City Deals; The opportunity for New Zealand
City deals – done well – have significant promise as a platform to drive economic growth and enhanced well-being for people and communities across New Zealand. Well designed and implemented city deals should do three things:
Stimulate economic growth.
Accelerate the planning and delivery of critical infrastructure projects.
Revitalise urban areas, and/or address the impacts of significant damage-causing events.
Evidence from overseas suggests that not all city deals are created equal, and some city deals are more genuinely transformative than others. City deals are more successful when:
There is a very clear purpose, supported by a rigorously developed and peer reviewed strategy, a blueprint for investment.
Governance arrangements have been put in place specifically for the city deal and designed to optimise success.
Funding is committed and available from the outset. Business cases are used to support approval to spend, not as a pitch for funding.
An unambiguous timeframe to deliver projects is defined, and
Incentives are baked in to work towards greater devolution or autonomy.
What is the definition of a City Deal?
City deals are best defined by their key features:
They are a bona fide deal: A formal multi-party agreement, including the national government, local or regional government, and often other stakeholders like business organisations or educational institutions.
They are place-based: A focus on a specific urban conurbation, or regional area encompassing perhaps more than one city or major town.
They are intentional: Designed to address the unique challenges and opportunities of the specific city/region.
Funding is committed: By both central and local government, and sometimes by other parties, for specific projects and initiatives
They are long-term: Commitment spans several years or decades.
They have bespoke governance: New structures, such as combined authorities, are put in place oversee and manage the agreed-upon initiatives.
[In the UK] Devolution is seen as the long game: The intention is for certain powers and responsibilities to be devolved from the national government to local or regional level, but this is an earned autonomy.
City deals tend to fall on a spectrum internationally, as depicted in the diagram.
City deals are highly adaptable and can be tailored to the specific needs and priorities of individual cities and regions. This flexibility aligns well with a growing desire to address localised challenges and opportunities – from climate change adaptation to population growth - in new ways.
City deals have been around for a while. In the United Kingdom there is now a track record extending over 10 years. City deals have also been implemented across a range of jurisdictions in Australia, with the earliest being the Townsville City Deal signed in 2016.
Where will New Zealand City Deals work? Auckland City Deal? Wellington City Deal? Christchurch City Deal? Will a smaller city be first? A Tauranga City Deal for example?
A framework for city deal design in New Zealand
As each city/region considers what sort of city deal might work best it is useful to keep the continuum shown in the diagram in mind. Moving from left to right, city deals increasingly focus on providing the right conditions for creation of jobs. At the same time, by assuming greater freedoms and powers devolved from central government there is much greater opportunity to realise the full potential of our cities.
Each city or region should follow follow a ten step plan as it seeks to design a city deal fit for purpose to the local context.
Identify sources of potential jobs and competitive advantage in your region.
Collaborate to leverage competitive advantage, e.g. universities and industry.
Keep education front and centre; growing a skilled workforce is critical.
Agree on a blueprint, and use this to prioritise investments to catalyse growth.
Don’t forget about investing to provide people with a great lifestyle.
Connectivity to global markets must be part of the mix.
Don’t forget about cities – agglomeration benefits are important
Good governance is essential. Make sure to get this right from the start.
Start building the evidence base early to inform future deals.
Just get started. Use each deal to try out new things. Learn and improve.
Kalimena Insights on City Deals
Want to find out more?
Get connected with Linda, she has presented multiple times on City Deals in New Zealand and can share her presentation to Infrastructure New Zealand members in October 2023 and more.
How will congestion charging work?
We think a Congestion-busting City Deal could work well for Auckland, timed to open at the same time as CRL. We think a small area-style scheme like London, operating within the CRL boundaries (more or less) would be the most effective, fair and economically efficient model. A city deal would lock in the framework for you this would work as between central and local government and provide opportunities for private sector and iwi input.
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Each week we will be posting links to the latest thinking or news on City Deals. What international deals could be possible in New Zealand? We’ll be tagging posts with ‘City Deals NZ’ to bring topical up to date content to one place.