Nicola Sturgeon did not check whether the centrepiece of her programme for government for the next year could be implemented it before announcing it to the Scottish Parliament, it has emerged.
The First Minister did not approach the Treasury to ask whether her Scottish Growth Scheme, which aims to help companies access up to £500 million of finance, would be allowed under the strict rules that govern public spending limits.
In a keynote statement to MSPs on Wednesday, she admitted the UK Government would need to agree that the scheme be taken off our balance sheet so that it is affordable and said she hoped this permission would be forthcoming.
Derek Mackay, her Finance Minister, said that the plan was included in the programme as a courtesy to MSPs and he was sure the Treasury would support it.
But the Conservatives accused her of an amateurish approach to government by failing to even ask before she unveiled the initiative. This was despite it being the headline announcement in the Scottish Government’s press release that followed her statement.
The row came the day after Ms Sturgeon was accused of neutering her attempts to boost the economy in the wake of the Brexit vote by refusing to remove the lead weight of her threat of a second independence referendum.
Murdo Fraser, the Scottish Tories’ Shadow Finance Minister, said: This growth fund was the centrepiece of the SNP’s Programme for Government, and yet they didn’t even bother discussing it with the people they need to work with to make it happen.
While the SNP was announcing this investment, it turns out that they hadn’t even consulted the UK Treasury on whether they would be able to agree this extra funding. It’s clear that this policy has been cobbled together without any real consultation.
Ms Sturgeon told MSPs the three-year Scottish Growth Scheme would be would be targeted at small and medium-sized businesses with significant growth or export potential but which are finding it difficult to access finance.
She said it would offer guarantees or loans worth up to £5 million for each successful business and these would appear on the Scottish Government’s balance sheet as contingent liabilities rather than coming from their spending money.
The First Minister told MSPs that keeping the guarantees and loans off the Scottish Government’s books would mean that the scheme will not require a single penny of investment from the Treasury.
However, she admitted that this would require their cooperation in agreeing the budgeting treatment. This is because the guarantees would sit on the budget under Annually Managed Expenditure, which usually covers matters like pension funds and is not directly controlled by the Scottish Government.
Mr Mackay told Holyrood’s finance committee that ministers had wanted to tell MSPs about the scheme before consulting Westminster. He said: “We had no conversations with them on this specifically before bringing it to parliament. We gave parliament the courtesy of knowing first.
He said he has written to David Gauke, the Chief Secretary to the Treasury, and he expected to get permission for the scheme.
“I see no good reason why the UK government wouldn’t want to proceed with this and support us on this. In fact I wouldn’t be surprised if they copy it, he added.
Mr Mackay also defended a decision to delay publication of a draft budget for Scotland until after the Chancellor’s Autumn statement, saying the Brexit vote means it would be better to wait.
News Source TelegraphNews