following the Chancellor's summer statement.
The Institute for Fiscal Studies (IFS) has today published analysis of the funding announced by Rishi Sunak earlier this month, after a row broke out between the Conservatives and Scottish finance secretary Kate Forbes over how much would be allocated to Holyrood.
Ms Forbes claimed Holyrood would receive £21m out of a £30bn package of measures announced by the Treasury as part of a ‘Plan for Jobs’. However the disagreement came over the rest of the funding which would be given to Holyrood for other schemes.
Previously the IFS said Ms Forbes claims were “not true”, however now acknowledge that while the Parliament will get £21m, it will also get an extra £120m in new funding from the ‘stamp duty’ announcement, and should receive more than £700m from other public service spending announcements – bringing the total amount of cash received following the summer statement closer to £900m.
In further analysis, it concludes that the Chancellor’s £30bn ‘Plan for Jobs’ was not entirely accurate, and has called for the Treasury to be more transparent about its calculations and announcements, clearly specifying what is ‘new’ funding and what is funding being diverted from already announced projects.
Economist and associate director of the IFS David Phillips explained: “I, myself, have been confused by this lack of transparency. When asked whether the Scottish Government would receive just £21 million as a result of the Plan for Jobs as the Scottish Finance Minister has claimed, I said that I couldn’t see how you would arrive at such a number given the schemes just mentioned, as well as the stamp duty holiday for England and Northern Ireland. It would get much more.
“In a big picture sense, this is correct: the Scottish Government will get far more than £21 million. Because stamp duty is devolved to Scotland it will get much more than that to enable it to enact its own tax holiday or spend on other measures. Exactly how much is not yet clear…But initial estimates published by the OBR this week suggest it could amount to around £120 million spread over this year and next.”
Mr Phillips admitted he was wrong to suggest Holyrood would get funding from the government’s Green Homes grant announcement, and added: “ Instead, apart from the stamp duty money, it will receive £21 million – the figure quoted by the Scottish Finance Minister – as a result of the combination of the ‘Plan for Jobs’ and the reductions in investment spending elsewhere that the Treasury is now expecting.”
He continued: “Of course, Scotland as a nation will receive much more – UK-wide measures like the Job Retention Bonus, Kickstart Scheme and VAT cut could amount to around £1 billion of genuinely new money for Scottish businesses, jobseekers and consumers.
“And the Scottish Government itself will receive over £700 million as a result of other funding confirmed in the Summer Economic Update – mainly as a result of extra spending on public services in England such as the NHS.
“Add that to the £21 million and you get the £800 million the UK government says the Scottish Government received as a result of all the spending confirmed last week.
“Although, as with the Scottish Government’s figures, it is worth noting that this excludes the additional funding as a result of the stamp duty holiday, which mean the final overall figure will probably be nearer £900 million.”
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