Clarity needed on Northern Ireland funding

Following the UK Government’s announcement of £2 billion funding for the Northern Ireland Executive, Finance Secretary Derek Mackay has written to Rishi Sunak, Chief Secretary to the Treasury.

In the letter, he seeks clarity on what the funding means for the Scottish Government’s Budget under the Barnett formula.

The full text of the letter reads:

Dear Rishi

Further to my recent correspondence regarding our respective budget processes, I am writing to seek further clarity following the UK Government announcement of 15 January to provide £2 billion of funding to the new Northern Ireland Executive.

I welcome this announcement as another positive step to restoring devolved government in Northern Ireland. As you will be aware, I am keen to understand the basis on which the funding has been allocated in accordance with the Statement of Funding Policy, and the implications this funding allocation has for the Scottish Budget. In particular, given the reference to £1 billion of Barnett-based investment guarantee, I would be grateful if you can confirm what additional investment Scotland will receive as part of the normal application of the Barnett formula.

You will be aware that the Scottish Government fundamentally disagreed with the way additional funding was provided for Northern Ireland as part of the deal reached with the DUP in 2017, and that issue is yet to be resolved. I consider it important that the UK Government reconsiders its approach to exceptional funding allocations. There should be clearer criteria and better engagement with the devolved administrations in relation to such allocations, as well as a clearly defined dispute resolution process.

I would welcome early clarification on the additional resources that will come to Scotland as a result of this announcement to enable this to be properly included in the Scottish Budget due to be published on 6 February.

DEREK MACKAY