THE UK Government has been warned its plan to bypass Holyrood with post- Brexit funding could end up “undermining” its goal of stopping Scottish independence.

A leading think tank has criticsed proposals to replace EU cash with the UK Shared Prosperity Fund (UKSPF), which would be administered directly by Westminster to Scottish, Welsh and Northern Irish communities.

The SNP government has warned the scheme, which is due to be introduced in April, would "bypass the rightful decision-making powers of Scottish ministers and the Scottish Parliament”. Similar concerns have been raised for the devolved administrations of Northern Ireland and Wales.

Further questions have now been raised by the Institute for Government (IfS), which warned the funding programme could “backfire” on Tory ministers.

The UKSPF is supposed to replace the European Regional Development Fund, which supported investment in business and research, and the European Social Fund, which supported employment and skills projects.

A total of £9 billion was awarded to the UK via the two funds between 2014 and 2020, of which £4.6bn has yet to be spent.

Downing Street hopes its new scheme will speed up the delivery of cash and “bind together the whole of the United Kingdom” by demonstrating the financial power of the Union.

But the Institute for Government report tells the UK Government it still has “basic questions” to answer about the scheme.

The think tank said: “There is a clear opportunity to put in place something that is more flexible and less bureaucratic than the EU system, and that demonstrates to voters the value of UK-wide action.

“But the Government appears to be proceeding with its plans for the UK Shared Prosperity Fund with almost no meaningful engagement with the devolved governments or other stakeholders. Unless they change course, and begin to work in partnership, ministers risk undermining their own objectives.”

The National: Westminster has been warned the Shared Prosperity Fund could hasten the break up of the UnionWestminster has been warned the Shared Prosperity Fund could hasten the break up of the Union

READ MORE: Tories plotting 'assault on devolution' with new community fund, SNP warn

Under the EU funding programmes, Holyrood, Stormont and the Senedd were afforded control over how the cash was spent. But the Institute for Government warned devolved administrations view the replacement scheme as “an unwelcome encroachment”.

A UK Government spokesperson replied: “We reject these conclusions. We will ensure that the Government and its institutions continue to collaborate effectively with the four nations to realise the benefits of working together as one United Kingdom.

“We have been engaging with a wide range of key stakeholders in Scotland and across all parts of the UK since 2016, and this has helped identify the opportunities for UKSPF policy, learning lessons from EU funding.

“We will ramp up UK-wide domestic funding to at least match what the EU currently offers – reaching around £1.5bn a year.”

The analysis comes after the SNP raised objections to another UK funding programme, warning it represented an “assault on devolution”.

The new UK Community Ownership Fund is designed to help local groups take over at-risk facilities, such as shops, pubs and post offices. The programme will draw from a £150m pot, with £12.3m allocated to Scotland.

But the SNP believe the new scheme is part of a plan to strip Holyrood of powers.

SNP MSP Kenneth Gibson said: “I’m all for empowering communities to help secure local facilities but this is less about that than it is an insidious and barely-disguised Tory assault on devolution. It also begs questions about where this public money will end up considering the scandal of how Covid contracts have ended up in their donors’ hands.

“Basically, it’s the thin edge of the wedge that will lead to the Tories taking control of even more of Scotland’s money and the cuts that follow that.”

Mhairi Black, the SNP's shadow Scotland spokesperson, commented: "The SNP has repeatedly warned that the UK Shared Prosperity Fund is a blatant attempt at a power grab - robbing powers from the Scottish Parliament by stealing Scotland’s funds and dictating how money is spent.

"As this IfG report highlights, the UK Government's handling of the SPF continues to be a threat to devolution. It’s the thin edge of the wedge that will lead to the Tories taking control of even more of Scotland’s money and the cuts that follow that.

"As part of the EU, Scotland received funding and we were in a position to allocate it towards the key priorities of Scotland’s elected Government and our communities. That approach has been discarded by Westminster - with funding left to the whims of Boris Johnson's Tory government we did not vote for.

“The fact is when the Tories had control of Scotland’s money before devolution they cut it to spend that money in their constituencies in the south east; and even now we see what Tory Westminster control of spending means for England’s councils – cuts not cash.

"The bottom line is that funding decisions under this replacement scheme for Scotland must be decided by the democratically-elected government of Scotland. It's clear beyond any doubt however that the only way to properly protect our interests and our Parliament is to become an independent country."

A spokesperson for the Ministry of Housing, Communities and Local Government told The National: “We have engaged with the devolved administrations, as well as local partners and stakeholders to ensure that the Community Ownership Fund delivers for communities in Scotland, Wales and Northern Ireland.

“The fund will be delivered on a UK wide basis, using powers granted by the UK Internal Market Act 2020, to support people and communities all across the country."