Agenda item

To submit a report by the Chief Executive.

The Chair welcomed Ms Alwen Williams and Mr Hedd Vaughan Evans – North Wales Economic Ambition Board (EAB) to the meeting.

Submitted – a report by the Leader and the Chief Executive.

The Leader said that the EAB is committed to achieving the Final Deal Agreement with both the UK and Welsh Governments before the end of December 2020.  She noted that it is considered that the EAB has now reached a milestone and there is a clear plan to the projects contained within the Growth Deal. 

The Chief Executive reported that in 2016 the EAB adopted a Growth Vision for the Economy of North Wales. Based on the Growth Vision Strategy, a Growth Deal was prepared and agreed by all the partners working with both the UK and Welsh Government and the private sector in October 2018.  In November 2019 the EAB and the UK and Welsh Governments agreed the Heads of Terms, with a Final Deal Agreement to be completed in 2020.  She expressed that it is important that the Council is part of the EAB and that a strong governance structure and working in partnership has been imperative in reaching the milestone of being ready to sign the Final Deal Agreement. 

The Deputy Chief Executive reported that the Growth Bid does include a number of strategic economic development interventions and working in partnership the region can attract this investment; without the Ambition Board and the Growth Bid the resources would not have reach North Wales.  The Growth Bid afford a level of activity and investments by the public sector to support the economy which has not been seen since the austerity period.  The Business Plan attached report complies fully with the expectations and requirements of both the UK and Welsh Governments and which includes input from the private and public sectors.  The Deputy Chief Executive further said Growth Bid will support the high value sectors to flourish and address structural, long-term barriers to economic growth.  However, the Board is fully aware that in the short-term a range of actions will be needed to facilitate recovery and alignment between those short term measures and the Growth Deal is key.  It is anticipated that the Growth Bid will attract 4,000 new employment opportunities and will generate between £2 billion and £2.4 billion GVA per year and will attract possible investments of over £1billion.  

The Deputy Chief Executive further said that the anticipated direct benefit for Anglesey is as follows:-

·           Direct investment in capital projects on Anglesey including Holyhead Gateway, Morlais and MSParc development;

·           Supply chain and job opportunities for local companies from large capital project such as Morlais, Holyhead Gateway and other regional investments;

·           Improved digital connectivity for businesses, residents and visitors and a 5G tested at MSParc;

·           Access to new facilities, equipment, support and specialist research for food and drink businesses;

·           Access to cutting-edge research and support on sustainable farming techniques for Anglesey’s farming businesses through the Grwp Llandrillo Menai site in Glynllifon;

·           Opportunities for renewable energy initiatives within the Smart Access to Energy projects, investment in a Low Carbon Centre of Excellence at MSParc;

·           Demonstrator projects involving production of hydrogen from low carbon energy sources;

·           Potential opportunities for strategic sites to be developed as part of the long-term Land and Property programme;

·           Improved skills through biotechnology, low carbon centre of excellence, tourism and the rural economy.

The Director of Function (Resources) and Section 151 Officer reported that the Growth Bid will have an effect on the budget of the Council. Staffing costs to support the projects within the Growth Deal will be required for a period of 15 years.  The 6 North Wales local authorities and the partner organisations i.e. 2 Universities and 2 Colleges have agreed the funding with each local authority initially contributing £50k in addition to the £40k that was contributed to the EAB; therefore each local authority contributing £90k. These contributions will be reviewed annually to take account of any increase in pay and pensions costs.  He noted that it is expected that the funding of the projects will take place in the first 6 to 7 years of the project but the funding will not be afforded to North Wales by the UK and Welsh Governments within a pattern of spending by the EAB but will be afforded through payments over the 15 year period.  Therefore, the EAB will need to borrow money to facilitate the negative cash flow for the Growth Deal and the finance from the governments will need to be used to refund the borrowing strategy.  It is accepted that interest will need to be paid on any borrowing and the overall interest costs which fall on the 6 authorities will be split on the basis of population, with Anglesey contributing around 10% to the annual cost.  This will equate to £47k - £67k per year for this Authority but it was noted that these are estimated costs and there are potential risks as it will be dependent on the spending forecast of the Growth Deal and as to how much borrowing will need to take place when projects develop.  The interest rate modelled was 2.2% but the actual interest rate may change depending on the type of borrowing undertaken, the timing of the borrowing and the economic conditions prevalent at the time. The Director of Function (Resources) and Section 151 Officer further said that business rates will need to be paid on rateable properties that will result from some of the projects and the Welsh Government have agreed in principle that 50% of the additional business rates generated will be transferred back to the EAB as a contribution towards the additional borrowing costs.  He further said that the Growth Deal will identify the resources each project will receive and there will be a need to monitor these project to make sure that they do not overspend as there is no additional resources available. 

The Director of Function (Council Business)/Monitoring Officer reported that a Governance Agreement 2 (GA2) is required and a copy of the draft GA2 was attached to Appendix 4 together with a summary at Appendix 3 of the report.  The GA2 is designed to regulate the partnership between the 6 North Wales Local Councils and the 4 Colleges for the duration of the Growth Deal.  She noted that the report will be submitted to the full Council to be held on 8^th December, 2020 with the recommendations as set out in the report. 

She referred to the Scrutiny questions at 4 and 5 within the report as to how the partnership will be regulated after the Growth Deal has been signed. Scrutiny and monitoring processes will be undertaken by the EAB with a membership consisting of each Leader of the 6 North Wales Councils, each of whom have a vote. The 4 Colleges will also be members of the EAB but will not have a vote as the EAB is a statutory joint committee.  A Leader from each of the 6 Councils will be appointed Chair on an annual basis but will not have a casting vote.  If any item on the EAB’s agenda does not receive agreement, the item will be subject to a cooling-off period and will then return to the EAB for further consideration.  If no agreements can then be reached by the EAB the proposal will fall.  Owing to the statutory joint committee model agreed by the parties the agendas, reports and minutes will be published and available on the Council’s website.  She further referred to the Host Authority model which has been chosen by the parities with Gwynedd Council appointed as the host authority.  The Section 151 Officer and Monitoring Officer of Gwynedd Council will advise the EAB and its staff.  HR, Audit and ICT services will also be provided by Gwynedd Council.  The EAB will operate under the Standing Orders and Procurement Rules of Gwynedd Council.  Any significant changes to the Overarching Business Plan, as well as any significant changes to the GA2, budgetary matters and any partners seeking to leave the EAB are all reserved matters which will need to be considered and approved by the full Council.  The elected members on EAB will be subject to their Members’ Code of Conduct as will Officers working for the EAB.  The representatives of the Colleges will be subject to a Conflict Policy as they have no Code of Conduct.  Decision records will be produced and published and a quarterly report will be submitted to each partner which will report on progress of individual projects including their financial performance.  She referred to how Scrutiny of the EAB would work as set out in the third schedule to the report.  

The Committee considered the report and made the following points:-

·           Reference was made as to the possible risks of overspend within projects. Questions were raised as to how the economic projects within the Growth Deal will be managed if there is overspend in a particular project.  The Leader responded that it has been raised as a risk at the EAB and mitigation measures have been put in place.  She expressed that some of the projects within the Growth Deal are immature at present and still developing ideas but if other projects are more mature they would be prioritised.  There are also other sources of funding for energy projects as well as the Growth Deal.   She noted that there will be monitoring of the budgets by the host authority.  Ms Alwen Williams (EAB) said that the role of the Officers within the EAB will be to manage the projects within the Growth Deal to the best possible standards.  She noted that there is a possibility within some of the projects to create revenue investments that can be reinvested within the region;

·           Questions raised as to how the EAB is going to adjust to the covid-19 pandemic and during the recovery period and Brexit. The Leader expressed that the Growth Bid is the main focus of the EAB but they have been able to collect evidence on the effect of the pandemic on the region as well as taking Brexit related factors into consideration. She expressed that it has been important that the Officers of the EAB have been able to carry on with their day to day work on the Growth Bid;

·           A member referred to the strategic nature of the EAB and expressed the view that he would have expected that a Trade Union representative needed to be part of the EAB.  The Leader responded that the matter needs to be considered by the EAB.

It was RESOLVED to recommend to the Executive and Council to approve the draft resolutions as worded in the report.

ACTION : As noted above.