Cynulliad Cenedlaethol Cymru

I'd like to welcome Members to committee this morning. I appreciate that we've got quite a lot to get through today. So, with that, I move to item 1 on our agenda. We have apologies from Joyce Watson, and we don't have any substitutions today. There are a couple of Members who I know will be joining us a little bit later, and if there are any declarations of interest, please, say now. And I should also point out, under Standing Order 34.19, we've determined to exclude the public from the committee meeting to protect public health, but, of course, this meeting is being broadcast live on Senedd.tv. Should there be any problems with my broadband connection this morning, then we've previously agreed that Helen Mary Jones will stand in on a temporary basis until my connection is resolved. And, with that, I think we've done all the formalities. 

I move to item 2, and this is predominantly a session to update on the city and growth deals across Wales. We last looked at this area last January. It tends to be around about this time every year that the committee takes an interest in the city and growth deals. So, I'd like to welcome the witnesses this morning. Under this item, we have two sessions this morning: we have one later on in regard to Swansea and the north Wales growth deal, and this session, the first hour this morning, is predominantly looking at the mid Wales deal and the Cardiff capital region city deal. So, I'd like to welcome Members to committee this morning. And, if I could ask the witnesses to introduce themselves for the public record. I'll just name you on my screen in the order that you appear. So, Councillor Anthony, would you like to introduce yourself? 

I'm Councillor Anthony Hunt—Anthony's fine. I'm the leader of Torfaen County Borough Council. I'm the chair of the Cardiff city deal. 

Thank you. Councillor Ellen. 

leader, Ceredigion County Council—[Inaudible.]

Diolch yn fawr. Carwyn. 

Bore da. Carwyn Jones-Evans, strategic manager for the growth deal, working for the two local authorities. 

Councillor Rosemarie. 

I'm Councillor Rosemarie Harris. Good morning, and I'm the leader of Powys County Council, and the joint chair of the mid Wales growth deal. 

Thank you. Diolch yn fawr. Nigel. 

Good morning, all. I'm Nigel Brinn. I'm corporate director for the economy and environment, Powys County Council. 

Lovely. And, Kellie, please. 

Good morning, everyone. Bore da. I'm Kellie Beirne, director of Cardiff capital region. 

Thank you. I appreciate you all being with us this morning. If I can kick off—and perhaps I could ask Councillor Ellen to address this and perhaps Councillor Anthony Hunt as well—just asking, really, for an update on progress in your particular areas over the last 12 months, but particularly where you think progress has been slow. I think that's what the committee would be interested to understand. Councillor Ellen, would you like to go first? 

Right, thank you. Thank you very much for the opportunity to present to you this morning. Well, we started in 2020, just after the pandemic came upon us, last March. In April 2020, we published the vision for growing mid Wales. This was the culmination of a lot of work previous to that, but it sets out the strategic vision for which the growth deal was proposed. And, then, during the year, we've been held up by the pandemic, there are no two ways about that, but I know that the officers, Carwyn Jones-Evans especially, have been in negotiation with Ministers of both Governments during the summer, and that gave an opportunity to set out strategic context and agree the basic need for the deal.

We've been pressing hard to get the heads of terms signed as soon as possible. Both Rosemarie and myself have written to both Ministers—or the Secretary of State and the Minister—pressing upon them the need to move more quickly than we had been moving. But it did take until 22 December before we managed to get the heads of terms signed, and that set out the agreement for the broad scope of the portfolio going forward. 

The capacity has been an issue, together with COVID, both in the Government and in both local authorities, but we, at last, have a basis to work on. And, as we move forward, we're having also to work in a different way to the other growth deals, in that both Governments have asked us to take—. The next step is to form a portfolio or to bring together a portfolio of ideas of the main threads of our vision so that it gives us a framework on which to hang any projects that will come at the next stage of development, but we do need to get agreement on the portfolio business case as soon as is possible in order that we can sign the full deal agreement and then move forward to continue developing projects.

Thank you, Councillor Ellen, I'm keen to dig into some of that a bit later on as well. I appreciate that. Diolch yn fawr. Anthony, would you like to—? Again. focusing particularly on areas where you think perhaps progress has been slow from your perspective.

Obviously, the last 12 months have been a rollercoaster for everyone, with not just the pandemic, but Brexit and climate change and the flooding that we had at the beginning of this last 12 months in many Valleys areas. But this is a 12 months, really, where we'd hoped the foundations that we'd built as a region would start to come to fruition, and we're seeing a lot of that. We very much see ourselves as a region and not just as a city deal approach, and we've tried to build those foundations.

In terms of things that have been frustrating in the last 12 months, I guess, due to the pandemic and associated issues, lots of things, like the graduate scheme, public transport and access to finance, have all been affected, and they've been the things that we've been trying to battle against in the last 12 months to forge some progress.

Okay, thank you. That might bring us nicely on to the next set of questions from Helen Mary Jones.

Diolch yn fawr, Cadeirydd; thank you, Chair, and welcome to you all. You've both begun, Anthony and Ellen, to touch on this, but I want to explore a little bit more about the way the pandemic has impacted on the city deals. Have you had to change your longer term—? Obviously, there's been a delay in getting things moving—you would expect that—but have you had to change, or are you considering changing, your ambitions or your interventions in any way to reflect the impact that the pandemic has had? We know it's been felt differently by different groups in society—it's impacted worse on women than it has on men; worse on black people and people of colour than it has on white people. So, have you made any changes to your long-term plan as a result of that? And—I may as well ask both questions, I think, at the same time, Chair—what influence will the Welsh Government's economy and recovery and reconstruction mission document have on your plans for the city deals? I don't know who wants to go first with that, maybe Anthony, since Ellen started, and obviously anyone else who—.

Councillor Anthony, would you like to come in?

Okay, thank you, Chair. It's a very pertinent question, really. I think the key has been getting that balance right between not overreacting and oversteering and keeping our strategic direction going, whilst also being sensitive to the things that you mentioned that have been raised very much by the pandemic. It's really thrown into sharp relief the inequalities in our society and in our communities, and that's true in our region as much as it is in any other region. So, I think we've got to maintain that overall strategy, whilst adjusting to things.

For me, it's really brought home the need to focus on things like the foundational economy, on getting supply chains right, on making sure that we reach every part of our region. I've always been very much of the opinion that GVA is a very limited indicator, even if it is the indicator we're judged by. We could make the target, but miss the point, in my view. We very much try to focus on things like our challenge fund, things like supply chains, making sure we're aware of things like both the inequalities within regions, but also the inequalities within different parts of our community, many of which have been brought home by the pandemic.

In terms of the Welsh Government document, we very much want to dovetail with that and the ambition that is coming forward to build back in a way that is better, is more socially just and more environmentally sustainable, and we need to be very cognisant of that, I think, in the goals we set and the interventions we make as a city deal and as a region.

And I'm personally really encouraged to hear that. I think your point about hitting the target but perhaps missing the point is a real risk, because obviously you've got to work to the targets that are expected of you, to a certain extent, haven't you? Rosemarie or Ellen, do you want to come in from the mid Wales point of view about whether the pandemic has changed your thinking at all?

I think the portfolio approach, as far as we're concerned—and, of course, we recognise that it's the first of its kind—it remains completely valid as far as we're concerned, but, of course, it's quite a lot of work. It means getting a strategic framework in place and everything that's associated with that, like management and governance and all the other things. We do have an expert helping us—an expert who works with UK Government and Welsh Government; an expert on preparing business cases. But, of course, COVID has come in and has really stretched both local authorities. Local authorities, as you know, have played a leading role in all the work that COVID has produced, as well as having to do new things like test, trace, protect. So, our officers have been extremely stretched—they were stretched before. And I would have to say at this point, in terms of preparing for deals, there is very little funding support upfront. So, we've had to use our own officers and our own resources, so that has stretched us quite a lot.

In terms of the Welsh Government economic recovery and reconstruction mission, I think, with the portfolio approach, as I say, it remains valid; we can adapt it as we go long, we can adapt it over time. And I think, in terms of the COVID impacts and perhaps ways of working differently—well, yes, they've become obvious, haven't they? The whole virtual thing has become more obvious, anyway. But we've very keen to adopt a green agenda going forward—fewer miles travelled, local food outlets, that sort of thing, using electric vehicles. In Powys, we're building to passive house standards—building a school and houses at the moment. So, I think it's also important to note that, of course, the growth deal won't be the only funding avenue; hopefully, there will be other funding avenues that we can draw down as the years progress.

Nigel Brinn wants to come in as well. Nigel.

Thank you, Chair. Just a very, very quick point, very much echoing what Councillor Harris has just said there, but one of the key components of the mid Wales growth deal is connectivity. We talk about remote working et cetera. We've got so many not spots, so many areas hard to reach, so many areas with poor connection, it just really refocuses the emphasis there. So, we know there are many Government and national programmes to deal with this, but we're still in that—if it's that 5 per cent that's missing, a lot of those are in mid Wales. So, where we see the growth deal really adding value is breaking into some of those hard-to-reach locations, and securing that connection—not just for broadband, mobile phone signal is a challenge for us as well. So, I would just really emphasise that. And this covers quite a few areas, but there really is added emphasis on some of the key themes within the growth deal following the pandemic. Thank you, Chair.

Thank you.

Thank you, that's helpful.

Any further questions, Helen Mary?

No, that's—

I'll just come in and perhaps ask Councillor Ellen briefly if you wanted to address any of the issues around how you believe the pandemic might have to reshape the mid Wales growth deal?

I think the way we're working now, because we're not as far forward as the other growth deals, because we were later to the table, as it were, we've had the opportunity to develop this portfolio approach. So, we haven't got things really set in stone. We've got our directions of travel there and, I think, having consulted widely with people across the region, we know the main areas that need to be developed. How they're going to be developed is the next stage, and what sort of schemes will be put in place in order to develop the themes. So, I think we're at an early enough stage to be as flexible as possible, to be able to react to coming out of the pandemic, and to be able to react with the direction of travel of the new Government when it comes after May, and also the way things are developing in London as far as economic and green policies are concerned.

I can appreciate that, absolutely. I know that my colleague Vikki Howells is going to ask some specific questions in regards to the Cardiff city deal, so I'm just going to just concentrate on some areas—. Vikki Howells has just joined us now. I was just saying, Vikki, that I'm going to address some issues on mid Wales, and then I'll come to you to ask some questions around the Cardiff city deal. So, from my perspective, if I probably perhaps address this to Councillor Rosemarie Harris, the Growing Mid Wales partnership was set up in 2015, so that was six years ago now; are you content with the progress that has been made in terms of securing a growth deal over that past six years?

Thank you, Chairman. I think if you'd asked me along the way, I would have said that I wasn't content—you know, progress has been slow. But on reflection—we have now picked up speed, of course—we have covered a lot of ground. We've certainly talked to a lot of people. We spent a lot of time in the early years meeting businesses; we had business breakfasts in Powys, we met over 700 businesses, and we talked through what they felt their needs were for the area, and I know that Ceredigion did the same, but did it, perhaps, in a slightly different way. And as Councillor Ellen has just said, we were aware that other deals were further ahead, so we were able to observe and learn. We spent a lot of time working on setting up the governance arrangements. We formed a joint board of cabinet members from the two authorities, and we've also formed an economic strategy group from prominent business people from the two counties, who meet on a fairly regular basis. Along the way, we've also agreed to the setting up of a regional learning and skills partnership. We very much want to keep our young people within the area, because we provide a very good education in Powys and Ceredigion, and our young people have been leaving us. So, we wanted to make sure that we knew what skills the businesses needed, and we wanted to make sure that we could provide that training. So, we're still working on that, but we're making great progress on that as well at the moment.

It's taken time. Officers have generally met with civil servants, Councillor Ellen and I have met with Ministers, we've been before you before and we've been to London to select committees. All of these things have taken time. But, along the way, and in more recent times, we've set up working groups to take forward some of the thematic areas that we're basing our economic development on. And we've continued to work with businesses, we've continued to invite businesses and organisations. We have a partnership, which is a much border partnership than just the joint cabinet. It's the Growing Mid Wales partnership, where we involve other organisations and other businesses, and when we meet, we invite in businesses to talk about what they can do. It just raises awareness of what is already in the area, what is possible, and what we need to do.

So, looking back, we have done quite a lot. We have also had promises of funding, of course, not as much as I would have liked, but I haven't given up on that yet, and I think there will be other sources of funding that we can draw down. We had a promise from the UK Government, as you're aware, and we hope that that will be improved upon. We haven't had a written commitment yet from Welsh Government. But, of course, they did sign up to the heads of terms, so we know that that commitment is there.

Okay. Sorry, I can see Councillor Anthony wanted to come in. Anthony.

Just very briefly. Thank you, Chair. Obviously, there's a conflict here. We're all politicians, we want to see positive change, we want to see it yesterday. But I think, with growth deals, if we want to be genuinely transformational and genuinely break the mould and get away from the old cycles of economic development that we've suffered from in the past 40 years, then it takes time to build those foundations and to build those relationships, especially in Cardiff's case—you're dealing with 10 different councils and different ways of doing things, different instincts. I think if we were to move to the bit above the ground of the building and not concentrate on those foundations, on building those relationships and getting that culture of working together, then perhaps we'd do more in the short term, but, in the long term, I think that would be a risk. I think we've concentrated a lot on getting those foundations right, and I think that will stand us in good stead going forward.

Thank you, I know that Vikki Howells will want to dig into some specifics as well in terms of the Cardiff deal. From my perspective, just to help discussion here, I can hear a business listening in and saying, 'Hang on. Six years—it's a long time. Yes, there's been lots of talk; yes, there've been groups set up; yes, the governance processes have been put in place; yes, there've been meetings going. But we haven't seen anything.' So, that would be the frustration from a business perspective. So, I just want to dig in a little bit to why, or address the issue that a business would perhaps put to you and say, 'Look, we're not seeing any projects. Why aren't we seeing projects after such a long period of time?' I'm happy for officials to also come in on this, if they think that's appropriate as well. But I ask—

If I can come in—

Ellen.

Sorry, Russell. I'm as frustrated as you are, because the truth of the matter is that we didn't know definitely, in mid Wales, at least—I know the others are quite a way ahead of us—we didn't know that we had any funding at all, and we were knocking and knocking and knocking at the door, ever since 2015, and it took until just before Christmas before we were able to have those heads of terms signed. We were waiting for both Governments to come to a decision that they were going to support us after all. So, hopefully, now, during this coming year, we can start, once this portfolio is in place and that's signed up to—and, again, we need both Governments to sign up to that—then we can get motoring. But we are preparing. We're paddling hard under the surface to make sure that we get there in the end.

Thank you, Councillor Ellen. I can appreciate that, because, in that six-year period, it was only later on in that period where Governments committed to a growth deal for mid Wales. So, I appreciate that. Carwyn wanted to come in and then I'll come to Nigel, but, really, what I wanted to dig in to is why we aren't seeing specific projects. I appreciated what you said about building the foundations. Carwyn.

Diolch, Gadeirydd. So, yes, it has taken a while to get to the point where we are. It's a conversation I've had with the business members of the economic strategy group. That group has been meeting for a year now, and, I think, speaking as an official, it's been difficult for us, as officers, to get to grips with this approach. When I came into the region, and formerly, leading on this role, we were told by the two Governments in terms of, 'Get your strategy right from the start; don't jump directly to projects. Be clear on why you are trying to achieve this'. And the previous conversation we've had around COVID and how things can quickly change really validates that approach about, actually, it's about setting the framework and the investment vehicle in the region and demonstrating to the two Governments that we're clear on how we're going to use this funding at a strategic level.

The growth deal obviously is not a grant fund either, and there's been a level of communication we've had to do within the region around understanding what that means in practice. And we all know how much work goes into developing project business cases, and we need to be absolutely certain before commissioning project business cases that these are the right sorts of things that are right for mid Wales.

And the portfolio approach, we're the first region in Wales—we're the last region to have a growth and city deal agreed, but we've been successfully able to make the case to both Governments in terms of securing the investment and the formal heads of terms last year. That came off the back of the vision document, really articulating a framework—as Councillor ap Gwynn said—a framework on which to hook projects and activities. That has greatly helped the conversation with business leaders in the region about being clear. It's like flying a kite for mid Wales; these are the opportunities here. It was a vision written from the perspective of opportunity rather than, 'We want money, and these are our problems'. It was a vision of opportunity and, 'We can do these things'. Evidently, the world has changed and the baseline has changed completely in terms of the economic data—take tourism and some of our key sectors in mid Wales. So, the interventions or the response we'd require probably will have changed in that past year, but we're in quite a strong position now in terms of a portfolio approach, in terms of being clear on why we are doing this and articulating to the two Governments that we've got a system to deal with the funding. And projects are being encouraged to bring forward now, but we've got to be clear: it's not just a capacity issue within the two local governments either; it's a capacity issue externally as well that we've had to work on and have those conversations. As Councillor Hunt, really, has alluded to earlier, it's a similar situation in mid Wales—changing behaviours and understanding.

Yes, and to Nigel Brinn, as an officer of the council, I suppose I'm asking you, really: do you think, in terms of the lack of projects that any business or anyone can physically see, is that a decision of the local authorities or is that a process issue with Welsh or UK Government?

It could be just—I won't repeat what Carwyn and Councillor Ellen have just covered. I think there is genuine frustration in terms of the time taken to deliver projects on the ground. But you have referred to the Growing Mid Wales partnership, which has been going for six years, but it's only in the last 18 months or so that it's actually been dealing with the growth deal as such. They were doing all sorts of collaboration prior to that—trip funding and all sorts of initiatives within the public sector. But, certainly, to answer your question more specifically, we are doing very much what's being directed of us by both Governments, both sets of civil service. And this was only reaffirmed, I think it was last week, Carwyn had a letter from both Ministers—UK Government and from Welsh Government—on 26 February confirming that we need to adhere to the portfolio business case. So, have a broader programme of work—[Interruption.]. Sorry, Chair.

Sorry, I was going to say—so, effectively, Welsh/UK Government have effectively said, 'Look, we don't want you bringing projects yet'; that's not the position you're in. Is that right?

Very much so. I won't repeat what Carwyn has said, but it's, 'Let's get our vision right; get that right in the first place. Identify the themes, get the overarching programme together with examples of the typical type of project', which we're now bringing forward. But it's in that order: vision, portfolio business case, then projects.

So, that's what UK and Welsh Governments are telling you, effectively, as that's your answer to me: 'No projects yet, we want you to get the foundations right'. Is that your view about how the process should work as well, or not?

I think it makes an awful lot of sense. I think it's quite frustrating, because everyone wants to know where are the projects and what they're going to be—everybody. I'm sure that this committee, along with ESGs et cetera, everyone wants to know where the projects are. But rather than go back for individual approvals on each project, if we have the programme approved, we can then do that at a more local level. And I think the pain is now, but it'll actually prove beneficial in the programme going forward. We were talking about Joe Flanagan providing advice here—. Perhaps if I just pause there, because I think Carwyn wants to come back in, and he's been managing this process— 

I was just going to—. Carwyn can come in on this comment I was going to make as well. But, effectively, 'Progress is slow and we haven't got projects because that's what the UK and the Welsh Governments are directing us, but we kind of agree with that approach as well', is kind of the summary I think I'm picking up. Carwyn, you wanted to come in.

Thank you, Chair. Yes.

Well, for some reason we can't hear you, but you're not on mute, Carwyn. You might have clicked a button.

Ah, there we are. It's the headset. There we are. 

We can hear you now—go ahead.

As I said earlier, Chair, it goes against the grain of what we've done as officers in local government for the past 20, 30 years, really, in terms of, you know, we've always had an eye on developing projects fairly early on in the process. The thing to note here is that Joe Flanagan is really using us in mid Wales as a pilot, as a case study, with Treasury on the new approach in terms of portfolio business cases. There is a tension there in terms of projects not being—the detail not being there at an early stage, but the point is that that doesn't mean that there aren't any projects there, we've just not made a decision on them yet. So, the confirmation we've had from the two Governments is: don't make a formal decision on projects yet, make a formal decision on the portfolio.

We go forward on the basis of an initial basket of projects, so we are having conversations in the region; we've commissioned feasibility studies at programme levels. Nigel mentioned digital; we've got applied research and innovation, an emerging piece on hydrogen, and we've got the site and premises review there. And that's one example where COVID has impacted, because pre pandemic, we thought we had a pretty good idea of the sites and premises market in mid Wales, and now that has had to be reviewed. But all of that work is coming to fruition in the next month now. We are starting to publish the portfolio business case in its early stage for people externally to see what the deal is about. But projects are there; we've just not made a decision on them yet. And we won't make a decision on them, because how projects are ultimately funded are predicated on having a full business case developed, so the portfolio allows that to happen and change and flex as time moves along.

I'm sorry, I'm going to have to be a little bit rude. Even though I want detailed answers, I know we've got—I've probably spoken too long on this question. Helen Mary Jones wanted to come in, and then I've got one more question on mid Wales before we move to Powys.

Just briefly. There was an explanation of this in our papers, but just for people who are listening, could somebody explain what you mean when you talk about a portfolio approach, and how that's different from what's been done elsewhere? Believe it or not, there are members of the public who do listen to our meetings, so it would be helpful for them to understand the difference between what's been done with some of the other deals, potentially, and this portfolio approach that the Governments are asking of you.

That's a good question. So, a brief—brief, please—definition of that to help those listening in. Who would like to address that? Carwyn, you put your hand up first—go ahead.

Basically, a portfolio is the broad definition of a collection of programmes and projects. Now, all deals have got to do them; north Wales is doing their portfolio business case now. They've started the projects; they've developed programmes around that; they've developed the portfolio around that. We've got to start with a portfolio, but basically, it's just a basket of programmes and projects—that's the shortest form I can describe it.

That's what I'd understood, but I thought it was worth getting that on the record, Chair.

Thank you. I appreciate that as well; that's helpful. We're short of time, so just a brief answer on this, please, from the mid Wales perspective. So far, in terms of funding confirmed, £110 million, £55 million from each Government—Councillor Rosemarie's pointed out you're waiting for written confirmation from Welsh Government on their £55 million. There's been an announcement yesterday in terms of some extra funding for the mid Wales growth deal from the UK Government. Is that enough?

Thank you, Chair. It's never enough, is it, really. We had hoped originally for £200 million overall, which, with match funding from the private sector or from local authorities, wherever, would have meant £400 million, which would have been a great deal of money and would have helped a lot. But we will do the best that we can. Over the period of time, we hope that we'll be able to draw down other funding. Nigel, our director, mentioned to you that connectivity is a priority for us; I hope it's a priority for us all. We would work with the Department for Digital, Culture, Media and Sport, we would work with private sector, BT, whatever, to try and draw down further funding.

And how much funding are Powys and Ceredigion going to be contributing towards the deal?

That, Chairman, hasn't been decided yet. I think we're both considering in terms of budgets, and, at the moment, we're in the middle of budget rounds, that we perhaps put a little money aside each year so that we are prepared in capital terms. But, really, we'll need to look at the business cases, the projects, and then we'll be able to decide what we can put in and what we can draw down from elsewhere. I'm still hoping that maybe the UK shared prosperity fund will help us—I know that there's disappointment in Wales with the first announcement, but in the future. And this is a deal over quite a number of years, so I'm hoping that we will have support there, and I'm hoping for an announcement in the budget today, Chair.

Okay, and Councillor Ellen, you wanted to come in.

I think you've got to be careful to say that they've offered us more money. In fact, they've reprofiled a 15-year investment over 10 years. So, an annual uplift of £1.8 million is there, but the overall quantum hasn't changed; it's just the way it's going to be delivered, apparently. So, we've got to be careful here, I think.

I agree with Rosemarie that we need to go after all streams of funding possible that are there and available to develop, be that connectivity or tourism or transport or whatever, or the research and development work that is going on in the university in Aberystwyth here. There are research funds available. Biotechnology and Biological Sciences Research Council, for example, is one that has supported them in the past, and I hope it will to the future.

As far as local government investment—. I think we've got to be clear here we're trying to draw in private investment as well. Unless the programme—not the programme, unless the project is a local government project, then local government wouldn't invest. We'd be relying then on private investment or third party investment of another sort. If it is our project, then of course we'd invest in it, but there are a variety of different ways of investing here—the match fund, the streams coming down from both Governments.

Thank you—diolch yn fawr, Councillor Ellen. We're pressed for time, so I'm going to come on to Vikki Howells to ask some questions to Anthony Hunt. Vikki Howells.

Thank you, Chair, and apologies for being late due to another meeting. So, good morning, everyone, and I'd just like to dig down into some of the details now on the Cardiff city region and how things are progressing there. So, firstly, could you set out the latest position regarding the projects that have been approved to date by the wider investment fund, including the amount of money that's been invested and the outputs that have been achieved to date?

Chair, are you happy for me to take this question, first of all? I can just dig into some of the detail, if that's okay. So, thanks very much for the question. As you know, we too have an open, competitive wider investment fund, so we don't have to have pre-set or—[Inaudible.]—projects; anyone can bid in. So, our deliberate strategy has been, really, to make sure that every place in the region gets a level of infrastructure development, be it transport, be it digital, be it connectivity of some sort, housing and so on, premises, and then the rest of the fund is really targeted at where the market feels it can do the best job.

So, what we've done to date, really, as I say, is come up with that wider portfolio approach. Projects to date—I think I submitted something that shows, for example, the compound semiconductor foundry, which was our first investment; Metro Plus, which is a scheme that offers sustainable transport development right across the region in 10 local authority areas; Metro Central, which is the development in the centre of Cardiff to improve and enhance station facilities and access into the core Valleys lines; our housing investment fund, which is a housing viability gap fund; and a small and medium-sized enterprise housing finance fund. We've got our graduate programme, and we've also invested in lots of med-tech businesses in the region. So, recently, for example, we've made an investment in a data healthcare company, and that was an equity investment, so a different kind of investment to the repayable finance that we generally do.

The really good news is that we've had a big funding announcement around the Strength in Places fund, where we made—. I think we were one of only seven regions in the whole of the UK to make a big application, and we came away with £44 million—a £25 million grant from UK Research and Innovation, with the remainder being made up of other public and industry contributions. And the good news as well is that we've just invested in Zip World on the old Tower site. So, a real mixed portfolio of investments, but £150 million invested in the last four years—that's how long our deal has been running—match funding in the region of about £250 million, and our leverage, our projected leverage total, is up to about £2.5 billion.

We're about to take a report to cabinet on Monday 15 March, which is to approve a £50 million investment in a strategic premises fund, because we're finding the demand for industrial facilities, especially med-tech, compound semis, cyber, creative is just going through the roof at the moment. So, aligned with other things that we're trying to do to support our clusters, we're hoping that, very quickly, that £495 million can be committed. And I think the really good thing is that lots of those projects that I just spoke about are repayable finance. They've been on commercial terms, they're equity investments. So, we're not spending down our fund, we're trying to build a platform that enables that return on investment so we can leverage further funding and future investment for the region. 

Thank you, Kellie. Really useful information and some exciting projects there. So, would you say the degree of progress in approving and investing in projects to date is as you would expect at this point, five years in since the investment fund was agreed? And has the pandemic had any impact on that, either negative or, possibly, positive? 

Yes, thanks again for the question. So, in March 2017, our investment fund was signed off. So, yes, we are coming to the end of that first gateway period and, indeed, we've just been through our gateway review process with the UK Government and Welsh Government. So, I think, yes, I very much agree with what Carwyn and colleagues in mid Wales were saying. We had a city deal before we had a city region, if that makes sense, so we've almost been a start-up organisation. So, we've gone through all the pains and anguish and the growing pains, really, of being a start-up and now we're kind of in scale-up phase. So, we are moving to a different part of the process, which I think is positive, but we still remain on target to very much commit that £495 million by about 2026-27. And of course, if we can secure wider investment along the way, then the more the better, especially if we're going to be investing on commercial terms.

I think, yes, COVID has had a big impact. Particularly tourism, hospitality, leisure have been absolutely hammered, and Councillor Hunt mentioned our local wealth-building challenge fund. So, rather than us assume we have all the answers, what we're trying to do is just put problems out there and say, 'What are we going to do about the future of high streets? What will retail look like in a few years' time? What are we going to do about food security? How do we accelerate efforts around decarbonisation?' So, rather than saying, 'We're going to do this project', we're going into businesses and the wider community, publishing a load of data and saying, 'Look, how can you help us solve these problems? What new solutions, projects, schemes, initiatives might come about of us trying to do public procurement a bit differently?' So, I think that's been one of the positive responses that we've made. I think the other big area for us is trying to organise our fund now into sub-funds, so our strategic premises fund, which, hopefully, will be approved by the Cabinet on the fifteenth, will be run by a professional fund manager; we can go for the best opportunities—[Inaudible.]—

[Inaudible.]

—[Inaudible.]—fund as well will work on the same principle. So, we've taken much more of a professional fund management approach to some of the opportunities that are in the market, and making sure, really, that we've got some of the tools and techniques to enable us to respond in a quicker, much more dynamic way, I think.

Vikki.

Thank you. Apologies, I forgot my microphone was on then. Those are the hazards of working at home, when someone's asking you questions during the committee session. You answered two of my questions in one there, so that's the good news. I've only got one left, which is on—you mentioned the UK Government's gateway review there as well, Kellie, in one of your earlier answers to me, so what's the latest position on that, and when do you expect to hear the outcome?

If I could—. Kellie, if you pick up there, and I'll bring in Anthony as well, if he wants to comment on this area as well. Kellie.

Thank you, Chair. We've just been through the process now. We had our challenge sessions with the UK Government and Welsh Government in January and February of this year, and we're told now that we'll get the result by 31 March of this year. So, trying to remain hopeful—fingers crossed, hopefully we've been able to demonstrate good progress. We've got our next five-year business plan in train, about to publish things like our prospectus, which is aimed at the levelling-up agenda. So, hopefully, we're trying to set our stall out in firm terms, but, of course, we still wait to hear whether we are successfully through to the next gateway period.

Anthony, do you want to come in at all? Don't feel you have to, by the way.

No, it's just that I don't want to—[Inaudible.] We're just waiting for that result, but we're hopefully looking forward to the future.

Thank you. Do you have any further questions, Vikki? No?

No. Thank you, Chair.

Thank you, Vikki. Helen Mary Jones.

Thank you, Chair. A question to both mid Wales and Cardiff city region: can you tell us to what extent your city growth deals have been developed in conjunction with and will operate with the Welsh Government's regional approach to economic development, for example, in relation to the regional economic frameworks that are being developed by Welsh Government? I don't know who wants to go first. Nigel is jumping in; good.

I'll jump in very quickly, Chair. Yes, I would hope they're going to be entirely complementary. We are working very closely with colleagues in Welsh Government. They are an integral part of our Growing Mid Wales partnership, and we get every opportunity to contribute and we welcome that, the close working, going forward. Very brief answer from myself, for once, Chair.

Thank you.

And with regard to Cardiff?

Yes, thank you. Similarly with us, really—working closely with Welsh Government. I think our strategy at the moment is shaping up more around the potential to morph from a city deal into a city region, and some of the opportunities that we very much see posed through the corporate joint committee frameworks, especially in terms of greater freedoms, flexibilities, fiscal levers and powers that would have really enabled us to ramp up progress. So, I think that that is the sort of key milestone for us at the moment. We have a strategy and a framework in place, and I think now that Welsh Government has updated 'Prosperity for All' and we have the recovery/reconstitution approach, aligning those now will be very much a complementary activity to take us into the next phase.

Thank you, and your answer there leads me to my next question, which is about the establishment of the corporate joint committees. How do you see those working in practice? And, specifically, I'm interested in the role of scrutiny and how local authority members in each of the constituent local authorities will be able to effectively scrutinise the work of the corporate joint committees. I think the issue is maybe different, of course, for Cardiff, because there are many more local authorities involved than there are in mid Wales, but some of those principles for me around how that joint scrutiny will be able to take place. I heard what Kellie said about that the joint corporate committee may free the city deals up to do things more quickly, to be more responsive. I know you will all know that there are concerns then about accountability. I don't know who wants to start on that.

Shall I come in, Chair?

Thank you.

Yes, please.

In terms of CJCs, well, in terms of mid Wales we're working together currently, so we have joint governance arrangements already. We already work together on transport and we're working together on the growth deal, and we're working very well. That said, I think there are still conversations ongoing about CJCs. Regulations are still being drawn together. But I think we in Powys really rather consider ourselves to be a region anyway, because we're such a huge area, as you know. I consider Powys to be in a slightly different position, because we have 13 neighbours, many of whom we work with anyway. Two of them are in England. We have joint venture situations with some of our neighbours already, so I would always want that flexibility to be able to work with any neighbours that we wish to. I wouldn't want to be too restricted, and I'm sure that Councillor Ellen would say the same.

In terms of scrutiny, in terms of a very big area, because our area would be 40 per cent of Wales, mid Wales, the two counties. So, there's going to be an obvious physical issue unless we can carry on doing meetings virtually. That's good, but there are times when the two groups will need to be together to get to know each other, because they will need to get to know each other if there's going to be any sort of in-depth scrutiny of these issues. I think if we are to have CJCs, this is probably the way to start, with just some areas. But I think the scrutiny, we'd want it to be more than superficial, because it can be very helpful.

That's really encouraging.

Before I bring Councillor Anthony in, I think Nigel, you put your hand up as well. Do you want to come in before I come to Councillor Anthony?

Thank you, Chair, thanks very much. Very, very quickly, yes, as Councillor Ellen has just said, there is of course local scrutiny taking place at the moment, but as we're upgrading our inter-authority agreement as we move on to the next phase, we're now working on how we actually embark upon joint scrutiny. So, just to inform the panel of that. Thank you, Chair.

Thank you, Nigel. Anthony.

I've always viewed the CJC stuff as very much an opportunity rather than a threat. I'm glad the Minister's taken the approach of trying to co-design them with us, not just do it to us. I've already said we see ourselves very much as a region, not just a city deal. We'd hope we're a permanent partnership, not just something that comes and goes with central Government policy, and we want to engage as equal partners. There's obviously a challenge to the Welsh Government in terms of economic development there as well as an offer to them. We do want to work with them as partners, but there's also a challenge that I recognise for us as councils. Any partnership involves exchanging hard power for combined influence. You have to get to know each other's cultural approaches, you have to recognise that people have different instincts, different attitudes to risk and different priorities, and try and work through those. But I think, if we're grown up, we can do that. There are inevitably issues of accountability and scrutiny to work through in getting that right, but I don't think that's insurmountable, and I think it's important that we do engage positively with scrutiny so that backbench members in all our councils feel involved, aware and informed of the process, and it doesn't become something that's distant to them.

And I think the opportunity is there to do that, if we engage in the right way, and I believe that opportunity is there. I'm the leader of a Valleys authority; I'm frustrated that for far too long we've been divided off against each other in terms of our development and attracting investment, and growing our grounded firms that are within our communities. I think we need to take a whole-region approach so that we can combine our strengths, rather than squabble amongst ourselves as has happened in the past too often. 

So, there is a challenge there to get that scrutiny piece right, to get the accountability lines right, though I believe a combined approach, which we're using, can do that, and I'm not one of these people who believes you need to have a big, hulking macho regional mayor to come in; I don't believe in that approach. I don't believe that, as chair of the joint cabinet, I am a leader as such; I'm a facilitator. I'm there to try to make sure that everyone feels they have a voice, and to bring as many people into discussions that we have going forwards as possible so that we can operate as a genuine partnership, and not to just impose my will or impose my approach on other partners, because I believe that doesn't work in the long term.

So, I hope that demonstrates a commitment there to getting that scrutiny piece right, to getting that engagement with the accountability piece right. We can't deny it isn't an issue as you move to partnerships, but I think if you have the right attitude to make sure you try and take people with you and engage, then that can be overcome. 

Thank you, Anthony. Do you have any further questions, Helen Mary? 

Can I just ask one further point on that? Given that in Cardiff you're a bit further down the road in terms of, as Kellie was saying just earlier, actually delivering projects, can you tell us, Anthony, what's been happening so far in terms of scrutiny of the city deal decisions and what the joint Cabinet has done? Has it been down to scrutiny committees in individual authorities where perhaps particular projects are going to be based, or is there—? Because it's obviously much more complicated to have joint scrutiny arrangements when you've got so many more local authorities involved than is the case in mid Wales, where you could imagine a joint scrutiny committee actually meeting with two local authorities, but it's more difficult to imagine how that would work with the number of authorities that you're working with. 

We've got a joint scrutiny committee across the region. In the last 12 months, we've come into that stage, as you say, of starting specific projects for them to get their teeth into. I think that's much more attractive as a scrutiny committee, I can imagine, if I was a member of it, because it's less a general issue and more specific investments that you can start to investigate. I'm certainly keen. One of the first meetings I did as chair was with that joint committee to say, 'Look, I'm at your beck and call, ask me tough questions, get officers along and really drill down into those decisions, because we want you to be satisfied that you can scrutinise those decisions properly.' So, certainly, that's something that I think—. The ability, I think, of scrutiny to really get involved in that will only improve as we come more to specific investment decisions that they can then take a view on and question us on. 

That's really helpful. I think Kellie wanted to say something, Chair, if we've got time. 

Just briefly, if that's all right. I want to get time for Hefin David's questions as well. 

Sorry, yes, just very quickly, we do have that joint scrutiny arrangement. We also have an investment panel that makes sure all the due diligence and the phases of business plan development are done, which is five members of the private sector and five members of the public sector. When those business plans are looked at, they go through our economic growth partnership, our programme boards, our transport authorities, and so on. So, I think it is about the different layers of scrutiny and making sure there's industrial, business, higher education institutions scrutiny, community sector scrutiny and making sure, really, that the city deal is, of course, politically led but supported by other partners and other sectors that have to be involved in the process. 

That's helpful. I suppose what I would say in response to that is that the democratic scrutiny is really important, because of course it's the democratic scrutiny that's done by the people that people can sack.

Hefin David.

Can you hear me?

We can.

Okay. I'm having technical issues here this morning. If you haven't said already, can you set out any significant milestones you think need to be met in the next six to 12 months?

Sorry, is that a question for me? I didn't hear at the start. Am I okay to pick up on that one?

Yes.

Yes, so, as I said, we've got out five-year business plan and really the milestones for the next couple of years, and the one that we really want to focus on in the next 12 months is really ramping up pace in terms of the climate crisis. I think we've seen really interlinked characteristics across COVID, low growth and productivity, and what we need to do next in terms of climate.

The area that we're focusing on first and foremost is decarbonisation of transport. That is a significant issue for us in the Cardiff capital region, but also an opportunity. This year, as well, it's going to be about beginning that process of morphing into the corporate joint committee, so strengthening our governance and reinforcing the bits that we need to take forward into those new structures. Scaling up delivery of the programme, I've mentioned the sub-funds that we're going to create. They need to be in operation quickly, particularly to support medium-sized companies and the supply chain ripple effects that we get from that.

Levelling up, it's going to be a massive agenda. It's not just about the shared prosperity fund, as significant as that is. There's a UK-wide levelling-up fund now. We know that there's the potential for things like R&D funding settlements for regions, a new national infrastructure bank, which I think will be announced today, going to the north of England. There are big opportunities, and we've got to make sure that we're positioned for even greater quantums of funding in the future.

And then the real big one, I think, for the next 12 months: we've got the compound semiconductor cluster quite firmly embedded in the region now. I think the other two that we've really got to focus in on in the next 12 months are around cyber, data, AI—that whole cluster. There was a recent review of fintech done by Ron Kalifa for the UK Government, and he's identified Wales and the Cardiff capital region as being a key area. So, the creative industries as well. I think we've really got to make progress on building up these big industrial-scale clusters that can help with the foundational economy, medium-sized companies, and making sure that our smaller and start-up companies are engaged in an ecosystem of support. So, not much. [Laughter.]

I think that's really appreciated and there's quite a list there to be going on with. I won't bring anyone else in, if you don't mind, Chair. I'd like to focus on this last question, which is about how we've scrutinised you over the past five years. What would you like to—. How would you evaluate our scrutiny of you? Has it been good enough?

Kellie first then Councillor Rosemarie.

Sorry, Chair. I've been to this committee three times now, and it's always been a really positive experience. I think the issue has been that the last couple of years have been about start-up and about laying the foundations and getting things up and running. I think, in terms of future scrutiny, very much at the project level, at the programme level, are we just doing lots of one-off projects that look good or are we really thinking about the long-term structural programmes of significance that will really move the dial?

I think the second point, then, is the proof of the pudding is in the eating. Maybe I would come along and say the things that I say, but I think speaking to partners, the private sector, university colleagues, FE colleagues, community sector colleagues—people who feel that they're part of this process, not just as recipients or beneficiaries but sort of co-leading it—I think there would be some really useful perspectives to try and capture.

Councillor Rosemarie.

Thank you very much, Chair. Yes, I agree with all that was said there, but I also think that scrutiny has a very important role to play. I think one of the things in terms of the city and growth deals is that scrutiny needs to recognise that all the areas involved here are very different from each other. The people are different. The needs are different. The geography is different. You need to be perhaps looking at the types of businesses that can be sustained in those areas, perhaps a need to scrutinise the amount of funding offered against the need. I would argue that the need is probably greater in mid Wales, in a very rural area, where we have the lowest gross value added in the country. I think there needs to be thought about that sort of thing. I think it's fairly obvious that you need to ask about the time frames and all of the bureaucracy that's involved; it has been quite daunting at times. Also, one of the questions that probably needs to be asked is about the amount of funding and resource that's provided upfront of a deal. This has stretched our officers and our resources. I appreciate we're only two authorities in this case, but that has put on pressure as well. 

Thank you very much. That's really helpful. I won't ask who you think has been the best scrutineer on the committee, because that wouldn't be fair to everyone else. [Laughter.] Thank you, Russ, I haven't got anything else I'd like to ask, unless anyone else wanted to come in.

Thank you. From my perspective, I was just thinking as you were asking that question, Hefin, that I would very much like to be in a position where, a year from now, whoever is Chair of this committee, and whoever is on the next committee, is in a position of being able to scrutinise specific projects, particularly when it comes to mid Wales, I suppose.

Just to finish off, related to Hefin's question, in terms of both mid Wales and Cardiff, where do you see yourselves in 12 months' time? From a mid Wales perspective, do you think that if you came back to the next Senedd committee 12 months from now, that committee would be asking you for details about specific projects that you would've announced at that point? So, I'm asking you about the timeline 12 months from now; are we going to see specific projects on the table and being delivered?

That's what I really hope—that we can see that happening before the next local government election, which is a year from now, more or less. That would be my vision—that we want to see both Governments work with us, hand in hand, so we can get the full deal signed off as soon as possible, so we can get down to the nitty-gritty of looking in detail at the projects that are beginning to come through, and that we can see them begin to develop. Hopefully, we will have the money down. I'm not clear whether there's money going to be available in this financial year for investment, but that needs to be clarified as well, and definitely in the following year, so that we'll be ready to go and be able to offer investment to match any investment coming forward for future developments.

Money is the most important element in all of these things, but if you put that aside for a moment—if the money is on the table today, here it is—do you think that this time next year you will be talking about the detail of specific projects and be talking about those projects?

With a fair wind—as I say, I put it down to both Governments working with us, because if they don't and if they're holding us up, then everything's held up. So, that would be my message to you: make sure that both Governments, if you can, work with us so we can get the full deal signed as soon as possible so we can move on to start developing projects in earnest.

We can certainly make those points to both Governments and we can include that in our own report for the next committee to follow up on. From your perspective, Councillor Ellen, are you confident that you will be able to work as quickly as possible? Is there anything that from your perspective is going to be—? If you've got the money on the table and both Governments have said, 'Here's the money, we're not holding anything up and it's over to you', are you confident that you will then be able to progress the projects quickly?

I am indeed. Carwyn Jones-Evans has already been appointed to lead the project, but we've also now got funding in order to strengthen the project team to work with him. So, now that those blocks are beginning to come into place, I'm quite confident that we will be able to see huge progress during this coming year.

I think you're steering me away from talking—. Before I bring you in, Nigel, perhaps the last question here from me. Perhaps if you could comment on this: as I understand it, the Governments want to see projects that are transformational and want to see them impacting across the entire region. So, are you confident that the projects that will come forward will be beneficial for all of the Powys and Ceredigion areas?

Thank you, Chair. Yes, absolutely, it's a key part. It's implied and it's absolutely clear within our vision going forward that there has to be a regional benefit. Perhaps an obvious example would be the skills agenda. If you were ranking our themes, we talked about connectivity, but skills is at the fore there. Improving skills across the region will benefit all aspects of the region. I was just going to comment in support of what Councillor Ellen just said there. I think in terms of the admin and bureaucracy, and the governance, it is really, really important, but it needs to be proportionate for the amount of investment we have, particularly in mid Wales. Listening to what Kellie was saying earlier, there are some eye-watering sums there, which is absolutely fantastic for CCR, but we need to make sure we don't overdo the admin and bureaucracy and governance in terms of the amounts that we are spending, albeit important to get that investment right. Hopefully that answered your second question as well, Chair. 

Thank you. I appreciate that. I want to be fair to all, so if there are any last comments from any other witness that you want to make before we close this session. No. Thank you, in that case. Thank you, Anthony, as well, for the acknowledgement. So, from my perspective, thank you very much for your time this morning. Honestly, it's been helpful, I think, to have these scrutiny and update meetings—not only beneficial for us, but I hope beneficial for yourselves in terms of the exchanging of ideas. But I certainly hope that the next committee that follows our committee continues the process of asking you to come back on a yearly basis to update on progress. I certainly hope that will be the case. But with that, diolch yn fawr, thank you for joining us this morning. This brings this particular item to an end. For Members, we'll take a five-minute break. Diolch yn fawr. 

I welcome Members back and move to item 3 in regard to our session this morning on city deals. This particular session is a session in regard to the Swansea bay city deal and the north Wales growth deal, for an update on those particular areas. I would like to welcome our witnesses this morning to the committee. Perhaps if I could just start by asking you to introduce yourselves for the public record.

Councillor Rob Stewart, leader of Swansea council, but also chair of the Swansea bay city deal.

Bore da. Jonathan Burns, Swansea bay city deal portfolio director.

Bore da. Alwen Williams, portfolio director for the North Wales Economic Ambition Board.

Lovely. Thank you; diolch yn fawr. Thank you all for being with us this morning. If I could just start with just a very general question. If you could give us an update on progress over the last 12 months specifically—any developments over the last 12 months. I'm particularly keen to know about any areas where you feel that progress has been slower than you would have liked to have seen. Who would like to go first? Councillor Rob. Thank you.

Thank you, Chair. I think it's been quite a significant year for the Swansea bay city deal in terms of delivery and progress. We've obviously completed the reviews that were taking place, I think, the last time we visited you and obviously we've implemented all of the recommendations required for those reviews. So, that has been good progress in terms of finishing, if you like, the first chapter in terms of the reviews of governance. Obviously, we've recruited staff to the central office. Dr Jonathan Burns is now in place with his staff and we're fully up to complement there. So, we've got a fully functioning project management office now helping us to manage the delivery of the projects.

In terms of the pipeline of delivery, three of our projects are now approved: Yr Egin, Swansea bay waterfront and Pembroke Dock marine. Three are with the UK and Welsh Government for final approval, and the remaining two are due to be submitted very shortly. So, again, in terms of a good pipeline of not only definable projects, which are there for full interrogation and understanding, we've got delivery on the ground. If any of you have had a chance—I know it's difficult in these times, but if you've been into Swansea city centre recently, you will have seen the significant progress on the Arena site, which is part of the digital project. We're due for practical completion on that in the first week of September. So, in terms of progress, we're very, very happy with that.

In terms of the draw-down, £54 million has been allocated, and obviously we're very grateful for the updated announcement yesterday in terms of the accelerated funding. That will be helpful to all authorities and projects in the deal in terms of providing us with more money sooner, which obviously helps lighten the burden placed on local authorities in terms of their borrowing to fund their element of contribution to the projects.

In terms of delays, no real delays to report. I think the problems that we raised previously or the issues that we raised previously in terms of the routes for approvals are still a little complex, and probably some of the assurance processes are probably disproportionate to the amounts of money given, especially in the context of COVID where millions and millions and billions of pounds have been allocated out very, very quickly and, obviously, delivered quickly. But I think that has improved. I think the relationship between both the people on the ground, the deal and those representing Welsh and UK Governments, have improved, and the approvals process has improved significantly. And I think that's very much down to the work done by Jonathan and the team at the programme office, but also their counterparts in the Welsh and UK Governments. I think things have moved along very, very positively during COVID. So, overall, Chair, very happy with the progress that's been made during the pandemic.

Thank you, Councillor Rob. I know there's a lot of information in there that I know Members will want to dig into in a moment. And from your perspective, Councillor Dyfrig.

Diolch, Dyfrig. Thank you. Over the last 12 months, I think the key thing that we achieved was obviously signing the final deal. There was an awful lot of work that went into achieving that, not least securing the European structural funding under priority 5—public services reform and regional working—to recruit the team to support the delivery of the growth deal. And we've done that effectively in the time leading up to signing the final deal. So, there's been a lot of recruitment work ongoing, and currently still is; we had our latest new joiner join us yesterday, and we interviewed also yesterday for another vacancy, and we have a further four vacancies live on the system. So, a lot of recruitment going on.

We've also been through a process of upskilling and training. So, ensuring that the whole team are trained and skilled in delivering better business cases aligned with the HM Treasury better business case guidance, and that was the structure that we used to present our portfolio business case and the five programme business cases for approval of the final deal. We've also been through a portfolio gateway review and presented our business case through that independent review, which was run by the Welsh Government's assurance hub, which delivered 11 recommendations that we've acted on or are acting on. We've established programme boards for each of our five programmes. Each has an appointed senior responsible officer and lead member, and we went through the accounting officer review with Welsh Government to secure the final deal. That accounting officer review also delivered nine recommendations for us to work through.

So, it feels like it's been a busy year in terms of setting up the governance and getting all of the structures in place, and it's really good now. We're expecting—. We've signed and returned the final award-of-grant letter, and we're expecting the first instalment to be delivered within this financial year, so by the end of March. So, we're really looking forward to moving into delivery.

Diolch yn fawr. Thank you. There's a lot in there that I know Members will dig into in a moment. Helen Mary Jones.

Diolch, Gadeirydd. Thank you. I want to ask both of the city deals, or the ambition board. I rather like the idea that the one in the north isn't called a city deal, because it's a lot more than a city, isn't it, it's a whole region. Has the impact of the pandemic impacted on your development and delivery of the deal, and particularly, have you changed your approach or your ambitions or your interventions in any way to reflect the way in which the pandemic has been felt differently by different groups of people? We know it's been worse for women than it has for men. We know it's been worse for black people and people of colour than it has for the white population. So, have you changed any of your plans, and to what extent have things being delayed?

I mean, I should declare a constituency or regional interest in both of these deals, of course, because the mid and west region covers some of the important projects planned by the Swansea city deal, and the area covered by the north, and I obviously have particular interest in some of the ambitious work that's planned for Llanelli. So, has the pandemic held you back? Have you changed your focus, has it made you rethink all sorts of things like the Welsh Government ambition for more people working from home, for example?

So, not from a local authority perspective, but from a growth deal perspective.

Yes.

I'm looking for any of the witnesses to come in on that at all.

Yes, Chair, I'm happy to go first on that one. 'Not really' is the answer to that. I mean, the sort of confidence and assurance that we've taken from our continued delivery has been that, actually, the challenges that were there before COVID are the challenges that are there after COVID, and one of our main projects that we're awaiting final sign-off on at the moment is obviously the digital project. And, of course, with the need to do much more remote working and homeworking during the pandemic, having those reliable networks in place, not just in our cities and towns but in all of our communities, is really, really important. So, if anything, it's given more impetus—COVID has—and moved us probably further along in terms of demonstrating the need for some of these things to be delivered earlier.

So, we're confident that all of the programmes and projects within the portfolio are still the right ones. They still deliver the things that the region needs, and that's why I was so pleased with the announcements, both from Welsh Government previously and UK Government yesterday, in terms of an accelerated funding profile. Because, you know, we've said for some time, if we get the money earlier, we'll obviously try and deliver earlier, and that's something that we really put our shoulder to the wheel about. So, no—very, very pleased with that.

In terms of the projects on the ground, we've had a few weeks' delay, and we picked that up early days of COVID, when there were severe restrictions in place, but as we were clearer about what was possible and what wasn't in terms of construction, et cetera, obviously, we then got largely back on track. And, as I said, we're still on track now for practical completion of the digital waterfront project, which is the one in our region, which is in the live construction, in the early part of September.

Jonathan Burns, do you want to come in?

Yes, please. It's probably important, as well, to note that we have a mechanism in place—a COVID impact assessment. So, it's one of the first things—. I was appointed in March, two weeks prior to the pandemic. One of the key things, even though we have a risk assessment and we have red risks currently in our portfolio—and I'll cover those in a second—the COVID impact assessment was another layer, if you like, on that risk assessment process, so that we can identify, at an early stage, and look at mitigations to make sure that we overcome some of those potentials that could happen.

But in terms of the two red risk portfolio risks, one is around securing funding, and as Rob said, that was previous, so we have that on our radar; we're working towards that. The other one is around Welsh European Funding Office-funded projects. So, we have two city deal projects that require WEFO funding, and the time frames around that. Those risks remain, but the overlay of COVID, for me, is around assurance of approval of funding, and that timely approval. Rob highlighted the example for the digital, but many of the others are in the same sort of thing.

The kind of sectoral requirements—so, if you take the creative hub down in Yr Egin as an example, making sure that phase 2 fits for the needs of the sector, so they're doing things like evidence-based need. It's similar for our waterfront, because that's in delivery, and looking at tenancy. We're working with consultants and with businesses to engage with that to make sure that we have fit-for-purpose space. And, again, low carbon, which is Neath Port Talbot-led, a lot of that space is innovation space. So, even though COVID will have an impact—I'm sure that there will be things in there—the need for the space is still there, and we have evidence to provide that.

Delays to construction costs are marginal. The stuff around maintaining of anchor tenants—it's critical for us to keep a review of that; ability to deliver project outputs; and then also, there could be increased costs because of some weeks of time delay, but, again, you're talking on the whole, quite marginal. And just to put a bit of colour on it, Yr Egin, I've spoken to the project lead down there recently, and even within the year of COVID happening, one tenant has left, another tenant has come in, and the one that left was for personal reasons, it wasn't a COVID, economic reason, but they are still operating their facility down there in line with Government guidelines and restrictions. So, basically, they've not offered concessions; they're still operating as they did previously within the guidelines.

Councillor, you asked the second question in terms of the kind of different groups—how do they feel. So, we have talked to all of our primary stakeholders and all four local authorities, universities and health boards, and the people they work with. Because if you take the Delta Lakes development, Pentre Awel, they're working with community groups, local councillors and various other groups down there to make sure that it's still relevant, and all projects that we have in our portfolio are. So, around digital skills, energy, health, advanced manufacturing—all leading to economic growth—are front and centre of what we're trying to achieve.

Briefly, if you can, Dyfrig. Go ahead.

Diolch yn fawr. And with regard to Swansea, have you had a chance to consider what impact the recovery and reconstruction mission might have on your work?

Obviously, we welcome the announcements in terms of reconstruction and recovery. We're working through the detail in terms of that, but we think it's a nice fit in terms of the link between what we do as a region, what local authorities are doing in their own terms of reconstruction and then the national plan over the top of that. We see it as a helpful document and a helpful approach from Welsh Government. So, nothing really to say on that. We find it a good approach.

Thank you. Diolch yn fawr. We're going to move on now to some questions specifically on Swansea, and then we'll move to some specifically in regard to north Wales. So, with that, Suzy Davies.

Diolch, Gadeirydd. Hello, lovely to see you both. I hope you're all well. As Russ said, my questions are all about the Swansea bay deal. I just want to add something to the questions you had from Helen Mary about COVID impact, and extend that, really, to world events more generally and whether what's happening in the steel sector, for example, might be imperilling the steel innovation centre. Are there other world events, other than COVID, that might be impacting and imperilling some of the other projects in the deal?

Not really, other than the ones that Jonathan mentioned previously. Obviously, on our risk register, as on everybody’s, was what our future trading relationship would be with the rest of the world, and specifically with the European Union. Clearly, we haven’t yet seen the full impact of the Brexit deal on the economy, because obviously a lot of our economy is currently hibernated, and therefore we need to see how that plays out. Obviously, as part of the delivery of things like the Swansea digital waterfront, supply issues have had to be overcome as we’ve adjusted to the post-Brexit world. So, there have been some challenges in terms of supply chain, but there has been nothing directly, I would say, that has impacted on either the scope of the projects or the focus of the projects as a result of COVID or Brexit at the present time. We’re just, obviously, mapping out the risks of the new landscape and making sure that those are documented and appropriately managed. But no, Suzy, as you would expect, there’s nothing significant there that we could point to to say that that has caused us an issue.

Well, that—. Sorry, Jonathan.

All I was going to add, Suzy, was that, obviously, with our risk register, we look at opportunities as well. So, if you take the greener economy, which again links to the economic recovery reconstruction mission and lots of other things, we also have those on our radar. So, we know that things like our Pembroke Dock marine, our homes as power stations, supporting innovation on carbon growth—all of those have opportunities around these. So, we've incorporated those into our risk registers as well and the safeguarding of jobs could come into that around the steel industry, for Wales in particular but the UK as a whole as well. But Brexit and COVID are the key ones that are probably of wider environmental concern.

That's great. So, that suggests that even though there may be timing issues, the actual projects themselves are still pretty stable. 

Yes. 

Can I ask you, then, about the spend profile of this? Because what I've heard so far is we've had £54 million draw down from the £240 million from the combined Governments, and there's only about £5 million, if I understand correctly, that's not really allocated from the two Governments at the moment; even though it has not been received, at least it's been earmarked for something. But that's only part of the spend for the city deal. We've got an equivalent amount, or a bit more, actually, coming from other parts of the public sector. And the majority, over £600 million, is supposed to be coming from the private sector. Can you give us some idea of when you expect that money to appear and who it'll appear from? I'm particularly interested in the influence of the economic strategy board on that, because that seems to me where the private sector seems to bite the most obviously.  

Yes, certainly. I'll take the first bit and then hand over to Jonathan. I think, in terms of timing, it's a difficult one, because that is dependent on the Government signing off the projects and therefore allowing us to go into delivery. And, obviously, that is separated now from the release of the funding arrangements. One of the changes that took place over the last year or so has been to decouple the release of funding from the approval of the projects directly. It's now based on the portfolio business case and the progress with that. So, it is difficult for us to say that. Obviously, in terms of the Swansea digital waterfront—I'll use that one again because it's the live one in construction—obviously, there's significant public investment, via the council, of over £100 million in that, with around £23 million then coming from the two Governments. So, the burden falls very heavily towards the local authority on that one. But, the accelerated funding from both the UK and Welsh Governments will help with the payback of some of the money that we're putting in on behalf of the Governments before it arrives.

Also, within the city region, we've recently agreed the distribution mechanism, so that the money that is held centrally currently can get out to the projects and support those projects that are in live delivery. All of that has been put in place. When you get into the other projects, then, obviously they will have varying degrees of leverage for private sector funds. As those business cases are approved and they then get into the delivery phase, they will then start to access and secure those private sector investments. So, it is difficult for us to give you a specific timeline, but what I can say in terms of when we expect approvals—because I think we can be relatively comfortable about that—is that, as I said, we've got three approved at the moment: the digital infrastructure, the Pentre Awel project, and the homes as power stations. Those have been submitted and they're the ones waiting for final approval. And then there's supporting innovation and low carbon growth, the life sciences and well-being sports campuses, and the skills and talent projects; those are the ones that will be submitted in due course, and obviously, we hope those get a quick turnaround. Our aim still is, as it was when we last spoke, to try by the end of this year to make sure that all of those business cases are through their final approvals and then we can give you some greater degree of confidence in terms of when delivery will occur on the ground.

Okay. Thank you. Jonathan wants to come in. Can I just clarify something, though? In terms of speed and putting it in those terms, the fact that the relationship between the two Governments and the board has improved and you've had this nod on accelerated funding—it will be material, it will speed things up, yes?

It won't speed up delivery of the projects, because they were never that directly linked, because the councils were going ahead at risk anyway. I think that was one of the points here. We'd obviously been very ambitious locally. The approvals were difficult for a time. Obviously, getting the same amount of money but faster helps us in terms of managing the profile of spend, and therefore means that the councils do not have to front-load as much of their own money in, because more is coming in earlier from Government. So, it does help, but it doesn't change the delivery profile in that respect. The approvals will change the delivery profile.

That's helpful. Thank you. Jonathan.

Just to build on what Councillor Stewart said, the incurred expenditure to date—that's the £100 million—of that, around £20 million of that is city deal funds, but that's yet to be distributed out to the lead deliverers and the local authorities, because we had to get the money in and approved and also the funding agreements—our control mechanism, if you like, of delivery. They're now in place, so that money will start to flow out to the projects. But the important thing is, as Rob kind of picked up, I think we've got around £4 million of private-sector funding spent within the portfolio currently. In the next four or five years, you will see a massive uplift of that private sector funding spend, and that's based around procurement, largely, research and development, tenancy, particularly anchor tenancy—so, S4C being an example for Yr Egin, Ambassador Theatre Group being an example for the waterfront, but there are others. But you'll find that for the ones that are led by private industry, like Pembroke Dock marine, that spend will happen pretty much with immediate effect, because that project's been approved. And as Rob said, as more come through, you will see that uplift of all the spend for public sector, city deal and private sector. The spend profiles we may have to reprofile based on the announcement from the Treasury yesterday and in today's budget. But as Rob said, that doesn't affect the delivery timescales, because we proceeded at risk on several projects.

Okay. Thank you for that. I appreciate I'm a little bit over time here, so I'll leave it there, Chair. Those will be really interesting questions for the successor committee, though, because it's the private-sector input that's probably the most fragile, I would have thought, with the economic conditions we're likely to face.

Chair, if I may, just one point on that, because I think it's really important. Again, I'll use the Swansea project as a good example. One of the things that the private sector is telling us is that if the public sector were to step back from its commitments and from its ambition to lead on some of these things, then the private sector money would not come forward, and I think it's important that we keep that in mind, because in the post-COVID world, in the post-Brexit world, there does need to be that reinforced partnership with public sector lead on many of these things in order to attract the necessary private sector investment that we need.

Those 9,000 jobs depend on that. Vikki, are you okay if I leave all the gateway review questions to you?

[Inaudible.]

Thank you.

That moves us nicely on to Vikki Howells.

Thank you, Chair. I'm glad you clarified that, Suzy, because my broadband connection is quite poor, so I wasn't sure whether that topic had been covered. I'm interested in the findings and the implications of the gateway review strategic assessment, so I wonder if you could furnish us with a little detail on that.

Yes, very happy to. I think I'll hand over to Jonathan on this one. He's got the chapter and verse on it.

We had a gateway review last summer, and that had conversations with many of our stakeholders, including Welsh and UK Government as well. As part of the frustrations that were raised—I think that was the point—what we now have in place with Welsh and UK Government is a joint board, an implementation board, and they now have a process called an accounting officer review process. As Rob alluded to earlier on, that approves our portfolio business case. So, now we have that process in place, we better understand how that works, and relationships have improved as a consequence. So, that has reduced, if you like, the uncertainty and the process that the Welsh and UK Governments have for approval. So, we're working with them, we've actually been consulting with them on that process, and we've shaped it with them, as have north Wales, and I'm sure mid Wales as well. The time frame as a consequence—and again, Rob touched on this—we are looking at around about a three-month turnaround for our submission of a business case to the approval of the Welsh and UK Governments. It's slightly gone over, because we've got two currently in that process, and the three months is up virtually today, and we're still awaiting approval of two projects, so we're hoping within the next week or two we will get those agreements for Pentre Awel and digital infrastructure to go ahead.

So, the frustrations there were—it's a rear-view look now. So, we've overcome, I believe, pretty much all of those issues. But this is subject to the twists and turns that we've had of different officers and various people involved in Government, and the requirements around the Green Book, their business case guidance and what was conveyed to the region, and how the region responded to that. But I do think that our business cases are now fully robust. They're aligned to the Green Book, so, yes, we're happy with that.

And those issues you alluded to there, Jonathan, were they the critical administrative issues that you talked about in your written submission?

Yes. So, there were six recommendations in total, and three of them were referred to as critical, the ones that needed to be dealt with immediately. So, I'll run through those three and then cover off the other three recommendations quickly.

So, the first one was around the terminology of 'portfolio' and 'programme'. Previously we were termed as a programme, but actually we're a portfolio. That came through the external review with Actica. So, what we needed to do was align to Welsh and UK Governments, so everybody agreed regionally and with the Governments that the terminology and why we're using it is clear, and we've done that. So, we now have a portfolio business case, we have a portfolio management office, and we work to what we call P3M principles and practices—portfolio, programme and project management—and we have a far better definition, and are cascading that out to the portfolio now of what that is. That's the first one.

The second one, again, it's a rear-view thing now, because it was for the Welsh and UK Governments to actually define what the conditions were to trigger further draw-downs of funds, and to approve business cases, and all that sort of stuff. So, we now have that in place, aligned with the funding award conditions that they set previously, in the funding award offer letter. Then the third one links to that, and is confirmation of that acceptance criteria: how do we close down the external review recommendations? Because you'll find, with some of them, there are really tangible things that you can just close and other things that are ongoing. So, you would evolve governance, that type of thing. So, those three, the status of those three, were agreed with Welsh Government. They're closed, they're complete, but we will continue to monitor them to make sure that nothing else happens in the future.

Then the other ones, which were either essential or recommended, were based around the accountabilities and responsibilities between our strategic oversight, which is joint committee, and Rob chairs that, and then the delivery board that we have, which is currently called programme board, to make sure that we have the appropriate things going to each of those boards, and that the appropriate level of responsibility and approval happens at those boards. So, what we did to respond to that, we did a governance evaluation. We looked at a broader evaluation because we thought it was good timing. Sixteen recommendations came from that, and it's been approved by our joint committee and we're already in the process of implementing and improving the robustness of that.

The next one was about a project management office, making sure that we have a reinforced PMO and the importance of the PMO. They called it an information powerhouse, from the recommendation report. So, we now have one. We have loads of governance, documentation and strategies and plans, and the implementation of those now is in place, and that hopefully will come through in the report.

Then the last one was about feasibility work, because some of these projects are very big. They are infrastructure-heavy, but where there was any feasibility seedcorn funding to get projects moving quicker, what we've done as a kind of mitigation, that wasn't necessarily something that Welsh Government agreed to do, so we've done that internally, and as myself and Rob have said, we have proceeded on several projects at risk, and we're progressing in terms of recruitment of staff and the progression of planning applications, et cetera, so that we don't hit the wall of, 'Now we're in delivery, but we're behind.' So, we've reduced that lead time between approval of business case and delivery of infrastructure. So, those are the six recommendations.

Thank you. We're just a bit pushed for time. Vikki Howells. 

That concludes my questions on Swansea. Thank you, Chair. 

Do you want to move on to any questions with regard to north Wales, Vikki?

Yes, absolutely. So, firstly, regarding the north Wales deal, if you could outline the next steps involved with developing and agreeing the growth deal projects.

I'm happy to take that.

So, the projects are now developing their outline business cases. We've got 14 projects sitting within the five programmes. They are, as project teams, following the better business case guidance, which includes holding workshops for each of the cases within the five-case model, and that's in progress. All projects will go through a gateway review and this is something that we've booked in with the assurance hub at Welsh Government, and that's in line with our integrated assurance process. And that will happen before the projects are put forward for approval from the north Wales economic ambition board. 

Our first project went through a gateway review last week. So, that was a very, very critical milestone for us in that the first of our projects has moved quite quickly into gateway review. They received a report early this week that outlines some feedback that they, as a project team, are now considering, as well as the recommendations.

The project business case approval is a matter for the economic ambition board with Government, and Government, obviously, approving the assurance process that we've put in place; so, the process of putting the projects through gateway reviews, et cetera. The end-to-end project approval process is the project business case gets produced, an independent assurance happens, the programme board reviews the business case, the portfolio board reviews the business case, and then the business case is presented for a decision from the economic ambition board. So, that is the step-by-step process that we follow. That's what we're following for each of the 14 now.

Thank you, and your written evidence suggests that work is under way in collaboration with Welsh Government to design and develop an investment prospectus for north Wales. That all sounds very exciting. What does it involve?

Yes. So, it's aligned with what we've previously spoken about, which is about attracting inward investment, attracting investment into the region, and using the investments that we're putting in place through the growth deal as a lever to create the narrative that will attract that investment in. So, we're looking at designing an electronic brochure, effectively, with a target audience that is much wider than the region and Wales. So, we're looking at national and international interest in some of the investments we're placing, how that unlocks the potential for inward investment, and the broader narrative about what we have to offer here in terms of infrastructure, skills and resources. I think that's going to be piloted with north Wales.

Thank you, and how does it all tie in with the Welsh Government's regional approach to economic development, for example, with the regional economic frameworks that have been developed in your area? 

We've been working since the beginning of last year, really, with Gwenllian and her team regionally to develop the regional economic framework. I think due to COVID-19, the work did—. It was put on hold because we were constantly monitoring the situation, evaluating the impact it was having on business, but the regional recovery group that we have established for north Wales now has commissioned a core group to lead on the development of the regional economic framework. So, members of my team are working really closely with members of Gwenllian's team to pull that together. We expect it to be a 20-page document that outlines the framework and encompasses the way we work together for regional economic development. That, I think—. I'd like to say that was always part of our plan and COVID hasn't forced that to happen; we had a plan in place pre COVID last year, which we are now picking up and delivering against.

Thank you. Looking forward, then, to the next six or 12 months. What sort of significant milestones do you intend to meet over that time, and how do you intend to report on them?

We've got a project pipeline, and that will see the first 10 projects of the 14 produce outline business cases and those outline business cases will be considered by the board, and commence procurement phase. We expect to see the first full business case considered by the board in September 2021, and commencing delivery actually by the end of this year as well, and we are constructing a reporting framework, but the reporting will be quarterly to our economic ambition board, and also to Welsh Government and the UK Government, with an end-of-year annual report as well.

Thank you. One final question from me, looking ahead to our successor committee, are there any improvements that you think could be made to the scrutiny of the city and growth deals in the sixth Senedd? 

Diolch.

Helen Mary Jones.

Could I then turn very briefly, Chair, because I know we're short of time, to Swansea, and just ask you about how you've approached your scrutiny? You've told us a bit about your management of the arrangements, how the leaders work together, but what arrangements you've got in place for scrutiny—is there an intention to do that jointly, or will it be through your existing scrutiny systems in the local authorities?

So, our scrutiny arrangements have been operating now for some time. We have regional scrutiny arrangements in place. They're supported by, and run by, Neath Port Talbot Council on behalf of the four councils. The scrutiny committee is made up of representatives from all of the councils, who can call projects and members in for updates as they wish. In addition to that, where there are local interests in specific projects that don't cut across the whole of the region, they may also do some local scrutiny at local scrutiny committees within the region. So, we have a two-tier approach to scrutiny, and our view is, and has been from the start, that we will—if invited to turn up at a scrutiny meeting, we will attend.

That's helpful; thank you.

Thank you. 

Diolch yn fawr. Thank you, Helen Mary Jones. With that, I think we've covered every area that we wanted to raise with you, but are there any areas—? We're just a little bit over time, but are there any areas you think that you should—have information that you should impart to us as a committee? I should say that this is one of our last sessions before this committee finishes its work, but we will looking to report to the next committee in our legacy report, and providing the next committee with our suggestions as to what they might want to look at. Is there anything from your perspectives that you feel that we could be recommending to a further committee in terms of scrutiny, or indeed to the Welsh Government Ministers, as they come before us next week? 

Chair, nothing specifically in terms of the current deal, but, of course, I think one point of interest will be the new funding arrangements post Brexit in terms of the shared prosperity fund, levelling up funding, because if those moneys do come other ways than directly via the Welsh Government, then, again, we need to make sure that we're managing and understanding how that is having an impact in terms of what it could add to our regional delivery. So, I think that might be an area of interest for the committee. 

I couldn't agree more. Thank you, Councillor Rob, for that. And Jonathan Burns. 

One of my areas, and it kind of links to one of the first questions, is about inward investment, and it's foreign direct investment, FDI, and stuff around how and what we can do to join that up in support across Wales, because we don't want to compete with each other from different regions; we want to be synergistic as much as we can. So, I think an aspect around how we work together, and foreign direct investment as an example. There could be other examples as well—[Inaudible.]

Thank you, Jonathan; we appreciate that. With that, I'd like to thank our witnesses for being with us this morning. Diolch yn fawr. We appreciate it, and I very much hope that the next committee will invite you back for an update on your work in around about a year from now, but that will be a matter for them, of course. But diolch yn fawr. 

With that, I move to item 4. Well, just before I do, I should say that, in next week's session, for our final general ministerial scrutiny, we have got the Ministers Ken Skates and Lee Waters with us for our final ministerial session.

But, with that, I move to item 4, and, under Standing Order 17.42, resolve to exclude the public from the remainder of the meeting, if Members agree. Thank you. Diolch yn fawr. That brings our public session to an end today.