Agenda item

The report was noted.

Steven Aldred Jones – Regional Finance Manager provided an update on the Provisional Outturn position for Q1 2023/2024 as included in the report circulated.

Members asked for an explanation why the capital expenditure to date is so poor over the projection. The Director of the Swansea Bay City Deal commented that even though we are in year 7 in terms of actual delivery we are talking about the last 2-3 years. There were several factors outside of officers control, which combined have caused slippage including Covid, inflationary pressures, construction costs and rising energy prices. Mitigations are in place and work is ongoing to ensure the scope of what was planned is still fitting with purposes.

Officers are going through change requests such as Pembroke Dock Marine with the opportunity for offshore wind, so officers changed the business case as they did with the Matrix project and with Neath Port Talbot around the Advanced Manufacturing Production Facility. This means they are making sure projects are still relevant, but changes take time for approval.

Officers advised that they are also seeking extra funding largely down to the new deliverers so going down the process of re-approving a budget can take a long time. Funding agreements is a control mechanism which take a lot longer as they are legal documents. Officers have also used value engineering on some projects.

It was noted that processing re-approvals is time intensive, but any slippage will not affect the deliverance of a project, only the time frame in which it will be delivered.

Members commented that the Homes as Power Station (HAP) project is reliant on house builders and questioned how the project was affected by the increase in mortgage rates and the slowdown of housebuilding in other parts of the UK. The Director of the Swansea Bay City Deal stated there were risks but the Registered Social Landlords (RSL’s) remain committed and are building/refurbishing. There is local authority housing stock and private sector builders. The indications are that people are still delivering and using environmentally friendly fabrication that supports the notion and technology of Homes as Power Stations. There has been an analysis of the supply chain, and a staff member has been employed to support and develop the supply chain around innovation in the homes. Engagement is ongoing with Welsh and UK governments, RSL’s and other providers. A funding call has recently closed, and several applications were received in the first round of funding so new and refurbished homes can be taking into account and captured.

Officers advised that there is a lot of parallel working going on with HAPs homes and these are being monitored and taken into account of as well. The house prices have gone up so officers believe that the private sector funding will be achieved, even if less homes are built it may balance out.

Members noted that investment over the coming years was a critical part of the City Deal.  The Director of the Swansea Bay City Deal clarified that RSL’s are classified as private sector in relation to private sector funding.

The report was noted.