Auditors highlight 'add-on' City Deal transport benefits


City Deals have proved key for urban areas looking to win further funding for transport even outside of the initial agreements, a report from the National Audit Office (NAO) has found.

A study into the first wave of City Deals signed with the eight largest urban sites outside London has found that while funding cuts risk limited local efforts to reap the rewards of devolution, numerous locations have used the agreements to source ongoing transport cash.

It highlights how Newcastle believes it would have been 'less likely' to receive the £64m for transport projects announced in the 2012 Autumn Statement 'without its City Deal', while agreement on Leeds' £1bn West Yorkshire Transport Fund was agreed in principle as part of the deal.

Similarly, the NAO suggests 'access to government decision-makers' has 'helped cities understand how to articulate local priorities to secure new funding and responsibilities'.

It points to Liverpool, where City Deal negotiations 'helped it understand better' the benefits of detailing national economic benefits from investment in local transport and logistics.

The NAO highlighted that the deals had helped locations develop funding frameworks to assess the cost and benefits of infrastructure investment and 'prioritise capital investment in line with local strategic growth priorities'.

Investment frameworks in Greater Manchester, Sheffield and Leeds have allowed the regions to measure the benefits of investment across schemes including transport and housing, helping them to 'identify a range of potential benefits' from developments.

The report also details how schemes including Manchester's 'earn-back' deal - potentially worth £900m of additional tax and revenue from £1.2bn of local investment in transport infrastructure -took longer to implement because of a lack of initial agreement between the city and Treasury over controls on future funding.

Despite Manchester's City Deal leading to initial agreement in 2012 to implement the 'earn-back' mechanism, the report states 'it was autumn 2014 before HM Treasury and Greater Manchester agreed a simpler arrangement that provides a capital grant, subject to the city proving the impact of its investment'.

'Some programmes that relied on the Government using new ways of funding the cities have taken longer to implement. For example, HM Treasury wanted to reward Greater Manchester accurately for generating additional tax through infrastructure investment. In November 2014, both sides agreed a simpler "gain share" arrangement as part of Greater Manchester's Devolution Deal,' the report reads.

The report acknowledges that progress made in Greater Cambridge to form a simpler 'earn back' deal led to adoption of a similar scheme in Manchester, Glasgow and Leeds.

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