Finance minister rolls back on pledge to spend “every penny” of Covid funds on tackling pandemic

FINANCE Secretary Kate Forbes has rolled back on promises to spend “every penny” of coronavirus funding on tackling effects of the pandemic.

According to a new report, the finance minister is now planning to keep up to £330m of the funds allocated for coronavirus for Brexit-related needs.

Last month Ms Forbes told a committee of MSPs that “when it comes to the budget, it is not about holding things back but about budgeting for the forecast pressures.”

She said: “Every penny will be allocated on Covid spend, but it is not the case that any money will be sitting aside unused—it will be allocated to an anticipated need.”

According to a report by the Scottish Parliament Information Centre (SPICE), the comments are “at odds” with later statements made by the finance minister.

The SPICE report states: “While the Barnetts to which these funds relate derive from UK Government’s coronavirus response package, the Cabinet Secretary also said that she was keeping open the option of using some of the remaining £330 million to support any additional funding requirements that might arise as a result of the end of the EU transition period.

“This would seem at odds with previous commitments made by the Cabinet Secretary to allocate all of the COVID-19 Barnett consequentials to COVID-19 spending in Scotland.”

It comes after Cabinet Office minister Michael Gove said earlier this week the Scottish Government must explain what it has spent the funds it was given to manage the Brexit transition period on.

And previously SNP MPs have called for the UK Government to provide more than £1.1bn in extra cash for Brexit contingency, following the announcement that Northern Ireland would receive £440m extra to help its businesses cope with the new rules.

Northern Ireland, unlike Scotland, will have to manage two sets of regulations as it will retain access to the EU single market and the UK market, with more stringent checks on goods flowing through the country to and from the EU.

Liberal Democrat MP Alistair Carmichael said the decision was a political manoeuvre by the Scottish Government.

He said: “There will be a lot of nurses and care home managers in Scotland who will read with disbelief that the Scottish Government are holding back funds intended for Covid-19. The First Minister was all too happy to splash the cash at her party conference for political coverage but frontline workers and local councils cannot afford to wait until the next time is it electorally convenient for the SNP.

“If there is money allocated for the pandemic then it should be spent on the pandemic. Any financial issues with Brexit will come back to the Treasury anyway so it is hard to see how this hoarding can be justified while lives and livelihoods are under pressure.”

Prime Minister Boris Johnson said the funds should be used in areas for which they were allocated.

When asked by The Herald, Mr Johnson said: “Obviously they should be spent on the things for which they’re intended, that funding should clearly go on the things for which it’s intended.”

Maurice Golden, the Scottish Conservative economy spokesman said there had to be full transparency over spending around Brexit.

He said: “It seems the SNP finance secretary can’t get her story straight about spending, which is not a trait we want in someone supposedly in charge of the books.

“One minute she says that all new UK government funding will be used to address the pandemic and the next she’s saying it’s for Brexit.

“Not only is that contradictory and in need of explanation, we still are not entirely clear about how they will spend money intended for Brexit preparedness.

“The public deserve transparency and must be told how Covid and Brexit funding is being spent.”

The Scottish Government said its funding decisions are “rightly for Scottish Ministers” but further details would be ” set out in full in the Scottish Budget on 28 January, despite significant difficulties caused by the UK Chancellor’s decision to delay the UK Autumn Budget until next year.”

A spokesman continued: “The UK Treasury has indicated that COVID-19 consequentials cover the period up to March 2021, and the Finance Secretary has allocated £330 million as a contingency to ensure we are in a position to provide further support to health and businesses, including for issues arising from Brexit, as it is required over the coming months.

“Our limited borrowing powers mean we do not have flexibility to increase spending to meet demand and therefore must manage our expenditure – much of which is demand led so cannot be accurately calculated in advance – within the consequentials provided. On current planning assumptions, the £48.8 million allocation for EU Exit preparations the Scottish Government has received for 2020-21 falls far short of the funding that is required in Scotland to deal with the consequences of a No Deal or ‘Low Deal’ EU Exit.”

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