City Deal could be finalised in spring despite concerns over inflation: auditor

The business cases for the Derry City Deal projects are in the final stages of development with a final financial deal possible next spring.
By Kevin Mullan
Published 19th Dec 2023, 15:39 BST
Updated 19th Dec 2023, 15:46 BST
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This is in spite of ‘significant increases in the cost of construction, materials and energy’ that have made the some planned projects more expensive than originally forecast.

That’s according to Colette Kane, the Northern Ireland’s Local Government Auditor, who examined the various City Deals and Region Deals currently being rolled out across the North, including Derry’s, in her Local Government Auditor Report for 2023.

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She reported that the deals require ‘careful financial management to support long-term financial recovery and sustainability for councils in the challenging economic context they currently find themselves in’.

Among the City Deal capital projects across the North is the proposed Central Riverfront project in Derry which – once approved – will see a multi-million pound investment in the regeneration of Foyle Street, the riverfront and Queen’s Quay and in the Derry North Atlantic (DNA) maritime museum in Ebrington.Among the City Deal capital projects across the North is the proposed Central Riverfront project in Derry which – once approved – will see a multi-million pound investment in the regeneration of Foyle Street, the riverfront and Queen’s Quay and in the Derry North Atlantic (DNA) maritime museum in Ebrington.
Among the City Deal capital projects across the North is the proposed Central Riverfront project in Derry which – once approved – will see a multi-million pound investment in the regeneration of Foyle Street, the riverfront and Queen’s Quay and in the Derry North Atlantic (DNA) maritime museum in Ebrington.

Ms. Kane said the Derry and Strabane City Region Deal could be finalised in the spring of next year.

"This deal was launched on February 24 2021, and provides an investment package of £250 million. Despite challenges posed by inflation, all preliminary business cases are currently in the final stages of development, with the intention of finalising the financial deal in the spring of 2024,” her report notes.

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The auditor acknowledged, however, how the projected costs of the City Deal projects have risen due to the inflationary pressures witnessed over the past three years.

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"There is a strong sense that initial optimism about the impact these various investment plans could have has been tempered by concerns about the financial viability of initial plans.

“Significant increases in the cost of construction, materials and energy have made the projects initially planned significantly more expensive than would have been forecast,” she stated.

Inflation and challenging budgetary envelope impacting City Deal capital projects

Related topics:Northern IrelandDerryNorthInflation