The Northern Ireland Audit Office has warned that delivery of City and Growth Deals is slower than anticipated and inflation is reducing their real value by more than £35 million each year. The four regeneration funding packages are worth over £1.5 billion, with roughly £600 million from UK central government. As the funding is a fixed sum, delays erode its purchasing power.

By 31 March 2025, less than 5% of central government capital funding, about £58 million, had been drawn down across all deals. That figure is forecast to reach only 8.5% by March 2026. Only the Belfast Region City Deal, signed in December 2021, has projects that are operational. The Mid South West deal has not yet been formally signed, and its governance arrangements await final approval.

Each deal is intended to be delivered over 15 years, but the Audit Office says time constraints are not being managed as a strategic risk, potentially placing funding at risk. Recent project-level setbacks illustrate the challenges. Plans for the £44 million Mourne Mountains Gateway project collapsed twice due to land issues; Newry, Mourne and Down District Council is now consulting on an alternative tourism trail. In Derry, Ulster University has paused the appointment of a design team for a new School of Medicine building pending budget confirmation, and a planned digital innovation hub is in considerable delay after the university said it could not accommodate it.

Auditor General Dorinnia Carville acknowledged positive collaboration between central and local government but said it was too soon to assess value for money. She noted progress is slow and that continued delays are eroding the value of the investment. Without decisive action, she warned, potential benefits may not be maximised.

The report also raises concerns about long-term financial sustainability. While deals cover construction and set-up costs, local councils must underwrite future operational and maintenance expenses, creating a risk that these commitments become unsustainable.

A spokesperson for the Department of Finance said it would consider the report’s recommendations and remains confident the deals will drive economic growth and create employment. A UK Government spokesperson said it is in close communication with partners and committed to ensuring benefits are felt as soon as possible.