Holyrood and Cardiff argue they should receive an extra £2.9bn and £1.67bn respectively under Barnett formula rules

This article is more than 3 years old

This article is more than 3 years old

The Scottish and Welsh governments have joined forces to launch a formal dispute process over Theresa May’s deal with the Democratic Unionist party.

Following last month’s general election, the prime minister agreed to give £1bn of additional funding to Northern Ireland in return for support from the DUP for her minority government.

Yes, Northern Ireland should have the £1bn. But what about other UK regions? | Jonn Elledge Read more

The devolved administrations in Edinburgh and Cardiff argue that Barnett formula rules, which calculate how much money should be distributed to Scotland, Wales and Northern Ireland, mean they are entitled to an extra £2.9bn and £1.67bn respectively as a result of the deal.

Derek Mackay and Mark Drakeford, the finance secretaries of Scotland and Wales, have written to the Treasury to invoke a formal dispute resolution process through the joint ministerial committee.

Facebook Twitter Pinterest Derek Mackay of the SNP. Photograph: Andrew MacColl/REX Shutterstock

They last used the process in 2012 to claim additional funds to make up for money spent on the London Olympic games.

Mackay said the SNP-led Scottish government had “repeatedly made the point” that all areas to which the £1bn funding package had been allocated were devolved matters and so subject to the Barnett formula.

“Despite this, the UK government argues that there should be no Barnett consequentials from this deal and refuses to acknowledge that Scotland, Wales and England will be short-changed by billions of pounds,” he said.

“That cannot be right – and the deal goes against the principles of the UK Treasury’s own statement of funding policy.”

Drakeford said the government had abandoned “well-established arrangements [on funding to devolved administrations] to the detriment of Wales and other parts of the UK”.

The Conservative/DUP deal: what it says and what it means Read more

He added: “The arrangements offered to Northern Ireland have direct read across to areas of devolved responsibility. For this reason, the benefits of the additional spending should be mirrored across all parts of the UK.

“For all its faults, the Barnett formula is supposed to be clear and rules-based. It is simply inexcusable that the UK government is willing to ‘bypass’ those rules.

“That is why we have begun the formal dispute resolution with the government so that Wales is treated fairly alongside all nations of the UK.”

Speaking on the BBC’s Sunday Politics Scotland programme in June, while negotiations between the Conservative party and the DUP were ongoing, Scotland secretary David Mundell said any additional funding given to Northern Ireland as part of a deal should adhere to Barnett formula rules.

“I certainly won’t support funding which is deliberately sought to subvert the Barnett rules,” he said.

Facebook Twitter Pinterest Mark Drakeford of Plaid Cymru. Photograph: Alamy

“We have clear rules about funding of different parts of the United Kingdom. If the funding falls within Barnett consequentials, it should come to Scotland.”

In a statement on Wednesday, a UK government spokesman said: “As we have made clear, this agreement is part of the government’s commitment to support growth across all parts of the UK.

“Like previous Northern Ireland support packages, and the funding of over £1bn for city deals in Scotland and Wales, this funding is a targeted intervention to address a specific set of unique challenges.

“And, as was the case for those previous interventions, this exceptional funding will be made outside of the Barnett funding system.”

