Westminster and Holyrood 'At Odds over Devolution Funding'

A “fundamental disagreement” remains between Holyrood and Westminster on Scottish government funding, John Swinney has told a parliamentary committee.

Concern is mounting about the likelihood of an agreement being signed before the current Scottish parliament is dissolved on 24 March for elections in May.

The deputy first minister told the Scottish parliament’s devolution committee on Tuesday that agreement on the “fiscal framework” – a formula setting out how Holyrood would be funded by UK taxpayers following further devolution agreed by the Smith commission – had foundered on the issue of how the block grant to Scotland should be adjusted.

Swinney said that, while he remained fully committed to reaching a deal and that significant progress had been made on other issues, “we have so far been unable to reach a satisfactory agreement on the adjustment of the block grant for the new tax powers. This is due to a fundamental disagreement on the issue of ‘no detriment’.”

No detriment was the principle contained in the Smith commission agreement that neither the UK nor Scottish governments should suffer financially from policy decisions made by the other once the new powers come into forc

Swinney said: “My clear position is that no detriment means that if tax policy and economic performance in Scotland remains the same as in the rest of the UK then the Scottish budget should be no better or worse off either at the point of devolution or in the future than it would have been under the current funding framework.”

He told members of the cross-party committee that he estimated the Scottish budget would be reduced by more than £2bn over 10 years as a direct result of devolution of powers under the present offer from Westminster.

Swinney told the committee that Nicola Sturgeon would be making a statement to the Holyrood chamber on Tuesday afternoon regarding the stalled negotiations. He said the first minster had held discussions withDavid Cameron 10 days ago, and that Swinney himself had had talks on Friday with the Treasury, meeting Greg Hands, the chief secretary, and George Osborne, the chancellor, and speaking to them both on Monday by telephone

Source: Guardian UK

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