SCOTLAND will not automatically benefit after a £1.6 billion fund was awarded to boost rundown urban areas in England, it has emerged.

The money was announced by the UK Government last week with the aim of creating new jobs, helping train local people and stimulating economic activity.

The SNP described it as a “Brexit bung” designed to persuade Labour MPs to vote for Theresa May’s deal.

Under the way funding works for the devolved nations – known as the Barnett formula – new cash for public services in England should result in more money for Scotland, with how it is spent left up to Scottish ministers

But yesterday the Treasury indicated it would be up to local authorities to make individual bids for the cash.

The revelation provoked anger from the SNP, with the party’s Treasury spokeswoman Alison Thewliss saying the Scottish Government could lose out on more than £150 million.

“This would be an outrageous Tory power grab on the Scottish Parliament, which would roll back devolution and could shortchange the Scottish budget by more than £150m,” the MP said. “Yet again, Westminster is proving it simply cannot be trusted to act in Scotland’s interests. Any attempt by the Tory government to take control over the Scottish Parliament’s spending decisions will be resisted in the strongest terms.

“By seeking to ride roughshod over devolution, and put these powers in the hands of remote Tory ministers with no mandate in Scotland, the UK Government is making the case for independence. Scotland’s wishes have been ignored ever since the EU referendum, and it is clearer by the day that the only way to properly protect Scotland’s interests is with independence.”

The Stronger Towns Fund is targeted at places that have not shared in the proceeds of growth in the same way as more prosperous parts of the country, ministers said.

Of £1bn being allocated using a needs-based formula, the north-west of England gets £281; the West Midlands £212m; Yorkshire and the Humber £197m; the East Midlands £110m; the north-east £105m; the south-east £37m; the south-west £35m; and the east of England £25m.

The announcement said another £600m will be available through a bidding process to communities in any part of the country.

Asked if under Barnett funds were being passed to the Scottish Government, a Treasury spokeswoman said the aim was to make sure that Scottish local authorities are able to access that money.

Shadow chancellor John McDonnell branded the initiative a bribe at the time of the announcement. He said: “This fund smacks of desperation from a government reduced to bribing MPs.”

The SNP’s deputy leader at Westminster, Kirsty Blackman, said Scotland “must get its fair share and not lose out like we did with the Tories’ £1bn Brexit bung to the DUP”.