Cardiff Capital Region in £1 billion City Deal Bid

On 4th September the ten local authorities of the Cardiff Capital Region submitted a request to UK Government to commence negotiations for a City Deal which could be worth up to £1bn.

The Cardiff Capital Region (CCR) is targeting the City Deal in time for the March 2016 Budget. This will require a period of intense work through the rest of this calendar year in order to inform the Spending Review and Autumn Statement.

The bid will seek to develop a City Deal to deliver:

  • An Innovative City-Region - building on our strengths to make a greater contribution to the Wales and UK economy
  • A Connected City-Region – delivering infrastructure investment to support a more productive city-region and link people to jobs
  • Targeted support for business - increasing productivity and providing quality jobs, as well as attracting inward investment and increasing the role of the private sector in delivering growth for the CCR and Wales
  • Support for those out of work - reducing worklessness by implementing a city-region response to the specific causes of worklessness and the barriers to economic activity

City Deals are agreements between UK Government and a city or region. They give local areas the power to take decisions that affect their area and invest in priority projects that will help businesses grow; improve employment opportunities for local people and generate economic growth. The recently agreed Glasgow City Deal was worth over £1bn.

The CCR is home to around half the population of Wales and accounts for over 50% of the nation’s economic output. The success of the CCR economy is therefore a major factor behind the economic performance of Wales as a whole, and its future success will be an important component of rebalancing the UK economy.

Many other regions in the UK are seeking to negotiate similar deals and the CCR is in a competitive process to secure investment.  While it isn’t possible to be precise about the level of investment until the specific projects are identified, if the bid was able to secure comparable funds to city deals already concluded, CCR would be expecting to negotiate a deal of around £1bn of investment across a 20-year period.

Earlier this year the Leaders of the ten local authorities of the CCR agreed to work together and are now seeking a City Deal to deliver a step change in the region’s economic performance. In a position statement sent to the Chancellor of the Exchequer, it proposes that a Cardiff Capital Region City Deal will improve productivity, drive innovation and support job growth throughout South East Wales, creating local opportunities and delivering for the Welsh and UK economy.

As home to one of the UK’s four capitals, the CCR is a 1.5 million citizen region creating an annual economic output of £29bn. It also has a greater proportion of its workforce qualified to degree level
However, the gross value added (GVA) per capita (a measure of economic output) in the CCR is only 76% of the UK average and the region currently has the lowest number of FTSE listed business of any of the UK Core City-regions.

The ambition of the proposal is to build on the progress made in establishing a more formal city-region response to economic development, ensuring that future decisions are based on the benefits that can arise through scale, shared risk and reward, and efficient and coordinated investment decisions.
  
Realising the Cardiff Capital Region’s economic potential would mean better employment and income prospects across the city-region’s ten local authorities as well as potentially significant additional tax receipts for both the Welsh and UK governments.

The CCR economy has experienced significant changes in recent years. Over the past decade Cardiff has been the main source of new private sector jobs in the city-region with the capital city’s population growing rapidly over the last decade. Cardiff is now the fastest growing UK city and is projected to grow by 26% by 2034.

Over the next few months CCR will work with UK and Welsh governments to develop a detailed proposition.  This will require the identification of key projects across the region which will help to deliver economic growth and be aligned to the themes highlighted above.  All 10 authorities have already committed resources to a fund to support this work.

There will be financial implications for all authorities to consider.  However, in reality these implications will not be immediate as it will take time to conclude the deal and to put in place the practical arrangements to begin work.  It is unlikely that any financial impact will occur before April 2017.

Councillor Mel Nott OBE, Leader of Bridgend County Borough Council, said: “The growth of the city region is a concept which is creating huge opportunities elsewhere in the UK and Europe. It could generate major infrastructural investment, especially in rapid transport systems such as rail electrification and a South Wales Metro, and would help to strengthen Bridgend County Borough’s appeal as a place to live, work and invest in new business opportunities. Our job now will be to ensure that the benefits of a City Deal can be extended into all of our communities.”

Leader of Caerphilly Council, Cllr Keith Reynolds said, “The submission of our request to the UK Government is a positive step forward for this ambitious new project. The City Deal vision could unlock huge amounts of potential across our communities and would signal the start of an exciting new era for the region. Here in Caerphilly we are committed to this shared goal of bringing prosperity and opportunities to all our residents in the future.”

Councillor Phil Bale, Leader of City of Cardiff Council, said: “A City Deal offers an opportunity to attract significant levels of new funding for the Cardiff Capital Region. It will allow us to invest in the projects that will create real opportunities for local people, support local business and drive forward economic growth. Each deal is tailored to suit the local priorities of the city and region involved, but they tend to share some things in common – significant investment in areas such as transportation, skills and housing.

“In partnership with the ten local authorities of South East Wales we will now begin work to develop a detailed proposal for the UK Government. Together we can make a real case for investment to reboot our region’s economy, put us on an even keel in terms of UK infrastructure investment and allow us to compete with other areas of the UK and internationally.”

Councillor Bob Bright, Leader of Newport City Council, said: “Newport fully supports this bid to unlock the many economic benefits for the Cardiff Capital Region. It is anticipated that a City Deal for the region could release significant new money to support investment in major infrastructure projects and would ensure that Newport makes the most of exciting developments such as the electrification of the south Wales mainline. This has the potential to transform the way our residents live and work, and how they economically engage with our neighbouring partners”.

The leader of Torfaen council Cllr Bob Wellington CBE, said: “Torfaen council embraces this innovative and collaborative bid for significant additional investment from central government in our region. The City Deal will improve regional productivity, innovation and job growth which will in turn create local opportunities and improve the lives of our residents.”

Councillor Hedley McCarthy, Leader of Blaenau Gwent County Borough Council, Councillor Brendan Toomey, Leader of Merthyr Tydfil County Borough, Councillor Peter Fox, Leader of Monmouthshire County Council, Councillor Andrew Morgan, Leader of Rhondda Cynon Taf County Borough Council and Councillor Neil Moore, Leader of Vale of Glamorgan Council are all backing this bid too.

The city deal will require close working with UK Government, Welsh Government and the private sector.  New city region governance arrangements will need to be put in place to ensure a collective approach to the delivery of the investment

Leaders of the ten authorities will meet on a regular basis, supported by officers from all authorities, through the next few months to consider the detailed proposition.  Local accountability arrangements will be the responsibility of individual councils.

public.relations@newport.gov.uk

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