Agenda item

To submit a report  by the Head of Regulation and Economic Development.

The report of the Head of Regulation and Economic Development which provided a summary on progress and decision-making in relation to the Anglesey Freeport Programme was presented for the Executive’s consideration.

The report was presented by Councillor Llinos Medi, Chair and Portfolio Member for Economic Development and the Economic Development Manager highlighted the main points for consideration. The report summarises the developments to date and outlines the process to be followed to submit an Outline Business Case in the next phase in the Anglesey Freeport Programme including the delegated authority sought by officers to contribute to this work.

Freeports are a partnership between active ports and their host local authorities. They include the designation of specific sites where businesses get these benefits within an outer boundary set at a maximum 45km from the port. The report identifies at the bid stage the sites that could benefit from different customs, tax and regulatory rules. The Anglesey Freeport is a public/private partnership between IoACC as the host authority and accountable body and Stena Line, the Holyhead Port operator. It is supported by a range of other stakeholders including landowners, Bangor University, M-Sparc, Grwp Llandrillo Menai, Ambition North Wales and other private sector business and potential investors. The Freeport presents an opportunity to attract significant new private sector investment in Anglesey after the recent loss of major employers.

The Anglesey Freeport Programme now moves on to the business case stage including the development and submission of an Outline Business Case (OBC) in the next six to nine months followed by the production of a Full Business Case (FBC) which is likely to take up to twelve months. The UK and Welsh Governments have not yet published the specific guidance for the Welsh Freeport Programme but have indicated that the Anglesey Freeport should continue to progress using what has been published. When the Welsh guidance is published the Council will review whether any changes in approach are required. The immediate requirements of the process are outlined within the report. To support its input into the process of developing the OBC, the Council has appointed an interim Freeport Bid Director through the Regulation and Economic Development Service’s Framework Agreement for economic issues. Funding for this role is being made available by the UK Government.

As the host authority IoACC is deemed to be the Accountable Body for the Anglesey Freeport and in that role, it will have responsibility for a range of governance and financial matters including the management of up to £26m of Government funding if the OBC and FBC are approved, as well as other duties as listed in the report. Additional capacity will be needed to support this role mainly in the Economic Development and in the financial and legal functions. There will also be a time commitment for senior officers required to participate in the governance structures. The report seeks authority to participate in the governance arrangements for the next phase of the project. To progress the proposals to the Outline Business Case stage, revised governance arrangements need to be established. These arrangements are set out in the Initial Collaboration Agreement (ICA) that will be signed by the two partners – IoACC and Stena Line. For Anglesey Freeport, IoACC and Stena Line are the only local authority and port operator which simplifies its governance structure compared with most other UK Freeports. Authorisation for the Chief Executive to sign the Memorandum of Understanding (MOU) is a key decision required under item 17 on the agenda.

The Executive’s members acknowledged the significant work that had gone into the preparation and submission of the successful Anglesey Freeport bid and the Economic Development team responsible for that work was congratulated on the achievement. A number of points were raised in the ensuing discussion to which the Head of Regulation and Economic Development and the Economic Development Manager responded as follows –

·      By confirming that the protection of worker’s rights and environmental standards, the contribution to achieving Net Zero and the aims of the Wellbeing of Future Generations Act are core matters which will be addressed by the OBC but to what level of detail is dependent on the Welsh guidance when issued especially as a detailed Full Business Case will have to be prepared subsequently.

·      By clarifying that the Council’s responsibilities as the statutory body for planning is not affected by the Freeport designation and discussions with Stena Line to ensure that the use of sites is compliant are ongoing. The Freeport status also provides an opportunity for the local planning authority to create Local Development Orders which will give investors assurance regarding the expectations.

·      By explaining that the Regulation and Economic Development Service is in the process of briefing other council services on what the Freeport designation means in practice and the possible implications for them and that this process of sharing information will continue.

·      By confirming that discussion with the Learning Service and other partners with an interest in education and skills has begun and that this information and expertise will feed into the OBC to ensure that the OBC documentation is robust and achievable.

·      By advising that with regard to managing expectations in relation to what the Freeport may generate in terms of employment, that Anglesey is starting from a low base having recently lost 750 jobs with the closure of the 2 Sisters plant and in the region of 3,000 jobs over the past 10 years. If the Freeport does lead to job creation on a projected scale of between 3,000 and 13,000 then many of these will be replacing those that have been lost to the Island. Additionally, it is hoped that the Freeport may contribute towards enabling some of the 8,000 to 10,000 Anglesey residents who currently work off the Island to find employment locally on the Island.

·      By confirming that the resources to carry out the next phase of preparing and completing the OBC are sufficient. The UK Government is providing up to £300,000 for the development of the OBC and Stena Line is covering the costs of some elements and has commissioned its own consultants to provide it with support in this regard.

The Chief Executive advised that although revenue funding is being provided initially by the Welsh and UK Governments the Anglesey Freeport has to be self-sustaining in the long term meaning that the business interests and partners  that derive benefits from the Freeport in terms of tax breaks and investment will be expected to contribute in return to ensure the ongoing viability of the Freeport so that the cost burden does not fall entirely on the local authority and Stena Line. These are matters that will be discussed in the coming months as the governance arrangements evolve and expand ensuring that those who contribute to the Freeport have an input along with those who will benefit from it. 

Councillor Llinos Medi, Chair and Portfolio Member for Economic Development referred to the importance of appreciating how complex and time consuming the work on the Freeport Programme is and of understanding that the benefits and returns will take time to be felt. There are also risks and challenges for the Council as the Accountable Body responsible for overseeing the Freeport’s administrative and financial affairs. However, conferment of the Freeport status on Anglesey provides opportunities for economic growth and activity locally and within the region and is an exciting development for the Island. The Freeport can be developed in a way that is unique to the Island and in a way that also ensures the social benefits that can follow from economic prosperity. She proposed the recommendations of the report and these were agreed subject to removing recommendation (b) as this was relevant to item 17 on the agenda and including the Deputy Chief Executive in recommendation (c).

It was resolved –

·      To note the success of the Anglesey Freeport bid in achieving Freeport status.

·      That delegated authority be granted to the Chief Executive or in his absence the Deputy Chief Executive (in consultation with the Leader and relevant Portfolio Member) to agree any necessary variations to the proposed Initial Collaboration Agreement that may be necessary.

·      That the Chief Executive of Anglesey County Council be identified as a representative to the Freeport Governing Body and be granted delegated authority to make any decisions necessary to the objectives of the Anglesey Freeport as well as delegated authority to nominate an alternative to attend in his place who shall be entitled similarly to make any decisions necessary.

·      To approve the entering into of any grant agreement between the Council and the UK/Welsh Government to receive public funds from the Government (up to £300,000 for the Outline Business for the OBC).