SCOTTISH Labour is proposing to take £10,500 off every single one of its MSPs to help create a new “leader's political office" for Kezia Dugdale.

Dugdale needs the cash from her colleagues’ staff allowances to fill a £150,000 black hole created by her party’s catastrophic Holyrood election defeat.

By coming third behind the Tories this month and losing nearly 40% of their MSPs, Dugdale led her party into its worst defeat in over 100 years.

However, she has the support of her colleagues who believe she needs time to develop and grow as leader.

A key challenge is ensuring Labour at Holyrood has the resources to provide a credible Opposition to the SNP Government.

In the last Parliament, Labour’s operation was paid for by Short Money - the annual payment to opposition parties - a Leaders’ Allowance, party cash and £3,400 from every MSP out of their allowances.

The money paid for the research and press activities of the leader and her group of MSPs.

The Short Money pot is calculated by the total number of MSPs a party has - £7,977 per member – and Labour’s sum has fallen by over £100,000 following the election.

It is understood this Short Money fall is part of a £150,000 loss compared to previous arrangements.

As reported last week by the Sunday Herald, Dugdale wants to merge the existing income streams to help pay for a new “leader’s political office”.

This would fund posts such as Chief of Staff, Communications Director and Political Director, the aim of which would be to ensure Dugdale has a proper network of support.

Picture: the funding increase would boost Labour at Holyrood

However, the overall funding drop means Labour has to come up with new ways of filling the gap.

The party in Holyrood plans to increase the contribution every MSP makes from their publicly-funded staffing allowance from £3,400 to £10,500.

Tripling the payment is believed to apply to all members regardless of whether they are regional List or constituency members.

One senior party source said: “I don’t think people mind paying more, but MSPs want to be clear they are getting good value, not just the leader.”

However, the hike is believed to be manageable as MSP staffing budgets are going up from £62,000 to £85,000.

Even if the individual contributions to the Labour “group” pool increase to £10,500, MSPs will still have £74,500 to hire staff.

Meanwhile, Dugdale has called on Scottish Tory leader Ruth Davidson to hold the UK Government to account on the promises made to shipbuilding workers.

The UK Defence Minister was last month unable to confirm that the Type 26 shipbuilding programme on the Clyde would proceed according to previously agreed timetable.

In her letter, Dugdale wrote: "The workforce were not given a throwaway line of potential future work - they were given a commitment and importantly a timetable to ensure the jobs and skills would remain in the numbers needed to continue to build the best naval ships in the world.

"For the UK Government to renege on that timetable, the construction drum beat, and the delivery schedule is not only dishonest - it would be deeply damaging to a vital industry and all the people who work within in it."

An SNP spokesperson said: “Labour have brought these issues entirely upon themselves through their failure to offer any kind of credible policy programme during the election – and squabbling over dwindling resources is no way to win back the trust of voters.”

A Scottish Labour spokesperson said: “The Scottish Labour Party is focussed on being an effective progressive opposition to the SNP in Holyrood. We do not comment on internal staffing issues."