Agenda item

To submit a report by the Director of Function (Council Business)/Monitoring Officer.

The report of the Chief Executive incorporating the key documents required to reach Final Deal Agreement for the North Wales Growth Deal with the UK Government and Welsh Government was presented for the Executive’s consideration.

The Leader introduced the report and said that this step in the North Wales Growth Deal Bid represents the culmination of a long process to which the Isle of Anglesey County Council has contributed fully along the way.

The Chief Executive agreed that this represents a significant milestone in the Growth Deal Bid process bringing to fruition a great deal of work over a long period of time and demonstrating also the value of a strong partnership based on willing collaboration and understanding between partners across sectors. She said that thanks are due to Officers who have served on the range of boards developing the Growth Bid which has brought it to the point of this historic occasion; it is hoped that this programme of much needed economic investment in the North Wales region will quickly produce results at a time when the Covid-19 pandemic has severely impacted the economy.

The Deputy Chief Executive said that in recognising that employment and the economy are not confined to local authority areas with people and businesses moving across boundaries, the Welsh Government’s economic development interventions are being delivered increasingly through regional structures. Working collaboratively as a region makes is easier to secure additional funding at a level that would not be possible for the six local authorities if they were operating separately and individually. The Deputy Chief Executive referred to the economic benefits and investments the Growth Deal is expected to bring to both the Island and the mainland in what is the largest and most significant economic development programme the region has seen since the austerity period began. The programme will focus on supporting growth in high value sectors in terms of employment and the labour market. The projections are for the creation of between 3,000 and 4,000 additional jobs generating over £2b of additional GVA which in turn is expected to draw in private sector investment to the value of £1b. Whilst there are currently on the Island a number of highly visible projects in the form of Morlais, Holyhead Port and the Menai Science Park there is a range of other projects in connection with housing and property, ITC, sustainable transport and green energy on which the Island can capitalise to draw down additional funding. It is important that the Authority remains a strong, productive and influential voice within this regional model of working and it is hoped that the New Year will see a shift from the planning and preparatory stage to a phase wherein the funding will begin to be realised and spent.

The Director of Function (Resources)/Section 151 clarified the financial implications of the Growth Deal to which there are two elements, namely the revenue costs of running the programme which it has been agreed will be shared between the six local authorities and the colleges with Anglesey Council contributing £90k with an annual uplift for inflation. The North Wales Economic Ambition Board (NWEAB) has successfully secured European funding which has helped keep costs down. The second element involves funding the capital expenditure on the projects within the programme – there is a medium term temporary funding gap between the expected expenditure profile of the Growth Deal and the expected profile of government funding received over 15 years which will be managed through borrowing, i.e. Government grant funding will be spread over 15 years whilst expenditure on the projects is likely to occur within the first 6 years  leaving a funding gap which will be bridged by borrowing. As the funding comes in so the borrowing will reduce each year. Paragraph 2.5 of the report shows the total (15 years) partner contributions to cover the cost of borrowing notionally required to facilitate the negative cash flow whilst paragraph 2.6 shows the annual partner contributions to cover the cost of borrowing notionally required to facilitate the negative cash flow. These contributions are in addition to the established core and supplementary annual contributions shown in Paragraph 2.7 of the report (the figures are expanded on in the attached Business Plan). Timing is a factor with regards to borrowing as are interest rates meaning the figures may change ; for example if Government was to release grant funding before the close of this financial year or early in the next then a capital sum would be available at the outset thereby reducing the borrowing requirement.

The Director of Function (Council Business)/Monitoring Officer outlined the legal implications and governance arrangements. She reported that when the Final Growth Deal is agreed and signed with the two Governments a new Governance Agreement 2 (GA2 – provided in full under Appendix 4 with a summary under Appendix 3) will replace the current GA1 and will regulate the partnership between the 6 North Wales Local Councils and the 4 Colleges for the duration of the Growth Deal.  The political model will remain the same as for GA1, namely an Economic Ambition Board (EAB) consisting of each Leader of the 6 North Wales Councils, each of whom has 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.

In terms of operation, the Host Authority model will apply as agreed by the partners; Gwynedd Council has been appointed as the host authority and will provide the Section 151 Officer and Monitoring Officer functions as well as HR, Audit and ICT services.  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. The conditions of the Growth Deal also require the submission of a report to the Welsh and Westminster Governments and an annual report will be taken to Gwynedd Council’s Audit Committee. Scrutiny arrangements are set out in Schedule 3 to GA2 and a call-in mechanism similar to that in effect at the Council will apply.

Councillor G.O. Jones reported from the 10 November, 2020 meeting of the Partnership and Regeneration Scrutiny Committee which considered the Final Growth Deal Bid with advisory input being provided at the meeting by two representatives from the EAB. The financial, legal and governance arrangements were discussed and the economic benefits and opportunities likely to derive to the Isle of Anglesey from the Growth Deal were outlined. In considering the matter the Committee had raised the implications of Brexit and Covid 19 in terms of adjustments that may need to be made by the EAB and had sought clarification with regard to the EAB’s  membership and in particular the absence of  Trade Union representation. The Committee had further sought clarity with regard to the steps to be taken in the event of project overspend. Having received assurance on these matters, the Committee had determined to recommend that the Executive support the Final Growth Deal Bid Agreement.

Councillor Carwyn Jones gave his perspective as Portfolio Member for Major Projects and Economic Development and welcomed the regional collaboration which underpinned the Growth Deal Bid and had made it possible, and he acknowledged also the work of Officers in progressing the Deal through various stages. The Deal Agreement offers opportunities on a scale that would not be available to the authorities working on their own and offers the prospect of economic regeneration for the Isle of Anglesey as well as the region at a critical time.

It was resolved that the Executive –

•           Approves the Overarching Business Plan as the document that sets out the arrangements to deliver the North Wales Growth Deal as the basis for entering into the Final Deal Agreement and acceptance of the Grant Funding Letter with the UK and Welsh Governments and recommends its approval to Full Council.

•           Approves the provisions in Governance Agreement 2 relating to executive functions, and recommends that Full Council approves the provisions relating to non-executive functions, and specifically adopts the delegations and Terms of Reference in “Governance 2:Appendix 1” thereof as the basis for completing the Final Deal Agreement and Acceptance of the Grant Funding Letter with the UK and Welsh Governments.

•           Formally endorses, and recommends that Full Council authorises the accountable body, Gwynedd Council, to sign the Grant Funding Offer letter on behalf of the Partners.

•           Formally endorses, and recommends that Full Council approves the method used to calculate the cost of borrowing notionally required to facilitate the negative cash flow for the Growth Deal, and to include a provision within the Council’s budget to pay this contribution and the established core and supplementary contributions as set out in GA2 (and in paragraphs 2.5 – 2.7 of the report).

•           Grants delegated authority to the Chief Executive in consultation with the Leader, Monitoring Officer and Section 151 Officer to agree minor changes to the documents with the Partners as necessary to complete the agreement.