Agenda item

Following scrutiny of the item, the Chair resolved to write to the Swansea Bay City Deal Board to highlight the inconsistency that effectively scrutiny of this has been removed (with permission), but GVA figures are still being used to promote City Deal activity.

The report was noted.

Ian Williams, Swansea Bay City Deal Portfolio Development Manager presented the report as included in the agenda pack.

Members clarified that the abbreviation of SMART means Specific Measurable Realistic Achievable Time based. Officers confirmed this. Members acknowledged that GVA (Gross Value Added) is amorphous and difficult to quantify and understood where the decision had come from.

Members stated that they were disappointed that when the project started, that figures were used and now they can’t be quantified. Members wanted to have confirmation on where GVA would be used as they noted that on a business case level it can be used but other areas it can’t.

Members also asked what other markers are going to be used to give an overall understanding of how the whole project is doing rather than individual projects as individual projects can’t be scrutinised unless members ask specifically, or if they have a presentation on them.

Members stated that the role of scrutiny is to understand the value to the whole of the Swansea area but felt the goal posts have moved.

Officers explained that GVA as a calculation will still be used in the business cases but what the calculation does in the economic appraisal is that it bases it on assumptions and multipliers, this means officers can’t evidence and attribute a project and programme intervention directly to GVA. Officers explained that they can talk about the economic impact of a building and used Swansea Areana as an example and explained that they can talk about the economic impact of the direct consequence of having the arena, including the economic impact of it, ticket sales, footfall, support to the all the direct businesses associated with it, in and around the arena. Members were informed that officers would then use an evaluation model to look at any other evidence in the wider impact of the city centre and surrounding areas, for any economic impact. Officers explained however that it wouldn't necessarily be GVA used.

Members were also given the example of Yr Egin where economic assessments around phase one and there are economic impact indicators within that report. Officers explained that having S4C as an anchor tenant within Yr Egin with all the surrounding supply chain and all the companies involved in the building itself will have economic impact directly and indirectly to the supply chains and the surrounding area.

Officers explained that all the economic appraisals will happen once things are operational, but they will also do an economic impact of construction as well. Members were advised that there are approximately 120 different measurements of success indicators that all business cases have identified.

Members were advised that those were economic indicators that they are already using and that while it might not just be at the portfolio level for every single one, just because of the nature of what the what the project or building may entail officers gave reassurance that they are measuring the economic impact. It's just not attributing GVA to the portfolio.

Members highlighted that on the City Deal website the figures are mentioned of £1.8 billion and that is what officers would consider GVA and then it's subsequently been uplifted £2.3 Billion. Members weren’t happy that this information was still being put out, but officers can’t verify it.

Officers advised that they can't evidence it directly, but they still estimate that figure and when business cases evolve and if a plan changes of any significance, the economic evaluation would need to be redone but officers haven't done one yet because everything that they planned to do is, in the same direction of travel.

Members were informed that the only project that is different, is floating offshore wind, but an economic appraisal is being done on that new element of the project within the programme and officers will continue to evaluate it and it still is the target, but as officers can't evidence directly attributable to the portfolio. Officers will still monitor GVA, but there are so many moving parts with it that they may find that GVA could go down for the region because it's not just the portfolio that's in play for the region for economic activity. Officers advised that the portfolio would generate economic impact and they will demonstrate that through other indicators.

Members acknowledged the difficulties that the project management board identified in terms of GVA being amorphous and difficult to quantify but members highlighted that using those numbers to promote the city deal activity despite officers saying that it's hard to do that because of other factors and asked that the committee highlight this to the City Deal board as an area of concern. Members also commented that because effectively the scrutiny on this item has been removed with permission, but GVA figures are still being used to promote it.

The chair confirmed he’d like to write to the Swansea Bay City Region Joint Committee Chair to highlight this inconsistency.

Members also expressed the view that if economists at Welsh Government and UK Government have looked at GVA and are recommending that it is a flawed measuring tool and to use other methods then the committee should listen to it.

Officers confirmed that WG and UK Government Economist confirmed that advice. Officers advised that GVA can remain as a headline figure in modelling terms in the economic appraisals, but it's on their advice that it's not possible to evidence to monitor on that level.

Following scrutiny of the item, the Chair resolved to write to the Swansea Bay City Deal Board to highlight the inconsistency that effectively scrutiny of this has been removed (with permission), but GVA figures are still being used to promote City Deal activity.

The report was noted.