Scotland is short-changed by levelling-up agenda, Swinney says

Deputy First Minister John Swinney has admitted that the Scottish Government is not fully engaged in discussions about the UK Government's levelling-up agenda, claiming it is more bureaucratic and less lucrative than previous arrangements put in place by the EU.

The agenda was unveiled in 2020 to ensure infrastructure projects that help local communities continued to be funded following Brexit, the aim being to replicate what was offered by the European Social Fund and European Regional Development Fund.

Giving evidence to the House of Commons Levelling Up, Housing and Communities Committee this afternoon, Swinney said the amount of money allocated for Scottish projects has reduced from £183m a year to £212m over three years while decisions over how it is spent are being taken at a UK rather than devolved level.

He said that as a result, while the Scottish Government is supportive of levelling up generally, "when it comes to looking at that agenda there are some challenges".

"We very much welcome the policy intent of the levelling-up agenda," he said, noting that it meets a recognised need to improve opportunities for and the quality of life of people in communities across the country.

However, he said that as the UK Government is administering the fund on a UK-wide basis there are concerns it is making decisions on "wholly devolved functions".

That "raises questions" about whether the money is being allocated in a way that is "consistent and aligned with policy-making in Scotland", he said.

Asked by committee member Deidre Brock, an SNP MP, to expand on the implications of the change in funding arrangements, Swinney said it had created a level of "confusion and uncertainty" for organisations applying for financial backing.

"The core point here is that when the devolution settlement was put in place in 1998 a very clear division of responsibilities was allocated," he said.

"That's generally been pretty clear and worked pretty well.

"What the Internal Market Act [which sought to remove trade barriers within the UK in the absence of EU regulations] did was it was the first significant attempt to essentially enable the UK Government to act in a number of previously exclusively devolved capabilities and much of that relates to the levelling-up agenda."