diff --git a/.devcontainer/devcontainer.json b/.devcontainer/devcontainer.json
new file mode 100644
index 00000000..677eaf80
--- /dev/null
+++ b/.devcontainer/devcontainer.json
@@ -0,0 +1,9 @@
+// For format details, see https://aka.ms/devcontainer.json. For config options, see the
+// README at: https://github.com/devcontainers/templates/tree/main/src/kubernetes-helm
+{
+	"name": "Kubernetes - Local Configuration",
+	"build": {
+		"context": "..",
+		"dockerfile": "../Dockerfile"
+	}
+}
diff --git a/.github/workflows/python-package.yaml b/.github/workflows/python-package.yaml
index 363e2081..3bd09184 100644
--- a/.github/workflows/python-package.yaml
+++ b/.github/workflows/python-package.yaml
@@ -38,6 +38,10 @@ jobs:
     - name: Test with pytest
       run: |
         SKIP_DIFF_TESTS=1 pytest --cov=flux_local --cov-report=term-missing
+    - name: Test with pytest pydantic v1
+      run: |
+        pip install pydantic==1.10.11
+        SKIP_DIFF_TESTS=1 pytest --cov=flux_local --cov-report=term-missing
     - uses: codecov/codecov-action@v3
       with:
         token: ${{ secrets.CODECOV_TOKEN }}
diff --git a/Dockerfile b/Dockerfile
new file mode 100644
index 00000000..f8174f7c
--- /dev/null
+++ b/Dockerfile
@@ -0,0 +1,47 @@
+# Docker environment for local development in devcontainer
+FROM ubuntu:jammy-20230308
+
+RUN apt-get update --fix-missing && \
+    apt-get upgrade -y && \
+    apt-get install -y --fix-missing \
+        curl \
+        unzip \
+        software-properties-common \
+        vim \
+        git \
+        python3-pip
+
+# renovate: datasource=github-releases depName=kubernetes-sigs/kustomize
+ARG KUSTOMIZE_VERSION=v5.0.3
+RUN cd /usr/local/bin/ && \
+    curl -OL https://github.com/kubernetes-sigs/kustomize/releases/download/kustomize%2F${KUSTOMIZE_VERSION}/kustomize_${KUSTOMIZE_VERSION}_linux_amd64.tar.gz && \
+    tar xf kustomize_${KUSTOMIZE_VERSION}_linux_amd64.tar.gz && \
+    chmod +x kustomize
+RUN kustomize version
+
+# renovate: datasource=github-releases depName=helm/helm
+ARG HELM_CLI_VERSION=v3.12.1
+RUN mkdir -p /src && \
+    cd /src && \
+    curl -OL https://get.helm.sh/helm-${HELM_CLI_VERSION}-linux-amd64.tar.gz && \
+    tar xf helm-${HELM_CLI_VERSION}-linux-amd64.tar.gz && \
+    cp linux-amd64/helm /usr/local/bin/helm && \
+    rm -fr /src
+RUN helm version
+
+# renovate: datasource=github-releases depName=kyverno/kyverno
+ARG KYVERNO_VERSION=v1.10.0
+RUN mkdir -p /src && \
+    cd /src && \
+    curl -OL https://github.com/kyverno/kyverno/releases/download/${KYVERNO_VERSION}/kyverno-cli_${KYVERNO_VERSION}_linux_x86_64.tar.gz && \
+    tar xf kyverno-cli_${KYVERNO_VERSION}_linux_x86_64.tar.gz && \
+    cp kyverno /usr/local/bin/kyverno && \
+    chmod +x /usr/local/bin/kyverno && \
+    rm -fr /src
+RUN kyverno version
+
+COPY . /src/
+WORKDIR /src/
+RUN pip3 install -r /src/requirements.txt
+
+SHELL ["/bin/bash", "-c"]
\ No newline at end of file
diff --git a/flux_local/manifest.py b/flux_local/manifest.py
index 68378db9..96b18e9a 100644
--- a/flux_local/manifest.py
+++ b/flux_local/manifest.py
@@ -10,7 +10,10 @@
 
 import aiofiles
 import yaml
-from pydantic import BaseModel, Field
+try:
+    from pydantic.v1 import BaseModel, Field
+except ImportError:
+    from pydantic import BaseModel, Field
 
 from .exceptions import InputException
 
@@ -427,6 +430,8 @@ async def read_manifest(manifest_path: Path) -> Manifest:
     """
     async with aiofiles.open(str(manifest_path)) as manifest_file:
         content = await manifest_file.read()
+        if not content:
+            raise ValueError("validation error for Manifest file {manifest_path}")
         return cast(Manifest, Manifest.parse_yaml(content))
 
 
diff --git a/requirements.txt b/requirements.txt
index a7de88f2..b19e1987 100644
--- a/requirements.txt
+++ b/requirements.txt
@@ -8,7 +8,7 @@ nest_asyncio==1.5.6
 pdoc==14.0.0
 pip==23.1.2
 pre-commit==3.3.3
-pydantic==1.10.11
+pydantic==2.0.3
 pytest==7.4.0
 pytest-asyncio==0.21.1
 pytest-cov==4.1.0
diff --git a/tests/test_manifest.py b/tests/test_manifest.py
index ac16d8eb..d47fdcd3 100644
--- a/tests/test_manifest.py
+++ b/tests/test_manifest.py
@@ -4,7 +4,6 @@
 
 import pytest
 import yaml
-from pydantic import ValidationError
 
 from flux_local.manifest import (
     Cluster,
@@ -94,7 +93,7 @@ async def test_read_write_empty_manifest(tmp_path: Path) -> None:
 
 async def test_read_manifest_invalid_file() -> None:
     """Test reading an invalid manifest file."""
-    with pytest.raises(ValidationError, match="validation error for Manifest"):
+    with pytest.raises(ValueError, match="validation error for Manifest"):
         await read_manifest(Path("/dev/null"))