The £4.8bn UK Government Levelling Up Fund will be extended to whole of the UK to help boost growth in Scotland, Wales and Northern Ireland.
At least £800m will go to town centre and high street regeneration, local transport, cultural and heritage projects.
The fund was announced at the last Spending Review and will run from 2021/22 to 2024/25, aimed at driving regeneration in places facing particular challenges, that have received less government investment in recent years.
Scottish Secretary Alister Jack said: “This fund will allow us to directly invest in capital projects in Scotland – I look forward to working on the delivery of the fund in Scotland and with local authorities, who know best what their communities really need.”
But the SNP’s deputy Westminster leader Kirsten Oswald criticised the way the funding was being controlled.
“The Tory government’s move to bypass the devolved governments and dictate spending over devolved areas is yet another sign of its naked power grab plans.
“Rather than passing on funding through Barnett consequentials – which could have seen Scotland receiving its share totalling around £400m – the Tories are intent on dismantling devolution and taking control, with absolutely no clarity over how much will be spent in Scotland.”
The UK Government had previously announced plans to bypass the devolved administrations and replace EU structural funds with a centrally-controlled fund.
In the UK Internal Market Act passed last year, Westminster was granted new spending powers in areas that are otherwise devolved, such as powers to spend on infrastructure and cultural and educational facilities.
Further details on how the fund will operate will be published in the prospectus at Budget next week – including who can bid, the types of projects eligible for funding and the criteria for assessing proposals.
It will supersede existing local growth funding streams, such as the Local Growth Fund, Pinch Points Fund, and future rounds of the Towns Fund.
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