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Autumn Statement: City deals promised for Scottish and Welsh cities

Words: Laura Edgar

Chancellor Philip Hammond has announced a number of deals for cities in Scotland and Wales, as well as more funding for Local Enterprise Partnerships in his 2016 Autumn Statement.

He declared that the government will work with local partners and the Scottish Government towards a city deal for Stirling and is also “making progress” towards a deal with Edinburgh.

The government is also going to consider proposals for a deal with the Tay cities.

The Autumn Statement document notes that the government is also making good progress in discussions with local partners and the Welsh Government on a city deal for the Swansea Bay City Region and will consider a growth deal in North Wales.

Local Enterprise Partnerships (LEPs) in England will receive £1.8 billion through a third round of Growth Deals. The document says £556 million of this will go to the North of England, £392 million to the Midlands, £151 million to the East of England, £492 million to London and the South-East, and £191 million to the South-West.

Awards to individual LEPs are expected to be revealed in the coming months.

The government said this funding of local infrastructure is aimed at improving transport connections, unlocking house building, boosting skills and enhancing digital connectivity.

Mayoral combined authorities will be given powers to borrow for new functions, which “will allow them to invest in economically productive infrastructure”. This is subject to agreeing a borrowing cap with HM Treasury.

The government said it would consult on “lending local authorities up to £1 billion at a new local infrastructure rate of gilts + 60 basis points for three years in order to support infrastructure projects that are high value for money”.

A second devolution deal with the West Midlands Combined Authority is being worked towards, the document notes, while the government is set to begin talks with Greater Manchester on transport funding.

The Greater London Authority’s (GLA) affordable housing settlement was unveiled in the statement. It will receive £3.15 billion to deliver more than 90,000 housing starts by 2020-21. Additionally, the government said it would continue to work with London to explore further devolution of powers.

The government has published a strategy setting out an overall approach to building the Northern Powerhouse, and one for the Midlands Engine will be published “shortly”.

The statement confirms the arrangements for a Northern Powerhouse Investment Fund and a Midlands Engine Investment Fund. The British Business Bank will make its first investments from the Northern Powerhouse Investment Fund early in 2017, aimed at supporting local SMEs. Its first investment from the Midlands Engine Investment Fund will happen shortly after.

The Autumn Statement can be found here.

Read more about the Housing Infrastructure Fund here.

Read reaction to the city and regional support here.

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