City deal to be formally signed off

A £1.2BN City Deal for the Cardiff Capital Region, which aims to create 25,000 new jobs over the next decade, will be formally signed off today.

The leaders of the 10 local authorities that make up the region, which has a population of 1.5 million, will sign the deal at a St David’s Day event at Cardiff Airport.

The deal, which is also being backed by the UK and Welsh governments, was agreed in principle last year. However, the projects that will be taken forward could take 12 months to be finalised.

What we do know is that some £734m for the City Deal has already been ringfenced to fund the next phase of the South Wales Metro in electrification of the Valley Lines.

Other projects that could be supported include:

Funding towards a £100m indoor arena in Cardiff with a capacity of 15,000.

Creation of employment sites in the Heads of Valleys, including at junction 34 of the M4 around Miskin – which could eventually provide the impetus for a new road link into Cardiff Airport.

The world’s first compound semiconductor cluster in Newport.

The local authorities will draw down £120m in capital from their own borrowing powers. The UK Government will also allow the councils to draw down a further £375m over a 20-year period.

Providing gateway review targets are met, they will not incur capital repayment on the £375m, just interest.

The City Deal will not be delivered through a statutory body, but a joint cabinet approach made up of the leaders of the local authorities.

Repayment of borrowings and interest will be based on a local authority’s population in relation to that of the region as a whole.

Cardiff will be liable to capital and interest payments of around £50m – or nearly a quarter of the projected financial costs over the long term.