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By G.A.Ponsonby
 
The Westminster Government has agreed to release £16 million 'Olympic Funding' to Scotland after pressure from the Scottish Government.
 
The money is a consequence of spending on the London Olympics since the coalition government came to power in May 2010.

The concession by the Tory / Lib Dem administration followed pressure from the Scottish, Welsh and Northern Irish administrations who had raised the matter as a formal dispute at the Joint Ministerial Committee.

However the refusal of the previous Labour government to transfer the consequentials in the same way means Scotland will not see the full £165 million that should have been transferred.

Today's announcement of the release of the funds was welcomed by SNP MP and Westminster Olympics spokesman Pete Wishart who said:

“16 million is a considerable sum and I am sure the Scottish Government will put it to good use.

“The failure of the previous Labour government to transfer this money has short changed Scotland by over £140 million.”

The failure by the previous Labour government to honour the ‘consequential’ Barnet formula was condemned in the House of Lords in 2009 when Lord Richard argued that Scotland should receive up to £300 million in additional funding as a consequence of what he called the “English expenditure” in the East End of London.

Mr Wishart added:

“£165 million should have come to Scotland and could have been invested in projects that would have supported jobs in our economy.  Even the House of Lords supported the SNP’s case for this money to be properly paid to Scotland.

“It is a great shame and a sign of the neglect the Labour Government showed to Scotland that their refusal to transfer the money left Scotland short.”

The question first arose in 2007 of whether the Barnett formula should be applied to regeneration and transport elements of Olympic funding.

On 14 April 2010, the Scottish Government raised the issue as a formal disagreement with the UK Government under the protocol on "Dispute avoidance and resolution" which now forms part of the Memorandum of Understanding between the UK Government and the devolved administrations.

The Welsh Government and the Northern Ireland Executive notified the UK Government of their wish to be parties to the disagreement on 30 April 2010 and 24 June 2010 respectively.  The issue was escalated to a dispute under the protocol on 13 September 2010.

Following further consideration, administrations have agreed:

  • to reaffirm their shared commitment to the success of the 2012 Olympics and other major sporting events in the UK.
  • to reaffirm their shared commitment to the principles of good communication, close co-operation and mutual respect as the means of avoiding and resolving disputes, and to the use and benefit of the JMC's dispute-resolution protocol as set out in the Memorandum of Understanding between the UK Government and the devolved administrations.
  • the importance of learning lessons from all disputes in order to make them less likely to arise in the future. In this instance, they noted that agreement was reached in earlier discussions of this dispute that decisions on the application of the Barnett formula should "always be evidence based, be undertaken in a timely manner and in consultation with the devolved administrations". (This wording was agreed previously and is now included in HM Treasury's Statement of Funding Policy which was published alongside the UK Spending Review in autumn 2010.)
  • that there have been significant changes in public finances since this dispute first arose and that they should therefore not revisit decisions on the Olympics budget first made by the previous UK Government.
  • that the Scottish Government, the Welsh Government and the Northern Ireland Executive will receive a one-off sum equivalent to the Barnett formula consequentials of relevant changes to Olympics funding since the present UK Government took office in May 2010. These sums amount to £30.2m, of which the Scottish Government will receive £16m, the Welsh Government £8.9m and the Northern Ireland Executive £5.4m (rounded to the nearest £100,000).
  • the importance, firstly, of reviewing thoroughly the costs and benefits of the 2012 Olympic Games and other major sporting events in the UK and, secondly, of governments co-operating on and sharing such studies.

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