Denbighshire County Council - Agenda item

To consider a report by Councillor Hugh Evans, Leader and Lead Member for the Economy and Corporate Governance (copy enclosed) seeking Cabinet’s endorsement of the key documents required to reach the Final Deal Agreement for the North Wales Growth Deal for submission to Council for formal approval.

Vote taken: 8 in favour, 0 against, 0 abstentions

RESOLVED that Cabinet –

(a) formally endorses and recommends that the Council approves the Overarching Business Plan as the document that sets out the arrangements to deliver the North Wales Growth Deal as the basis for entering into the Final Deal Agreement and acceptance of the Grant Funding Letter with the UK and Welsh Governments;

(b) formally endorses the provisions in Governance Agreement 2 relating to executive functions, recommends that Council approves the provisions relating to non-executive functions, and that it specifically adopts the delegations and Terms of Reference in “Governance Agreement 2: Appendix 1” thereof as the basis for completing the Final Deal Agreement and acceptance of the Grant Funding Letter with the UK and Welsh Governments;

(c) formally endorses and recommends that the Council authorise the accountable body, Gwynedd Council, to sign the Grant Funding Offer letter on behalf of the Partners;

(d) formally endorses and recommends that the Council recommend approval of the method used to calculate the cost of borrowing notionally required to facilitate the negative cash flow for the Growth Deal, and to include a provision within the Council’s budget to pay this contribution and the established core and supplementary contributions as set out in Governance Agreement 2 (and in paragraphs 5.5 – 5.7 of the template report attached as part of Appendix 1);

(e) that the Chief Executive in consultation with the Leader, Monitoring Officer and Section 151 Officer be granted delegated authority to agree minor changes to the documents with the Partners as necessary to complete the agreement, and

(f) that Cabinet confirms that it has read, understood and taken account of the contents of the Denbighshire County Council Well-being Impact Assessment attached as Appendix 2 to the report as part of its consideration.

Councillor Hugh Evans, Leader and Lead Member for Economy and Corporate Governance presented the report seeking Cabinet’s endorsement of the key documents required to reach the Final Deal Agreement for the North Wales Growth Deal for submission to Council for formal approval.

The report included some background regarding previous approvals of all partners leading up to the current position. The North Wales Economic Ambition Board (NWEAB) were committed to achieving Final Deal Agreement with the UK and Welsh Governments by the end of 2020 and the relevant documentation was currently going through the democratic processes of each of the local authorities. Cabinet and Council, along with all partners, had been asked to approve the various documents which would enable the Final Growth Deal to be concluded.

The Leader reiterated the aim of the Growth Deal to build a more sustainable and resilient economy in North Wales in partnership with public and private sectors, supported by £240m funding from the UK and Welsh Governments over the next 15 years. The Growth Deal aimed to deliver investment of up to £1.1bn in the North Wales economy to create 3,400 – 4,200 new jobs and generate £2 – £2.4bn in net additional GVA by 2036. The Leader delivered a joint presentation with the Corporate Director: Economy and Public Realm; Head of Legal HR and Democratic Services and Head of Finance covering the following areas of the Growth Deal –

· the Growth Vision and Growth Deal Portfolio of investment together with direct benefits to the region including economic prosperity; creation of better quality jobs and a more skilled workforce, and improvements in living standards

· the portfolio of programmes which related to (1) Low Carbon Energy; (2) Digital; (3) Innovation in High Value Manufacturing; (4) Agrifood and Tourism, and (5) Land and Property together with programmes not directly funded but supported in relation to Skills and Employment and Transport

· illustrated the geographical spread of the fourteen projects identified with each project delivering widespread benefits across the region ensuring a step change

· elaborated on the specific projects identified in Denbighshire which related to (1) St. Asaph Business Park; (2) Former North Wales Hospital Site Denbigh; (3) Llysfasi Carbon Neutral Farm Project, and (4) Bodelwyddan Key Strategic Site

· detailed the legalities of the Final Growth Deal Agreement between the NWEAB and UK and Welsh Governments for delivery of the Deal which would be signed on the basis of the portfolio business case and five programme business cases

· highlighted the financial considerations including the cost of the programme and how it would be funded including partner contributions over the 15 year term together with the annual partner contributions and the methodology behind the calculations which for Denbighshire equated to a range of between £64k - £90k

· reported upon the Governance Agreement 2 to take the partnership into the implementation stage of the Growth Deal, continuing the governance model adopted in Governance Agreement 1 and defining the relationship between the Board and its partner organisations, the limits of delegation and accountability.

The detail of the Growth Deal had been widely scrutinised and had more recently been subject to a Members Workshop. Councillor Jeanette Chamberlain-Jones, Chair of Partnerships Scrutiny Committee had been unable to attend Cabinet and requested the Leader read out her statement on scrutiny’s findings following consideration of the Growth Deal on 5 November. In brief the Scrutiny Committee –

· acknowledged that while projects would be located in various areas across the region they would all, to a greater or lesser extent, benefit the entire region

· agreed it was extremely important that the Deal moved forward to secure the funding to deliver the projects and realise the anticipated economic benefits

· had been assured that the Governance Agreement was sufficiently robust and had set out structures to protect all partners with transparent monitoring and scrutiny arrangements to maintain accountability of the Board’s decision making

· had been supportive of the principles set out in the Scrutiny Protocol

· some concerns had been raised about the potential impact of Covid-19 and Brexit on projects and the area’s future economic prosperity and resilience but it was recognised that the Board had already identified those risks and were monitoring them; it was felt that the Growth Deal could potentially provide some security and support against any negative impacts in that regard

· had been of the view that the Growth Deal provided an excellent opportunity for the region to realise its economic potential

· emphasised the need, once the Growth Deal Agreement had been approved, for the Board to link its work to that of other high profile programmes, such as the Northern Powerhouse, to maximise the benefit to the region.

On behalf of the Scrutiny Committee, Councillor Chamberlain-Jones recommended Cabinet support the Final Growth Deal and recommend the proposals within the documents for submission to Council for formal approval. The Leader thanked the Scrutiny Committee for their hard work in scrutinising and challenging the detail of the Growth Deal and for the assurance that could be taken from that work.

During the debate Cabinet members sought further clarification regarding various elements of the documentation and the Leader and officers responded as follows –

· confirmed that the current potential creation of Corporate Joint Committees (CJC) which were currently being consulted upon by the Welsh Government had been taken into account within the legal agreement – it specifically set out that if the law changed and CJCs were created, the decision as to whether or not the existing model was transferred into a CJC was reserved to each of the six local authorities to determine individually

· advised that in the reform legislation there would be a power for two or more authorities to merge on a voluntary basis and if that were to happen then all of the legal obligations that each of those bodies had individually before they merged would fall to the obligations of the new body

· Councillor Mark Young queried whether the council would need to declare an interest in any land owned by them earmarked for development given that they would gain from any subsequent investment and he was assured that, as a partner body, the council would still be able to participate in discussions and there would be no need to declare any prejudicial interest on that basis

· there had been political commitment to the £240m government funding and discussions with both governments had been ongoing on matters of detail with no indication that the funding commitment would be withdrawn. However there was no legal commitment to providing those funds until the Deal was signed

· explained the funding calculations for partner contributions confirming that region wide projects were equally funded but for individual projects for which specific partners would receive greater benefit (building/asset etc.) they would be expected to pay for the borrowing requirement associated with that project

· acknowledged the difficulties of future proofing particular projects over the 15 year term of the Growth Deal, particularly in areas such as digital infrastructure, which had been identified as a risk. It was accepted that some flexibility would be required within the project and programme management with some adaptations to reflect changing circumstances which would be monitored over time, and Cabinet and Council would also have a role in that regard. However it was hoped that the projects would be future proofed so far as possible with a forward looking approach in terms of future requirements such as the green agenda and decarbonisation, new skills and jobs fit for the modern age.

Cabinet acknowledged the complex and lengthy process leading to the Final Agreement stage and paid tribute to the hard work of all those involved within that process and the development of robust arrangements going forward. Cabinet was satisfied that the clear information provided in terms of the portfolio of programmes and projects; financial considerations and affordability, and governance arrangements had demonstrated all those elements had been considered and addressed and assurance had also been taken from scrutiny’s work in that regard. Councillor Thompson-Hill added that funding to cover the additional costs had been identified providing assurances that the financial element could be covered.

The Leader invited questions from non-Cabinet members and, together with the relevant officers, responded to the issues raised as follows –

· officers agreed to consider the points raised by Councillor Meirick Davies regarding how the information was presented for ease of use

· the expectation was for the digital programme to be delivered early on within the process and work would be carried out to develop capacity in the private sector which would be encouraged by the significant investment proposed in that area

· the environmental and ecology impact of specific projects would be considered as part of statutory processes around planning permissions and the proposals had also been aligned with well-being goals and suitable developments

· the procurement approach had been detailed in the overarching business plan with an emphasis on encouraging and supporting improved access to regional and local SMEs and given the aim to benefit the local economy, that concept had been built into the overall proposal to ensure local companies benefitted and helped to deliver that investment; with regard to post Brexit the existing procurement regulations still applied and work would continue within those legal restrictions and parameters as applicable as and when the rules changed

· cycle lanes had not been included as a specific project within the bid but would be dealt with at a strategic level across the region within the transport programme and members were reminded there were other local funding streams available for local authorities to deliver local expectations of that nature.