- Financial Monitoring (Report to Follow)
The Chair welcomed the Head of Financial Services and Deputy Section 151 Officer, along with the City Deal Finance Manager, in the absence of the Section 151 Officer.
At the last meeting of the Swansea Bay City Region Joint Scrutiny Committee an update report on the grant terms and conditions was requested to come to today’s meeting, but due to timescales this information was unavailable. The committee noted that the grant terms and conditions had been received from Welsh Government on the 24th October 2019. These had also been circulated to the appropriate officers and had been considered by the 151 officers. The Committee were reassured that additional money would be coming in the future. However this would need to be clarified in writing and members requested an update at the next meeting.
Attention was drawn to Appendices A and B within the circulated report.
Clarity was requested on the timescales for the terms and conditions from Welsh Government. It was explained that the request for the grant offer would need to be returned by 30th November 2019. Members were pleased to note that dialogue had already started with Welsh Government officials.
Clarification was also requested on the absent contribution of £50,000 from a co-opted partner. It was noted that officers are engaging with the co-opted partner as far as their representation is concerned on both the programme board and joint committee.
The committee asked what the long term impact was on the financing of the City Deal, following the recent increase in the Public Work Loan Board rate and queried whether it was expected to have a further increase. It was noted that interest rates went up 1%, which may change the financial details on a project by project basis. Officers were unable to provide a definitive response in relation to an increase in the interest rates.
Concern was raised in relation to a partner that is indecisive in their involvement in city deal. Members therefore asked what the impact was on the delivery of the projects with the current understaffing. Reassurance was provided on the ongoing recruitment process of the Programme Director.
Attention was drawn to the fairness of the breakdown on the ‘Benefit in Kind’ between the Local Authorities. Officers confirmed that the allocation was a recommendation following the review requiring the different Authorities to take on their given functions. The committee noted the relevance of this point and stated that the Swansea Bay City Region Joint Committee may wish to note this point and provide a comment in future.
Discussions took place around the process of the divide of the release of monies due to the release of the terms of conditions. It was explained that the methodology of the divide wouldn’t change due to this. However, the exact distribution would require a mechanism which is equitable. It was noted that the grant would be dispersed to those projects with approved business cases, receiving their 1/15 of the share. The rest of the money would remain within the City Deal Programmes Office account. It was highlighted that Local Authorities may wish to loan this to support their projects. The interest generated off this would require discussion and further decisions. It was noted that the interest rate being considered would be 2.5% above the bank of England base rate equating to about 1%.
Considering the experience the City Deal has had on the delay of projects being approved, it was queried whether there would be a change in the stipulation of delivering projects in 5 years. Officers emphasised that the 5 year timeline was a decision from the Shadow Committee itself and not a requirement from the UK and Welsh Governments. It was noted that this would be due a review.
Members agreed that a letter be written to the Swansea Bay City Region Joint Committee asking for Clarity on the 5 year stipulation and whether the committee would consider extending this.
Following scrutiny the report was noted.