UK Government funding to replace EU cash should bypass SNP ministers and “should be directly allocated to councils”, Michael Gove has said.
Mr Gove has also insisted that he wants to use UK Government funding to improve Scotland’s under-pressure ferry services, despite transport being devolved to the Scottish Government.
But the Tory minister has been warned his EU replacement funds are set to put Scotland’s Highland and Island communities out of pocket.
Conservative ministers in Westminster want to give funding directly to Scotland’s councils as it looks to replace European Union funding in the wake of Brexit.
While Scotland’s 32 local authorities receive the bulk of their money from the Scottish Government, UK Levelling Up Secretary Michael Gove set out his intention for funding from the UK’s new shared prosperity fund to be “directly allocated” to local government.
His comments came as Alison Evison, the president of the local government body Cosla, told a conference attended by both Mr Gove, and First Minister Nicola Sturgeon, that the “erosion” of council’s core budgets was the “biggest single challenge” facing local authorities.
Ms Evison used her speech to an online Cosla conference to speak out about both funding and the “increasing centralisation” of services.
With the UK Government looking to replace cash from EU structural fund with new alternatives, Mr Gove said it was his intention that this should go “straight to local councils in Scotland”.
He told the conference: “We are replacing the old EU structural funds with our new £2.6 billion UK Shared Prosperity Fund.
“That money will go straight to local councils in Scotland so that they can invest in local priorities, improve communities and place, people and skills and supporting local business.”
He told council leaders that the UK Government would work with them, Scottish ministers and others “to make sure that funding works for local communities”.
The Tory stated: “It is my intention that that funding should be directly allocated to councils.”
But he told senior council representatives he would work with the Scottish Government on this.
Mr Gove also questioned if “more might be done to empower local communities from Holyrood”.
His comments came as the Cosla president insisted “only properly and sustainably funded local government” can deliver for people across the country.
Ms Evison, who is quitting Labour to fight the May council elections as an independent candidate, added: “The erosion of our core budget is probably the biggest single challenge facing local government today.”
She also told how local authorities are “continuing to see an increasing centralisation of service”, claiming this has resulted in more and more spending decisions being “centrally directed” by Holyrood ministers.
Mr Gove appeared before MSPs on Holyrood’s Finance Committee and was pressed over the methodology used to allocate the funding compared to the method under the EU – when the Highlands and islands were given disproportionate funding for their population share.
Committee convener, Kenny Gibson warned that organisations are “deeply concerned” due to the shared prosperity fund being “allocated entirely though local authorities”, warning that those previously-reliant on EU finding will “miss out on crucial funding”.
Scottish Greens MSP, Ross Greer, said: “Concerns have been raised, particularly by Highland Council that as the Highlands and Island were considered a transition region under European arrangements, they were eligible for more funding -certainly disproportionate to their population share.
“But the Highlands weren’t a priority for CRF and were ranked lowest on the scale for the levelling up fund. It appears our Highland and island local authorities felt that they are now being put at a significant disadvantage compared to if we were still within the European Union.”
Mr Gove acknowledge that “we need to keep these judgements under review”.
He also suggested that the UK Government has ambitions to directly fund Scotland’s ferries, despite transport being the responsibility of the Scottish Government.
He said: “With respect to the Highlands and islands, it is the case that one of the successful levelling up bids was a successful bid from Inverness.
“I’m very conscious of the fact that for a host of reasons, we need to do more to support the Highland and island economy. We’re thinking hard in my department about how the specific needs of the Highlands and island can be addressed.”
Mr Gove added: “One of the things I would like to do is to use UK Government funding to directly provide improved ferry services for people from the Western Isles, Orkney and Shetland.
“Transport is a devolved responsibility – I respect that – but my door is open to working with the Scottish Government in order to do just that. One of the reasons we’ve set up a UK-wide islands forum is that there are…common issues that they all have that we believe we should bring together and work on.
“I want the Highlands and Islands to be better funded.”