Deal provides £250m funding boost for north-east Scotland

A funding package investing £250 million in north-east Scotland's economy will be confirmed today.

The new UK City Deal for Aberdeen involves equal funding committed by the UK and Scottish Governments and includes plans for innovation in the oil and gas industry.

It comes as the Prime Minister visits the city to meet senior executives from the sector to hear about the challenges facing the area.

David Cameron is also expected to announce UK Government measures addressing oil and gas jobs.

First Minister Nicola Sturgeon wrote to Mr Cameron last week calling on him to "accelerate the conclusion of a City Deal for Aberdeen".

Scottish Secretary David Mundell will sign the agreement on behalf of the UK Government today.

The deal also sets out how the region will diversify the biopharmaceutical and agri-food industries and will be Scotland's second UK City Deal, following Glasgow's arrangement in 2014.

Mr Mundell said: "Oil and gas is a crucial sector, not just for the north-east of Scotland but for the whole of the UK. I know it's a very tough time for people who work in the industry and their families, and I am determined that the UK Government will do what it can to support them.

"We need action which will help in the short, medium and long terms - building a bridge to the future of the North Sea; helping the UK's oil and gas industry to export its world-class expertise around the globe; and encouraging diversification of the economy to create new opportunities in other sectors too.

"This UK City Deal will help deliver that and demonstrates our commitment to this very important part of Britain's economy. We have seen in Glasgow the extra jobs and growth that this kind of deal can bring, and I want to see the same achieved in and around Aberdeen."

He also welcomed the match funding from the Scottish Government.

Keith Brown, Secretary for Infrastructure, Investment and Cities, who will sign the deal on behalf of the Scottish Government, said: "Aberdeen and the north-east remain central to driving future growth and prosperity in Scotland, and that is why the Scottish Government has agreed that on top of our existing support for the region we will invest £125 million in a City Deal that delivers significant benefits for the region and Scotland as a whole.

"Delivery of the City Deal will reaffirm the north-east's global reputation in oil and gas, and pave the way for diversifying the region's economy, building upon existing strengths in the agri-food and drink and biopharmaceuticals sectors.

"Investment in digital and transport connectivity, the expansion of Aberdeen's Harbour, and the establishment of a new innovation hub will drive future growth and prosperity, and help to cement Aberdeen as one of the world's leading cities for investment and business."

Mr Cameron insisted in the Commons on Wednesday that a ''bridge to the future'' can be built for all those involved in the North Sea and told MPs his visit to Aberdeen would see him outlining plans about what can be done to help the ''vital industry at this vital time''.

Earlier this week, Ms Sturgeon called on the UK Government to lower taxes on the oil and gas industry in the forthcoming March Budget.

Councillor Jenny Laing, leader of Aberdeen City Council, said: "At our oil and gas summit in February 2015 I led calls for a wide ranging package of measures to urgently support the oil and gas sector.

"I welcome the Prime Minister, his Ministers and Scottish Government Ministers to Aberdeen as they announce a city region deal as well as the additional measures they will bring in support of this nationally significant industry and the city in which it is based.

"Our city region deal recognises the need to continue investment and innovation in the energy sector not only in terms of decommissioning but also in the related technologies that will help deepen our presence in export markets.

"However the package announced today is only the first stage in transforming the north-east of Scotland and I look forward to continuing our discussions with all layers of government."

Martin Kitts-Hayes, co-leader of Aberdeenshire Council added: "Our teams have been working closely with both the UK and Scottish Governments to develop a deal that will support the oil and gas industry in Scotland, and also explore new opportunities for diversification and building on our reputation as an innovative place to do business.

"The deal is a testament to the collective enthusiasm and support we have received from the public and private sectors, and academia in developing our deal."

UK Communities Secretary Greg Clark said: "Aberdeen has a long and proud industrial heritage - today's city deal will help ensure this continues."

He said the package would help the oil and gas industries for the future as well as helping other businesses locate to the area and offer job opportunities.