The Swansea Bay City Deal: Concerns

As a good cynic, I will start by looking at some of the concerns I have with the city region deal as currently proposed.

The deal will bring together a significant amount of public sector investment, but it will also involve massive amounts of private sector investment - £673m according to the proposals. This represents a huge amount of money and I'm not entirely sure how this will be delivered at the moment. Businesses will need to see something very special in the Swansea Bay region to make the kind of investments we are talking about. However, early indications suggest that there is a lot of private sector interest in some of the projects. In Carmarthenshire, officials have stated their surprise at the amount interest in the Life Sciences and Wellness Centre in Llanelli. However, showing an interest and investing hard cash represent very different levels of commitment. Already, we have seen that not all projects are going to plan. Yr Egin, which is at an advanced stage came into trouble in November 2016 when it was revealed that the lead partner on the project (University of Wales Trinity St David) took their begging bowl to the Welsh Government for a grant of between £4 and £6million for the project. They have now been offered £3million by Economy Secretary Ken Scates and picked-up a good reputational bruising along the way.

If the private investment comes through I am sure that the project team's figures on job creation will be reasonably accurate. However, will this mean more jobs for local people, or will it mean skilled people moving into the area to take up these new jobs? Any new jobs must benefit local people. Furthermore, this should mean that the new skilled jobs should benefit local people. The skills project will be vital to the success of the scheme in the hearts and minds of local people.

There are also questions as to how local businesses will benefit from the city region deal. There are many excellent local businesses who create amazing products and provide innovative services. I asked Prof. Marc Clement, the Dean of Swansea Business School and Swansea University's lead on the city region board how local businesses can feed into the city region concept. There was some acknowledgement, I believe, that there will need to be a lot of work done to promote the city region concept with local businesses and to encourage them to get involved.

Capital is at the heart of all our problems in South West Wales. How do raise and retain capital? Any capital that is currently invested in local businesses and developments (other than that from the public sector) is cash that has, more often than not, come from outside the area. What that essentially means is that any return (i.e. profit) that is gained from this investment is then taken out of the area again either to the private investor or the members of the pension or investment funds. This really comes down to the heart of the problem in Wales (and any relatively poor area). The owners of the vast majority of private capital invested do not have a real vested interest in the area. They place cash into low-risk projects with an expectation that the capital will get a reasonable return.

The problem is even worse for intellectual property. Small and medium-sized companies that succeed around here because of their ideas are often bought out by larger companies. These larger companies have no real interest in keeping the acquired business or investing in Wales and will just strip it of its assets, which will in most cases be just the intellectual property. Over the long-term, no economic development strategy will overcome the economic decline of the area unless we are able to start building and maintaining significant amounts of capital in the region and find a way to protect and keep the ownership of intellectual property locally.

Some of the projects lack any real clarity as to their purpose or how they will develop. The Life Sciences and Wellbeing Centre in Llanelli is the best example of this. Over the 15 year lifetime of the development of the project, it will involve an extraordinary investment in the town - the greatest since the end of the industrial age. There as lots of uses of the terms wellness, wellbeing, innovation, caring of older people etc. but little real clarity over how it will develop. It is also part of the wider ARCH project which, while separate from the city region deal, is again as clear as mud. To quote their website, ARCH is

What is ARCH? We should view ARCH as the wave on which we can all ride to help us achieve success - faster, and together

Innovation and collaboration are they key foundations of our mission statement. ARCH brings together industry, innovation, academic research and the health sector

ARCH is a philosophy, an ethos. A community of like-minded partners who share the same pioneering aspirations, innovative spirit and can-do attitude to improve human health and wealth

To put it crudely, if it looks like BS and smells like BS, then it probably is BS. The people behind these projects really need to explain exactly what they will mean in clear English.

The ARCH project team won't be getting one of these anytime soon

Transport is not mentioned once in the heads-of-terms agreement of city region deal. I'm very disappointed by this. Anyone who has tried to travel from Kidwelly to Fabian Way during the day will tell you how god-awful it is to travel across the Swansea Bay area. No integrated region will succeed unless there is good quality public transport available to underpin it. Looking towards Cardiff, the Metro is at the heart of the city region deal. However, if the deal is agreed and a new board is established to deliver it, it is likely that they will be given powers over public transport in time, possibly in the form of a regional transport authority. But to develop a functional public transport infrastructure in an area that has very little and takes in vast rural areas will require billions of pounds - amounts that will make the original city deal look like peanuts. I think it is fair to say that the project team has not focussed on transport because it is not one of the region's strengths. However, it the deal succeeds and jobs are created, people will need an easy way to travel to their new jobs that does not involve the M4 motorway.

The governance arrangements are a bit confusing and will be sitting on top of a multitude of public bodies that already exist to serve the locality. The 'sovereign' body will be a joint committee of each local authority and will have sub-committees that will manage specific projects and policies. Spending public money will have to be agreed by this joint committee. There will be a wider body made up of local government, business, academic, trade unions and other interested parties that will focus more on policy and advice. Over the medium-term, there will be a need for the structure to be clarified and be made more sensible in reference to existing local government bodies, particularly if there will be further bodies being added such as a regional transport authority. In England, city mayors have been an answer, but I don't detect any appetite for a democratic solution in Wales.

This is Part 3 in a series of posts about the proposed Swansea Bay City Region Deal. Part 4 will consider the potential opportunities of the proposals.