Nicola Sturgeon accuses UK Treasury of ‘smoke and mirrors’ in Covid funding row

An announcement of extra cash to help the devolved administrations deal with Covid has been branded “Treasury smoke and mirrors” by Scotland’s First Minister

Nicola Sturgeon hit out at the same time as she insisted Scotland’s response to the pandemic had been “curtailed” by a lack of cash.

Ms Sturgeon said there were further restrictions the Scottish Government “could and would have considered”, particularly for the hospitality sector, if ministers at Holyrood had the “financial ability to do so”.

But she said her Government would now issue “strong guidance” for people north of the border to limit household mixing, with people being asked to keep any gatherings to a maximum of three households.

Her comments came at the same time as the Treasury said the UK would make additional funds available to the devolved administrations to “provide greater certainty and allow them to plan as they tackle Covid-19 during the crucial weeks ahead”.

Ms Sturgeon, however, said: “While any financial support in the face of the pandemic, and the emergence of the Omicron variant, is welcome, today’s announcement from the Treasury does not appear to amount to any additional funding.

“Instead, it merely advances money which Scotland would be due in any case from expected Barnett consequentials already budgeted for – with the stipulation that we would need to pay back anything received over and above the final Barnett amount.

“That’s not additional funding. That’s just classic Treasury smoke and mirrors.”

She added: “This lays bare the extent to which our existing financial powers in Scotland do not go nearly far enough in ensuring we have all the tools needed to respond quickly in the face of a rapidly evolving public health emergency.”

The First Minister complained that the UK Government’s decision not to bring in further restrictions in the wake of the new Omicron strain,  meant no additional cash for business support would flow to the Governments in Edinburgh, Belfast or Cardiff via consequentials.

Scots were last week urged to cancel work Christmas parties – with the hospitality sector claiming this will result in a wave of cancellations leaving businesses, which have already been hit hard by Covid, facing more losses.

Ms Sturgeon said the Scottish Government had found “around £100 million that we will use to help businesses” that are affected.

But she added that because the Scottish, Welsh and Northern Ireland Governments are not able to borrow cash to help them tackle the virus, they were forced to “rely on the Treasury”.

The First Minister continued: “Because the UK Government is at this stage not proposing any further protections – a position I do not agree with – there is no funding generated to compensate businesses for any protections we think are necessary and wish to put in place.

“That is not acceptable in current circumstances and, with the Welsh and Northern Irish Governments, we are pressing for a fairer approach that takes account of our devolved responsibilities for protecting public health.

“But for now, this is the situation we are in, and it means our public health response is curtailed by lack of finance.”

Her comments came as the Treasury announced additional funding is to be made available to the devolved administrations to “provide greater certainty and allow them to plan as they tackle Covid-19 during the crucial weeks ahead”.

More details of the cash will be revealed in the coming days, but Chancellor Rishi Sunak insisted: “Throughout this pandemic, the United Kingdom has stood together as one family, and we will continue to do so.

“We are working with the Governments in Scotland, Wales and Northern Ireland to drive the vaccine rollout to all corners of the United Kingdom and ensure people and businesses all across the country are supported.”

Scottish Secretary, Alister Jack, said the money came on top of the additional funds given to the Scottish Government to tackle Covid and a “record core funding settlement” from Westminster of £41 billion a year for the next three years.

Mr Jack said: “The UK Government has provided unprecedented support to people in all parts of the UK since the very beginning of the pandemic, and that support continues.

“With the Omicron variant, we now need to do everything possible to get booster jabs into arms as quickly as possible.

“The UK Government has made clear today that there will be further, additional, funding for the Scottish Government to support this – as well as the ongoing support of our incredible armed forces.

Businesses and union leaders, meanwhile, stressed the need for more financial support.

Andrew McRae, Scotland policy chair for the Federation of Small Businesses, said: “Governments in Edinburgh and London must cooperate to ensure the amount of cash support available to firms matches the scale of the restrictions.

“The financial firepower to help firms during this stage of the crisis must be found.”

Scottish Trades Union Congress general secretary, Roz Foyer, stated: “We are calling for urgent action from the UK Government to bring forward support including the re-introduction of the furlough scheme.”