Talks held on devolution funding deal

Scotland's finance secretary has met a key Westminster counterpart as part of efforts to reach an agreement on a new funding deal for Scotland.

A fresh settlement is needed as additional powers over tax and welfare are being devolved.

Greg Hands, the Chief Secretary to the Treasury, travelled to Edinburgh for the meeting with John Swinney.

It was the second meeting of the Joint Exchequer Cimmittee since the Smith Commission Report.

The committee is attempting to agree a fiscal framework for the devolution of new tax and welfare powers contained in the Scotland Bill.

A statement released after the meeting said it had focused on a range of options for adjusting the Scottish government's block grant in the future in relation to the new tax and spending powers being devolved.

Ministers also considered various methodologies for assigning VAT receipts to the Scottish government's budget.

Overall economic principles for fiscal rules and capital borrowing options were also discussed, including how Scottish government borrowing would sit within the context of the overall UK fiscal framework.

And the meeting also considered fiscal scrutiny and the current roles of the Scottish Fiscal Commission and the Office for Budget Responsibility in relation to devolved public finances.

The first minister, Nicola Sturgeon, has said she would only back the bill if the funding deal is fair for Scotland.

With new tax powers, there is a risk Scotland could find itself worse off, with the Treasury cutting the block grant by more than is raised.

The Treasury has said this will be the biggest transfer of powers to date and they are determined to deliver a fair and lasting settlement for the people of Scotland.