The Tay Cities Deal (TCD) must not be used to support Michelin workers at the expense of other projects, governments have been warned.
John Alexander, leader of Dundee City Council, said the city needs new funding to cope with the planned factory closure, rather than rehashing the existing investment deal.
A source close to the TCD, which was due to be signed off this week, said there should not be last-minute changes to the economy-boosting package, as support for the manufacturing disaster should be separate.
Their interventions came after the UK Government said it was reviewing how to spend its pledge for the Tay Cities Deal after the closure bombshell, but insisted the Treasury offer of £150 million would not increase.
Derek Mackay, who is in charge of the response to the crisis as the finance secretary at Holyrood, called for the UK Government to “step to the plate” and spend the £50m it saved from not match funding the TCD to help with the Michelin crisis.
Mr Mackay said: “We have been working with Tay partners to complete the arrangements for the £300m Tay Cities Deal and an additional £50m package.
“We stand ready to move forward with the Tay Cities Deal as soon as possible and call on the UK Government to bring forward additional measures and investment, in light of Michelin’s announcement.”
Mr Alexander warned against “tinkering” with the Tay Cities Deal, saying he feared any new support for Michelin within the TCD would squeeze out other worthy projects.
“We absolutely need to be clear that we will not be supporting the reprofiling of existing (TCD) funding for Michelin,” the Dundee chief said. “It has to be additional funding for Michelin.”
A source involved in the deal said the disastrous events at the Dundee plant must not be used to significantly delay the heads of terms agreement.
“We don’t think the deal should be changed, this (Michelin) is about the need for additionality,” they said.
Both governments agreed to hold back on signing the heads of terms, which will reveal the successful projects that could create up to 15,000 jobs.
The signing was pencilled in for today, but it is now hoped the signing will happen within a fortnight.
A UK Government spokeswoman said it is “reviewing how we invest the £150m we are putting into the Tay Cities Deal, to make sure that the deal can respond to this challenge”.
Last night a source in the Tory administration said they would not be increasing their contribution, but said it is “appropriate they have flexibility” within that contribution to respond.