Pressure is building on the UK government to increase its funding for a major economic deal in Scotland in next week’s Budget, after Scottish ministers announced they would provide £200 million.
Infrastructure secretary Michael Matheson has challenged Chancellor Philip Hammond to match the sum for the Tay Cities Region Deal when he reveals his annual spending plans, after reports that the UK government is set to invest only around £150m in the deal.
A sum of less than £200m is likely to be controversial, as deals for areas including Glasgow, Edinburgh, Inverness and Aberdeen have seen the two governments match each other’s funding.
It is hoped that the deal, which will cover Dundee, Perth, Angus and north Fife, will create up to 15,000 jobs by funding economy-boosting projects in the region.
Local councils have indicated they would be happy with £400m in total from the two governments, despite originally asking for £763m when the bid was tabled last year.
Among the projects set to benefit are Dundee Airport, Perth City Hall, the planned Cross Tay Link Road, improvements to the A90 and a 20-hectare business park in Tayside.
Mr Matheson said: “A Tay Cities Region Deal of this scale has the power to build on the area’s significant strengths and expertise .
“I expect City Region Deals to be funded on a 50:50 basis and I call on the UK government to match our commitment and make this a £400m deal.”
It has been reported that only around £150m of projects have been approved for investment by the UK government so far, with some business cases deemed not robust enough.
A UK government spokeswoman said the eventual sum the Treasury put forward would be based “on our assessment of the projects that have come forward, not on arbitrary challenges”.
She added: “We are not playing politics with the Tay Cities deal. We expect the Scottish Government to meet their responsibilities and support projects in areas that are devolved to Holyrood. We expect to announce further progress very soon and will move quickly towards signing Heads of Terms following discussions with the partners.
“It is essential for the future of the City Deals programme – which has already seen the UK government commit more than £1 billion to Scotland’s cities – that partners work collaboratively.”