What is a UK City Deal?

Australian program modeled on UK City Deal policy

Last updated 7 Apr 2017

The Australian Government is developing a City Deals program that is modeled on the UK Government’s City Deal policy. As part of the first wave of its City Deals which it approved in 2012, the UK Government committed £2.3 billion to around 40 programs in eight cities spread over 30 years. But just what is a UK City Deal?

There are some fundamental differences between the UK and the Australian context. The UK City deals are customized packages of funding and decision-making powers negotiated between the central government in London and local authorities in the targeted city. The UK City Deals policy is also framed in the reality that Government’s funding to local authorities and cities was to fall by 37 per cent between 2010–11 and 2015–16, and that, traditionally, resources for cities are allocated from the central government based in London. In contrast, Australian cities are the responsibility of the government of the state or territory in which the city resides.

Each UK City Deal has different targets and strategies as each city determines its own priorities with regard to growing the economic base of the city. As a consequence, the UK Government committed to removing barriers to cities’ growth plans by providing funding and transferring to each city the ability to make decisions relevant to that city.

Almost all of the funding in the UK City Deals is for capital development, such as local authorities investing in assets like buildings and roads. The cities are primarily responsible for implementing agreed programs with government support, but are expected to use their existing resources to manage the deals’ programs.

While the UK Government asked the cities to set out vigorous accountability and decision-making structures to manage the deals, the rolling out of the policy revealed the important need for robust evaluation. In 2015 the UK National Audit Office reported that the:

‘…Government and cities continue to find it difficult to know what works best in boosting local growth without a robust and shared evaluation approach. While some programmes have had early impacts, evaluating the effect of longer-term programmes in the City Deals on local economic growth is challenging. This is because the impacts occur over a long time and because it is difficult to assess what would have happened without the deals.'

‘The government and the cities could have worked together in a more structured way to agree a consistent and proportionate approach to evaluating the deals’ impact. The cities have developed methods for monitoring the impacts of some programmes, but there is no consistent methodology or shared set of definitions around key measures such as jobs.’ National Audit Office (2015) ‘Devolving responsibilities to cities in England: Wave 1 City Deals’ p10

Learn more about the Australian Government's City Deals in the AHURI Brief, City Deals for Australian Cities.