The UK Government will consult with Perth prior to making a decision on the withdrawal of £5 million of Levelling Up funding.
It comes after Perth and Kinross politicians reacted angrily to news funding earmarked for Perth City Centre by the previous Conservative government was to be withdrawn by the new Labour government.
The UK Government said the “difficult decision” was made due to inheriting £22 billion of unfunded spending commitments.
Earlier this year £5 million was allocated by the UK Government to support three city centre projects designed to support culture and regeneration.
The three Perth projects set to benefit were: the creation of a visitor attraction and office space at Lower City Mills; creating an exhibition and retail space at The Ironworks, and a new outlet for micro producers in the former VisitScotland tourist information office on Perth’s High Street.
As councillors gathered on Wednesday afternoon in Perth and Kinross Council chambers at the same time as chancellor Rachel Reeves delivered the UK budget, the council’s deputy leader Eric Drysdale broke the news to elected members.
The SNP Perth City Centre councillor said: “It is with significant disappointment that I can confirm to council we have been notified within the past hour that the £5 million Levelling Up money previously earmarked to fund important projects to help regenerate Perth city centre has today been withdrawn by the UK Government.”
Council leader Grant Laing described the decision as “short-sighted”.
Conservative group leader John Duff said it was “extremely disappointing”.
And Perth City Centre Liberal Democrat councillor Peter Barrett described it as a “body blow” for the Fair City.
The UK Government has now provided a statement in response.
A spokesperson for the Ministry of Housing, Communities and Local Government said: “Growth is the number one priority of this government, which is why over £3 billion of investment in local growth was confirmed for next year in the budget.
“This government inherited £22 billion of unfunded spending commitments, and we have therefore been forced to make the difficult decision to review these previously announced projects.”
The UK Government has now opened a consultation in order to understand the financial, strategic and community impacts withdrawing this funding would have.
The newly crowned city of Dunfermline is also set to lose out on £5 million of Levelling Up money.
An update on the UK Government’s website – referring to the £5 million funding previously pledged for Perth and £5 million for Dunfermline – states: “Given the need to make savings, the government has announced that it is minded to withdraw funding from the below Levelling Up Culture Projects and Capital Regeneration Projects announced at Spring Budget 2024, but will consult these places before making final decisions.”
Ministers will confirm the outcome of the consultation process in due course.
Scottish secretary, Ian Murray, will write to Perth and Kinross Council to confirm funding levels following the Autumn Budget.