Agenda item

Cabinet Members – Councillors Nia Jeffreys and Dyfrig Siencyn

 

To submit a report on the above.

 

To accept the report and note the observations.

 

The Leader and officers from the Economy and Community Department were welcomed to the meeting.

 

Submitted - the report of the Deputy Leader and Cabinet Member for Economy Operational Matters invited the committee to scrutinise:-

·         The contents of the project under the 'Prosperous Gwynedd' priority area in the Council Plan, which aimed to create the best possible circumstances for businesses and community enterprises to thrive, and support the people of Gwynedd into work; and

·         The progress of the Economy and Community Department in implementing the project to trigger growth in Gwynedd's economy.

 

The Leader set the context and the Head of Economy and Community Department outlined the content of the report and the Economic Development Manager / North Wales Shared Prosperity Fund Manager elaborated on the specific steps in terms of support for businesses.

 

Since the time of writing the report, it was noted:-

·         That the process of selecting projects that would receive funding from the Shared Prosperity Fund had ended, and that over £3m would be distributed to businesses. 

·         This was far below the 185 applications worth £10m that had been received, and should the Council have more time and resources, then many more could certainly have been supported.

·         That the £1m available through the Arfor programme had been distributed to 20 businesses and, once again, the demand was much higher than the resources available.

 

Members were then given an opportunity to ask questions and submit observations. 

 

It was noted that the UK Government's method of distributing funding from the Shared Prosperity Fund was very defective.  ⁠Specific reference was made to the lack of regional and national projects, the lack of strategy on a level higher than county level, the urgency to spend substantial funding in a short period of time which meant prioritising projects that could be realised quickly and the great uncertainty regarding what would happen after April 2025.  In response, it was noted that some things were better provided on a national level, some on a regional level, some on a county level and some on an even more local level, but that no model was ideal.  There was a need to plan on which level allocations and decisions should be made, but there had been no opportunity to do so in this case due to the timetable.

 

It was enquired whether some proposals were funded in their entirety and the rest were being refused, or whether there was an element of partially funding some schemes.  In response, it was noted that it had been decided not to fund some proposals in their entirety to be able to support more businesses, and that all of the partially funded businesses had confirmed that it was possible for them to deliver their project within the timetable with less funding.

 

It was asked whether the cost to the fund of employing additional officers to administrate the scheme included redundancy costs?  A request was also made for information about the background of those officers and what would they be likely to do after the scheme ended as it would be beneficial to keep the expertise within the Council or within the region.  In response, it was noted:-

·         That the cost of additional staff to administrate the scheme was an eligible cost of the grant, therefore, Cyngor Gwynedd did not pay for those staff.

·         That the small number of staff employed to run the projects in Gwynedd was a combination of people with previous background in the field and new young people in the field, and that the larger team across North Wales included a number of secondments from among senior officers from Gwynedd and other counties, along with former officers with a background of managing large funds, and European funding specifically.

·         The team, from a grant administrating aspect, had to be grown due to the need to process so many projects in a relatively short period and once again in this case, it was managed to give young people an opportunity to obtain experience in the field.

 

It was enquired how confident the officers were that it was possible for funded projects to be spent against the timetable.  ⁠In response, it was noted that it could be confident that it would be possible to spend the funding as a project maturity and implementation ability assessment criteria had been built into the process.  Nevertheless, should there be concern that a project was not delivering, there would be an opportunity to recycle the funding.

 

It was noted that the Department was to be congratulated for coordinating all grants across North and West Wales, but as no strategic direction had been provided by the UK or Welsh Governments, it was important to prioritise the preparation of a strategy for the benefit of Gwynedd.  In response, it was noted:-

·         It was fully agreed with the observation, but it had not been possible to complete the work of preparing a Gwynedd Economy Plan due to the additional requirements on the Service to manage and administrate the funding programmes.

·         Now that the decision-making work in terms of allocating the funding had been completed, the work of preparing the plan would soon begin and it was important that lessons from the experience of current arrangements were learnt and that the priorities for Gwynedd were clear for the future.

 

It was asked whether there was a risk that the Holyhead Freeport could have a negative influence on the Gwynedd economy.  In response, it was noted:-

·         That this question had been asked and that assurance had been given by officers that the Holyhead Freeport would not lead to any 'displacement'.  Nevertheless, no evidence had been seen so far of how this could be managed and it was greatly hoped that there would be a discussion on a regional level soon.

·         It was understood that the process of preparing the business plan for the Freeport was still ongoing and it was not yet clear what impact it would have on the region.

·         Details were not available either regarding which benefits or which detrimental impact the new Economic Investment Zone in the East would have on the rest of the region, and the situation would have to be monitored.

·         There was concern about any potential impact the Freeport would have on some specific areas such as Bangor, due to the tax advantages offered to businesses being set-up in the Freeport area.  It had been promised that guidelines would be in place which meant that this would not happen, but Gwynedd had not been part of any discussions about this or had not seen a plan.  Once plans would be available, the officers would be eager to scrutinise them and to see how collaboration could take place.

 

It was enquired what plans would there be to try to attract major employers to Gwynedd as a result of drawing up a Gwynedd Economy Plan as there was concern that any major businesses that imported / exported goods would select Anglesey and businesses transporting goods within British borders would select Flint / Wrexham.  Whilst accepting that Gwynedd could not offer tax advantages etc. to such businesses, it was asked what other support Gwynedd could offer those companies.  In response, it was noted:-

·         That major companies were unwilling to locate in marginal areas such as Gwynedd, which was far from the market with less workforce and higher transport costs, without an incentive for them to do so.

·         That there was an incentive for companies to locate in the Freeport area, e.g. funding to construct units and taxation relief, but this would not happen in Gwynedd.

·         That these were the type of questions to raise when preparing the Economy Plan as it was not anticipated that Cyngor Gwynedd resources could help.

 

Concern was expressed that the Parc Bryn Cegin site in Bangor had been empty for over two decades and, although the local member of parliament was doing a lot of work on this, it was noted that things were not progressing.  It was also asked where the new businesses units would be located.  In response, it was noted:-

·         That the new units would be located in Minffordd and provide for the whole county centrally. 

·         That there was also demand in other areas and it was awaited to see what the private sector market would provide itself in some areas.

·         That there was a shortage of industrial sites in Gwynedd and sites would need to be purchased despite the fact that Parc Bryn Cegin, which was in Welsh Government ownership, was empty.

·         That the joint Local Development Plan with Anglesey showed that there was sufficient industrial land within the plan area, but those lands were on Anglesey, and it was hoped that it would be possible to examine this as part of the Plan review with the aim of having more land and property provision in Gwynedd.

 

It was noted that Gwynedd was one of the poorest counties in Britain and was very reliant on the Levelling Up and Shared Prosperity Funds.  In response, it was noted:-

·         It was believed that Gwynedd's economy was overdependent on the tourism industry and there was a need to generate more local benefit from it.

·         That rural Wales had a serious depopulation problem and an economic plan was needed for the rural areas of Wales.

·         That there was a need to create a much easier environment to construct small or smaller units as there was demand for them.  ⁠It was believed that there were opportunities for substantial investment across the countryside and we needed to look much more carefully at our development plans to facilitate this.

·         It was not believed that the current Government understood the rural situation and that it was easier to see economic progress in urban areas with economic enthusiasm.

·         That very good and extremely successful businesses existed in Gwynedd that offered good employment to workers and that companies chose Gwynedd as the staff were stable and loyal. 

·         There was a need to recognise that there was a thriving economic foundation across Gwynedd and that this foundation meant that we were not open to substantial economic changes.

·         That opportunities for extension needed to be created for the small businesses we had in Gwynedd and that investment on a regional and national level was needed, along with a national plan for rural Wales.

 

It was emphasised that it was important that Gwynedd electors understood that the Council had not created all of the uncertainty regarding the future of resources to support the local economy, and that the UK Government was responsible for the situation, and this in order to gain electoral advantage.

It was noted that it was important that people understood that Cyngor Gwynedd had not caused the financial crisis, and that the Westminster Government was to blame for providing less money to us every year.

 

It was noted that some applicants who had been unsuccessful for grants felt that all their work on the applications had been in vain and it was enquired how it could be explained to those people that Cyngor Gwynedd was not to blame for this, and that the work completed by them would be important for other projects in future.  In response, it was noted:-

·         It was hoped, in every case, with the exception of completing the form, that the work would not be in vain.⁠

·         It was hoped that the officers would see everyone who had been unsuccessful with their grant applications to see if there were different ways of funding the schemes.  Also, the Service would refer an officer from Business Wales to the applicants, certainly therefore in terms of the larger grant applications to see if there was a different way of supporting the business to deliver the project.

·         That more grants would certainly come along in future although the details were not yet known, and everyone was advised to continue working on the details of their projects so that they were as mature as possible when another opportunity would arise for a grant.

·         Members were asked to pass on information to the Service about any projects that were concerned about their situation so that officers could contact them.

 

It was asked whether it was understood why Gwynedd's economic inactivity and unemployment rates fluctuated more than in several other places.  In response, it was noted:-

·         That much of the data generated was based on surveys and samples, and the smaller the size of the geographical area, then the less certain the size of the sample.

·         That there was a need to exercise caution with this type of data and it was important to look at the usual trend.

 

Looking at the additional value indicators and average wages etc., it was noted that the usual pattern was that the UK was doing better than Wales and Gwynedd.  It was enquired, whilst accepting that we did not have economic stimuli to make a huge difference, whether it was fully understood why that gap remained for so much time.  In response, it was noted:-

·         Although the information, specifically in terms of economy performance, showed a slight pattern of back and forth movement, the trend remained very similar.

·         That Gwynedd’s economy was more marginal and also a traditional economy in many ways, with sectors based on smaller than average units, and that this underlined the scale of the challenge.

·         That a long-term, consistent effort was necessary over many generations to close some of the gap, and although Gwynedd wages were never going to be on the same level as wages in London, there were several other advantages of working in Gwynedd. 

·         That the gap was currently too vast, but what mattered was that we were moving towards improvement.

 

It was noted that there was a trend for economic policy formulated by the UK Government to favour London, and that the same was true on a Cardiff level, and that other countries made more of an effort to ensure that regional parts thrived.

 

Referring to the table in the report, it was enquired in which fields and in which parts of the county the 101 Gwynedd residents who had received support so far in 2023/24 had secured a job.  It was also asked how many of the 364 local individuals who had attended the job fairs had now secured employment.  In response, it was noted:-

·         That the report specifically referred to activities involved with the Gwaith Gwynedd programme which targeted those people who were farthest from the labour market, people who had been unemployed for a prolonged period or people with health conditions which had often prevented them from working in the past.

·         That the Gwaith Gwynedd team mentored the individuals over an extended period and what happened in the long-term was also monitored to ensure that the individuals did not drop out of employment and to assist them to move on to better jobs within their sector.

·         That job fairs were used as an opportunity to identify people who needed additional support to gain access to employment.

 

It was asked if it was anticipated how the shrinking of public sector funding over the next few years would affect businesses in the county, considering that businesses received indirect funding from the public sector by means of contracts and employee spending.  In response, it was noted that it was hoped that this would be part of the brief for a Gwynedd Economy Plan as there was a need to understand what the indirect impact as a result of the shrinking of the public sector budget in general was on partners in Gwynedd.

 

It was noted that the quality of jobs, not unemployment, was the main problem in Gwynedd and, by creating more jobs, it was asked how it could be ensured that the local population took advantage of this, rather than the immigrant population, and whether it was possible to avoid this at all as low quality jobs would be necessary anyway.  In response, it was noted that conditions had been introduced attached to grant proposals, including a condition that the business, if it did not already do so, would pay the Real Living Wage to all their employees by the end of the year.

 

It was asked whether it would be possible to provide a full list at the end of the grant allocation period of the businesses that had received support, along with how many jobs had been created, as it would be beneficial to know more about the geographical distribution of the funding.  After a period of time, it was also asked whether the Department would look back to see if those businesses had been a success or a failure, and what would the timetable be for this.  In response, it was noted:-

·         That the names of successful businesses and the proposals made by them would be published.

·         The applications received had to be considered, therefore, if no applications had been received from specific areas, there was a need to address this in the new plan.

·         Although consideration would be needed on how to evaluate the plan beyond the programme period, the Department would continue to monitor it to see how the company had developed over the years, and also maintain the relationship with the person who has received support so that it would be possible for them to receive further support or benefit from further opportunities by the Council and others.

 

Concern was expressed about the reduction in the Gwynedd population and it was noted that this would mean that more businesses which employed local people would have to close. Also, as Gwynedd was a county that was very dependent on agriculture, and that farmers were facing substantial cuts in payments, concern was expressed about what would happen to Gwynedd's rural economy in future.  In response, it was noted:-

·         Concerns regarding the latest agriculture plans were understood and that messages were being conveyed from the Welsh Local Government Association Rural Forum to the Government.

·         It was believed that we were overdependent on agriculture and tourism in Gwynedd and a much more diverse economy was needed.

·         That risks had to be taken when creating employment in the rural areas and be ready to attract people from outside the county if they were willing to establish a business and create employment for local people.

·         That our ability as a Council to change the situation was very sparse, but we would do our best and consider all of these matters in the discussions when developing the Economy Plan, and return to the scrutineers with the details of the plan.

 

          RESOLVED to accept the report and to note the observations.