Government’s £230m boost to get Scotland back to work

Jump-start for economy as jobless rate soars

Finance Secretary Kate Forbes yesterday announced a £230 million “Return to Work” package to jump-start Scotland as it recorded the highest unemployment rate in the UK.

Ms Forbes renewed her calls for more borrowing powers to be transferred to the Scottish Parliament as she unveiled her plan to combat the economic devastation wrought by coronavirus.

The package will see millions invested in construction, business support, help with social distancing on public transport, improvements to roads and digitisation of the education and justice systems.

The finance secretary outlined the cash injection after new figures showed the number of jobless Scots has risen by 30,000 to 127,000 during lockdown.

The Office for National Statistics (ONS) figures also stated the Scottish unemployment rate for those over 16 is 4.6% compared with a UK figure of 3.9%.

Ms Forbes said the “Return to Work” cash came from underspends in some portfolios, which had resulted from activity being paused or delayed during lockdown.

During a Scottish Government debate at Holyrood on the “Fiscal Implications of Covid-19”, she outlined where the money would go.

A total of £51m will go into business support, including boosting highgrowth companies, while there is £78m for construction – including £40m for regeneration projects and £20m for roads maintenance.

Ms Forbes said there would be a further £66m to kickstart the country’s green recovery, including £7m to equip buses for physical distancing and the return to work.

There will also be £35.5m for digitisation, including justice and education services.

Earlier in the day, First Minister Nicola Sturgeon namechecked a few of the direct beneficiaries, including Ravenscraig, Edinburgh Bioquarter and the Michelin plant in Dundee.

Ms Forbes said: “The impact of Covid-19 has been enormous on both businesses and individuals and the Scottish Government has so far spent more than £4 billion tackling its effects.

“We are also taking steps to accelerate our economic recovery and this package ensures we can make immediate use of money which, because of the pandemic, might otherwise not have been spent this year.

“I do not underestimate the challenges we face but I also see opportunities.

“It is important we take this chance to reshape our economy in a way that works for everyone and promotes longterm growth, not just quick fixes.”

The finance secretary said cash received from the UK Treasury was welcome, but argued that the Scottish Parliament needed more flexibility within its fiscal framework, the arrangement that underpins Holyrood’s tax and welfare powers, to fully meet the financial challenges of coronavirus.

Ms Forbes claimed the framework was not fit for purpose and warned the costs incurred as a result of Covid-19 now exceed the cash the Scottish Government has received from the Treasury.

Her remarks came as SNP, Labour, Lib Dem and Green MSPs voted in favour of seeking more flexibility within the framework from the UK Government.

Ms Forbes said the £3.791bn received by Scotland from the Treasury through the Barnett Formula was too little, adding there was a risk the amount could yet be revised downwards and that she currently estimated a shortfall of “hundreds of millions of pounds”.

The finance secretary said more money was needed for transport, education and social security.

But Conservative finance spokesman Donald Cameron disagreed with her analysis, stating £10bn had come to Scotland from the UK Treasury.

“The United Kingdom is Scotland’s insurance policy as it has paid out in full and on time,” Mr Cameron said.

He added that the “strength of the Union” was “being able to spread resources across the United Kingdom during tough times”.

Mr Cameron also questioned Scottish ministers’ past spending, suggesting they had “maxed-out the credit card” and left too little in their reserves.

“The impact of Covid-19 has been enormous”