Hampshire cities seal investment deal

Portsmouth and Southampton have struck a deal aimed at attracting nearly £1bn of investment into the area just a week after a decision to end centuries of shipbuilding in Portsmouth.

Ministers said the so-called City Deal - under which Westminster hands over greater powers and funding - would lead to the creation of more than 17,000 jobs in the two Hampshire cities.

BAE Systems, the defence group, said last week it would end shipbuilding at Portsmouth, home to two-thirds of the Royal Navy's surface fleet, at a cost of 940 jobs. The announcement that only BAE's Scottish yards would continue to build vessels was seen as a huge blow to the local economy.

Nick Clegg, deputy prime minister, said the City Deal to unlock a projected £953m of investment showed the government was doing everything possible to "help the local area through a time of uncertainty".

The deal includes the transfer of land owned by the Ministry of Defence at Tipner and Horsea Island to Portsmouth City Council, which was expected to attract £831m of private and public investment to redevelop the sites.

Greg Clark, minister for cities, said the scheme "brings into productive use prime maritime land that Portsmouth and Southampton have for many years wanted to be available to attract jobs and investment."

City Deals are part of a government drive to boost growth by giving local economies more autonomy and control over funding. A first wave of deals, taking in the eight biggest cities in England, was completed last year. Portsmouth and Southampton is the fourth deal in a second wave, after Reading and Thames Valley Berkshire, Preston and Lancashire and Greater Ipswich.

Other elements of the Hampshire deal include £7m from the regional growth fund for regeneration of the Watermark West Quay site in Southampton and £5.8m for a jobs pilot in the Solent to help long-term unemployed get back into work.

Gerald Vernon-Jackson, leader of Portsmouth Council, expressed doubts over the size of the projected investment figures cited by the government. But he welcomed the deal's potential impact.

"This is not about mitigating the loss of jobs from the dockyard," he said. "This is a good deal for the whole of southern Hampshire. It's about long term private sector jobs - jobs that will be created in five, 10 or 15 years time."

The government has led a swift response to BAE job cuts before. In 2011, George Osborne created enterprise zones around BAE's Warton and Samlesbury sites in Lancashire, where almost 1,400 jobs were lost, and at Brough in East Yorkshire, where 899 BAE job were lost. However, the zones have got off to a slow start. The Lancashire one has only just opened for business, aiming to create 6,000 jobs. The Brough zone has attracted a handful of companies.

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