Scotland ‘faces long-term funding loss post-Brexit’

23 Mar 18

Scotland faces long-term reductions in regeneration funding after Brexit and could be asked to pay its share of the UK’s divorce bill, delegates at the CIPFA Scotland conference have heard.

Alan Bermingham, policy manager for governments at CIPFA, said that Scotland currently received around 15% of EU funds that come into the UK, but under the population-based Barnett formula, it stood to receive only 8% of the equivalent funding after Brexit.

“If [the funding] came through that way, you’re going to get a much smaller share of the cake,” he said.

In a Brexit workshop for public finance professionals, he also warned that the funding of major infrastructure projects would be “unclear” after 2020.

“If you’re planning that now…there’s a risk over whether that’s going to go ahead,” he said. “We’re in a period of uncertainty, so from a public finance point of view it’s about how prepared you are for that certainty.”

On the UK’s divorce bill, he said the EU wanted a single financial settlement rather than a longer-term payback. However, the extent to which that sum would be shared across the governments of the UK was unknown.

“Would Scotland pick up a certain share of that?” he asked. “After all, it has a certain share of the cake through the Barnett formula, so why wouldn’t it pick up a share of the liabilities?” But that discussion was still to take place, he said.

The good news was that the UK could go ahead and negotiate trade deals during the transition period, said Bermingham, although these would not come into force until the period came to an end.  

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