Chancellor George Osborne has announced that a City Region Deal for Edinburgh and South East Scotland is being negotiated and pledged £10 million towards two building projects in Scotland.

Delivering his Budget to the House of Commons yesterday, the Chancellor said that fines levied from banks as a result of misconduct are to be evenly split to create a new leisure facility in Helensburgh and contribute to the fundraising campaign for the V&A Museum being built in Dundee.

The funding for the V&A project, which comes on top of a £12.5m contribution from the Heritage Lottery Fund, will make a major contribution towards the iconic museum reach its overall funding target.

Welcoming today’s funding announcement, Scotland Office Minister Andrew Dunlop said the money would help ensure the project would play its full part in the regeneration of Dundee.

He said: “This is great news for the V&A and for the city as a whole.

“I am delighted the Chancellor has been able to find this money for Dundee in his Budget. It shows the UK Government is listening to Scotland and doing what we can to support important projects like the regeneration of the city’s waterfront.

“The V&A is a vital project, not just culturally, but also in terms of the part it can play in attracting jobs and investment into Dundee. An iconic enterprise like this will help put the city on the map, bringing in visitors and showing the world what Dundee has to offer.”

The facility in Helensburgh will be available for use by the local community and by members of staff at the nearby HMNB Clyde base at Faslane.

Based on the Helensburgh Pier Head - an integral part of the town’s waterfront - the new facility will benefit local residents in the town and surrounding areas who rely heavily on the naval base for their jobs, businesses and livelihoods.

Lord Dunlop added: “This is fantastic news and will be a major boost for people living in Helensburgh and the surrounding area, particularly those working at the naval base at Faslane. Their commitment to keeping Scotland and the rest of the UK safe and secure is exemplary, and it is only right we recognise their efforts.

“This money will help rejuvenate the waterfront at Helensburgh – and will provide a magnificent leisure facility for everyone to enjoy.”

The Chancellor also said he would open negotiations on a city deal with the region comprising the City of Edinburgh, East Lothian, Fife, Midlothian, Scottish Borders and West Lothian Councils.

The £1 billion initiative would follow other City Deals in Manchester, West Midlands and Merseyside, he said.

Speaking on behalf of the Edinburgh and South East Scotland City Region, City of Edinburgh Council leader, Andrew Burns, said: “We are delighted with the Chancellor’s pledge to develop a City Deal for our region and welcome the opportunity to continue our engagement with both the UK and Scottish Governments.

“We submitted our proposals in September 2015 and remain as determined as ever to negotiate greater fiscal powers and funding towards strategic housing, transport and infrastructure to help the region to become the most connected, creative, inclusive and innovative place in Europe.

“This commitment from Westminster is a step forward for our proposals to tackle inequality and accelerate substantial economic growth.”

Responding to the Budget, Sarah Speirs, director RICS in Scotland, said: “The steps taken toward Scottish City Deals announced in by the Chancellor in the Budget are significant and welcome moves which will help to unlock the potential for considerable benefits across the country.

“We welcome the funding for Edinburgh and surrounding areas and we suggest part of this investment, in addition to help better protect historic attractions in Scotland’s capital, should also be used to sustain and improve the existing and aging stock across commercial and residential property. City deals are a welcome funding mechanism to bring forward key infrastructure needs of cities and regions, and we would urge the future Scottish Government administration to welcome City and Region Deal bids from Stirling and Perth.

“Inverness has undergone significant growth, both in terms of economy and population, and it is important that any future funding is used to increase connectivity: transport, bringing forward the A9 duelling and increasing rail connectivity, together with energy and broadband investment is vital to support this growth and RICS calls for significant investments in these areas.

“Following on from the £504 million joint City Deal for the North-East, the announcement of a cut to supplementary charge on oil and gas from 20 per cent to 10 per cent and reduction of Petroleum Revenue Tax should provide a needed boost to the regional and wider economy.”