Chancellor Rishi Sunak’s surprise decision to cancel his autumn budget will not derail efforts to get the Tay Cities Deal signed off next month, the UK Treasury has confirmed.
A provisional date for rubber-stamping the multi-million-pound package has been set for October 29.
It will be almost two years since the initial terms of the agreement were approved at an event in Perth.
However, the decision on Wednesday to cancel the UK budget sparked fears of further delays, with a vital part of negotiations still to be settled.
Talks are ongoing to decide how and – more crucially – when the money will be shared out.
The Scottish Government has pledged to distribute the cash over 10 years, while the UK Government has so far committed to 15 years.
A final decision was expected to be declared during this year’s budget.
On Thursday, The Treasury confirmed to The Courier that the matter would be resolved as part of the ongoing spending review, which is separate from Sunak’s budget proposals.
The much-anticipated cities deal is expected to be worth £700 million and will fund projects across Tayside and Fife, including the controversial Cross Tay Link Road, and create thousands of jobs.
A UK Government spokeswoman said: “All partners are working to progress the deal, which will bring a huge, long-term boost to the area’s economy.
“We know the local partners are keen to conclude the deal over 10 years rather than the 15 years agreed and signed by all partners at the Heads of Terms.
“We have committed to looking again at this later in the year as part of the UK Government spending review. All parties have now agreed the terms of the full deal which will be signed once a mutually convenient date has been agreed.”
The SNP’s MP for Perth and North Perthshire Pete Wishart said there was still work to be done before an agreement could be struck.
“There are a number of issues with the Tay Cities Deal that I and my colleagues are still trying to resolve with UK Ministers, not least their insistence that Tay City Deal projects are funded over a 15-year period.
“This could have impacts on projects throughout Tayside and we are asking them to match the Scottish Government’s 10-year funding approach.”
He said: “Having the signing of the deal delayed for such a long time has also led to additional costs and financial burdens on some of the projects.
“What we need is a constructive and more flexible approach from the UK Government so that all the promises and commitments envisaged at the beginning of the Tay Cities Deal are met in full’.”
The Courier understands much of the negotiation has focused on a proposed £62 million for the James Hutton Instutite in Invergowrie.
The science facility wants to use the money to create an international barley hub and advance plant growth centre, which could allow it to continue competing on a global scale.
It is feared that unless it gets its funding early – within the first five years of the deal being signed – the project could become outdated and unviable.
Perth and Kinross Council leader Murray Lyle said: “We are working on the issue around the James Hutton Institute.
“The issue is that if you commit to a £62 million project upfront, with funding coming in the first two or three years, and if payments are coming through on a flatline basis, then that puts a big strain on the other projects.
“That is why we are continuing to work with both governments to be fair to everyone.”
The £300 million pledged by the two governments will help lever a further £400m of investment for Tayside and Fife, and help deliver up to 6,000 job opportunities across a range of industries.
