SNP ministers are ready to launch a formal challenge to the “grubby” Tory-DUP deal for depriving Scotland of £3bn.
Derek Mackay, the Finance Secretary, said they will trigger dispute resolution proceedings against the Treasury if the agreement does not lead to a windfall north of the border.
The DUP have pledged to prop up Theresa May’s government in exchange for more than £1bn of extra funding.
But that cash falls outside the scope of Barnett formula funding, which allocates Treasury cash on a proportional basis to devolved parts of the UK.
In a letter to the UK’s chief secretary, Mr Mackay promised to “invoke formal dispute resolution proceedings” if the matter is not resolved.
“The United Kingdom Government’s deal prioritises expenditure in Northern Ireland at the cost of all other parts of the UK and leaves Scotland almost £3bn worse off than it would have been if funding had been allocated using the well-established arrangements that are set out in the statement of funding policy,” he said.
Senior Conservative sources have insisted the Barnett formula does not apply to the money because it is an addition to the Northern Ireland Executive’s block grant.
They pointed out that similar exemptions affected cash for city deals in Scotland and Wales.
Speaking during a visit to Bristol, Theresa May said: “We’ve seen across Scotland, Wales and England, the Government investing in those parts of the country.
“If you look at Scotland we’ve seen city deals, we’ve seen the same in the south west of England with the Bristol city deal, we’ve seen the local growth deal.
“The Government recognises the importance of investing in all parts of the country.”
