Have current City and Growth Deals done enough for economic prosperity in Wales?

Over the last few years, the UK Government, sometimes alongside devolved governments, has signed a number of City and Growth deals to promote decentralisation across the United Kingdom and stimulate local economic growth.

These deals are designed to give more power and flexibility to cities, or to specific regions, in terms of employment and skills, business support, housing, transport and investments.

The arrangements for City or Growth Deals in Wales differ to those arranged in England and responsibility for economic development is devolved to the National Assembly for Wales.

As they stand, the Welsh Deals are a way of getting additional UK Government and Welsh Government investment into a specific geographical area and can offer Wales and its regions an opportunity to unlock additional funding to support interventions that can deliver economic growth.

We launched our inquiry into City Deals and Growth Deals in Wales in April; the map below shows the current regions and local authorities involved in each deal:

We looked at the effects and value of funding provided to Wales from the UK and Welsh Governments from Growth and City Deals, and how lessons learnt can be built into proposals for similar deals to boost economic growth throughout Wales.

We examined each deal in turn and have made our conclusions and recommendations focusing on improving the performance and impact of each deal.

In our assessment of the Cardiff Capital Region City Deal, we are content with the way that the Deal is being managed and are optimistic about the positive effect it should have on the area.

• The UK Government should proactively support the deal by participating in co-investment propositions of shared interest;

• The Cardiff Deal's gateway review, should be changed to better review the performance of the deal as a whole; and

• The UK Government should devolve Air Passenger Duty to the National Assembly for Wales.
  

Our assessment of the Swansea Bay City Deal notes the difficulties it has faced but acknowledges that the UK Government, Welsh Government and representatives of the City Deal itself have acted appropriately following the Independent Review.

• We emphasise the importance of the portfolio approach recommended by the Independent Review and suggest that this approach should be followed by all the City and Growth Deals across Wales.

• We recommend that the UK and Welsh Governments should accelerate the release of funds for certain projects in order to minimise the risk to council finances.

• We also recommend that, in the future, additional projects to be added to the Deal should be considered, including those for a Swansea Bay Tidal Lagoon or Swansea Bay Metro.

During our inquiry into the proposed North Wales Growth Deal we were pleased that £240 million in funding from the UK and Welsh Government had been pledged.

We were, however, concerned at the manner in which the UK Government announced that less funding than was anticipated was to be provided.

• We recommend that, in future, the UK Government should communicate more clearly with Growth Deal bodies.

• We recommend that all partners should continue working toward a Heads of Terms agreement by March 2020. Given North Wales' extensive border with other Welsh regions and areas in England, there should be close working with partners across Wales and in England through, for example, cross-border infrastructure or skills development projects

• We also reassert the recommendations of our report into the suspension of work at Wylfa Newydd Nuclear Power station and discuss the potential impact of the North Wales Growth Deal in this sector.

The Mid Wales Growth Deal is the least developed of the Deals in Wales.

We are pleased that some progress has been made towards a Mid Wales Growth Deal with an initial £55 million announced but is vital for the economy of the region that we see more detailed proposals in the near future.

• We recommend the Welsh Government should match the initial £55 million from the UK Government and any further funding increases, in the way they have for other deals.

• The UK Government should also look to increase its initial investment once firmer project proposals become available.

• We urge Growing Mid Wales to continue to work towards submitting detailed proposals by March 2020, and that the UK Government provide the support and challenge necessary to achieve this.

• Areas outside of Powys and Ceredigion are not currently participating in proposals for the Mid Wales Growth Deal, despite strong local connections. We recommend that these areas should be permitted to feature in Growth Deal projects, where appropriate.

We have made these recommendations to the Government

The Government has two months to respond to our report.

Our report 'City and Growth Deals in Wales' was published on 1 November 2019.

You can also download the PDF version of the report below.

Detailed information from our inquiry can be found on our website.

If you’re interested in our work, you can find out more on the House of Commons Welsh Affairs Committee website. You can also follow our work on Twitter.

The Welsh Affairs Committee is a cross-party committee of MPs that monitors the expenditure, administration, and policy of the Office of the Secretary of State for Wales (including relations with the National Assembly for Wales).