Agenda item

Report by Hedd Vaughan-Evans  (Operations Manager)

 

1.       To note the Quarter 4 Performance Report and updated Portfolio Risk Register.

2.       To approve the submission of the Quarter 4 Performance Report to Welsh Government and UK Government as well as the local authority scrutiny committees, whilst also noting that the Board is concerned about the increasing costs and risks facing the delivery of the Growth Deal and that, as a result of these concerns, it will have further discussions at its next meeting and, in the meantime, will consider mitigating steps, which will include discussions at a national level.

 

Alwen Williams (Portfolio Director) presented an overview of the report highlights, and the Programme Managers provided details on the programme updates, as follows:-

 

·         Digital - Stuart Whitfield (Digital Programme Manager);

·         Low Carbon Energy - Henry Aron (Energy Programme Manager);

·         Land and Property - David Matthews (Land and Property Programme Manager);

·         Agri-Food and Tourism and Innovation in High Value Manufacturing - Robyn Lovelock (Growth Deal Programme Manager).

 

Henry Aron (Energy Programme Manager) then presented an overview of the main risks.

 

DECISION

 

1.              To note the Quarter 4 Performance Report and updated Portfolio Risk Register.

2.              To approve the submission of the Quarter 4 Performance Report to Welsh Government and UK Government as well as the local authority scrutiny committees, whilst also noting that the Board is concerned about the increasing costs and risks facing the delivery of the Growth Deal and that, as a result of these concerns, it will discuss this further at its next meeting and, in the meantime, will consider mitigating steps which will include discussions at a national level.

 

REASONS FOR THE DECISION

 

Quarterly reporting on progress against the North Wales Growth Deal is one of the requirements of the Final Deal Agreement.

 

DISCUSSION

 

Details were provided about the background and relevant considerations and the consultations held.

 

The fact that there was some assurance from the Road Review Panel in relation to Warren Hall, Broughton, was welcomed, but it was asked whether the same assurance was sought in relation to other projects under review, such as Western Gateway, Wrexham. In response, the Land and Property Programme Manager indicated that this would be highlighted in comments to be submitted by Wrexham to the Panel office the following week underlining the impact on the A483 junctions, and the impact on the town, and not just the Western Gateway site, and also on the process of completing the Local Development Plan.

 

Concern was expressed about phosphates, in terms of mitigation / reduction of impact, and emphasised the need to continue to bring pressure to bear and influence at a regional and national level because this posed a significant risk. There was particular concern that they were looking at a whole river analysis of phosphates, because, although part of a river may be less affected, in terms of the catchment, it would nevertheless have a significant impact on any project along the whole route of that river. In addition, the licensing system could be in place for all river wastewater treatment schemes, rather than just for those in the worst parts of the river. In response, the Land and Property Programme Manager noted that the reduction strategy itself was seen as a step in the right direction in terms of highlighting an approach to phosphate mitigation, and the fact that it was now being considered as part of the complete picture in terms of delivering complex development sites. An increased focus would therefore be placed on this with more resources being devoted to it in order to find solutions to the problem. That was considered to be the context, rather than the whole route of the river from Llyn Tegid down to the River Dee.

 

It was noted that it was believed that there was more work to be done on the above two issues. Seeking assurances on the other projects, similar to that in relation to Warren Hall, was extremely important, rather than just making representations, and it would be beneficial for the Board to know in due course how that was to be done. In addition, it would be good for the Board to have a better understanding of the phosphates issue and where engagement is required at a national level.

 

It was noted that it was clear that a number of the risks were moving into the red category as a result of external factors, such as high inflation and higher standards of biodiversity, etc., and it was asked whether it would be possible for the Board, at its next meeting, to consider adopting a strategy to try to mitigate this. In response, the Portfolio Director agreed that this would be a good idea, adding that officials continually considered the risks, and were also aware that all growth deals across the UK faced the same risks. That was being communicated to the Governments on an ongoing basis. He also noted that a joint session between the Portfolio Management Office and the two Governments had been organized during May to discuss the risks, and the results of those discussions could be reported back to the next Meeting of the Board.

 

It was noted that there was a limit to how much the Board could proceed on risk, without knowing how the additional costs would be funded, and there was concern that projects would slow down more and more, unless there was a solution on how to deal with the additional costs. It was noted that the private sector also faced the same risks, with a severe shortage of materials, significant increases in production costs and supplies arriving late, and the need to ensure that the private sector also had the resources to deliver when working together on plans was emphasised.

 

It was noted that the Board had discussed the increased costs 8 months, or more, ago, and had decided to write to both Governments to express concern, and to initiate discussions about working with other growth deals. It was also noted that officials would have to continue the discussion for the next two months, and it was recommended that, once the authorities had been politically formalised following the elections, a special meeting of the Board be called to discuss the risks only, and their impact on the Growth Deal as a whole. It was emphasised that the Leaders had wider fiscal responsibilities that needed to be protected, and it was important that councils did not burn their fingers because the Governments were not willing to put more money in to mitigate the impact of the increased costs. The Board had great expectations to deliver, and it did not look like we were going to be able to deliver at the moment.

 

The Chair noted that the Board considered the risks of each project as they progressed, and received regular reports on the risks, and that each project must consider how it would deal with this.

 

The Portfolio Director noted that it would be beneficial to hold a special meeting. The overview was one issue to discuss, but there would be a different analysis of the way forward which might be different for each project.  Projects were asked to think of different ways of achieving the objectives, and it was thought that each project needed to be placed in its own frame to see if the opportunities to deliver were different, in order to make the most of the funding available. It was quite clear at this stage that more funding would not be forthcoming from the Governments, therefore there was a need to think about how to change the scope of the projects, change how those projects achieved the objectives, using a low-carbon form as much as possible to achieve those objectives.

 

It was proposed and seconded that a clause should be added to recommendation 2 stating that the Board had concerns about the increased costs and risks facing the delivery of the Growth Deal. It was further suggested that if the Board wanted to highlight its concerns, it was also important to refer to mitigation, including discussions at a national level.