Scots accept revised funding plan worth £10.3bn after talks with UK government fail

After Scottish ministries failed to reach an agreement on the revised funding formula to the UK government Monday, all 32 local authorities accepted on Wednesday the new fiscal deal worth £10.3 billion.

The Guardian reported that the legislation will provide Holyrood new income tax and welfare worth £15 billion. It will also give 50 percent of all VAT increase in Scotland, which is currently worth 4 billion annually. This was agreed upon after the Scottish independence referendum in 2014. However, the new financial deal will decrease the Treasury's grant by the same amount.

Scotland and UK are currently not in accord on how to calculate future grants based on the growth on population and taxation.

Meanwhile, BBC reported that all Scotland's local authorities agreed on the Scottish government's £10.3 billion funding deal, which means the tax freeze will continue for the ninth consecutive year. Finance Secretary John Swinney approved the deal, but most authorities agreed to it reluctantly. This could lead to decreasing services and cutting jobs. However, Swinney said that the new fiscal deal would let local authorities "increase the pace of reform and improve essential public services to communities all over the country."

First Minister of Scotland Nicola Sturgeon challenged UK's David Cameron to keep his word, according to a report by the Daily Record. In her three-page letter to the Prime Minister, Sturgeon said, "It has become increasingly clear that would systematically reduce the Scottish Budget."

"If he does, our negotiating teams can then get on with striking a deal which 
delivers no detriment, rather than doing what the Treasury seems to want to do, which is have a negotiation about how much detriment Scotland should agree to bear," she said.

Deputy First Prime Minster John Swinney has been negotiating with Treausry Chief Secretary Greg Hands on coming up with a revised block grant for Scotland as taxation and borrowing powers are going to be passed.

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Scotland, new funding deal, John Swinney, Greg Hands, UK, United Kingdom, government, Treasury, Holyrood

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