SCOTLAND’S Finance Secretary Kate Forbes has formally requested new powers including the ability to borrow up to £500 million this year to help meet “the significant economic and fiscal challenges” of the coronavirus pandemic.
Currently, the Scottish Government has the ability to borrow £450m a year under the Scotland Act 2016.
As well as the additional borrowing powers, Forbes has requested the ability to switch money from the capital budget to day-to-day spending.
Writing to the Chief Secretary to the Treasury Stephen Barclay, she also emphasised a need to discuss permanent new financial arrangements to help the devolved administrations better manage budgetary risk.
“Given the nature and scale of this crisis, and the economic impact it is having, I believe there is a strong case for temporary additional powers and flexibilities beyond those currently set out in the Fiscal Framework, alongside continued discussions on establishing clear and certain levels of consequential Covid-19 funding,” she told Barclay in the letter.
“As Budgeting rules do not allow capital underspends ... to be redeployed to support resource expenditure, I am seeking the ability to switch up to £500m of annual capital underspend to support our Covid-19 response.”
She added: “In the current circumstances, I believe the Scottish Government should have flexibility to borrow up to £500m to support the Covid-19 response this year.”
The letter was sent ahead of a meeting, to be held remotely tomorrow, of finance ministers from the UK and devolved governments.
Earlier this month Forbes warned public services faced “deep cuts” if ministers are not handed new borrowing powers.
She said it would be “increasingly difficult” for the Scottish Government to fund its response to the virus without impacting on other areas.
At PMQs yesterday the SNP’s Ian Blackford asked Boris Johnson for more borrowing powers for Scotland.
Johnson replied: “Scotland has so far received £3.8 billion in Barnett consequentials ... We will continue to invest massively in Scotland because Scotland, like
the whole of the UK, benefits from being part of the oldest and most successful political partnership anywhere in the world.”
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