Scotland will pay a price for the demolition of regional development

The UK Government's 'Pride in Place' programme is a case study in misleading propaganda. It is the weary familiar process of cutting one thing, replacing it with a much smaller thing but giving it a new name to make it sound like it is new money when in fact it is a cut.

Today the Scotland Office has announced the communities it has unilaterally decided are going to receive additional funding for what is in effect regional development but instead sounds like a spruce-up-the-town fund. Most of the coverage so far has focussed on whether it is a contravention of the spirit of democracy that this funding is being directly allocated by the Westminster Government.

And yes this is clearly against the spirit of devolution. Place-based economic development, community development and local government are all devolved matters and so the responsibility of the Scottish Government and not the Westminster Government. The attempts to bypass the devolution settlement are a blunt and entirely unsubtle attempt on the part of Labour to promote unionism by handing gifts to chosen communities.

But this masks a much bigger and much more important story; the UK Government has effectively all-but abolished regional development funding. While this impacts England more than Scotland, it has very real and significant consequences for the rest of us.

The recent history of UK regional development is convoluted but comparatively simple. In effect two things happened which drove the UK to allocate money but not follow through with coherent policy or analysis. The first was austerity. The imposition of big spending cuts which would hit the poorer North of England hard, imposed to protect southern bankers, was too blatant even for George Osborne.

So the idea of 'northern powerhouse' was created and some funding allocated – but it never amounted to a serious regional development strategy and it got no more coherent as it morphed in the Boris Johnstone era into 'levelling up'.

What should have been an extensive, coherent and thought-through national regional development strategy became effectively PR for austerity and then an electoral 'bribe' to what became known as the northern 'Red Wall' constituencies.

The second element was about Brexit. A lot of the UK's regional development funding came from two European Union regional development programmes; the European Structural and Investment Funds and the Regional Development Fund. When the UK left the EU it was going to result in a cut in funding to regions of Britain which were particularly Leave-orientated like the North of England.

And so promises were made that that money would be replaced – but not through the Assisted Area programme but through a Shared Prosperity Fund. There is not scope to go through the difference here but it was a distinctly weaker programme.

The outcome of all of this is brutal for those outside the South of England; funding has been cut by 76 per cent for Scotland and England and 50 per cent for Wales. Yet this still impacts Scotland less because we were getting proportionately less of this money because more was going through devolution. This funding was as much devolution as the North of England was to get so hits it much harder. The situation in Wales may even be worse.

The full details of this are more complicated than this summary and are documented in detail in this damning report from the Industrial Communities alliance.

But it is the wider consequence for the UK as a whole that is where the significance for Scotland really lies. It is Labour which is dealing these fatal blows to regional development in Britain which means there is no longer any political dynamic or commitment to reducing regional inequality in Britain.

On the contrary, the Starmer/Reeves growth strategy is almost wholly focussed on unleashing the banking, technology and construction industries headquartered in London. It seeks almost slavishly to repeat the approach of the Blair Government (Blair's influence on this administration is remarkable) – boost London at any cost and use it to fund public services for everyone else.

The problem is that this drove very significant regional economic inequality which gutted communities, caused rapid rises in political anger in the North and led directly to Brexit – which then led to further relegation of the interests of poorer communities which is now contributing to the rise in Reform.

The significance for Scotland is less the money that is being cut and much more the society that is being created as a result. The abandonment of regional development in Britain is going to achieve nothing more than further political anger and unrest. So long as we remain in Britain, what is done to Yorkshire, Northumberland, the Midlands, South Wales, Cornwall and everywhere else shapes Scotland's politics.

And what is being done to those areas will most certainly not shape our politics for the better.