Tory-DUP deal under attack from Scottish parliament and Welsh assembly as they launch formal dispute

In a letter to the Treasury, the Finance Secretaries of Scotland and Wales argue that the Barnett formula should apply to the PM’s £1bn deal with the DUP

The devolved nations argue it is ‘unacceptable’ for Theresa May to inject extra cash into Northern Ireland as part of her deal with Arlene Foster (PA)

The devolved administrations of Scotland and Wales have launched a formal dispute against Theresa May’s pact with the Democratic Unionist Party.

In a letter to the Treasury, the devolved nations argue it is “unacceptable” for the UK to inject extra cash into the Northern Ireland economy without applying the Barnett formula – the mechanism used by ministers to distribute funds to devolved nations.

It comes after the DUP agreed a deal with the Conservatives last month to prop up Ms May’s minority Government in the aftermath of the inconclusive general election result. But in order to secure the “supply and confidence” agreement the Prime Minister handed over £1bn in financial support for Northern Ireland.

However, the devolved administrations of Scotland and Wales now claim that, if the Barnett formula is applied, it would result in an additional £1.67bn for Wales and an additional £2.9bn for Scotland.

In the letter, Derek Mackay, the Scottish Finance Secretary, said the Scottish Government “fundamentally disagrees” with the way in which the funding was allocated for Northern Ireland.

He continued: “We have repeatedly made the point that all areas to which the £1bn 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.”

Mark Drakeford, the Welsh Finance Secretary, added he had been clear with the UK Government that additional funding for Northern Ireland “must respect the established funding principles and rules around the Barnett formula”.

He continued: “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.”

But responding to the letter from the devolved administrations, a HM Government spokesperson told The Independent: “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, the exceptional funding will be made outside the Barnett funding system.”