The UK Government has approved its remaining financial commitment to the £1.2 billion City Deal for the Cardiff Capital Region, following a second gateway review. This final tranche of £134 million will be released over the next five years.
Background of the City Deal
The City Deal, which covers ten local authorities in south-east Wales, was originally signed in 2016. Both the UK and Welsh governments committed £500 million each, with the ten councils collectively contributing £120 million. Approximately two-thirds of the deal, around £734 million, was ringfenced for the £1.1 billion South Wales Metro electrification project. The remaining funds, just under £500 million, were allocated to the City Deal’s wider investment fund, which has established evergreen funds—including property and equity funds—with returns reinvested into new projects.
Gateway Review Process
The UK Government funding was subject to gateway reviews from the outset. The Cardiff Capital Region successfully passed the first assessment in 2021. The second gateway review examined areas such as governance and economic impact, and its clearance now allows the remaining £134 million to be committed over the next five years. This is not new money but the final portion of the original 2016 commitment.
Statutory Status and Achievements
Last year, the Cardiff Capital Region became a statutory body—one of four corporate joint committees in Wales—with responsibilities for planning, economic development, and transport. Mary Ann Brocklesby, chair of the Cardiff Capital Region and leader of Monmouthshire Council, highlighted the region's achievements: “We have created and safeguarded more than 5,000 jobs, supported over 2,700 people to upskill or reskill, and delivered more than 83,000 square metres of new space, boosting private investment and business confidence across South East Wales.”
Government Reactions
Chancellor Rachel Reeves stated: “This new funding for Cardiff Capital Region is a direct result of the hard work and collaboration that has already seen nearly 4,000 jobs created and thousands of people helped to retrain. Our economic plan is the right one for the people of South East Wales. This money means more real jobs, skills training, and business support for people right across the region.”
Cabinet Minister for Enterprise, Connectivity and Energy, Adam Price, said: “Congratulations to Cardiff Capital Region on the successful outcome of their 10-year gateway review. The next phase of the City Deal will provide opportunities to deliver more transformational projects, particularly in key priority sectors such as compound semiconductors, with wide economic benefits in the region.”
Secretary of State for Wales, Jo Stevens, added: “The UK Government has made driving economic growth and creating new jobs for the next generation in every part of Wales our number one priority. The release of £134 million to Cardiff Capital Region means they can build on their success, continue to grow sectors where there is huge potential for growth, and help secure the economic future of south east Wales.”
