Ministers of the UK and Scottish governments joined the Borderlands Partnership council leaders to formally sign the deal which will receive £350m from the two governments and £44.5m from the local authorities. 

The deal aims to deliver long-term benefits to all parts of the Borderlands area, driving inclusive growth and delivering significant and lasting benefits for individuals, businesses and communities.

Specific funding has been confirmed for some projects, subject to full business cases, include:

• £8m for a Dairy Innovation Centre in Dumfries and Galloway
• £10m to support natural capital innovation across the Borderlands region
• £19m for the Mountain Biking Innovation Centre in the Borders
• £15m for Carlisle Station in Cumbria
• £5m for Alnwick Garden in Northumberland

In the south of Scotland:

• £31m will develop tourist attractions
• £20m will enhance the quality of rural places
• £15.5m will enhance business infrastructure
• £7m will develop key skills needed to boost the visitor economy

A feasibility study into the extension of the Borders Railway from Carlisle to Tweedbank will also be funded by both governments to the tune of £10m.

The deal will also mean an investment of £31m in green energy projects, with much needed improvements in digital and mobile connectivity across the region. The importance of towns will be the focus of a place investment programme linked to Destination and Business Infrastructure investments. 

It is anticipated that this investment will deliver an extra 5,500 job opportunities, attract over 4 million extra tourists and unlock investment in towns across the area, boosting the region’s economy by £1.1 billion.

Scottish secretary David Mundell said: “It’s fantastic news that the UK Government is to invest up to £265m in the Borderlands Deal. This is an ambitious approach to cross-border working between Governments, local authorities and partners which will boost economic growth by helping existing business, encouraging new ventures and bringing a wealth of improvements to people who live and work in the area and to visitors.

“The Borderlands Deal has made huge progress in the last 18 months. I’d like to thank the five ‎local authorities who have worked so well together, along with the UK and Scottish governments, to achieve this. 

“The south of Scotland and northernmost parts of England operate as a single economic area and it is important the border is not allowed to become an obstacle to development. 

“To date the UK Government has committed more than £1.41bn of Growth Deal investment to support sustainable growth in Scotland and create jobs and opportunities for the future.”

Infrastructure secretary Michael Matheson said: “I am delighted we have reached this important milestone in signing Heads of Terms for the Borderlands Deal. Successful delivery of the deal will create jobs, protect existing ones and extend the benefits of economic growth to even more communities across Scotland.

“Alongside the establishment of a new enterprise agency for the south of Scotland, and activities of the South of Scotland Economic Partnership, the Scottish Government’s £85m investment will deliver significant and lasting benefits right across the region.

“Our investment is focused on priorities defined by local partners and includes £31m to transform tourism, £15.5m to develop business infrastructure, £20m to enhance quality of place, and £13.5m to develop the skills and innovation needed to support the growth of key rural industries.

“The Scottish Government has so far committed more than £1.7bn over the next 10 to 20 years to City Region and Growth Deals and related investments across Scotland.”

As part of the next stage of the deal process, a formal Partnership Board will be established, which will include the five local authority leaders, a private sector representative from a to be established Economic Forum, and advisors from both governments and other private and public bodies.