‘Private sector must be central to the City Deal’
BUSINESS organisations, including the CBI and FSB, are calling for the private sector to be at the heart of the decision-making process and delivery of the £1.2bn City Deal for the Cardiff Capital City Region.
The call comes in an open letter signed by CBI Wales director Ian Price, FSB Wales head of external affairs Ben Cottam, IoD Wales director Robert Lloyd Griffiths and president of South and Mid Wales Chamber of Commerce Liz Maher.
The City Deal, agreed in principle last year, will next week start the process of final sign-off with approval from the 10 local authorities that make up the city region, which has a population of 1.4 million.
Governance arrangements will involve a joint cabinet made up of the 10 council leaders, not a body with statutory powers. However, that could emerge as part of local authority reorganisation by the Welsh Government, with statuory bodies with clear regional development strategies and powers in areas such as economic development, planning and transport.
The 10 councils have all committed to supporting a deal for at least five years. At that stage – the first built-in gateway review – any authority would in theory be able to walk away, but the intention is that they continue to support the deal for a further 15 years.
Over the 20-year programme of projects – which will not be finalised until after May’s local elections – the deal will aim to create 25,000 jobs in the region and leverage a further £4bn in private sector investment.
The business organisations’ joint statement said: “The City Deal is an initiative which we fully support. Indeed, much has been promised in the formation of the City Deal and it is the reasonable expectation of business that this will be delivered.
“We therefore hope that all 10 local authorities within the Cardiff Capital City Region will give commitment to their involvement in the City Deal in the votes taking place at each council in the coming weeks.
“This support will enable the City Joint Cabinet of the council leaders to move confidently forward and begin the transition process which will see dialogue with critical stakeholders such as business, and the completion of the City Deal operational structure – with the expectation from business that as a vital wealth-creating community, it is very much at the table.
“We applaud the joint working between the authorities, which has seen the City Deal reach this stage. We have also welcomed the engagement with the business community over the past 18 months.
“However, we now need the City Deal to move on to its next phrase, with the creation of the Economic Growth Partnership (EGP) and the Regional Business Organisation (RBO). The creation of these bodies will ensure business will be at the heart of the decision-making process, and enable business to play its role in the delivery of the City Deal.”
In what has to be seen as a smart move, any City Deal projects being taken forward will not have to be finalised for 12 months – allowing any new leaders and administrations to put their own stamp on projects.
And later this year we should know who will build the next phase of the South Wales Metro – and as a result, the mode of transport that will be used.
This will make it easier to bring forward “Metro-plus” projects – whether additional routes, such as to Cardiff Bay, or Metro stations.
There are also plans to open up new employment sites in the Heads of Valleys, including at junction 34 of the M4 around Miskin, which could eventually provide the impetus for a new road link into Cardiff Airport.
Also planned is backing to create the world’s first compound semiconducter cluster in Newport.
A City Deal could also provide an element of funding to realise Cardiff’s long-held aim of building a 15,000-seater indoor arena.
Some £734m of the £1.2bn has been assigned for the next phase of the Metro in electrification of the Valley Lines.
The 10 local authorities will draw down £120m in capital from their own borrowing powers.
The capital and interest would have to be repaid over the long term – potentially 25 years.
There is just under £400m that the UK Treasury will allow the authorities to borrow – and assuming certain targets are achieved, this would only incur interest and not capital repayments.
Combined with the repayment of the £120m, the total cost could be in the region of £210m.
Based on a per capita basis, Cardiff would be liable for around a quarter of the repayment profile, or £50m.