Swinney demands more UK funding

Mr Swinney has accused the Treasury of meddling in Scottish affairs

Finance Secretary John Swinney has called for an end to what he says are attempts by the UK Treasury to "bully" the Scottish Government.

Mr Swinney met his UK counterpart, Yvette Cooper, in London and demanded £120m extra cash as well as the safeguarding of existing rebates.

He will take the issue to a rarely used committee which is designed to resolve devolution disputes.

The Treasury described the talks as "constructive".

Mr Swinney told Mrs Cooper that the Treasury's stance over funding was "unacceptable" and that Scotland was being short-changed.

The meeting between the two finance secretaries had been planned for some time.

However, it was given extra urgency as tensions increased between London and Edinburgh over the level of funding to which Scotland is entitled.

'Financial black hole'

Mr Swinney believes the Barnett Formula, which is the process which determines Scotland's share of public spending, has been bypassed when it comes to issues such as funding for prisons.

However, Mrs Cooper refused to promise Scotland a proportion of the extra funding which has been given for prisons in England.

She said the money was allocated after a review identified "a significant gap between provision of and demand for prison places in England and Wales", which she said was not comparable to the situation in Scotland.

Mrs Cooper also reiterated the argument that the SNP's plans to scrap the council tax and replace it with a local income tax could result in a huge financial black hole in the Scottish Government's plans.

She had claimed in a letter to Mr Swinney that the 3p local income tax envisaged by the Scottish Government would raise £750m less than the amount currently raised by the council tax.

Mrs Cooper ruled out any extra funding for prisons in Scotland

But Mr Swinney is adamant £400m of council tax benefit should continue to come to Scotland, even if the specific tax is abolished, because it is part of the existing Scottish block grant.

He said: "The Scottish Government has been put in a position that the Treasury has refused to give us access to resources to which we are entitled.

"The financial arrangements make it clear that we should be given a share of the increase in prisons expenditure that has been put forward south of the border.

"The Treasury is not acting in an even-handed fashion towards Scotland - on prisons spending or council tax benefit - and the Scottish Government will want to take these issues to the joint ministerial committee to ensure that we can get fair and proper treatment for the taxpayers of Scotland."

However, the Scottish Conservatives claimed "grudge and gripe" politics have become the hallmark of relationships between ministers in Holyrood and Westminster.

David Mundell, shadow secretary of state for Scotland, said: "The SNP in Edinburgh and Labour at Westminster are embroiled in endless confrontation.

"Instead of this war of attrition and "can't do" posturing, Scotland needs constructive dialogue and a "can do" attitude."