Derry's City Deal to be paused by British Government

The British government is pausing work on its City Deals in Northern Ireland, including Derry.

The pausing of funding for city and growth deals in Northern Ireland has been blasted by the First Minister as “unacceptable and deplorable”.

The move by the UK Government comes amid a spending review.

It will impact four deals which are for Belfast regions, Derry city and Strabane, Causeway Coast and Glens and Mid South West.

The aim of the City Deal is to increase and realise the economic potential of the City Region to support a more prosperous, united community and stronger society. The City Deal investment aims to help boost innovation and the digital potential of the city region and unlock local partner funding, whilst the Inclusive Future Fund is aimed at bringing greater prosperity and social benefits to the whole of the community.

First Minister Michelle O’Neill said she will call on the Government to reconsider.

“The decision to pause funding for city and growth deals is unacceptable and deplorable, and I would urge the British Government to urgently reconsider,” she said.

“This approach is extremely short-sighted. These city and growth deals will be game-changers for the regeneration of our cities and towns, and a catalyst for economic growth and creating good jobs. It’s crucial that they continue as planned.”

Deputy First Minister Emma Little-Pengelly added: “Officials were informed of this potential direction of travel on Wednesday.

“We raised this during a meeting with the Chancellor in London on Thursday, spelling out the dire consequences such a decision would have and urged for a reconsideration.

“Departments and deal partners will be urgently assessing what this pause means for the city and growth deals projects moving forward. There will be much detail to work out, but we will do that as a matter of urgency, alongside all relevant partners.”

Finance Minister Caoimhe Archibald accused the Government of “acting in bad faith”.

She said she has written to the Treasury calling on it to “immediately reverse this reprehensible decision”, which she said “comes less than a week before the scheduled signing of the Derry City and Strabane Deal”.

She added: “I urged the British Government to provide space for proper political engagement to get to a positive outcome and a commitment to go ahead with the deal.

“Instead they have chosen to proceed to pause their funding commitments.

“The British Government have said it’s attempting to reset relationships, instead they have acted in very bad faith.

“I am calling on them to step up and honour the commitments and pledges made on city deals, where significant plans and contracts have already been put in place at significant cost to local councils, project promoters, the civil service and Whitehall departments.”

A spokesperson for Derry City and Strabane District Council confirmed the council has "received no formal communication" of the pausing of the deal and has no further details at this stage.

SDLP leader Colum Eastwood said that a decision to ‘pause’ funding for city and region growth deals just days before the Derry deal was due to be signed is an enormous shock.

The Foyle MP said that he will be raising it with the British Government urgently.

He added that all parties and partner organisations now have to pull together to save their city deals.

Mr Eastwood said: “This is a devastating announcement for the four City Deal regions across the North. Significant and substantial investment plans are now facing undue delay and disruption with no certainty or clarity ahead of the Comprehensive Spending Review."

He added: The British Government has said that it is committed to investing in those communities that need it most - well there’s no region that needs this kickstart investment more than Derry and the North West or Northern Ireland more generally. I know we can make that case powerfully.

“This funding was critical to projects that can transform communities across the North. We can’t afford to give up that opportunity. I will be in touch with British Government Ministers about this decision urgently.

“We fought for years to get to this point. Now we need every party and every partner organisation to pull together to save our City Deals.”

Local Sinn Féin councillor Sandra Duffy said the British Government’s decision to pause funding for City and Growth Deals is unacceptable and must be reversed immediately.

Cllr Duffy said: “News that the British government is pausing funding for City and Growth Deal projects is totally unacceptable and deplorable.

“It’s a major blow to our local economy, and businesses, and for the city and district as a whole who have worked tirelessly for years to drive forward this plan to transform our region. 

“The City and Growth Deal funding represents a historic investment in this region, and it will have absolutely game-changing outcomes for regeneration, creating good jobs and unleashing our full economic potential.

“I will be writing to the British Chancellor Rachel Reeves today urging her to immediately reverse this decision and reinstate this funding.”