Council refuses to sign ‘risky’ City Deal pact
NEATH Port Talbot council is refusing to sign a multimillion-pound agreement relating to the Swansea Bay City Deal over fears it could cost the local authority £21m.
Council leader Rob Jones says the City Deal’s Joint Working Agreement (JWA) contains “namby-pamby” and “fluffy” words relating to funding which could end up costing the council tens of millions more than expected.
At a council meeting on Wednesday, Cllr Jones said the agreement was “about 85% there” but still not right for the authority – despite being over a year since the City Deal was signed and the JWA having been redrafted 28 times.
He said: “I am not prepared to put this council financially at risk on a wing and a prayer.
“I support the City Deal, as do my cabinet colleagues, but until such time that I am completely satisfied from the information provided back to me I will not be signing the JWA.
“We are not sending a signal out that we are withdrawing from the City Deal or blocking it, we support it as it will be good in its entirety going forward for the region, but I will not put this council at risk.”
He added: “We want it in black and white that this is what’s happening rather than the namby-pamby, fluffy words like ‘we look at it in principle’ or ‘we will explore’.
“We would not expect anyone to sign up to an agreement with us using that terminology, so likewise I am not prepared to sign under those circumstances.”
The £1.3bn City Deal was signed in March 2017 with headline figures referring to a £1.8bn boost to the local economy and the generation of almost 10,000 new jobs over the next 15 years, based on 11 projects.
Council chief executive Steven Phillips, who recommended the stand-off stance to councillors, said: “Put simply, why would we wish to enter into an arrangement that would cost the council up to £21m more than it should do with the opportunity cost involved?
“A gap of this magnitude is too large and very difficult to justify.”
He added: “We are not risk averse but we are not stupid either – we want the best deal.”
The council says if the Welsh Government and UK government resolve the financial issues then the borrowing costs to the local authority over the life of the City Deal are just over £10m, which is manageable.
But if not, the costs rise to more than £31m.
It says the extra cost would jeopardise its planned funding of new school buildings and would significantly increase the budget savings required, currently estimated at £58m over the next four years.
On Wednesday, councillors on the policy and resources, and cabinet scrutiny committee unanimously backed the officer’s recommendations.
Councillor Linet Purcell said: “What we are being asked to do is to gamble and look at what we are being asked to gamble – the future of employable generations versus the feeding of the elderly and the educating of the young. That’s a gamble we simply cannot take.”
Officers say they are hopeful of “imminent progress” with discussions ongoing.