North East To Benefit From £504m Of Investment

28 January 2016, 09:46 | Updated: 28 January 2016, 09:52

More than £500 million is to be invested in Scotland's north east after Holyrood pledged additional cash on top of a city deal which is being jointly funded with Westminster.

The £250 million UK City Deal for Aberdeen includes plans to boost innovation in the crucial North Sea oil and gas sector, which has been hit hard by plummeting prices.

The package was unveiled ahead of a visit by David Cameron, who will meet key industry figures to find out more about the challenges the area is facing.

The Scottish Government is also pledging £254 million from future budgets over five to 10 years to improve the area's infrastructure.

The bulk of this cash will go on improving rail connections between the city and the central belt.

But Infrastructure, Investment and Cities Secretary Keith Brown said there would also be £20 million of funding for housing in Aberdeen and Aberdeenshire, along with £10 million to boost broadband services.

"We've said we want to do more than is laid out in the City Deal. The projects that we are now talking about respond directly to the first request of the two councils, which was to do with connectivity to Aberdeen, which they feel is vital for the future.''

He added that the additional £254 million "has to come from commitments in the capital programme and it has to come from future budgets''.

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

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

As well as support for the oil and gas sector, it will set out how the region will grow its biopharmaceutical and agri-food industries.

It is 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.

Mr Brown, 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."

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.