The Northern Ireland Audit Office has found that slow progress on City and Growth Deals is costing at least £35 million each year in lost purchasing power due to inflation. A report published Thursday reveals that by the end of March 2025, less than 5% of the central government capital funding had been spent across the four deals, which are collectively worth over £1.5 billion.

The funding packages involve roughly £600 million from the UK Government and a matching contribution from the Northern Ireland Executive, intended to be delivered over 15-year periods. Only the Belfast Region City Deal, formally signed in December 2021, has moved any projects to the operational stage. The Mid South West deal has yet to be signed, and its governance structures remain unapproved.

The Auditor General Dorinnia Carville acknowledged positive collaboration between central and local government but said it was too soon to assess value for money. She warned that continued delays are eroding the real value of the fixed investment. Project-specific setbacks illustrate the wider difficulties. Plans for the £44 million Mourne Mountains Gateway, a proposed tourism lift system, collapsed twice after land negotiations failed. Newry, Mourne and Down District Council is now consulting on an alternative tourism trail. In Derry, Ulster University has paused recruitment of a design team for a new School of Medicine building, pending budget confirmation, and a planned digital innovation hub is significantly delayed after the university said it could not accommodate the project.

The report also highlights longer-term funding pressures. While the deals cover immediate construction costs, local councils must underwrite future operational and maintenance expenses, creating a risk that these commitments become unsustainable. By March 2026, the forecast drawdown rate is expected to reach only 8.5%, leaving approximately £1.2 billion of central government funds unspent.

Alliance finance spokesperson Eoin Tennyson said the delays were putting the deals' transformational ambitions in serious jeopardy. He described the slow pace since 2018 as unacceptable and said tens of millions of pounds were being squandered at a time when the Executive needed to make every penny count. A Department of Finance spokesperson said officials would consider the Audit Office's recommendations and remain confident the deals will drive economic growth and employment. The UK Government said it is in close communication with delivery partners and committed to ensuring the benefits are felt as quickly as possible.