National Assembly for Wales

I'd like to welcome Members to committee this morning. I do move to item 1, and we do have apologies from Vikki Howells and Hefin David this morning. I would like to formally thank two previous members of the committee, Lee Waters and Mohammad Asghar, who have moved to different areas—Lee into Government and Mohammad to another committee. And I would like to—. Although I've done it informally, I would like to formally welcome Mark Reckless and Jack Sargeant, who'll be joining us shortly in committee. So, welcome on behalf of the committee.

If there are any declarations of interest, say so now. 

In that case, I move to item 2. Item 2 this morning is papers to note. Are Members happy to note these papers? Thank you.

In that case, I move to item 3, in regard to our city deals update. Last week we had witnesses from Cardiff and Swansea city deal areas, and later this morning we have witnesses in regard to the North Wales Economic Ambition board, but this morning, for the next hour, we have colleagues from mid Wales. I would like to welcome you this morning, and I'd ask you perhaps if you could—I ask the two leaders of the local authorities if they could introduce themselves first, and then the relevant council officers. 

Right. And the officers? Rosemarie?

Good morning. I'm the chairman of the Growing Mid Wales partnership at the moment, although Councillor ap Gwynn and I share the chair. We do it alternately. I'm also the leader of Powys County Council and I'm Rosemarie Harris. 

Bore da—good morning. My name's David Powell. I'm the deputy chief executive of Powys County Council.

Thank you. Members have got various questions, but, if I could start first of all, am I right to describe the mid Wales growth deal as a potential mid Wales growth deal, or shall I just call it the mid Wales growth deal? Who would like to take that?

Well, 'growth deal' is less of a mouthful, isn't it, really?

And I think it's closer to the mark, because we have been offered a growth deal in the Westminster budget, last October and the previous October. No details yet, but it's beginning to be worked up.

Okay, thank you. And, about 18 months ago, when we did our inquiry on growth deals and the regional economies of Wales, Councillor ap Gwynn, you came in then, and relevant councillors from Powys. At that time, we had an update on where you were at that point. That was 18 months ago. What has happened in that last 18 months? What progress has been made?

If I start, Chairman, we appointed consultants to look at developing an economic strategy for us. We appointed AECOM, and that work is still ongoing, although pretty much finished, really. We've done—in both areas, we've done a very big round of contact with our businesses. We've talked to our businesses, shared as much information as we could about our potential deal. We have had, in recent times, an informal cabinet, Ceredigion and Powys, where we've talked about the governance arrangement. We're probably going to have a joint committee. We haven't formalised that yet. We've talked about sharing the different responsibilities between the two local authority areas, and our officers have met with officials, civil servants, from Westminster Government and from Welsh Government actually in very recent times, during the last week, to discuss ways forward in terms of governance and lots of other areas of work that they will need sight of, really, before we formalise. 

Indeed, yes. We're hoping to set up a joint committee. As Rosemarie has said, the joint cabinets have met and more or less agreed the inter-authority agreement, which will have to ratified in both Cabinets separately in order for it to become live, but we're hoping that that will happen in the next few weeks. As Rosemarie said, we've agreed on apportioning different responsibilities as far as staff are concerned, but we've also appointed jointly someone that will help us to draft business cases going forward, because that's the main thrust of the work from now on, to start developing business cases. We've had a timetable—quite a tight timetable. London wants business cases in by October time—the first step, the first elements, of the business cases. 

Another thing that's already happened is that both Cabinets separately have agreed to nominate members of an economic strategy group that will sit underneath the joint committee and be there in an advisory capacity. And I think, whoever the Ministers appoint, or the Secretary of State appoints, to chair that group, that person will also become a member of the joint committee. 

And the Secretary of State appoints that person, you say.

Well, I'm not exactly sure whether it's the Minister and the Secretary of State together, or whether one or the other will do it. I'm not clear on that. 

We're taking it for granted that we're allowed to submit names and that a name will be chosen. 

Okay. And the discussions you've had with both Governments, can you just say a little bit more about those—perhaps what discussions you've had with the UK Government and then what discussions you've had with Welsh Government?

The discussions to date—we've had some discussions with Lord Bourne, who is leading, of course, from Westminster Government, and we're due to meet him again. But, at the moment, it's more civil servants meeting with our officers, and there's been a meeting in the last week. Are our officers allowed to—

Oh, yes, we'd encourage them to answer questions as well. 

Because neither of us were present at that meeting. 

No, no, I quite understand. If Mr Powell wants to talk to that point—. 

If I can just start off broadly, Chair, and then I'll ask my colleague Eifion to discuss the most recent meeting, which I couldn't attend. But, at a very early stage, we visited Westminster to meet the civil servants to get a sense from them about what would be acceptable and what they were looking for. And I think that's just—. The approach that we've taken is to try and make sure that we understand where the boundaries are. To some extent—. There's a pretty good landscape emerging across Wales, but there's also what's happening in England as well, which we've looked at, in terms of local enterprise partnerships, to get some awareness of that. And I've got some awareness of that from my previous authority where I worked. So, we got a sense from those civil servants about what they were looking for. But it is—. Every growth deal that is now emerging across Wales does feel slightly different to the one that's gone before. So, there isn't a template for us to follow, and that's where our discussions with civil servants have been particularly helpful. But, on the issue of the meeting that was held last week, I don't know, Eifion, if you wanted to say anything about that. 

I think the important thing for us, and the benefit as officers, is that, having access to the civil servants that have been leading other growth deal areas in Wales, they are able to advise us on where deals are particularly successful, and, more importantly, what hurdles or obstacles have caused things to stall in certain areas. So, having that intelligence and having that dialogue has been critical. And one of the key things that we have both been working on very hard is—you know, you can't define the growth deal as projects that can be delivered in the next six months, nine months, 12 months. The growth deal is an opportunity to turn the economic position of mid Wales around over the next five, 10, 15 years. So, the vision that we need to include in the growth deal has to demonstrate quite clearly that the overarching themes that we are working on at the moment give us the opportunity to grow and increase wealth within the mid Wales region. So, the thinking behind that—we're able to bounce ideas back and fore from civil servants, both Cardiff and London. 

I was going to ask you about your contact with Welsh Government as well, because you talked about meeting UK Government civil servants. Has that been the case with Welsh Government?

Civil servants from Cardiff and London are always present in the same meetings. So, it's a good balance. And the advantage for us of having that balance is that we know that, whatever suggestions will be coming up, as far as the operational work is required, we are meeting the expectations of both Governments at the same time. We're not meeting with one separate to the other and then learning one mistake from one and then picking something up from the other. So, having them both in the same room, in the same meetings—very helpful, very productive. I think our challenge was that—. The message we had loud and clear from the very outset was: this is capital, this is not revenue. So, David and I then agreed that we would set aside, within budgets that would be ratified by members—that we would put a funding stream, a very small, nominal fee, but we've set aside £150,000 each, both in Ceredigion and Powys, to start looking at using some revenue stream to support the work. Because, as both Councillor Harris and Councillor ap Gwynn have said, the main thrust of this now is beginning to put the meat on the bones of the first phase of the business case, and that's a huge task in its own right, and we need capacity to be able to do that on top of what we currently have. So, setting that—

And that needs to be done by October—is that right?

That's correct, yes.

Right, okay. And, just briefly, because we've got to move on—just ever so briefly—in that 18 months since we talked about this in committee last, what are the hurdles that you've—or perhaps what are the stumbling blocks, what would you have liked to have moved further on, what areas would you have liked to have seen moved further on?

Well, we always—we'd always like to hear that there's money definitely on the table, so that we can really think that the work we're doing is not going to fall by the wayside, along the way, but—

And you've not had that commitment from the Welsh or UK Governments yet.

We haven't had—. We've had a commitment, but not a definite sum committed—put it like that.

What do they say when you ask them for that sum of money?

Well, I don't think they were ready for that. I think they want to see what's going to come out of the work that's been happening, as Rosemarie already said. We've been meeting with the business communities in both counties and finding that they're very open to discussion and to bring their ideas to the table. But not just the present business community—we're also working, for example, with the Aberystwyth innovation centre, in the university in Aberystwyth. They are in the process of developing that centre, and the whole point of that is to develop business on the back of the research that's going on in the Institute of Biological, Environmental and Rural Sciences, and we're hoping that that will be a source of really innovative new jobs, going forward.

Okay. There are a lot of questions that stem from that, which Members will want to pick up, but I'll come to David Rowlands first.

Thank you, Chair. Ellen, you've touched upon the governance structures within the growth area, but, back in 2017, the committee recommended, and I'll quote, that city and growth deal structures should be

'set up in a way that allows them to streamline decision-making rather than increasing red tape for businesses seeking to invest in the area.'

To what extent will the proposed governance structures achieve this?

Well, that's why we've set up a joint committee. So, if both counties give that joint committee the delegated powers to make those decisions, then we won't have to be running back and fore to different cabinets in order to get that backing—similar to what they've already done, I think, in the city deals and north Wales. It's a leaders group, but, because we're only two counties, we've strengthened that—there'll be four councillors from each county on that joint committee, together, as I mentioned, with the chair of the economic strategy group that will be appointed as well. So, hopefully, that structure, when it's finalised now—it will be jointly chaired by the two of us—that will give us a way of being able to work more freely with those delegated powers.

We've also agreed that, rather than chair it for a year each, we will chair alternate meetings, and each local authority will supply the back-office administration for that committee, so that we're both equally involved as we move forward. It's obviously easier with just two authorities than it would be in a bigger area, but that will suit us very well. And of course we have to develop scrutiny to go along with that as well. But of course we already have scrutiny developed within the two local authority areas, and they'll be watching—they are already watching what we're doing. And there will be times when we will need to let the public know as well what we are doing—press releases, all sorts of things. In Powys, we've had seminars where we can share what information we have to date with our members, and I'm sure Ceredigion will be doing the same thing.

Yes, Rosemarie, actually that was part of the next question I was going to ask, about transparency, because, obviously, you have to bring businesses, the people of the area along with you. So, they have to know exactly what activities the growth deal is up to, so that you can bring them along. You just mentioned some of them, Rosemarie—was there anything else that you're doing to interact with the people in general?

I think as we move forward—we haven't got to the stage where we're into projects yet—we'll have a lot of information to share, and I think there'll have to be a constant stream of press releases. I see no reason why we can't go back out, talk to our businesses and share information. And I actually see a time when a lot of our businesses will need to be involved in various areas of expertise, in various different projects, although the economic strategy group, the actual group—we will have to keep fairly tight. But I see an area around that where lots of businesses will be able to make a contribution.

So, would businesses be included in that group?

No, I see a wider area. There will be businesses in the economic strategy group. It's made up of businesses, but it will, of necessity, have to be fairly tight. It would be difficult if it was big, but depending on the projects, there will be areas of expertise that they will need to draw in. So, we'll be able to involve more people going forward.

Do you think that businesses in Powys and Ceredigion are aware of the growth deal and what comes with it?

I think they are now, yes. We've held four seminars with different elements of business throughout the county, and I know that Powys have been doing the same. So, we've been trying to roll out the message and to garner support and, hopefully, give them encouragement to think afresh of how they could develop their businesses with the help, possibly, of the growth deal or the shared prosperity fund, or whatever streams of funding are going to come down the line in the next 15 years, because we're looking long term here, it's not going to happen overnight.

And have you had that support from businesses?

Yes, on the whole, we have, haven't we? Yes, there are ideas coming forward and new businesses also wanting to come in and develop.

And if I ask Councillor Harris, perhaps: do you feel that businesses in Powys feel that they're engaged in the process and that they have a stake in it?

Yes, I think they do, but I think, it's fair to say, that there's more that we can do. Obviously, this is an ongoing, rolling process, so we will need to do that. We've been round the county, and you will appreciate that it's a massive county. We've been round the county twice, doing a round of business breakfasts. We've had present, I think, something like 400 businesses and lots more have been invited, so, they are aware. We've also been out, my officer and I, to visit a number of our bigger businesses. We've held receptions at the Royal Welsh Show, where we've invited businesses in. But that's an ongoing thing, as I say. We will do more of that. 

You mentioned you could do more. So, what more could you do to engage with businesses?

I think we found that what we did was extremely successful. People came in and, obviously, once the whole process starts rolling a little bit more, once we get towards the project stage, people are going to be even more interested because, at the moment, all we've been able to share with them is that we've got a potential growth deal. We've worked on themes to date with our consultants. When we get slightly beyond that, there will be more to share. But we would like to have their ideas as well, so we are talking at the moment about how we can go out further and share more information. 

And if I may extend an invitation to you, if you go upstairs today, there are a large number of businesses from mid Wales who have got displays up here to support the work that we've done so far.

That's fine. I did encourage the other members of the committee to come and have a look before they travel home, before the snow hits us later on this afternoon. Joyce Watson.

Good morning, both. I'm quite interested in taking it forward. It seems that we have an idea, we have people engaged, we have some potential of £200 million of funding being available, and we have some themes, you said. And what has been said repeatedly is we're moving into the future. So, I suppose what I'm interested in, and the Institute of Biology, Environmental and Rural Sciences is quite rightly well placed to look into the future, but so is the Centre for Alternative Technology in Machynlleth—I don't know whether you've had conversations with those or whether you just didn't mention the fact that you have. I'm just trying to get my head round this, that we've had 18 months to get this far. How long is it going to be before we get any further? I know it's going to be a long time, but it already has been quite a long time with not a lot to report, unless I've misunderstood.

I beg to differ. I think we've been working hard on the ground to garner support and raise profile. It may not come out—I don't think that the Welsh news actually carries enough of the news coming out of Powys and Ceredigion, because we're not on the M4 or the A55, and that's exactly the reason why we need this growth deal. I can assure you that a lot of work has been done. Both of us have been to CAT. In fact, I have quite a good knowledge of CAT because my husband used to chair their trustee board. They're very keen on helping us. One of the themes is to develop more alternative energy and reduce the carbon footprint, which is exactly what they're advocating.

I think it's fair to say CAT are here today, they're upstairs. I think they're representing Powys today, but of course they're on the border of three counties. They're very keen to be involved. We actually held one of our business evenings at the CAT premises, which is very good because we've tried to move around the county geographically as well, but, of course, there is a sequence of events that has to happen here. We've had to get the consultants to do the economic strategy report, we have to look for funding, we'll have to look at outline business cases, so there's a sequence that we have to follow. If it was left to me, I would put more pace into it and it would all be happening tomorrow, but it's not as easy as that.

Okay, that's fine. You've mentioned businesses repeatedly, I haven't heard any mention of further or higher education, maybe that's just because you haven't mentioned them. Are they also involved? Because if we're talking about the future, we have to be talking about next generation.

Indeed. I think I have already mentioned the innovation centre being developed on the IBERS campus in Aberystwyth University, but skills are another matter. I think that I've been trying to push, we both have, as well—I've been very frustrated because we have not been able to set up a regional learning and skills partnership specifically for our mid Wales area because both counties have been weakened as far as FE is concerned because they've been amalgamated—into Neath Port Talbot in Powys's case, and Trinity Saint David in Ceredigion's case. The identity of Coleg Powys and Coleg Ceredigion is gradually being eroded.

I'm afraid the skills that are available for young people to take up are also not being addressed properly, in our view, and we would like—hopefully, we will be able to meet with the Minister this afternoon. I understand that Ken Skates now has the remit for skills. So, we'll be able to take that conversation further. I think there's a slightly open door now, but it really does need to be pushed, because we need those learning pathways. Both counties have got very good reputations for good educational outputs, both Ceredigion and Powys. What we do find, though, is we do educate our children and young people well, but they move away because there aren't any jobs for them. What I want to see is that we have these learning pathways where we can keep our young people in mid Wales and offer them high-paid, high-skilled jobs going forward. That's really part of the vision I had when I persuaded Edwina Hart to allow us to start working on this partnership four years ago now. 

That's great, and you're absolutely right—there's a massive depopulation that's happening in mid Wales, which is why I mentioned the skills going forward. Because that's clearly what's going to be needed, and that's why I particularly mentioned the Centre for Alternative Technology here. So, in terms of going forward and meeting with companies, there aren't many anchor companies. I can remember the ones disappearing; I lived in Ceredigion for a long time. I remember some of the anchor companies disappearing from there, and I don't know if you've got many high-value-added firms located within your constituencies, because the argument is that those would be a draw or a potential expansion within themselves. So, have you put any proposals in terms of what they might put on the table to help you? 

If I may, you started your questioning off, and the line of enquiry that you were asking—part of the growth deal and what we've done across mid Wales is to identify unique selling points in mid Wales, and rather than looking at same old, same old, the proposals that we will have coming forward very shortly are around innovation and alternative types of employment opportunities, which we are fairly confident will suck a large number of big, different companies into our region. Some of those unique selling points, for example, are how clean our airwaves are across mid Wales, and the importance of that is that the latest technologies around radio spectrum technology, for example—most places across Britain and across Europe, you can't test the technology you've developed because the radio waves are too dense in the air. Our part of the world lends itself perfectly to that kind of technology. 

If we take another type, a wonderfully unique selling point for us is we've already got a successful agriculture industry in mid Wales hugely dependent on it. But we do have key component parts showcasing it in the Royal Welsh showground. You've also got the Horeb food centre, and with the innovation centre in Aberystwyth, we'll have a unique selling point across the whole of Britain, because food manufacturers can come and test produce, refine it, have it formally accredited and showcased all in the same location across mid Wales. That will influence then the thinking around what type of food produce we should be looking to produce in the future. 

So, yes, you could look back historically and have a look at what traditionally has existed in Ceredigion and Powys, but what we're looking for is—as has been said already, we're looking to the future—what new jobs, what new opportunities, what new employment opportunities, and what will attract inward investment from these large companies. We can't be dependent on what we currently have because, as you rightly say, we haven't got many but we need more. So, what we have to do is identify what's different about our part of the world compared to everywhere else, and I strongly believe that what we've done collectively puts mid Wales on a whole different level to other growth deals. 

Can I also add, Chair, just to support what Eifion's saying—? Through the work that we've done, what has emerged is there are more companies out there doing quite innovative things that we haven't really needed to or had the opportunity to engage with. I just reflect on the importance of doing this for the sustainability not only of mid Wales, but public services in mid Wales, because we're seeing, as you mentioned, depopulation in mid Wales. Now, unless this is reversed, this really does call into question the sustainability of the current structures that we've got across mid Wales. 

One of the really encouraging things that we've seen is we now hold—and this is a little bit Powys-centric, if you like—but we hold a careers fair annually. The third one is just about to happen now in March. The second year, I think I'm right in saying, became the largest careers fair in the UK within two years, and the range of companies now attending have also supported building the links with the mid Wales growth deal.

But you were asking earlier on around—. I can see where you're coming from. You want to know what projects are we going to deliver. Well, one of the specific projects that we are starting to look at is: can we develop a cyber security centre within the mid Wales region, because there is considerable interest from higher education funders who have money to invest in this particular area? And we do have an emerging skills base around that. 

So, those are the—as has been mentioned before—unique selling points for mid Wales. It is not as people see it, and it will not be as it is now in the future. But I think the imperative of making it different in the future is really, really clear, but this won't happen within two years—this is a longer burn, I have to say that. 

That's great and I hear what you're saying. So, in terms of growing, expanding and sustaining, individual projects that deliver are great, but you have to join them up. 

Yes. 

So, if we're talking about innovation and futureproofing, are you looking at the types of energy that are going to drive that change and where it's coming from—so, that has to be alternative energy—to drive the alternative mechanisms that will then futureproof, and joining them together? Because all the evidence that we've taken elsewhere in terms of how people are going to be employed in the future—it will probably mean we will need more energy in specific areas, and you have a specific problem in Powys or mid Wales about the systems that are delivering that. 

So, in terms of all of those things, planning has to focus and be on your side to do that, and it hasn't been in the past. So, are you are bringing all of those things to the table and having some conversations so that you don't have these plans at the end that end up actually not coming to fruition because the blockages haven't been foreseen?

Who would like to briefly answer that point?

I'll pick it up if you want, because what we've—. Unless you want to—

It's all right; go on. 

I'll come to you in a second, Rosemarie. 

What we have within the mid Wales region is we have significant amounts of alternative technologies that are proving very, very successful already. The trick with all of this is identifying key locations that will have access to those technologies, and we can make then self-contained and self-sustainable units within there, so you're not overly dependent on access to the national grid, because the national grid is what you're referencing as a major problem for us. But, with wind technology, with solar panel technology—all those options are available to us that we can use and utilise, as long as we look and plan ahead. As local authorities, we have to identify those areas in order to provide that kind of energy source. 

Councillor Harris. 

I think it's fair to say, and you more or less said it there, that our planning system has to be a lot more flexible. We recognise that and we're having discussions about that. I think it's also fair to say that we have learned on our trip around our county—and I'm only speaking about Powys—that we have bigger businesses with greater ambition than we realised before. We have businesses who are already dealing internationally. In Powys, of course, we have the Royal Welsh showground as well. They have enormous plans for moving forward. We in Powys also can market events. It doesn't have to be a business in the traditional thought process. We would like to develop events and activities. We already host some of the biggest international events there are, like the Royal Welsh Show, the Hay Festival of literature, the Green Man Festival. They're all international players; we can drive that as well. 

I think, in terms of—. What there is in Powys and Ceredigion—if we don't have the huge businesses at the moment, the potential is most definitely there. But there are issues that we will have to sort with connectivity, with broadband, and also with our road networks. With our eastern boundary, particularly in Powys, we feel that we need to open up more into England. We can work with the Midlands Engine, with the Marches growth area, even with the Northern Powerhouse. There's a great deal that we can do in that sense. 

Just quickly, because we've got other questions to ask as well, but we already have a regional local skills partnership—is there anything you're proposing going to duplicate the work that that partnership does?

Unfortunately, we do need our own, because our experience of having to work under the umbrella of the 'mid and west', as it's called, our regional learning and skills partnership, has not been a particularly favourable one. Their focus has been on the skills needs of the Swansea bay deal and that area of work particularly, and what we want is a proper focus on what our employers will need going forward, and we're not getting that—at least, I've been very frustrated by what we've been getting and by the present structure, and that's why I've been lobbying hard, and we've both been lobbying hard recently, with successive Ministers, who've been responsible for the skills portfolio.

The last meeting we had—both of us—together with our officers, and with Elizabeth Treasure and Rhodri Llwyd Morgan from Aberystwyth University, met with Eluned Morgan when she had the skills portfolio and that's why I said earlier that I thought the door was beginning to open and they were beginning to realise that, because of the developments with the growth deal, they needed to listen to what needs we have going forward, then.

And I think it's fair to say that we're not just waiting for the skills partnership locally to be developed. We are having talks and you will know that, in Powys, we don't have much of a higher education provision. We have something at the Centre for Alternative Technology, but very little otherwise. So, we're talking to Aberystwyth University; we'd like to think that they would consider having a presence in Powys. We're also talking to the University of Wolverhampton and Harper Adams University, on the various strands of work that we can look at, because one thing we have found in our round of business meetings is that the employers cannot find the suitably skilled staff.

Right, I'm just going to bring—before I come to Bethan—David in quickly.

Just very quickly, Rosemarie, I'd written down 'connectivity', actually, just before you said it. So, obviously, with the digital roll-out and that, through Superfast Cymru—has it delivered for you?

No, not entirely. There are still very difficult areas. We are actually working on a project, actually with the Royal Welsh Show, where we would hope to bring 1 Gbps to the Builth area and we would hope to roll that out. We actually went on a visit to southern Ireland, where we saw something similar being done in the last few months. So, yes, there is still a problem there. We're having conversations with whoever we need to have conversations with there—various different companies—but there is still quite a lot of work to do there, because a lot of people home work as well, so that's going to be important.

Indeed, and it's not just broadband, it's mobile telephony, which is—well, I'm sure you know yourself; it has improved somewhat, but it's nothing like it should be.

And roads as well—the road network. We have some, and I don't need to tell you, Chair—

You don't need to tell our committee, because we've just done a piece of work on mobile and we—

Good. I hope you've got good news.

—launched the report last week, and we've just, at the back end of last year, launched a report on the state of roads across Wales. So, we know about these issues. Bethan Sayed.

I think it's fair to say, actually—. I mean, Wales is only small, isn't it? There may be four deals within Wales but it's still a small area. We as Powys have 13 neighbours, so we work with them all the time. I think it's inevitable that there will be spillover. In fact, that was the position until we managed to get the deal on the table for mid Wales; we were going to be just that bit in the middle that was left out and was going to have to rely on the other areas. But I think—you know, people travel to work these days, I think there will be a lot of interaction between the areas as the projects develop more. We were shown a presentation on the Swansea city deal the other day and it's extremely exciting. Some of the project areas touch on the areas where we live anyway. So, I think we will work together. And, over time, if there's a steel project in one area then there's no reason why we can't develop subsidiary companies to supply a steel plant, and it's something we will have to keep an eye on. 

Yes, and businesses will have to be involved going forward. I think one of the pluses of having consultants do a report was that it was independent. It was independent of us, and they did actually come up with the themes that we ourselves would have come up with. I mean, we could say that we could have saved money and done all of that ourselves. I'll leave that hanging in the air, but—

I'm sure you're intelligent enough.

They did a very thorough job, and they did go around talking to our businesses. Taking it forward, though, will be obviously down to us and our businesses.

Time and capacity is of the essence.

Can I just check: is that report publicly available?

Yes.

Yes, it is. Where would we find that?

On the website.

On your website. Where on your website? I couldn't find it. You don't know where—

I tried to find it on the AECOM website and I couldn't find it there, but I didn't go on Ceredigion's website.

Thank you. We're grateful. Mark Reckless.

Can I ask: do you think there is merit to this way of doing economic development through growth deals? Is there a benefit to this?

I think it's yet to be proven.

I think we in the regions know more about the region and the need in the region—the need to keep our young people, to develop our indigenous businesses, as well as to attract new business in. We know what the needs are and we know what the region can stand. Obviously, we have natural assets, so tourism and things like that are an obvious one, but at the moment one of our old industries is agriculture, and it's all a bit uncertain, and I won't use the 'B' word, but everything's a little bit uncertain at the moment. We need to be looking at innovative things and diversification of all sorts, and I think we who know the area—we and our businesses—are best placed to do that.

Is that what's happening? To the extent that you have these meetings of the UK and Welsh Government—it's taken quite a lot of time—and you'll only get this money if they approve of the way you're putting in place structures and priorities as to how you're spending it. Is that the right balance, in light of what you say about you knowing your areas best?

Not really, is it? But that's the way that public sector funding works. You've got to go through all the hoops before you're able to draw anything down, be it from Cardiff or from London. So, I would prefer them to say, 'Right, you've got money on the table. Get on and do it, and then come back and prove to us that you've been able to do it', but that's not the way it works, unfortunately. You've got to have five-case business plans to enable you to draw down any of that funding, so you have to really prove the case that whatever you're putting forward is really going to work and you're going to get the outcomes that you're looking for, so it's not an easy way of working and it's very labour-intensive, if you like, of people who are able to deal with five-case business plans.

Is it sensible to do that on a joint basis between—?

Definitely on a joint basis. We've appointed somebody jointly to help us develop the business plans.

We are used to working with each other anyway. We work on other platforms as well, so this isn't new to us.

It was suggested that the growth deal could be £200 million. Can I just clarify that £200 million? Is that the contribution from Welsh and UK Government or is that the total amount including private sector moneys leveraged in?

No. What's been intimated is up to £200 million from London, a similar match from Cardiff, and then we also have to draw in private funding.

How much private funding would you be expected to—?

I'm not sure of the exact sum.

At the moment, in one theme alone, we've got commitments of £80 million spend from the private sector.

We've got commitments, but what the total would be, I'm not quite sure.

It would depend on the cost of the projects, wouldn't it? We also have to put in money as local authorities as well. And at the moment, we're hoping that can come from a variety of sources. There's going to be some European funding around for a while, hopefully, depending on what happens, there's the UK shared prosperity funding, we can borrow, and there will be all sorts of ways that we will have to look at funding as well, raising capital.

But we must remember the £200 million doesn't come as a lump sum. It's a trickle feed over 15 years, so it's an investment over that length of time.

And we've heard about some of the issues in terms of timelines and perhaps a degree of disappointment we haven't moved forward faster as yet. I just wonder what your realistic targets and expectations are to achieve over the remainder of this year—where would you like to be by the end of the year?

We've got no choice. We've got a target to hit. We need to get the first-stage business plans in by October. 

The first-stage business plan—some stakeholders and others have seen documents that look impressive about what you're going to be doing. Can you describe to me how that first-stage business plan in October—how is that different? What is it about it that generates and pushes forward to actually delivering on the ground? 

I think the important thing to remember here is we're referencing the bureaucracy side of the growth deal, which we have to adhere to, but the actual reality of what's happening in parallel to this—. When we deal with the private sector, the private sector have got an agenda. If they're committing their funding resources to a particular theme that we're aligning to, they will plough on because obviously their business can't wait to invest on the back of, 'Will we or won't we get a growth deal to support this and maximise its impact and benefit?' So, we are working as quickly as we possibly can on the bureaucratic side to get all the paperwork and all the strategy documents in place, but the key to it is the engagement that's happening between our authorities with the private sector and the demonstration—the opportunities that the private sector are seeing through gaining access to unique selling points that exits in mid Wales that don't exist everywhere else.

What we want to do—. I think the previous questions were around working in partnership with growth deals. We need to be careful that we don't duplicate the same thing as well, because Swansea University have got a world-class facility down there developing engineering. I'd hate to think that we would start trying to compete with that, because that would be ridiculous—it would be a waste of public money. But what Aberystwyth University has is a world-class facility around supporting the food and agriculture industry. And the investments that are going in there and the developments the university are thinking about now are going to benefit us equally across the whole of mid Wales. We'll be able to advise the agricultural sector in the future, very shortly. When the agriculture industry diversifies between either dairy products or red meat products, all of a sudden we'll be able to give them new agriculture technology techniques of producing foods and foods of the future. Now, the individual farmer won't have the skill set to be able to do that everywhere across the region, but if the university can show and lead the way, we'll have world-leading higher education provision advising the main industry in our area. So, it's all about those kinds of things being as important as the paperwork. We'll worry about the paperwork and I think we'll let the private sector worry about making it happen.

Thank you.

May I just add something? One of the issues I think that you're pointing at here is an approach that has more than one Government involved as well. It does add a layer of complexity to this and there is that adage that you can only go as fast as the slowest person in the group, as it were. One of the things that we are keen to do is to get the funding side absolutely bottomed out with clarity, with the comprehensive spending review coming up and so on and so forth, and the commitments from both Governments. It does make it very clunky. I've been involved in things in different authorities, as I mentioned before—local enterprise partnerships—but the model that we're pursuing here is a different model. Is it fit for purpose? Well, it'll be fit for purpose if we deliver everything that we want to deliver. That's the key, really.

There are a number of other questions that follow on in the wake of this, including issues around policy around business rates and so on and so forth, which we will want to engage on with the Government in Cardiff around retention of business rates and so on and so forth at some stage. But it's a really complex package that we're trying to put together here. I sense that there is a push about, you know, 'What are you doing?', and I understand that, but we are going through a very methodical process.

And the other thing that I think we need to stress, which I think you've got a sense of, is that we are talking to especially colleagues in north Wales, to make sure any learning is given to us around that. That's been very helpful.

We'll be seeing them next, so we can raise that with them as well. Joyce Watson, quickly.

Learning from others you finished off with, and that was my question. You've identified weaknesses, one of them being the higher education sector. Have any of you heard about the CCTAL project that started in Carmarthenshire, because you do share borders? It's about engaging education—that could be schools—and businesses and also the unitary authority in coming together to provide, jointly, apprenticeship schemes in the area so that no one organisation or individual has to bear all the cost and all the delivery of it. And if you have heard of it, have you put that, having identified it as a weakness, within your programmes? Because we're talking about sustaining people within the community and hoping to retain them, which is another weakness you identified. 

If one person on the panel could address that question.

We're trying to develop apprenticeship schemes. I have heard of that scheme. In fact, I think it has been working within Ceredigion, especially the southern end of Ceredigion, where different employers share an apprentice in order for them to use them in smaller businesses. So, that has been working in Ceredigion to some extent. But we do need to develop the apprenticeships that are available. We as a council have started doing that more now and we have more—. I'm not sure how many we have, but we've got apprentices beginning in all sorts of areas of work in order to introduce them to the whole gamut of work that local authorities do, for example. So, that is an area of work that needs to be developed, definitely.

In your evidence paper to us, you said that one key priority for 2019 is to secure a growth deal for mid Wales that delivers transformational economic growth for the region. What does that mean?

We're hoping to raise the GVA by about 5 per cent over the 15 years, and to see the creation of 4,000-plus jobs.

And keep our young people in the counties.

Exactly, and strengthen our local communities—the Welsh-speaking communities. That's one of our aims as well. 

And you mentioned jobs. Have you done any analysis about how many jobs might be created through a growth deal?

The analysis we've had hopefully will give us about 4,000-plus extra jobs. 

And what more do you think that the UK Government or Welsh Government can do to support your aims?  

Move things forward more quickly. 

What do you want them to do specifically? 

We want them to guarantee the funding that will come to us. It's a bit of a catch-22, isn't it? It's difficult to proceed until you know that you're pretty sure you've got some of the funding. I'm sure that will come, though. 

They will no doubt say—both Governments will say—'We don't want to allocate the money until we've seen what your plans are.' So, how does that—? What else can the—? Beyond securing that funding from both Governments, what else can both Governments do to better support you, or do you think you're being supported well now? 

I think at the moment, as far as I'm hearing from officers, there is a good working relationship between our officers, civil servants here—and Rhodri Griffiths I think is leading there—and the civil servants that are working for the Secretary of State from his office as well. So, as long as that co-working keeps going on the same footing as it has been, I hope that that bodes well for the future. 

Because you have got two masters, and both have got slightly different objectives for economic plans for the region, perhaps. Am I right in saying that you believe that both Governments are united together in what they're expecting of you? 

Well, I very much hope they are. 

Yes. 

And you think they are so far. 

I think from an officer perspective, the type of input we've had from Rhodri Griffiths, Jodye Crabbe, from civil servants from both Governments, has been hugely beneficial to us at this point in time. You asked one thing about where we we can move it forward. One of the things I think that would benefit us enormously is that we have regular interaction in these kinds of fora with you, so that we can show you regular progress, because I think once the momentum is there—once this ball starts rolling and we see inward investment beginning to happen—I genuinely, genuinely believe mid Wales is a sleeping giant in the Welsh economy. Okay, population-wise we may not have the population of the other areas, but there are so many unique selling points for job opportunities for the future that don't currently exist in Wales. And, forgive me for saying it, but post Brexit we'll need to have innovative things of our own in this country that we can be proud of, and I think that we have got those opportunities sitting in mid Wales, we just need to exploit them. So, the more interaction have with you, the more we're able to put meat on the bone and share these ideas with you, and the more regular those opportunities are, the better.  

We'll welcome you back to committee, but perhaps I could ask: if you came back a year today and we asked, 'What's been achieved in the last 12 months specifically?', what do you think you'd be able to tell us? 

Well, I'm hoping to see that definite plans will have been worked up by then, that we will have had something further in the next budget or in the spending review that's coming up at the end of the year, and that that will specifically quote the need of the Growing Mid Wales partnership. We've had it twice, so I want to see that being firmed up with an actual sum attached to it. That's what I would like to see a year from now.   

And there will be business cases having been prepared for different projects. We'll actually be talking projects by then. I'd like to think also that over the next year, we actually get to meet more with Ministers. We're very lucky with Welsh Government that the civil servants actually come to our Growing Mid Wales partnerships, so they're alongside us all the time. We would like more frequent meetings. We appreciate everybody's busy, but I suppose we'd like an assurance that the direction that we're going in is the right one. We'd like to be able to share information as well.  

And, of course, you've got a meeting with the Minister for economy, who's covering skills as well now, this afternoon. 

This afternoon, yes. 

Okay. Thank you for your time this morning. We will take a short break, but we will, in 10 minutes, have the north Wales ambition board before us. If you would like to watch proceedings from the gallery, you'd be very welcome to do so, and I'll see you later in the event upstairs, as other Members no doubt will as well.   

Thank you.

Diolch yn fawr. Thank you. 

We'll take a 10-minute break. 

Welcome back to the Economy, Infrastructure and Skills Committee. We move on to item 4 with regard to our city deals update, and this session is with regard to the North Wales Economic Ambition Board, and I'd like to welcome Iwan Prys-Jones to the committee this morning. We're grateful for your time and for your paper that you've submitted as well. Thank you. 

You'll be aware, I hope, of our report as a committee 18 months ago on the city deals and regional economies of Wales. I wonder, since that point, what has progressed with regard to the north Wales ambition board. 

There's been a huge amount of work carried out over the past 18 months and it's pleasing to be able to report that that culminated in an offer of funding from both the UK and the Welsh Governments in the weeks leading in to the Christmas break. So, the good news is that, as a result of the extensive work that's gone on over the past 12 months, we have got a growth deal, potentially up to £240 million allocated from the two Governments. Obviously, it's a little bit less than the overall bid that had gone in initially, but that is a significant step forward. 

Also, positive developments over the past 12 or 18 months are the fact that the six local authorities have agreed formal joint committee governance arrangements to deliver the joint venture. What's snappily titled as 'governance agreement 1' has been signed by the six authorities. That provides the joint committee with sufficient ability to be able to submit and negotiate the bid with the Governments, and some more detailed work is under way around developing a more comprehensive governance agreement for delivering the bid, once finally approved, and for submitting. So, the overall direction of travel remains positive, but there's still some significant work to do before we end up with a finalised deal, finalised bid, and projects that are able to be delivered.

And are there any areas, particularly over the last 18 months, where you would have liked to have made more progress but you haven't, and what would the reasons for that be?

Well, I think we would have liked to have been spending money by now. Clearly, there's a significant amount of work gone into the development of outline business cases so far, to satisfy, not just the two Governments, but also the local authorities and other partners, that we've got a robust series of business plans and projects in place. I think some of the work and the processes leading to the development of those business cases has been longer than we'd anticipated originally. But then, hopefully, that's leading towards more robust projects, with a clearer timeline and process delivery, once the bid is finally approved.

And I wonder if you could give us any update on the latest discussions you've had with both Governments.

We have weekly update sessions at officer level, official level, between the Governments. That has produced a fairly detailed timeline for implementation now. The next critical stage will be to move the bid from the overall funding envelope, and a series of OBCs that we have at the moment, through to developing a detailed heads of terms document. And we're hoping to have that resolved in the next three, four months or so.

At a political level—

That was going to be my next question.

Sorry. At a political level, again, relationships remain reasonably strong. I think Ken Skates last attended the full meeting of the economic ambition board in December. The Wales Office Minister was up in north Wales in the autumn. Ministers from both Governments attended a high-profile summit, which was held around the end of the summer. So, relationships have continued to be positive. Both Ministers continue to be supportive of the bid. It's been slightly challenging that there have been a number of changes in terms of the ministerial appointments at the Wales Office, so it's been a case of updating Ministers as new Ministers have come along. But, by and large, the level of support from both Governments, at both Minister and official level, has been supportive.

Okay, that's fine. Joyce Watson.

Good morning. I'm going to ask a series of questions about scrutiny, which can only come about by streamlining decision making, and also the transparency of the deal. Because, in our previous inquiry, those were three areas that we highlighted that might need more work.

Okay. In terms of scrutiny, it's been really key to ensure that the partners involved within the EAB have had real clarity over the content of the bid. And that was really the prime driver behind having this kind of wide-ranging consultation event that took place in—I think it was in late July. Members from all six authorities, plus other partners—the universities, the colleges and the private sector—were all invited to a comprehensive session to go through the bid in some detail. There have also been presentations to individual local authorities, to the courts and boards of the various universities and colleges involved in the deal. And, importantly, there's a significant amount of energy and effort gone in to regular consultation with the private sector, in particular. I think, to date, we've had three, if not four, all-day sessions where private sector businesses were invited to come and scrutinise and challenge parts of the growth bid. There have been breakout sessions where individual private sector businesses have been able to challenge the bits of the project that are of most interest to those. So, I think we've been quite open and transparent in terms of exactly what the content of the bid is.

That's not to say that we're complacent. I think we recognise that there is an awful lot more to do. There was a session in Wrexham last week around the growth deal bid, and, again, I was reminded in that that, for an awful lot of members of the public, and indeed some businesses, there's still a comparative lack of information about what's in the bid, what it's all about and how it might be delivered. But I think the overall processes have been as open and as transparent as we're able to make them. Obviously, there are some discussions that need to take place at the EAB level around project prioritisation and the like, but, by and large, I think we've sought quite hard to engage a whole range of partners and also, importantly, the public sector and private sector within the development of the bid.

Okay, so in terms of the streamlining, it was a case of trying to reduce, where possible, any red tape that could be incurred on businesses' involvement in it so that it doesn't act as a deterrent. Are you happy that, where possible—because we're talking about public money—that streamlining has happened?

I personally view the growth deal as an opportunity to deliver a probably more radical change in terms of public service delivery across north Wales. I think the north Wales economic ambition board and, in particular, the six local authority leaders who are members of that board, have been very positive and supportive of not just having a joint committee to deliver the bid, but actually of that joint committee having then a significant role to play in terms of service delivery on a collaborative basis going forward, in particular in critical areas such as growing the economy, in transport, in property development and in digital and energy. So, there's recognition, I think, at the political level, that the growth deal bid structure or the economic ambition board provides a real opportunity to streamline quite significantly the way in which strategic projects like that are delivered in the future. 

The critical issue is how that entity is then able to work very closely with Welsh Government departments in particular so that, as far as businesses are concerned, it becomes much more of a one-stop shop for delivery within the region.

Right, and the scrutiny, of course, and the question that you've answered for the people involved in the process—. But it's the people who are not necessarily involved directly within the process—and you did touch on it—who need to be able to ask questions and seek answers, like us and others. Are you satisfied that that is all structured in such a way that people can openly scrutinise your decisions and they'll hold up to that scrutiny?

Clearly, the primary remit is back to the local authorities in the sense that a significant part of the financial risk associated with delivering the bid is going to be with the local authorities. As I said before, we've tried quite hard to ensure that businesses in particular have had plenty of opportunity to both comment and contribute towards the development of the bid, and I think that's been quite successful, although, clearly, there are many hundreds of businesses across north Wales that haven't taken advantage, or haven't been able to take advantage of that opportunity. As far as the general public are concerned, it's much more difficult, and I think we accept that, and, as I said, it struck me last week that there is still an appetite for more information about exactly what's within the bid and how it's going to be rolled out and delivered. And that's, perhaps, a message for us to go back to to make sure that that opportunity exists insofar as it's possible to engage with everybody and everything.

Okay, thank you.

David Rowlands.

Yes, I suppose this is the $64,000 question, as such, in that: how likely is it that the growth deal will achieve its ambitions? They are very large ambitions that you've set out: 5,000 new jobs to lever in £3 billion of private sector investment and increase the value of the north Wales economy from £13.6 billion in 2016 to £26 billion by 2035. Very ambitious.

Yes, they are, and we deliberately started with a process to understand exactly what the north Wales economy was and how it was performing. That started with developing quite an ambitious document in 2016 through to the early part of 2017, when it was adopted, which is the growth vision for north Wales. That was based on some in-depth econometric analysis that was carried out both by Bangor University and also by other consultants. And within that, we sought to identify exactly where the opportunities for transformational growth existed, and, importantly, where were the market segments that gave north Wales, potentially, a competitive advantage.

Now, the growth vision is far wider than the projects identified in the growth bid, and I think that's an important distinction. Members are very clear that it's the delivery of the vision as a whole that they want to see. The growth deal bid is a very helpful and useful funding opportunity in order to put part of that in place. But, actually, there's so much more in the wider vision, in particular, things like how we grow and expand the foundation economy, how we take advantage of some of the huge changes in tourism, how social care and other aspects of the economy that are crucially important are developed, but those elements aren't necessarily, in all cases, going to be transformational.

The critical messages that came out of that bit of economic analysis were: firstly, the north Wales economy has not performed too badly over the past 10 or 15 years, in the sense that its position, its average gross value added relative to the UK's, has not got any worse. And given the extremely high rates of growth in London and the south-east, that is quite an achievement. But that, then, masks a couple of issues: firstly, that we're still hovering, bouncing around at around 71, 72, 73 per cent of UK average GVA and nobody for a moment would suggest that that's good enough, hence the focus on transformational opportunities that are going to close that gap with the rest of the UK. Then, secondly, some critical sectors that we identified around energy, around advanced manufacturing, some of the opportunities around adventure tourism and high-value tourism, which have really done well over the past few years—those are really areas where we think we've got a great opportunity to exploit. Thirdly, there are issues around the cross-border economy, in particular in areas like energy and advanced manufacturing, where there's really strong synergies between north Wales and the north-west of England, and those are able to be exploited. And fourthly, and perhaps this is the most challenging one of the bids, I talked earlier on about the fact that the UK average GVA and north Wales average GVA have more or less tracked each other. But within north Wales, there are huge variations within that. Wrexham and Flintshire, the economy there has very much powered on ahead, and towards the north-west of Wales, growth has not been anywhere near as significant. So, we need to try and rebalance the economy within north Wales as much as we are across Wales.

So, that provided a really good basis, I think, for then working at the growth vision and, subsequently, picking up some projects out of the growth vision in order to deliver the growth deal. So, yes, the targets are challenging, but we believe that we've pitched them at areas where we think, and know, and have got economic data to justify that those are areas where there is already a competitive advantage.

With the possibility that we'll lose Wylfa, that's going to impact on you, isn't it? What other things might impact on you—such things as the inability of the six local authorities to borrow money or—?

Wylfa is obviously a blow for the region. I mean, it was—it may still be—the single biggest investment in Wales for a generation or two. Clearly, the loss of a significant project like that with £14 billion or £15 billion of investment and many thousands of construction jobs is a significant issue. We're continuing to work with Horizon and other partners and both Governments in particular to understand exactly whether and how that project can be rethought in another way, and also what implications that might have, then, on energy strategy. 

The issue is that the bid was never entirely dependent on Wylfa; there were projects in the bid that played to Wylfa, in particular, some of the sites and premises projects were intended to cater for potential supply chains going into Wylfa and the nuclear cluster stuff around Gaerwen in partnership with Bangor University. Whilst there was a link into Wylfa there, actually, there's just as strong a link into the potentially small modular reactor project that could take place at Trawsfynydd, for example.

So, it's a significant issue, but as I said, we're not yet accepting that the project is completely dead. But, inevitably, when there are significant changes like that, or when the national economic situation changes as a result of the whole Brexit debate and the future of European funding and issues such as that, clearly, some of those issues will have an impact on the strategy. But, as I said before, we focused the bid, right from the outset, on areas where we believe there to be a clear strength in north Wales at the moment, and we're looking to expand and deliver those in a way that creates a much more balanced economy. Projects will continually be under review, and as we go from the outlying business case into the more detailed business case, that's where we will be obviously focusing and refining those as time goes on.

Bethan Sayed.

Mark Reckless. 

May I ask to what extent have you been working with the regional business plans that have been drawn up by the Welsh Government's chief regional officers?

As I said right at the outset in answer to your colleague's question, we started with quite an ambitious high-level vision for the growth of the economy as a whole and that was founded in an econometric analysis. Welsh Government were involved in that process. The team that's responsible for putting the regional economic plan together in north Wales has been actively involved and supportive of the growth bid right from the outset. I don't think there's any disagreement between us in relation to the key sectors, which are those that are going to deliver transformational change, or indeed in relation to the underpinning foundation sectors of the economy that need to be grown and stimulated as well. So, we continue to work closely at officer level. I think, in terms of the strategy as a whole—obviously, I haven't seen the strategy yet, but in terms of that strategy as a whole, I would hope that it's broadly consistent with what they're seeking to try and achieve within both the growth bid and also the wider vision.

Also, as I touched on earlier on, the leaders—the economic ambition board views itself as having a role in terms of service delivery in the future as well. I think there are a number of different structures around strategic economic growth, around transport, the important sector of energy, which we were just discussing a moment ago, where I think there's potentially scope for real, in-depth collaboration, not just between the local authorities and other partners, but also between local authorities and Welsh Government in order to be able to deliver those projects. 

I appreciate there's good co-operation in general with Welsh Government. I wonder if I could just tease out a little bit more, if you are able to assist, assist the role of the Welsh Government's chief regional officer in respect of north Wales and the growth deal where you're chairing the board. How do they fit in and interface with your work, do you know?

Well, the chief regional officer has been the lead person from within Welsh Government for co-ordinating their input into the growth bid in any event. So, she and her team have been involved right from the earliest date. In fact, predating the development of the growth bid, back to version and previous to that within the economic—

Is that useful—to have them as a one-stop shop to interface with?

Absolutely. I think relationships at that level in north Wales are generally quite strong. That's not to say everything in the garden is rosy at all times. We do have disagreements. Clearly, some of the ambition that's been reflected in some of the projects around creating regional energy delivery bodies or a sites and premises joint venture or a regional approach to delivering strategic transport—they will require close working with other departments within Welsh Government apart from just the regional team. And in the case of transport, the emerging role of Transport for Wales is also really quite interesting in terms of how that might feed into that process. But, as I said, right from the outset, there is a view, I think, that is supported by the leaders of the local authorities, that the EAB joint committee provides a vehicle for delivering a number of these strategic interventions at a regional level, working closely in partnership with Welsh Government. And I think that almost comes back to the point that was made earlier on by Joyce Watson around that it's at that point that you potentially get the opportunity to deliver a one-stop shop as far business is concerned for aspects of strategic project delivery.

And what's been the role specifically of the regional skills partnership in developing the growth deal?

The regional skills partnership is structured slightly differently in north Wales to other parts of Wales, in as much as it's always been part of, or closely aligned with the North Wales Economic Ambition Board in any event. The team that are working on the regional skills partnership have been part of the loose project team that we've had delivering the bid. The chair of the regional skills partnership is also the chair of the private sector stakeholder board that contributes to the development of the economic ambition board, so, again, the development of the skills plan and the vision are quite closely aligned, and there's been close working relationships at that level right from the outset.

And could I ask you about what actions are being taken to agree the economic baseline against which you're going to be measured for the ambitious targets you have on GVA and jobs growth? 

As I said earlier, right from the outset of the bid, we sought to understand exactly what was happening within the economy of north Wales. And we did a quite high-level piece of econometric analysis to identify these areas of competitive advantage. Also, it pointed out some areas where the economy in north Wales was underperforming relative to what might be expected across the UK. A good example of that is the construction sector. The construction sector should be employing more people and delivering more GVA than it does in north Wales if you took a UK average. So, there' are areas like that where we know we've got gaps and issues to resolve.

So, we started with that detailed understanding of the north Wales economy. That's been followed up by some really strong support that we've had from the economics team in Bangor University, and they've helped us deliver a robust set of performance management measures against which we can monitor and progress in the future. There are detailed reports on the outcomes and the reasons why those outcomes have been identified. 

You mentioned the gap in construction GVA. I understand that Redrow—a FTSE 250 house builder—are based within the region, and I just wonder if you'd had any specific engagement with them on that issue.

Quite a number of building contractors—. I don't think specifically Redrow, but certainly a number of other building contractors and developers have been active participants in the private sector stakeholder sessions that we've held so far. One of the critical issues that we identified is that the housing completion rate across north Wales has been lower in the last few years than it's been for many, many years. We've sought to try and understand why that would be, and in some cases, it's because the major house builders aren't particularly active in the area at the moment. In other cases, it's because the SME house builders that used to provide quite a significant chunk of housing completions aren't there in the same volume or at the same rate as they were, now. In some cases, it's about the fact that, in the north-west of England, there's been a huge release of additional housing land over the past few years, and developers are seeing higher profits or bigger pickings in other places. So, there are a number of different factors involved, and all of that contributes to the fact that as one business sector, it's underperforming relative to others. That's why, as part of the sites and premises programme, you'll see a focus in there around stimulating both private and social housing and affordable housing development across the region, but also specifically seeking to try and grow the SME house building sector again in the region. 

Finally, from me, can you tell us what stage you're at at agreeing a process with the UK and Welsh Governments on continuing evaluation of the growth deal and the extent to which you're hitting your targets?

The baseline is there in the sense that the detailed work that Bangor University have carried out provides us, I think, with quite a helpful set of outcomes to be measured for future growth. We are working quite hard at the moment with both Governments to start the process of drawing a 'heads of terms' together, and it will be within that heads of terms document that the outline of the evaluation process going forward will be developed in more detail.

Thank you.

David Rowlands.

What are the significant milestones that you think the North Wales Economic Ambition Board will have to meet over the next six to 12 months in order to secure this growth deal?

It was a really big milestone when we had the commitment from both Governments towards the funding envelope. That really gives us something to target. The next critical milestone will be around agreeing a heads of terms document. That will allocate or set out which projects are going to be included in the final package that will feature in the bids. As part of that, it will also start to do the next phase of the governance process, so that that is robustly developed, and will also pick up the overall outcome measures, which are going to be delivered over the duration of the project. So, that's the next critical piece of work, and as I said, we're hoping to get that completed early in the next financial year—March or April hopefully. There's a fair bit of work to do to hit that target.

Once we get to that stage, then the next big piece of work will be around delivering the detailed five-case business models for the individual projects. Some are going to be more complex than others. We were pleased that it now has been accepted by both Governments that we don't have to have all of the projects with all of the business cases fully developed before any single project can come forward. That was one of the worries that we had at the outset. As part of the heads of terms, I suspect that what we will look to try and do is agree a set of priorities for which projects are going to be delivered first so that we can focus our energy on making sure that there's some early spend within the project.

So, it's governance, heads of terms and then detailed business case development and then moving on to project delivery. And side by side with the project delivery piece will be a development of the programme office, then, to deliver the bid as a whole. One of the challenges, I think, we've had so far is that the cost of putting some of these business cases together is quite significant. At the moment, those are being funded by resources that have been provided solely by the local authorities and colleges and universities and other partners, but obviously they're limited, given the constraints that many local authorities are facing at the moment. And the costs associated with the delivery of some of the detailed business plans will be quite significant. To give you an example: members have rightly prioritised the delivery of a digital strategy to roll out high-speed digital communication across north Wales. They view that as being absolutely essential for the next phase of delivering transformational growth, particularly in rural and peripheral areas, and, so far, about 120,000, I think, have consultancy support. I know the time that's gone into developing that detailed business case. So, that's the sort of level of commitment necessary in order to get us to the next stage on some of the projects. Having said that, all of that investment has been worth while. The fact that the work has progressed so well has resulted in the UK Government making an offer of just over £9 million, I think, from the local full-fibre network project to deliver the first phase roll-out of that, to which then the growth deal bid, once approved, can add another lump of expenditure, with a view of getting as much of north Wales as we possibly can connected to full-fibre technology.

To be fair, the mid Wales growth witnesses also said that the processes that you have to go through before you can get anywhere near the project stage—they said that that was one of the most difficult parts of it. Are you confident that you'll be in the position to put those things in place?

As I said, the process in north Wales has involved, I think, more scrutiny over the outline business cases than other bids in other areas. That's how it seems to us, and I think that's led to an element of greater robustness in the project development so far. But, inevitably, as we move into the detailed business case development, further work needs to be done and projects will change, I think, over time as they go through that business planning process. But, yes, it can be complex and it is time-consuming. What I would say is that it's not just about satisfying the two Governments of the robustness of the projects, because the borrowing risk of the bid is likely to sit on local authorities, members are equally keen to make sure that that risk is minimised insofar as is absolutely possible, and I think if there are high levels of risk that mean that some projects won't deliver their outputs, that's going to be every bit as much of a concern to members and to section 151 officers in local authorities as it is for the two Governments. 

But you've already outlined, or you have an idea of what projects you have priorities for and the timelines of those. Is that right?

Yes. Some projects, in order to fit within the reduced financial envelope, will have to be scaled back. Others we will look to have to try and fund through alternative funding sources, and a number of projects may have to be deferred slightly to fit within that. But, as I said, if we keep coming back to focusing on the key areas where we believe that there are transformational growth opportunities, particularly energy, particularly advanced manufacturing, particularly digital and also the foundation bits of the economy around transport, around property, and around skills—which underpin the delivery of everything—those projects that best deliver transformational change in those areas that allow the economy to make the leap it needs to make are the ones that we're seeking to focus and prioritise on. 

Okay, thank you.

Is there anything else you think that the UK or Welsh Government can do to support the ambition board's ambitions that they're not doing now? 

I think the critical issues are around the funding of the bid. So, clearly, more money would be helpful. One of the other challenges is around a number of the projects. Several people have referred to skills this morning—obviously, much of the money that's there to support the skills development projects is revenue budgets, and, of course, the growth bid is entirely capital at the moment. So, that bit of the project is more difficult at the moment and, clearly, it's the kind of project that may need to sit as part of a separate agreement with Welsh Government around how skills are focused.

I touched on the piece of work that we did right at the outset around understanding the economy and the whole issue around deprivation, social inequality and getting people in hard-to-reach groups back into employment. Those were all areas—and economic inactivity—that we highlighted as real challenges for the economy. But, again, many of the interventions that are going to be necessary in those areas are either requiring revenue funding or requiring different approaches between departments like the Department for Work and Pensions or Welsh Government or local authorities working in a different way together to target some of those hard-to-reach groups. So, there are areas like that that, if we're serious about changing the direction of travel as far as GVA in the region is concerned, need to be tackled, but they are going to need to be tackled through different partnerships and different funding approaches rather than just the capital availability through a growth deal. That's why we've deliberately focused on the political priority: to deliver the growth vision, not just the specific projects highlighted in a growth deal.

Thank you. Do Members have any further questions? Joyce Watson.

Keeping on the skills agenda—and you might have heard me ask earlier on—I accept that trying to deliver a capital investment-only programme has the danger of not leaving any legacy, and skills is just that. So, within your thinking and your project analysis, are you growing in or including an element of skills training as part of an ask from not only public sector but private sector if they're going to receive funding?

There are some specific skills projects in there—tourism academy being a really good example of that. But, obviously, the money in those areas is going into providing additional facilities and the money for the training provision will come either from businesses or from colleges. So, there are projects like that within the regional skills plan and within the growth bid. We've identified a number of areas where we would like to strengthen or change the way in which delivery takes place at the moment. There are still lines in the budget for revenue funding to try and take some of those forward, but, clearly, they don't fit neatly within the delivery of the growth deal, because it's capital. We understand that some bids in other areas have been able to develop innovative ways of using capital to fund projects like that. Obviously, we're exploring those where we can, but, as I said, the real challenge will be about delivering a different delivery model between the EAB, the skills partnership and Welsh Government, to deliver those core skills, and particularly in terms of how they relate with disadvantaged communities or those socially excluded areas.

Thank you.

Can I thank you, Mr Prys-Jones, for your time this morning and for your evidence paper? We're very grateful for that. And if you do have any further comments, then please let us know. The transcript of proceedings will be available, so please do review that and let us know any further comments that you do have. You made some comments about house building as well, which actually happen to be useful for our piece of work that we're starting next week in that regard. So, I appreciate that.

Yes, I think it's important to make the point: it's not about challenging the housing allocations that local authorities may have made, but it's recognising the fact that there are quite a large number of strategic sites that have been identified for house building within local development plans at the moment where progress has stalled for whatever reason. In some cases, it's down to market activity; in some, it's lack of capacity, and in other cases, it may be down to infrastructure or it may be down to services or abnormal costs.

What we're seeking to try and do is to put a comprehensive package in place that will involve, not just providing money potentially to SMEs, but part of the work underpinning the growth deal bid has been the powerful collaboration that's starting to emerge between the six registered social landlords in north Wales coming together to form a joint venture and, importantly, a potential joint venture between the EAB and Welsh Government to see how we might be able to tackle some of the other barriers that are bringing sites forward. So, what can we do to help site assembly, infrastructure onto sites and servicing costs to work alongside both the RSLs and the private sector, to remove what are currently barriers that are preventing housing developments across Wales?

That's helpful. I won't open that up for discussion or we'd be starting our inquiry a week earlier than we planned.

I'm happy to contribute to that debate if it's appropriate.

Thank you, I appreciate that. Have a safe journey home. Thank you very much.

Thank you very much.

Diolch yn fawr. And with that, there are no further items today, so in that case, we'll draw our meeting to an end.