Agenda item

The Committee were provided with a presentation from SQW in regards to investment zones.

It was explained that colleagues in Swansea and Carmarthenshire Councils commissioned SQW to develop a prospectus for a new green industries investment zone, covering the two local authority areas; the draft prospectus was included within the circulated agenda for the meeting.

Members were informed that investment zones was launched by UK Government in 2023 to develop ‘high potential clusters in areas with unmet productivity potential’ where local strengths and assets can be leveraged to create sustainable growth.

It was noted that a limited number of investment zones would be allocated across the UK; eight had been pre-announced in England, and there was likely to be one in Wales and one in Scotland.

SQW highlighted that the intention of investment zones was to build on areas where there were sectoral strengths in relation to a limited number of sectors, which government predefined in its policy offer; including green industries, advanced manufacturing, creative industries, life sciences digital and tech.

It was stated that UK Government had announced that each investment zone in England would receive a £80million package, which would equate to £20million per annum over four years; with a balance on how that might be used flexibly between fiscal incentives, business dates and other forms of spending.

The Committee was informed that the process for Wales had not yet been made clear; however, colleagues in Swansea and Carmarthenshire Councils were very interested in providing an early expression of interest to Welsh Government. It was highlighted that the proposal was focused on green industries, which was one of the governments stated priorities; and set out the prospectus as being complementary with the Celtic Freeport, with a large part of the narrative around adding value to the Celtic Freeport and South Wales industrial cluster.

In addition to the above, it was mentioned that there was emphasis within the guidance on the contributions that universities and business could make; SQW had built this into the prospectus, and had consulted with organisations such as Swansea University, the University of Wales Trinity Saint David and Local Authorities, when developing the document.

The core narrative was presented to Members, which highlighted that the investment zone will connect the energy generation potential, research and innovation capabilities, major sites and industrial strengths to support a higher-value, decarbonised economic future and greater wellbeing.

It was noted that SQW had completed an initial view of the potential benefits of the investment zone; it could unlock 5,300 jobs and £3.9billion in additional annual GVA. It was mentioned that this statement was broadly in line with the figures that had been quoted by other places that had been allocated an investment zone in England.

The presentation detailed the high level logic model, which was set out in the prospectus. When putting this together, it was mentioned that SQW were mindful in obtaining a balance between being high level enough in order to be flexible in light of the currently unknown content of the guidance; whilst also giving enough specificity to be clear about some defined areas and building on key strengths.

SQW provided an overview of this model:

·        Green industry strengths – there was no real definition of green industry in the governments documentation, therefore SQW had identified the following five areas in which South West Wales had a number of strengths:
-Energy production and distribution
-Advanced manufacturing
-Agriculture, agritech, food and bioscience
-High value low carbon services
-Decarbonisation technologies in the built environment

·        Key locations – SQW had identified the following key locations where a package of incentives might be of value:
-Swansea Energy and Transport Hub, and Port Development
-Llanelli Low Carbon Cluster
-Swansea City Centre and Waterfront
-Nantycaws Circular Economy Park
-Parc Felindre
-Cross Hands  Growth Zone

·        Opportunities unlocked – SQW had identified the following opportunities that could be unlocked through the progression of this proposal:
-Green, renewable energy supply
-New investment in advanced technologies
-Expanded local supply chain
-Stronger market for adaption and adoption
-Strengthened skill base

·        Regional impact – the following were acknowledged to be the positive impacts on the region:
-5,300 jobs
-£3.9billion additional GVA
-Increased business and industrial resilience
-Accelerated progress to net zero
-Enhanced health and wellbeing

A discussion took place in relation to the next steps, which included engagement with Welsh Government in regards to the prospectus, further work in understanding how an investment package might work, and determining what could realistically be delivered within the time frame of this designation. It was added that although the future application process was unknown, it was likely that it would require a business case, similar to that which accompanied the Freeport competition.

Members queried the timescales and finances that would be needed to develop and deliver this programme. It was explained that a lot of this was still unclear due to the current lack of clarity in how Welsh Government wishes to proceed with the process. Officers stated that they were aware that discussions were ongoing between UK and Welsh Governments, with UK Government clearly indicating that they will only fund one investment zone in Wales; it will be up to Welsh Government to decide if they wish to allocate the one location, or open it up to competition.

The Committee was reminded that the Chief Executive presented a report to the previous meeting of the South West Wales Corporate Joint Committee, 6 June 2023, when the policy offer was first launched. It was confirmed that the Committee granted authority to the Chief Executive to commence initial discussions with Welsh and UK Governments in order to explore the benefits that could accrue if an investment zone policy offer were to be allocated to South West Wales; as well as resolving that a letter, registering an expression of interest in the potential for an investment zone policy offer in South West Wales, be sent from the Chair of the Committee to the relevant ministers. Officers confirmed that these actions had been completed, and that it would be beneficial to send another letter to request a meeting with the relevant ministers.

It was noted that in the interim, the four Leaders had met with the relevant minister and relayed the work that was being carried out across the region, including the intention to bid for an investment zone. The Chairperson welcomed the suggestion of arranging a meeting with the relevant ministers, and to enable the Leaders to take any actions necessary to ensure UK and Welsh Government were aware of the regions intentions to secure an investment zone.

The four Leaders reiterated the benefits of the proposal for the region, and expressed that they were content for Welsh Government to have sight of the draft prospectus.

RESOLVED: That the report be noted.