Scottish and Welsh ministers in formal dispute with Tories over £1bn DUP deal

The Scottish and Welsh governments have begun a formal dispute with Westminster over the Tories' £1 billion deal with the Democratic Unionist Party.

The devolved administrations have invoked formal dispute resolution procedures over the agreement, which includes #1 billion in new funding for Northern Ireland.

In a letter to the Treasury, they argue it is "unacceptable'' for UK ministers to fund devolved services in Northern Ireland without applying the Barnett formula, the mechanism used to distribute funds to the devolved nations.

"Your decision to 'bypass' the Barnett formula undermines and discredits the existing funding framework,'' the letter said.

"Applying the formula in the usual way would have resulted in an additional £1.67 billion for Wales and an additional £2.9 billion to Scotland. There is no justification for ignoring the needs of Wales, Scotland and England.''

Scottish Finance Secretary Derek Mackay said any suggestion the cash for Northern Ireland is comparable to the funding of City Deals is "wrong'' as these require additional funding from devolved administrations, councils and other regional partners.

He said: "The Scottish Government fundamentally disagrees with the way in which this additional funding for Northern Ireland has been allocated.

"We have repeatedly made the point that all areas to which the £1 billion funding package has been allocated are devolved matters and therefore the Barnett formula should apply.

"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.

"That cannot be right - and the deal goes against the principles of the UK Treasury's own statement of funding policy.''

Welsh Finance Secretary Mark Drakeford added: "We have been clear with the UK Government that any additional funding for Northern Ireland must respect the established funding principles and rules around the Barnett formula.

"The UK Government has abandoned these well-established arrangements to the detriment of Wales and other parts of the UK.

"At a time when public services in Wales are under pressure as a result of the UK Government's damaging and ongoing policy of austerity, it is only right that Wales gets its fair share of funding through the established rules of the Barnett formula.

"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.'