Time for a City Deal re­think?

Call to take a re­gional ap­proach

Llanelli Star - - FRONT PAGE -

IT WAS her­alded as a huge op­por­tu­nity for the econ­omy of the Swansea Bay City Re­gion, which has some of the most de­prived com­mu­ni­ties not just in Wales, but also the UK.

But two years on from the chore­ographed fan­fare of the sign­ing-off cer­e­mony for its City Deal, with Prime Min­is­ter Theresa May and then First Min­ster Car­wyn Jones cen­tre stage, what was seen as the start of a new era of col­lab­o­ra­tive work­ing be­tween the re­gion’s four lo­cal au­thor­i­ties – Swansea, Pem­brokeshire, Neath Port Tal­bot and Car­marthen­shire – con­tin­ues to be mired in con­tro­versy.

And the lat­est blow has come with a sting­ing ap­praisal on progress to date from Neath Port Tal­bot Coun­cil, which has put its in­volve­ment on no­tice un­less pro­jects be­come a re­al­ity. Its chief ex­ec­u­tive, Steve Phillips, is right in his scathing as­sess­ment of a City Deal that ur­gently needs to put its house in or­der.

One pos­i­tive sign is that the Swansea Bay City Deal’s joint com­mit­tee, which in­cludes the au­thor­i­ties’ chief ex­ec­u­tives and lead­ers, is com­mit­ted to im­ple­ment­ing, in full, the rec­om­men­da­tions of two crit­i­cal re­ports into its gov­er­nance ar­range­ments.

And those re­ports were any­thing but po­lit­i­cally in­spired “hatchet jobs” with ar­guably the more crit­i­cal as­sess­ment com­ing from within, with a re­port com­piled by a team of au­di­tors drawn from all four coun­cils.

The re­al­ity is that the City Deal to date has been driven by Swansea and Car­marthen­shire coun­cils. Both Pem­brokeshire and Neath Port Tal­bot, while not quite ca­sual ob­servers, have been far less in­volved. What if Neath Port Tal­bot pulls out?

Hope­fully, it will not come to that. But if it does, the deal can still pro­ceed – al­beit with one less authority us­ing its bor­row­ing pow­ers to help fi­nance pro­jects. While it is billed as a £1.3bn City Deal, that in­cludes pro­jected lever­age fi­nance of £637m from the pri­vate sec­tor. The Welsh and UK gov­ern­ments have com­mit­ted in prin­ci­ple £241m.

To get pro­jects away in the first five years, the four lo­cal au­thor­i­ties would use their bor­row­ing pow­ers and be paid back over 15 years.

As it stands, none of the 11 pro­posed schemes, many of which are hardly ad­vanced, has been signed off by the UK and Welsh gov­ern­ments.

The pro­posed £200m Life Sciences and Well­ness Vil­lage pro­ject for Llanelli, which is seek­ing a £40m City Deal con­tri­bu­tion, has been put back down the pecking or­der. Its spon­sor, Car­marthen­shire Coun­cil, is seek­ing to de­velop a new fund­ing and busi­ness model fol­low­ing the re­moval of de­vel­op­ment part­ner Ster­ling Health Se­cu­rity Hold­ings. The sus­pen­sions at Swansea Univer­sity are also linked to the pro­ject.

With­out univer­sity in­volve­ment, the pro­ject has no fu­ture.

So there needs to be hon­esty here and no time wasted trying to “revive a corpse”. The pro­ject has been driven by the soonto-re­tire chief ex­ec­u­tive of Car­marthen­shire Coun­cil, Mark James, and Pro­fes­sor Marc Cle­ment, the dean of Swansea Univer­sity’s School of Man­age­ment, who was sus­pended last year for gross mis­con­duct, which he ve­he­mently de­nies.

The bot­tom line is that all pro­jects are 100% fund­able, but it doesn’t means that all pro­jects get 100% fund­ing. Each pro­ject needs a huge in­vest­ment from the pri­vate sec­tor, and just how they would get a re­turn re­mains un­clear.

Re­gard­less of the Well­ness Vil­lage’s fu­ture, the City Deal needs a more re­gional ap­proach and less of a fo­cus on lo­calised pet pro­jects.

The in­ter­nal re­view team’s re­port says: “In­ter­vie­wees stated that some of the lo­cal pro­jects were planned and would have been pri­ori­tised at lo­cal authority level, but were in­cluded in the Swansea Bay City Deal to ac­cess fund­ing.”

There has been too much of a fo­cus on build­ings. Phase one of the Yr Egin creative in­dus­tries pro­ject in Car­marthen­shire, which is now home to S4C, wasn’t ini­tially in­cluded for City Deal fund­ing, but af­ter a short­fall in fund­ing was iden­ti­fied it was – high­light­ing clear weak­nesses in gov­er­nance ar­range­ments.

On the sur­face there is noth­ing wrong with us­ing part of the City Deal to help kick-start the much­needed re­de­vel­op­ment of the cen­tre of Swansea.

It fol­lows other public­sec­tor in­ter­ven­tions, in­clud­ing New­port Coun­cil mak­ing ef­fec­tive use of its bor­row­ing pow­ers to ac­cess low-in­ter­est-bear­ing loan fund­ing from the UK gov­ern­ment’s Pub­lic Works Loan Board, that en­sured the city’s Fri­ars Walk scheme got built.

And in 2013, the Welsh Gov­ern­ment also in­ter­vened to sup­ported de­vel­op­ment of much­needed new of­fice space in the cen­tre of Cardiff.

It ac­quired the in­vest­ment in­ter­est in the now fully let One Cap­i­tal Quar­ter of­fice scheme at the wider Cap­i­tal Quar­ter de­vel­op­ment. This timely in­ter­ven­tion al­lowed de­vel­oper JR Smart to invest in a new wave of of­fices, while the Welsh Gov­ern­ment made a sig­nif­i­cant re­turn af­ter sub­se­quently sell­ing its in­vest­ment in the build­ing.

How­ever, Swansea could have done this with­out seek­ing City Deal back­ing, but in fair­ness it has pri­vate de­vel­oper part­ners on board and things are happening.

The UK and Welsh gov

An artist’s im­pres­sion of the Well­ness Hub as part of the

Swansea Coun­cil leader Rob Ste­wart and Neath Port Tal­bot chief ex­ec­u­tive Steve Phillips.

Car­marthen­shire Coun­cil chief ex­ec­u­tive Mark James.

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