The Scottish Government is working with the UK Government and other devolved nations to prevent Scotland losing millions of pounds of European Structural Funds, Deputy First Minister Nicola Sturgeon confirmed today.

It follows the recent agreement by the European Council on the EU’s budget for 2014-20.

The deal, reached by the European Council – including the UK - would mean that structural funds budgets will be allocated on a new formula, which in the UK favours densely populated regions.

The UK’s overall allocation for 2014-20 would fall by approximately 6%. However, initial calculations suggest that Scotland could face a drop of over 30% - a cash terms fall of around €300 million.

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The Deputy First Minister has spoken to the other devolved governments and the UK Government and agreed that officials will work together to seek to identify alternative allocation methodologies.

Ms Sturgeon said: "The allocation of structural funds agreed to by EU member states, including the UK, could see Scotland face a disproportionate reduction in European structural funding.

"Although we expected reductions as a result of the overall reduction in EU spending, the allocations across the UK which are now emerging were not envisaged.

"Significantly lower spending on encouraging investment, growth and jobs would be extremely unwise in these difficult economic times.

"Wales and Northern Ireland also face significant reductions, whilst England could receive an increase.

"I have made clear to the UK Government that an allocation process that resulted in a disproportionate reduction for Scotland would be unacceptable, and I welcome the fact that the other devolved governments are also questioning the initial allocation.

"Michael Fallon, the UK Minister for Structural Funds has agreed that our officials will work together to identify alternative allocation methodologies to ensure the UK Government recognises the importance of a fair allocation of funding."

(GK)