Scotland and the World

What's wrong with Westminster funding Scottish communities directly?

Q: What's wrong with Westminster funding Scottish communities directly?

Money for Scottish communities is good - that's not the question. Since 2020 UK ministers have held a general power to spend directly in devolved areas, and the record shows what happens when the map is drawn in Whitehall: Scottish priorities replaced, budgets cut in the changeover, and the Highlands and Islands falling off the map entirely.

The short answer

Nothing is wrong with money arriving in Scottish communities, and this page won't pretend otherwise - some of it builds good things, including one this site has welcomed. The question the cheque distracts from is the one this site keeps asking: who decides?

Since 2020, UK ministers have held a general legal power to spend directly in Scotland on matters the devolution settlement says are Holyrood's - and a series of funds has used it. The pitch is localism: money straight to communities, no middleman. The record is the opposite: priorities written in Whitehall, Scottish ministers given no role, a funding cut smuggled inside the changeover, and - the detail that gives the game away - Scotland's most remote communities falling off the map the moment it was redrawn in London. Localism decided elsewhere isn't localism. It's the old centralism with better branding.

What changed in 2020

Tucked into the United Kingdom Internal Market Act 2020 - the same Act covered on our devolution page - are sections 50 and 51, which give UK ministers power to fund almost anything, anywhere in the UK: infrastructure, economic development, education, culture, sport. Read that list again; it is a list of devolved responsibilities. The House of Lords Constitution Committee warned at the time that the provisions "risk blurring the lines of financial accountability" (Lords Constitution Committee); the Scottish Parliament refused consent to the Act, and it passed anyway (Institute for Government).

The first announced use was to replace EU structural funds - not through the Scottish Government, which had administered them for four decades, but through funds controlled from Whitehall.

The case for the cheque

The strongest version of the other side, stated fairly. Direct funding delivers real, visible things: community centres, high-street regeneration, port infrastructure. The then Scottish Secretary called the Shared Prosperity Fund "real devolution in action" - power past Holyrood, straight to councils and communities (Alister Jack, The Scotsman). And honesty demands this page's own receipt: the £3 million that moved the Rosyth-Dunkirk ferry closer came from a UK direct fund, and our Europe ferry page welcomed it.

So the argument here is not that direct money never does good. It's that a spending model is a constitution in miniature - and this one should be judged on its record, not its brochure.

What the record shows

Compare the two systems that have actually operated.

EU structural funds ran on programmes built around Scottish priorities, negotiated between the Scottish Government and the European Commission on something like equal terms, on seven-year cycles that let communities plan (Scottish Parliament, Finance and Public Administration Committee). Whatever you think of Brussels, the design was: Scotland writes the plan, the funder agrees it.

The replacement inverted that. Scottish ministers were given no role in how the Shared Prosperity Fund and Levelling Up Fund were allocated; councils bid to Whitehall, against each other, on criteria written in Whitehall - the Scottish Government reported being "beyond disappointed by the continued refusal of the UK Government to engage... in any meaningful way" (gov.scot). And inside the new wrapper came a cut: £32 million in the first year against the £183 million EU funding was worth - £151 million short (gov.scot). The promise of Brexit-era ministers had been that Scotland would not lose out. The mechanism made sure nobody in Scotland could hold anyone to it.

The reset, and the redrawn map

Fairness to the current UK government, looking at both sides of the ledger: the successor Local Growth Fund, launched in April 2026, is being delivered in partnership with the devolved governments - a genuine improvement on the bidding-wars era, and it should be said plainly (gov.uk; prospectus).

But look at what Whitehall kept: the size of the pot, the purposes, and the map. Scotland's £140 million over three years is directed at five areas - Glasgow, Edinburgh & South East, Tay Cities, Ayrshire, Forth Valley. Aberdeen and the North East sit outside it, though they at least hold a separate card: a ten-year Investment Zone worth up to £160 million, jointly funded by the UK and Scottish governments (gov.uk). The Highlands and Islands hold nothing. Shetland Islands Council is publicly protesting the loss of support for island communities (Shetland Islands Council). This is the recurring lesson of centrally designed localism: the communities furthest from the drawing board are the first to fall off the drawing. The same pattern runs through broadcasting, where "local" decisions made far away kept optimising the locals out.

Does it matter? The direction of travel says yes

The honest question deserves a straight answer: if a good project gets funded, why should anyone care which government signed?

Three reasons. Accountability: when Shetland loses out, who do islanders vote against - a Whitehall department they didn't elect, or a Holyrood that didn't decide? The Lords committee's "blurred lines" warning was about exactly this, and blurred accountability is not a side effect; for whoever holds the pen, it's a feature. Coherence: two governments funding rival priorities in the same places makes long-term planning - the thing the seven-year EU cycles provided - impossible. Precedent: spending power is policy power. Whoever writes the fund criteria decides what counts as regeneration, what counts as a community, what Scotland's map looks like. That power now sits in Whitehall by statute, whoever runs Holyrood.

And the direction of travel is more of it, not less. Andy Burnham - at the time of writing the favourite to be Britain's next prime minister - has built his pitch on "Manchesterism": place-based funding and mayor-led delivery, applied nationally (TIME, June 2026). Whatever its merits for England - and English regions may do well by it - it is a model designed around English mayors, into which Scotland gets fitted as one delivery zone among many. A parliament Scotland actually elected becomes, in funding terms, one more layer to route around.

One honest caveat about the remedy. Moving decisions closer to communities is the right destination, and it is genuinely hard to reach from here - because while two governments compete over the same terrain, each needs its name on the plaque at least as much as its money in the right place. While the constitutional contest runs, every fund is also a campaign, and subsidiarity keeps getting designed for visibility. That is an argument for settling the question - not for the arrangement that makes the competition permanent.

So what's the real question?

Not whether Scottish communities should get investment - of course they should, and some direct-funded projects are good ones.

The real question is who decides what Scotland's communities need: their own parliament and councils, or whichever Whitehall department currently owns the map. Real localism moves decisions closer to Shetland, Stranraer and Stornoway. A fund designed in London isn't closer - it's a different far-away, with a friendlier leaflet and no one local to answer for it. Under independence, Scotland's governments would still argue about regional funding, as every country does. But the map of Scotland would be drawn in Scotland - and the communities on its edges could reach the people holding the pen.

Take it with you

Facts for sharing - each button copies the line, with its source and a link back to this page.

Since 2020, UK ministers have held a general power to spend directly in devolved areas - infrastructure, economic development, education, culture, sport. The Lords Constitution Committee warned it 'risks blurring the lines of financial accountability' (Internal Market Act ss.50-51; House of Lords)
EU structural funds ran on Scottish priorities, agreed between the Scottish Government and Brussels on seven-year cycles. The Whitehall replacement gave Scottish ministers no role in allocation - and delivered £151m less in its first year (gov.scot; Scottish Parliament)
Whitehall's new Local Growth Fund map covers five Scottish regions - Glasgow, Edinburgh & South East, Tay, Ayrshire, Forth Valley. The Highlands and Islands fell off it, and Shetland's council is protesting the loss (Shetland Islands Council; gov.uk)
Andy Burnham's 'Manchesterism' would roll place-based direct funding out nationally - a model built around English mayors, into which Scotland gets fitted as one delivery zone among many, whoever Scots elect at Holyrood (TIME, June 2026)
Spending power is policy power: whoever writes the criteria decides what your community needs. A fund designed in Whitehall isn't closer to your town - it's a different far-away