The Corporate Director Communities presented the draft Joint Working Agreement Business Plan (JWA) which had been recommended by the Cardiff Capital Region Cabinet and sought its adoption as the formal “JWA Business Plan”. 

The Corporate Director Communities explained that the JWA Business Plan would address the updated Affordability Envelope, the methodology for agreeing the nature, scope and prioritisation of projects to be developed for the overall benefit of the Cardiff Capital Region, the methodology and responsibility for any external audits and performance monitoring and revenue and capital monitoring reports to be prepared by the Joint Committee and the frequency of those reports.  He stated that the JWA draft Business Plan would now be referred to as the CCR Strategic Business Plan for the Wider Investment Fund to reflect its status and focus.    

The Corporate Director Communities outlined the strategic context and spatial priorities of the draft JWA Business Plan and identified the emerging opportunities within the life of the plan.  He explained that the agreement with the UK Government and Welsh Government provided £1.2 billion of which £734m was allocated to the Metro with the balance of £495m being made available as the Wider Investment Fund.  The Regional Cabinet had stated that the high level aims of the Wider Investment Fund were the creation of 25,000 new jobs and £4bn of private sector investment.  The first investment had been made in the Compound Semi-conductor Project, providing a loan of £38.5m with the potential to generate 2,000 jobs and over £380m of private sector investment.  He explained that following this initial investment, Regional Cabinet had agreed in principle to support the Metro Central Project, Regional Housing Investment Fund, Digital Strategy and Skills for the Future schemes.

The Interim Head of Finance and Section 151 Officer reported that the Council’s contribution to the CCRD is £11.328m (9.4% of the overall Local Authority Partnership capital funding requirement) and that a recurrent budget pressure of £598,000 was included within the MTFS in 2017-18 to fund the Council’s contribution.  This was based on the funding profile at that time.  She explained that due to a change in funding profile, the Council was required to make a payment of £2,299,950 before the end of the 2017-18 financial year. This would reduce later years payments and require the expenditure and funding within the capital programme to be re-profiled but within the same overall programme envelope.  The Interim Head of Finance and Section 151 Officer informed Council that in order to ensure there is no impact on capital funding availability it was proposed that the balance of funding required over and above the available £598,000 budget (£1,701,950) be met from under spends within other council wide budgets, which would require a virement from this budget to the Communities Directorate budget from where the payment will be made and a re-profiling of expenditure and funding for the scheme within the capital programme.

Councillor Andrew Morgan, Chair of the Cardiff City Capital Region City Deal addressed Council and expressed his thanks to the Leader and Chief Executive of Bridgend County Borough Council who along with Councillor Peter Fox, the Leader of Monmouthshire County Council and he had played a leading role in the development of the City Deal.  He stated that all 10 local authorities in the Regional Cabinet are equal partners and have equal votes in making investment decisions.  He informed Council that following the first investment made in the Compound Semi-conductor Project, it was on course to delivering 2,500 highly skilled jobs.  The adjacent factory had also been secured, to generate £420m of private sector investment as a result of the loan of £38.5m made by City Deal.  He informed Council that the Housing Investment Fund would see brownfield sites being tackled and will drive opportunities for apprenticeships and graduates. 

A member of Council questioned the impact the proposed virement would have on the Communities Directorate budget.  The Leader confirmed that there would be no impact on the Communities Directorate with the proposed virement of budget.

A member of Council questioned how would the Housing Investment Fund help small businesses and builders and support Bridgend based employers as it was believed that it would favour volume house builders.  The Leader stated that Bridgend would benefit from the Skills for the Future and the Housing Investment Fund would be targeted towards smaller builders.  In addition, the County Borough would benefit from the Digital Strategy and better transport links that would be derived from the Metro Central Project.  He informed Council that approximately 7,000 people leave Bridgend to travel to Cardiff each day with people being employed across the region.  He stated that no one could say for certain what benefits City Deal would bring to Bridgend. 

A member of Council commented that one of the biggest barriers to economic prosperity across the region is the traffic congestion on the M4 around Newport and questioned when the motorway would be upgraded to alleviate that congestion.  The Chair of the Cardiff City Capital Region City Deal commented that he is supportive of the black route and each time he had met business leaders they had requested that the issue of traffic congestion around Newport be addressed.  He stated that it made it more difficult the region when connectivity issues exist and there was a need for a decision to be made on the preferred route around Newport without delay. 

A member of Council questioned how City deal would be funded by the local authorities given the proposals for local reorganisation.  The Chair of the Cardiff City Capital Region City Deal stated that RCT Council had set aside funding in order to generate a surplus which would not have an impact on the Council’s budget.  He stated that each of the 10 local authorities are committed to City Deal and this would be the ninth Council to vote on proposals for the Joint Working Agreement Business Plan.  The Councils which had voted previously had done so unanimously.  He stated that he had been given assurances that local government reorganisation would not be a barrier which would compromise City Deal.  The Leader commented that this Council had budgeted for City Deal in the Medium Term Financial Strategy (MTFS) and is affordable and that funding of £375m would be levered from the UK Government across the region. 

A member of Council questioned the risk to the MTFS of using the under spend and how will affordability be addressed.  The Interim Head of Finance and Section 151 Officer stated that the strategy is to fund internally where possible and that the proposal is a change in profiling which will reduce costs on revenue and borrowing and is a prudent use of resources. 

A member of Council commented that it appeared that the proposal before Council would favour Cardiff who would derive a greater return on their investment and that the benefits of City Deal would only be realised in Cardiff.  Concern was also expressed at the proposed use of £1,701,950 and its impact on under spends.  The Leader commented that only project had been approved to date, being the Semi-conductor Project in Newport which is the subject of a loan and not a grant.  He stated that the Metro hub will benefit the region as a whole and other programmes in City Deal would benefit Bridgend.  He also stated that the Housing Investment Fund would benefit valley communities and all communities would benefit from digital skills and better connectivity.  The Interim Head of Finance and Section 151 Officer reassured Members that there would be no impact on budgets and that under spends would be considered.  The Corporate Director Communities stated that the investment in City Deal would not be concentrated in Cardiff but scattered across the region.  The Leader informed Council that the funding by the UK Government for the Metro project is match funded by the Welsh Government.  He stated that the local authorities had direct influence on the other projects.  He also stated that there in excess of 20 City Deals in the UK and that 2 successive UK Governments have honoured each City Deal and had signed up to sequels to City Deals and there was a need to ensure that this region benefitted from investment.  He informed Council that all projects will have to go through the framework and be able to demonstrate that they deliver extra private sector investment. 

Concern was expressed by at the decision not to electrify the railway line west of Cardiff and the lack of a half hourly rail service to Maesteg, whereas Cardiff was getting a new transport hub and questioned the benefits to Bridgend.  The Deputy Leader commented that IQE, the Semi-conductor manufacturer is working with Bridgend College to ensure the right courses are delivered in to support those highly skilled jobs and to equip future generations.  The Cabinet Member Communities commented that the upgrade to the valley line will benefit Bridgend and that the City Deal project will last for 30 years.

A member expressed concern that many valley communities have empty properties and that additional housing will worsen the problem, concern was also expressed that Bridgend would not derive benefits from City Deal.  The Corporate Director Communities informed Council that there is a longlist of capital schemes awaiting to go through the framework.  He stated that City Deal was about prosperity for the region and not confined to boundaries.    

Concern was expressed at the financial management of City Deal and that the local authorities were being held hostage by having to make further investment.  The Interim Head of Finance and Section 151 Officer informed Council the local authorities were still working to the same financial envelope and that the proposed internal funding from under spends was the most prudent.      

It was moved and seconded that a recorded vote be taken on the proposals contained in the Joint Working Agreement Business Plan; but firstly, an electronic vote was required to see that there was a consensus of Members for this.

Therefore an electronic vote was taken, the result of which was as follows:-

For (recorded vote)                   Against               Abstain

38                                               7                          0

As the vote for a recorded vote was carried, this was then undertaken, the result of which was as follows:-

For                                            Against               Abstain

37                                             7                         3

RESOLVED:   That Council approved

a)            The JWA Business Plan attached as Appendix A.

b)            The budget virement of £1,701,950 from underspends on other council wide budgets to the Communities Directorate to enable the payment to be made in full from revenue budgets in 2017-18, and that the scheme be re-profiled accordingly within the capital programme.