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Swinney boosts housing with Barnett funds

By Keith Aitken in Edinburgh | 3 May 2013

Scottish Finance Secretary John Swinney has announced a £290.8m investment boost for housing plus plans to shift funds from colleges and police to make up for central budget cuts.

The move follows UK Chancellor George Osborne's announcements in the Autumn Statement and March Budget, which have given Scotland £290.8m in 'Barnett consequentials' over the next two years. This is allocated under the Barnett Formula – which adjusts Scottish funding in line with Whitehall spending changes. All this money will be allocated to housing, Swinney announced in a Holyrood written answer.

The bulk of the funding is available to Scottish ministers only for supporting loan and equity investment, and will ultimately have to be repaid to the Treasury. ‘This is not normal capital expenditure which can be allocated to directly support the social housing sector,’ Swinney stressed.

The other effect of the UK Budget on Scotland is £54.8m of resource budget cuts. To offset these, £12m will be transferred out of the housing capital budget, replaced by a similar amount in loans finance made available from other sources, notably the UK Government’s Warm Homes Fund.

Swinney will also claw back a £10m underspend by Scotland’s further education colleges and £20m–£30m from the accumulated police reserves, a move made possible by this year’s merger of regional forces into a new national police force.

‘Between them, these three steps will almost fully offset the cut that has been made in the Scottish Government resource DEL [Department Expenditure Limits] budget in 2013/14, without detriment to existing programmes and spending plans,’ Swinney said.

His Labour shadow, Ken Macintosh, welcomed the boost for housing investment but was angry that Swinney had announced the plans in a written answer to SNP colleagues and Holyrood finance committee chair Kenny Gibson rather than in an open debating session.

‘There is more spending here than in his December [Scottish Budget] statement, yet it is sneaked out with no opportunity to question the minister,’ Macintosh protested.

‘I am sure we are not the only ones who want to know how the education secretary managed to take another £10m from Scotland’s colleges when they are already reeling from cuts, and I am sure there are more than a few raised eyebrows at the remarkable £20m to £30m Mr Swinney has just lifted from the pockets of the police service.’

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