Both Aberdeen and Inverness are being formally considered for city deal investments, Chancellor George Osborne confirmed in his Budget today.
The announcement – coupled with an eagerly-awaited rescue package for the North Sea oil and gas industry – means today’s Budget is arguably the most important for the region for years.
It emerged on Monday that the Westminster government planned to sign off a city deal for the Highland capital later this year – and insiders said that the Granite City’s bid was even more advanced.
Formal talks will get under way with council chiefs in Aberdeen and Aberdeenshire, and the Scottish Government, “immediately after the Budget”.
The two north-east local authorities formally backed their proposals for a £2.9billion deal last week.
City leader Jenny Laing described it as “an opportunity on an unprecedented scale”.
The ambitious bid aims for nearly £3billion worth of infrastructure improvements over the next 20 years, coupled with an economic strategy focusing on securing Aberdeen’s status as a world energy city.
Both local authorities have also committed to capital investment plans totalling £1.4billion in the coming decade.
A total of 26 city deals have been confirmed across the UK since coalition government came to power.
Glasgow became the first Scottish city to secure the status last year, winning £1.2billion in UK and Scottish government funding, as well as loan money.
Each agreement is different depending on the needs of the local area, but all aim to provide extra levers to boost growth, including direct funding, greater borrowing powers, the ability to “earn back” tax from the Treasury, control of transport budgets and the ability to develop specialised skills programmes.
Elsewhere, Mr Osborne also announced Scotland’s Charity Air Ambulance is to upgrade its helicopter after it was handed £3.3 million, with the cash coming from bank fines.