The bulk of projects in the £1.2bn City Deal will benefit the Valleys and other communities outside of Cardiff, said the chair of its local authority leaders’ group.
And Andrew Morgan, who is also leader of Rhondda Cynon Taf Council – one of the 10 unitary authorities behind the City Deal covering the Cardiff Capital City Region – said the aim is for work on its first projects to commence early next year.
City Deal at a glance
£1.2bn to be spent over 10 years on projects
£734m already committed to the South Wales Metro
10 local authorities will borrowing more than £500m
First projects could start early next year
Aim to create 25,000 new jobs
Leverage £4bn of additional private sector investment
The City Deal, which would run for a decade with the aim of creating 25,000 jobs and leveraging a further £4bn from the private sector across the region, has been agreed in principle between the Welsh Government, the UK Government and the local authorities.
The latter will provide finance for the City Deal of more than £500m through their own borrowing powers – with the interest only repayable on most of that over the next 20 years if City Deal projects pass gateway reviews.
Some £734m of the funding has been earmarked for the Welsh Government’s integrated Metro transport project, in particular its next phase through electrification of the Valley Lines.
Mr Morgan said the current long list of City Deal transport projects from 10 local authorities have been costed at more than £2bn – far exceeding the total value of the City Deal of which more than half is already ringfenced for the Metro.
There will also be other projects around skills and innovation.
However, supported by the Welsh Government and professional advisory firm KPMG, projects will be scored on their regional economic impact.
This will inevitably see many projects on the current long list, particularly road-based, being ruled out.
Mr Morgan said: “What every authority has been asked to do is submit everything which they would have in their regional transport plans.
“There could a road link in a particular authority which is important to them, but on a regional basis doesn’t hit the mark. However, it doesn’t mean they shouldn’t go in the pot.
“We have agreed some form of baseline across projects, so that every local authority will benefit, but it could be varying amounts.
“In fairness the 10 local leaders so far have been very supportive as one (project) may not bring jobs into your county, but you if you get the jobs across the boundary in a neighbouring county, and as long as you have the ability for people to travel and commute to those jobs, that is the important thing. It is far less about looking for trophies in your local authority.
“So far it has been positive and we have to get through the actual list and it has to evidenced-based. But some (projects) quite clearly aren’t going to hit the mark on a regional basis and are quite localised priorities.”
Mr Morgan said the UK Treasury is not insisting that the City Deal, as first identified, should result in a 5% rise in the region’s economic competitiveness on the gross value added measure, but instead should result in an uplift above the expected trend.
‘Bigger winners will certainly be the Valleys and places outside Cardiff’
And he insisted that the City Deal was anything but Cardiff-centric
He added: “Quite a few people, and in business too, are saying this is about Cardiff, but realistically the vast bulk of City Deal funding, especially the transport element, will be spent well away from Cardiff. This is because if you just try and spend money in Cardiff improving transport you will fail, as the reason is you have to stop people getting in their cars and driving to Cardiff. Putting more cars there is a waste of time.
“On the transport element (Metro in particular), the big winners will certainly be the Valleys and places outside of Cardiff.”
As to when the City Deal will go unconditional, Mr Morgan said: “The intention is that we want to be in a position by December that we have finalised as much as we possibly can, so that we can take a proposal to each of the local authorities in January for the leaders can get council endorsement.
If that is the case, then to demonstrate movement on the ground, and to give business and other political leaders reassurance, the intention is to have projects starting as early as next February/March.”
He also confirmed the authorities were working with the Welsh Government towards establishing a regional transport body.
He added: “We are in the process of setting up a shadow transport authority which could be formalised by the autumn. We are also in formal discussions with the Welsh and their transport body (Transport for Wales) with the intention of establishing clear lines and responsibilities on who is covering what (transport projects).”