UK Government pledges £52bn for Scotland in Spending Review

Finance Secretary Shona Robison has claimed Scotland has been “short changed” by the UK government’s spending review.

Chancellor Rachel Reeves said her spending plans would deliver £52bn for Scotland in the coming years including extra investment in defence, carbon capture and computing.

Reeves said the announcements had provided Scotland with the “largest settlement in real terms since devolution was introduced”.

But Robison said the deal had short-changed Scotland by more than £1bn when comparing the rise in the country’s block grant with increases in other UK government department budgets.

As part of the spending review, Reeves set out increased funding for the NHS and housing in the rest of the UK, which will have a knock-on effect on the money the Scottish government receives from Westminster.

The chancellor said the Scottish government would receive an average block grant of £50.9bn per year over the next three years.

However, Robison said money for day-to-day funding should have been increased by more.

She said: “Today’s settlement for Scotland is particularly disappointing, with real terms growth of 0.8% a year for our overall block grant, which is lower than the average for UK departments.

“Had our resource funding for day-to-day priorities grown in line with the UK government’s overall spending, we would have £1.1bn more to spend on our priorities over the next three years. In effect, Scotland has been short-changed by more than a billion pounds.

“This all comes on top of the UK government’s failure to fully fund their employer National Insurance increase, depriving us of hundreds of millions of pounds in funding.”

Reeves said overall UK defence spending would rise to 2.6% by April 2027 as part of a plan to make Britain a “defence industrial superpower”.

This includes a promise to spend “an initial £250m” over three years on the Faslane submarine base, “supporting jobs, skills and growth across the west of Scotland”.

Details of what the investment will involve have still to be released but Defence Secretary John Healey said it would provide “long-term, sustained investment for HMNB Clyde” to keep submarines maintained and operational around the clock.

The chancellor also announced £4.5bn would be invested in munitions at sites across the UK, including Glasgow.

Development funding to advance a carbon capture project in Aberdeenshire was also announced in the UK government’s Spending Review.

The Acorn Project based in St Fergus would take greenhouse gas emissions and store them under the North Sea, in a process known as carbon capture and storage (CCS).

It comes following calls from business leaders for investment in the long-delayed project, which had previously been on a reserve list for funding.

The exact amount of development funding for the project has not been announced and UK government documentation published with the Spending Review states “a final investment decision will be taken later this parliament, subject to project readiness and affordability”.

Reeves said: “These are investments to make sure the towns and cities which powered our last industrial revolution will play their part in our next industrial revolution, to reduce our reliance on overseas oil and gas and protect working families from price shocks.”

SNP Westminster leader Stephen Flynn welcomed the Acorn funding which he said came after “years of Westminster delays and funding snubs”.

But he added: “The glaring omission in today’s announcement was any detail on the scale of funding and the timescales for delivery which stands in stark contrast to the £22bn commitment the Labour government has already given to carbon capture projects in England.”

It is almost as if the chancellor was trying to tick off the first minister’s wish list for infrastructure spending in Scotland.

It is not so long ago that John Swinney challenged the UK government to give the go ahead for the Acorn carbon capture and storage project and to reactivate the promise of investment in an Edinburgh supercomputer.

Only yesterday, Mr Swinney called for new spending to build more social and affordable housing.

There are spending announcements on all three issues from Rachel Reeves today although no immediate detail on what “support” for Acorn actually means.

There is also additional defence investment at the Clyde naval base.

Extra spending on the NHS in England generates additional cash for the Scottish government to spend.

There will inevitably be important details to be picked over and Scottish ministers remain concerned about cuts to aspects of welfare spending and while their overall budget continues to grow, they may still have some difficult choices to make.

At first glance this statement gives the UK government a better story to tell in Scotland than they had before. In the days ahead, we’ll see if that withstands closer scrutiny.

The review also plans for the building of the most powerful supercomputer in the UK at the University of Edinburgh.

The chancellor pledged up to £750m for the scheme, which will give scientists from across the UK the computing power needed for research on projects such as modelling climate change or developing new medicines.

Funding for the supercomputer was dropped when Labour took power after last year’s general election but has now been reinstated.

Secretary of State for Scotland Ian Murray said: “This is a landmark moment and will place Scotland at the forefront of the UK’s technological revolution.

“This will see Scotland playing a leading role in creating breakthroughs that have a global benefit – such as new medicines, health advances, and climate change solutions. “

The new supercomputer will vastly exceed the capacity of the UK’s current national supercomputer, Archer2, which is also housed at the university.

Prof Sir Peter Mathieson, principal and vice-chancellor of the University of Edinburgh, said “This significant investment will have a profoundly positive impact on the UK’s global standing, and we welcome the vast opportunities it will create for research and innovation.”

The university has already spent £31m on the infrastructure required to house the new supercomputer.