Agenda item

Alwen Williams (Chief Executive) to present the report.

 

1.     To note the update on the transitional arrangements for the Local Growth Fund since the relevant reports were submitted to the CJC in March and June.

 

2.     To note that the Year 1 Transition Plan (2026-27) for the Local Growth Fund was submitted on the 9th of June to the Welsh Government by Cyngor Gwynedd as the lead accountable body for Year 1, and that this plan sets out the approach to maintaining continuity from the UK Shared Prosperity Fund (SPF) while preparing the region for a fully regionalised delivery model under the Corporate Joint Committee (CJC) in Years 2 and 3.

 

3.     To endorse the proposed programme of work and milestones required before the next meeting of the Economic Well-being Sub-Committee in October 2026, recognising that the preparatory work must begin immediately if the CJC is to be ready to take responsibility for the Local Growth Fund from April 2027 onwards, subject to confirmation from the Welsh Government.

 

4.     To authorise the officers to proceed with the necessary requirements, including planning, engagement, commissioning and capacity-building work over the summer, using the funding provided by Welsh Government to support preparation for delivery of the Local Growth Fund from 2027/28 onwards, subject to confirmation from the Welsh Government.

 

The report was presented by the Chief Executive.

 

DECISION

 

1.    To note the update on the transitional arrangements for the Local Growth Fund since the relevant reports were submitted to the CJC in March and June.

 

2.    To note that the Year 1 Transition Plan (2026-27) for the Local Growth Fund was submitted on the 9th of June to the Welsh Government by Cyngor Gwynedd as the lead accountable body for Year 1, and that this plan sets out the approach to maintaining continuity from the UK Shared Prosperity Fund (SPF) while preparing the region for a fully regionalised delivery model under the Corporate Joint Committee (CJC) in Years 2 and 3.

 

3.    To endorse the proposed programme of work and milestones required before the next meeting of the Economic Well-being Sub-Committee in October 2026, recognising that the preparatory work must begin immediately if the CJC is to be ready to take responsibility for the Local Growth Fund from April 2027 onwards, subject to confirmation from the Welsh Government.

 

4.    To authorise the officers to proceed with the necessary requirements, including planning, engagement, commissioning and capacity-building work over the summer, using the funding provided by Welsh Government to support preparation for delivery of the Local Growth Fund from 2027/28 onwards, subject to confirmation from the Welsh Government.

 

REASONS FOR THE DECISION

 

To update the Economic Wellbeing Sub-Committee on the Local Growth Fund and to obtain the Sub-Committee's support to progress the work required over the summer to begin planning to meet the Welsh Government's requirements for greater regional collaboration and co-ordination of the fund from 1 April 2027.

 

DISCUSSION

 

It was explained that the purpose of the report was to ensure that north Wales was prepared for the Local Growth Fund's exchange arrangements, and the expectations that the Welsh Government set for April 2027 onwards.

 

It was noted that the report provided an update to Members on developments, whilst also seeking approval for a preparatory work programme when forward planning this change, which would need to be implemented during the summer 2026.

 

Members were reminded that the Shared Prosperity Fund (SPF) was now being replaced by the Local Growth Fund. However, it was stressed that emphasis was placed on productivity growth, balancing economic imbalance whilst also highlighting the need for a more substantial capital budget.

 

It was reported that the Local Growth Fund implemented three priorities, namely:

 

·        Supporting competitive and productive businesses

·        Increasing skills and employment opportunities

·        Improving regional infrastructure

 

It was confirmed that the 2026/27 financial year was being considered by the Welsh Government as a transition year, noting that existing arrangements for the SPF continued to be operational. It was highlighted that Cyngor Gwynedd was the lead authority on the matter for north Wales.

 

It was declared that Cyngor Gwynedd was the lead authority for the Fund, and they had already received a grant proposal letter for 2026/27 which made it a requirement on the implementation of the pragmatic transitional Transition Plan. Members were reminded that the final Regional Development Plan had been submitted to the Welsh Government on 9 June 2026, as a way of sharing information with the Government on the administration of the Plan in its first year.

 

It was noted that the local authorities had developed plans to implement the plan for its first year. It was reiterated that they did so by considering the Plan's priorities as well as local needs.

 

It was reported that recent guidelines provided by the Welsh Government confirmed the expectation that the responsibility for strategic planning, priorities and supervision from the Fund would move to the Corporate Joint Committee from April 2027 onwards (instead of the Local Authority). It was emphasised that this region had expressed objections to this decision as it impacted the ability to make decisions locally. It was assured that officers had made an application for formal consent from the Welsh Government's insight on this matter, reporting that a letter from the Cabinet Minister for Enterprise, Connectivity and Energy was expected to provide an update. It was emphasised that this letter would be shared with all local government leaders in Wales.

 

It was mentioned that the Welsh Government's vision was clear within the guidelines, explaining that there was an expectation for Corporate Joint Committees to prepare a regional growth plan for a 10-year period, to provide a strategic framework for investments in the future. It was reported that the North Wales Corporate Joint Committee had received £200,000 grant funding to implement this application, noting that a draft of the plan was expected by the end of September 2026 and a final plan by the end of November 2026.

 

It was emphasised that there was no intention to replace local priorities, but to provide a mechanism where they could be aligned with regional priorities to maximise investment opportunities.

 

It was noted that the draft work programme had been included in the report, including considering evidence and existing strategies, renewing the existing economic baseline, developing a long-term growth vision, forming governance arrangements, as well as conducting key engagement work with local authorities and regional partners. Attention was drawn to the milestones that had been noted by the Welsh Government to develop this plan and emphasise that a failure to do this could lead to risks in applying for budgets in the future, and the Government could decide how to allocate any funding centrally. Frustration was expressed that the timeframe provided by the Welsh Government was very challenging, with a significant amount of work required to present it on time. It was highlighted that those milestones were as follows:

 

·        ⁠30 July 2026 - Submit a progress report to the Welsh Government

·        ⁠30 September 2026 - Submit a draft Regional Growth Plan to the Welsh Government

·        2 October 2026 - Submit the draft Regional Growth Plan to the Economic Well-being Sub-committee for consideration

·        30 November 2026 - Submit the Final Regional Growth Plan to the Welsh Government

 

It was considered that the initial priorities were engagement with the local authorities and partners, as well as commencing the work of establishing governance arrangements.

 

It was highlighted that the report noted the need to commence the preparatory work whilst officers continued to seek clarity about the Fund's long-term arrangements, to ensure that no negative financial implications were having an impact on the region.

 

During the discussion, the following observations were made:-

 

It was considered that it was essential for the Joint Committee to address the Government's tight timescale to ensure that decisions impacting the region were not decided centrally, considering whether officers had capacity to do so in a timely manner. In response to the observations, the Chief Executive confirmed that the Welsh Government had provided a £200,000 grant budget to assist with the work and the capacity to achieve it, as well as publish written guidance on the Fund. It was acknowledged that there was currently insufficient capacity to achieve the work, but there was a plan underway to ensure that a sufficient resource was in place. It was noted that the Welsh Government officers acknowledged that addressing the timeframe was challenging, stating that a plan could be submitted detailing the Fund instead of the 10-year growth plan in its entirety, was acceptable. However, it was considered that it was timely to develop a new 10-year plan as that would be an opportunity to develop the economic vision until the end of the Growth Deal and Investment Zone period in 2036. There was confidence that the deadlines could be addressed on these terms.

 

The frustration of Members was expressed that some matters associated with the Plan were unclear, and formal clarity had not been provided by the Cabinet Minister to date. It was emphasised that this made it challenging to make a decision on the matter.

 

Disappointment was expressed that the criteria for the Fund were very different to the SPF, and that it adapted from being a revenue budget to a capital budget. Examples were shared of key services funded by the SPF and its previous budget but was now ineligible to be funded from the Fund.

 

A discussion was held on the concern that the Fund could be lost within the wider work of the Joint Committee, should the Joint Committee be responsible for its administration and governance from April 2027 onwards. The need for certainty that the Fund would be administered across the six local authorities within the region was considered, as there was concern that Conwy County Borough Council and Denbighshire Council, as sites in the middle of the region, could be forgotten in lieu of projects in the western and eastern areas of the region. It was asked whether the budget within the Fund would continue to be allocated to every County, as was the case in administering the SPF.

 

It was considered that the SPF administration and the first year of the Fund had been very effective. Observations were received that it would be beneficial for the arrangements to remain in the current system, as there was certainty that they worked.

 

It was asked what the cost of the Joint Committee would be administrating the Fund, compared with what was the cost for Cyngor Gwynedd to do so at present. It was emphasised that it was necessary that this cost was not significantly higher for the Corporate Joint Committee, to ensure the best use of public funding. In response, the Chief Executive confirmed that the Fund's administration cost arrangements would remain the same as what was operational for SPF. It was detailed that this meant that 4% of the budget was available for the administration costs of the Fund - should it be used by Cyngor Gwynedd or the Corporate Joint Committee. It was explained that the £200,000 grant funding referred to was only available for the transitional year (2025/26).

 

Observations were noted that this change to the regional administration of the Fund moved democracy decisions away from the region's residents, as they were not decided locally.

 

An update was received by the Member for the Isle of Anglesey County Council, who noted that he had trouble with the relevant Cabinet Minister recently, where it was confirmed that the Welsh Government continued to commit to previous arrangements about the Plan. Disappointment was expressed that the Government continued with this view instead of responding effectively to the concern of the region, and there was concern that there was a need to approve this report to ensure that the budget reached the region or caused a risk that it would not be allocated efficiently. It was emphasised that not receiving the funding would be very challenging, and it would be less challenging to change the existing arrangements to operate regionally on the implementation of the Fund. In response to the observations, the Monitoring Officer considered whether the Members wished to adapt the Decision Sought as a way of approving the report if the formal confirmation from the Cabinet Minister was received, and that it would fall if that confirmation did not arrive, should the Members be in favour of approving the report.

 

It was asked whether assessments, evaluation or monitoring was completed, as officers proceeded to develop a new 10-year plan. It was also considered whether the growth vision noted within the original plan in 2016 had been reached. In response, the Chief Executive confirmed that the vision noted in 2016 was directly relevant to the Growth Plan as it was only the Growth Plan that was operational at that time. It was added that the progress of that Plan was reported to the Sub-committee regularly, emphasising that the Plan responded to the objectives of the vision noted in 2016.
It was highlighted that the economy had adapted significantly within the last decade, and it was important to renew the vision as a region to ensure that equivalent challenges received attention. It was confirmed that conducting evaluation activities would be part of developing a new 10-year plan. Similarly, it was considered that it was necessary to have input from the local authorities as part of that process.

 

The possibility of arranging a meeting for Members to discuss this matter further following this decision was considered. It was considered that conducting such a meeting would enable consideration of a vision of how the Fund would be able to have the most benefit to the residents of the six authorities and reassured the members whilst the situation continued to be vague from the Welsh Government. The Chair noted his support for this meeting, encouraging Members to make a decision on the report to ensure that the schedule would not slip on the development of the Fund.

 

The Chief Executive emphasised that the decisions considered within the report allowed the Corporate Joint Committee to prepare for this change, discover the best ways that they could work with the local authorities to ensure that the funding had a positive impact on communities. Attention was drawn to the fact that this was not the first time that the Welsh Government adapted a funding method in this way, as the Corporate Joint Committee had been working with the relevant local authorities on the Wrexham and Flintshire Investment Zone project for many years and had dealt with the same considerations and challenges when establishing that project. ⁠It was emphasised that fostering a close relationship with those authorities had enabled decisions to remain local within the Counties, and it was hoped to replicate this success with the Fund to ensure that it would be administrated on a structure that worked effectively for everyone.

 

A vote was conducted on the report, where 5 members were in favour and there was 1 abstention.

 

The members expressed their thanks for the report.