A multi-million pound deal to support Aberdeen should be signed “as a matter of urgency” to prevent the city’s status as an important hub for the UK’s oil and gas industry being damaged, Nicola Sturgeon has told David Cameron.
The Scottish Government is willing to split the cost of a “city deal” with the UK Treasury to help Aberdeen get through the downturn in the oil industry, Ms Sturgeon said in a letter to the Prime Minister.
Aberdeen City and Aberdeenshire councils submitted a bid for a UK City Deal worth £2.9 billion to both Governments last year, but the First Minister said the scale of recent job losses in the region meant that an agreement should be reached “as soon as possible”.
“It is vital that government sends a strong and unequivocal signal that it is fully supportive of the region’s position as a global oil and gas hub. The city deal provides a good opportunity to signal our respective governments’ support for the region,” she wrote. “I am prepared for the Scottish Government to fund the deal on a 50:50 basis and to work with you, as a matter of urgency, to bring this to fruition.”
Ms Sturgeon was forced to act after a global slump in the value of oil prompted major producers such as BP and Shell to announce severe job losses and salary cuts for existing employees. The First Minister said she would visit Aberdeen on 1 February for a series of meetings with senior executives at BP, as well as holding discussions with Aberdeen Chamber of Commerce.
Responding to Ms Sturgeon’s letter, the Scotland Secretary David Mundell said the “full details” of a deal would be announced “shortly”, describing it as “an excellent example of the UK and Scottish governments working together for the benefit of Scotland”.
He added: “We are committed to doing all we can to support the oil and gas sector and the wider north east economy. I am delighted that the Scottish government has committed to join us in contributing funding, adding to that already pledged by the UK Government.”
City deals are a UK Government initiative in which investment is targeted to boost local economic growth. A similar deal worth £1.1bn for Glasgow and the Clyde Valley region was signed in 2014, with the aim of supporting infrastructure projects, helping small businesses and driving growth in the life sciences sector.