Latest COVID-19 funding allocations

More than £1.8 billion of extra funding has been allocated to tackling the impact of coronavirus (COVID-19) in Scotland.

It covers areas including health, transport and business support, accounting for all but £330 million of the latest consequentials generated by UK Government spending. The remainder will be used to meet further urgent demands relating to both COVID-19 and Brexit up to the end of March 2021.

The funding is detailed in a letter from Finance Secretary Kate Forbes to the Scottish Parliament’s Finance and Constitution Committee.

Ms Forbes said:

“From the outset, I have ensured that the money we receive is distributed as quickly as possible to where it is needed most. Our decisions have provided vital additional resources to our NHS, schools and other public services, they have kept our transport system running and provided much needed financial support for businesses impacted by the pandemic.

“To provide full transparency, I detailed earlier allocations in the summer and autumn budget revisions. This latest round will deliver measures such as the COVID-19 vaccination programme, local business support packages and free school meals over the holidays.

“The UK Treasury has indicated that this funding covers the period up to March 2021, so I have 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.”

The latest allocations include:

• around £600 million for health and social care, wider public health initiatives and welfare support. This includes the COVID-19 vaccination programme, test and trace and the £500 bonus for health and social care workers. 

• support for business and the wider economy totalling £570 million, including funding for the strategic framework, local business support packages, the newly self-employed hardship fund and local authority discretionary business funding

• an estimated £139 million of previously announced funding for government, bringing the overall support package to councils to more than £1 billion

• around £500 million to support transport services and cover pandemic-related income shortfalls within organisations such as Police Scotland, the Scottish Funding Council and the Scottish Courts and Tribunals Service

Background

The latest COVID-19 consequentials bring the total received by the Scottish Government to £8.2 billion.

A further update on COVID-19 spending will be provided through the Spring Budget Revision in the New Year.

A copy of Ms Forbes’ letter to the Finance and Constitution Committee Convener Bruce Crawford is below.

Dear Bruce,

I am writing to update the Finance and Constitution Committee on usage and allocations to date of consequential funding received during 2020-21 as a result of the Covid-19 outbreak.

We have drawn down and allocated this funding over the course of the year in response to what has been an exceptional and dynamic set of circumstances. I have updated Parliament on several occasions and, although a further update will be provided through the Spring Budget Revision in the New Year, I thought it would be helpful to provide further information in advance of that.

Around £6 billion of consequentials were allocated in the unprecedented Summer Budget Revision and as part of the Autumn Budget Revisions. Since then, consequentials provided have been increased to £8.2 billion.

I can confirm that thus far, further allocations have been provided as follows:

• Around £600 million has been provided to health and social care, wider public health initiatives and welfare support. This funding supports the public health response to Covid including: vaccinations and test and trace; the £500 non-consolidated payment for health and social care staff; and the Winter Plan for Social Protection, which helps people pay for food, heating, warm clothing and shelter as well as free school meals over the school holidays and the self-isolation support grant.
• Support for business and the wider economy of £570 million, including grants via the Strategic Framework, funding for local support packages, the newly self-employed hardship fund, digital support, Local Authority Discretionary Business Funding and remaining allocations from the £97 million support for culture and heritage.
• Previously announced support for Local Government, relating to the estimated £90 million Lost Income Scheme as well as £49 million of additional funding confirmed to councils in September. Added to additional funding already committed, this brings the value of the overall support package to councils to more than £1 billion.
• Around £500 million of funding to support continued provision of transport and funding for income shortfalls within our partner bodies including Police Scotland, the Scottish Funding Council, Registers of Scotland and the Scottish Courts and Tribunals Service in order to ensure that they can continue to deliver vital services, as well as mitigating shortfalls in devolved tax as a direct result of Covid-19.
• Due to the nature of the Covid-19 outbreak, the potential asks for further demand led spend with regards strategic framework support for business in Scotland and additional demands on health, and the requirement that the funding provided to date will cover all costs until the end of March 2021, I have allocated £330 million of funding in order to support these asks. This is consistent with the terms of the funding guarantee provided by HM Treasury to the devolved administrations, which specified the funding was to cover the period until March 2021. This contingency is also required in order to support any additional funding requirements as a result of the end of the EU transition period.
• The Scottish Government’s limited borrowing powers means we do not have flexibility to increase spending and therefore must manage demand-led expenditure risks within the consequentials provided.

The figures above remain a snapshot of a dynamic funding position. I will formally advise of final allocations as part of Spring Budget Revision, the last formal opportunity in the financial year to transfer budgets.

KATE FORBES