To ask the Scottish Government for what reason it has reportedly not allocated £450 million of available European Union funding for investment projects in Scotland. (S6T-02023)

That allegation is simply wrong. The programme is not yet complete. By the end of the programme, most of the funding will be spent. The claims that other parts of the United Kingdom will achieve specific levels of spend are also wrong, because their schemes have not closed either. We do not expect Scotland to be markedly different from the level that was achieved in previous schemes.

I am interested in the Deputy First Minister’s response, which is the same response that the First Minister provided: that EU funds will be spent by the Scottish National Party Government in the future. However, according to EU data, the Scottish Government has already returned an unspent €199 million to the fund, and reports are that it is struggling to spend the other €331 million. Does the Deputy First Minister understand why those in local government—who are running enterprise and investment programmes and our cash-strapped public services—are so angry?

No. Liz Smith’s question fails to understand how the scheme operates, which is through the Scottish Government paying out funds at its own risk then claiming reimbursement from the European Commission. The idea that the Scottish Government is sitting on lots of money, which it will return, completely fails to understand how the scheme operates. Even when the scheme was suspended, the Scottish Government still paid money to partners, so there was no point at which partners have not been able to claim the money from the Scottish Government, which then claims reimbursement.

Liz Smith sits on the Finance and Public Administration Committee, so she will understand how outturn data works. There is no outturn data. When it is published, it will be provided to the Finance and Public Administration Committee very shortly after it is provided to the Scottish Government.

There has been no conclusion to the scheme. It will continue, and we will endeavour to spend as much of it as possible. Sixty per cent of the allocations are being made to local government. The rest is allocated largely to non-departmental public bodies such as NatureScot and Skills Development Scotland. There are close relationships in that. We will continue to provide that money to partners at our own risk then claim reimbursement from the European Commission, which is the way that those schemes have operated for years.

The Deputy First Minister says that she will try to spend the money. Surely that money was available previously, so it should have been earmarked for spending that would help the Scottish budget.

In her recent budget statement, the finance secretary said:

“Quite simply, we cannot spend money that we do not have”.—[Official Report, 19 December 2023; c 19.]

Does the Deputy First Minister agree with the finance secretary? The Government had that money, which could have been spent on urgently required investment.

It is being spent. We have until 2025 in which to continue to spend it. It is being spent currently, it will continue to be spent and there has been no point at which it has not been being spent. We will continue to maximise the funding that is available.

I have looked closely at the source of the figures that were reported—I have looked at the European Commission’s open data portal—and cannot in any way that is based on that data arrive at the £450 million that was quoted.

The point is that we are maximising the funding that is available. Liz Smith’s party is stripping all EU funding from Scottish communities. For as long as the scheme exists, we will maximise the funding that is available. Many thousands of people, businesses and communities in Scotland have already benefited, and will continue to benefit until the scheme closes next year.

In October 2021, Michael Gove awarded £23.7 million in levelling-up money—a partial replacement for EU funding—to upgrade the B714, which is a strategic necessity. Two weeks ago, I met him to point out that neither the funds nor the inflationary increase to deliver the project—in common with 60 of 71 projects across the UK—had been delivered, and Mr Gove is now retired as an MP. Will the Scottish Government press an incoming Government to honour the levelling-up commitments that were made to deliver on essential strategic projects that the outgoing UK Government promised?

We will, of course, press the incoming UK Government—whatever the party—to honour its levelling-up commitments. However, as Mr Gibson said, levelling-up was “a partial replacement for EU funding”, and neither of the parties that are most likely to form the next UK Government want to return us to being able to benefit from that EU funding.

Audit Scotland confirmed that access to the funds is available until the end of June 2024. According to the EU’s cohesion open data platform, the SNP has 27 days to spend €280 million. Even by its own standard of fiscal incompetence, that is chaos.

The SNP’s initial budget has already been reduced by €72 million due to—by the SNP’s own admission—lack of demand or lack of ability to spend it. If the Deputy First Minister does not recognise the figure of £450 million, what is her figure for the underspend? Was funding for programmes fully matched by public bodies, or were the cuts that were made by the Government multiplied? Will the Government supply the full figures at the end of June?

Much like Liz Smith did, the member fails to understand how the scheme works. When partners receive money from the Scottish Government, the Scottish Government allocates the funding and then claims reimbursement. Therefore, the risk sits entirely with the Scottish Government. It is not the case that grant funding comes to the Scottish Government and then is allocated by the Scottish Government. I appeal to members across the chamber to understand how the scheme works.

The final expenditure figures will not be known until 2025. Yes, they will be published. In fact, they will be published openly and transparently, and they will reveal to Scottish people just how much money they have benefited from by being associated with the European Union. The Scottish people will also realise how disappointing it is that no party that is likely to form the next UK Government—including the Labour Party—will in any way restore that funding to them.

It is welcome that the Deputy First Minister has confirmed that the Scottish Government’s expectation is that most of the funding will be spent by the time that the programmes conclude. Can the Deputy First Minister say any more about the projects that those EU investment funds have supported in Scotland to date? Does she share my concern that the UK Government’s replacement funding programmes fall far short of the EU funding that was lost to Scotland after Brexit?

The member’s last point is indisputable.

Hundreds of projects across Scotland were supported by the last programme of European structural funds, and if we go all the way back to when they started in 1973—because that is how long benefit has been flowing to the Scottish people—we can see thousands of programmes.

In the Highlands, there are new enterprise hubs, such as the rural and veterinary innovation centre. The funding has also supported children with foundation, modern and graduate apprenticeships. On our climate change objectives, the programmes have helped with electric vehicle charging points and active travel schemes. There is also free advice and support for businesses and small and medium-sized enterprises across Scotland because of the programmes.

I hope that members can unite in recognising how critical the funds have been not only to their own constituents, but across Scotland. It remains a matter of sadness that UK Government’s replacement funding, such as the shared prosperity fund and the levelling-up fund, is not a like-for-like replacement.