Conservative think tank calls for power to be moved away from Holyrood to empower local communities

Cross-border investment funds should be "more ambitious" and the UK and Scottish governments must work better together, according to a former Scotland Office minister.

In a new paper for the think tank Onward, titled Beyond Holyrood, Iain Stewart MP says Growth Deals between UK, Scottish and local governments should be simplified, with elected "provosts" brought in to oversee how cash is spent.

Stewart, who served in the Scotland Office from June 2020 until September last year, states that "Holyrood has a tendency to be a centralising force in Scotland, especially under the current SNP administration" and that the Growth Deals in place across Scotland "embody the spirit of devolution by empowering local areas to set their own priorities for economic growth and how these relate to wider local needs" like housing.

The first generation of these deals ends in 2026 and Stewart, the MP for Milton Keynes South West, says they should be replaced with "bigger, simplified funds" with "better coordination" between Westminster and Holyrood.

And the report suggests these new deals should involve further political devolution through the creation of elected "provosts" to replace existing growth boards and act as figureheads for investment while improving accountability.

Stewart said: "Growth Deals 2.0 offer a huge opportunity for Scotland. They should be simplified and combined with other funds, with a single, bigger overall fund that will reduce inefficiency. The Westminster and Holyrood governments should better co-operate on how money is allocated, with clearer longer-term objectives, but otherwise maximise local autonomy on how money is spent."

In a foreword to the paper, Scottish secretary Alister Jack stated: "The Scottish public expects its two governments to work together constructively to address the issues that matter most to them."

He went on: "Over the next few years, we have a great opportunity to widen and deepen the current package of growth deals. The first agreements will conclude in 2026 and the current funding package for levelling-up runs until 2025. It is the right time to plan the next stage. I want to see a healthy debate about how we can best evolve the underlining principles of growth deals and levelling up."

Onward aims to "address the needs" of the whole of the UK, "particularly places that feel neglected or ignored in Westminster".

Its director Sebastian Payne commented: "The trend in Scotland since the creation of the Scottish Parliament has been to centralise significant areas of public service, from police to fire and transport, often with bad results. Directly-elected 'provosts' can champion their areas and promote investment — echoing the success of the mayoral devolution in England. These provosts can ensure that the economic needs of local areas are not overly dominated by Holyrood and the Scottish Government."

Responding to the paper, Scottish wellbeing economy secretary Neil Gray said: "Since 2016, the UK Government has launched a systematic attack on democratic sovereignty of Scotland’s Parliament – with the Internal Market Act, the use of Section 35 and the attempted block of the Deposit Return Scheme only a few of these Westminster power grabs.

"It is simply astonishing that two senior Tories, who have served in the Scotland Office, have the brass neck to now call for further devolution. These proposals aren’t worth the paper they are written on.  

"While the Scottish Government will always work with willing partners to strengthen our economy, the stark reality is that the investment offered by Growth Deals and the Levelling Up Fund do not fill the black hole of funding left when Scotland was dragged out of the European Union against its will.

"On top of Brexit, the impact of Westminster’s cost-of-living-crisis is crippling communities across Scotland – these proposals do not go nearly far enough in this regard.

"Of course, the Scottish Government will continue to engage constructively with UK Government ministers to consider how we work together to empower local economies and enable drive forward our shared ambitions.

"However, the only way for Scotland’s economy to realise its full potential is with the full powers of independence which will enable us to rejoin the European Union, and the world’s largest single market, and build a wellbeing economy that works in the interests of workers and our local communities."