KEY areas of the City Deal for the Swansea Bay City Region are not working properly and should be more open to scrutiny, a review has said.
The review team found several flaws in the £1.3 billion scheme, which brings together Swansea, Carmarthenshire, Neath Port Talbot and Pembrokeshire councils, four universities and health boards, the private sector and the UK and Welsh Governments to deliver 11 projects.
There was a “disconnect”, said the internal review, between the projects’ concepts and their business cases, none of which have been signed off as yet.
It added that an investigation of suspended Swansea University employees, given potential impacts on the Llanelli Wellness and Life Science Village – one of the largest projects – was eroding trust.
The review said plans should be drawn up in case Government funding for the projects is withdrawn at a later date, although there is no suggestion this will happen.
Oppostion leader in Carmarthenshire, councillor Rob James, said he felt the review was “absolutely scathing”.
The review said the UK and Welsh Governments have not signed off a City Deal implementation plan because they need evidence of better risk management and a financial plan, among other things.
Although still at an early stage, the review team said clarity was lacking about how much the four councils would have to borrow to fund projects in their area, and that there was a risk that councillors might not approve the money required.
“Programme risk management is not effective,” said the report.
The review said a City Deal body called the economic strategy board, which includes private sector representatives, could provide Government with the confidence it currently lacks around the commercial viability of the project business cases.
The review team said the strategy board had queried where the private sector investment was coming from for the Llanelli Wellness and Life Science Village, but had not received answers, and that it had reservations about phase two of the Yr Egin creative and digital centre in Carmarthen.
The strategy board has also raised transport questions surrounding the Swansea City and Waterfront Digital District, which is to comprise commercial space for tech and start-up businesses on The Kingsway and the new University of Wales Trinity Saint David campus in SA1.
But the review team said it was unclear why the four council leaders served on the strategy board, given that they are also on a joint committee, and also said there was a lack of clarity about how strategy board candidates had been shortlisted.
“The lack of openness and transparency over the process in respect of these appointments has undermined the trust of UK and Welsh Governments,” said the review.
The review team also said the current arrangements placed too much responsibility on Carmarthenshire Council and its chief executive Mark James regarding the number of roles that need fulfilling.
The review has made several recommendations, including that the joint committee – which approves final business cases before they are submitted to Government – should establish clear operating principles, including risk management, ethical values and an overarching record of declarations of interest and offers of gifts and hospitality by all council officers and elected members.
Consideration should be given, it said, to webcasting joint committee meetings.
The review also recommended that roles and functions are shared out differently to improve checks and balances, and that the economic strategy board membership is altered to ensure a robust commercial appraisal of the projects.
But it said all City Deal parties were committed to delivering the projects, which are expected to create nearly 10,000 jobs over 15 years.
Carmarthenshire Council terminated a collaboration agreement with a private sector partner – Sterling Health Security Holdings – for the Llanelli Wellness and Life Science Village last December. Council officers are now looking at different ways of delivering the project.
Swansea Council leader Rob Stewart said the review’s findings will be formally considered by the joint committee at its next meeting.
He said: “Looking to ensure governance is as robust as possible reflects that we’re still in the very early stages of a 15-year programme, but we’re ready to support any recommendations that would benefit the region’s economic prosperity in future by speeding up the City Deal’s delivery.”
Cllr James said: “This report is absolutely scathing for Carmarthenshire Council and it is imperative that lessons be learnt immediately.”
He claimed that public confidence had “taken a big hit” in recent months, and welcomed the call for greater scrutiny.
“To move forward and deliver on the aspirations of the City Deal, this report needs to be endorsed by members of our council and all recommendations adopted in full,” he said.
The internal review follows a separate UK and Government review of the way the City Deal is run, plus two reviews carried out by the Wales Audit Office and a consultancy on behalf of Carmarthenshire Council.
These latter two reviews said the council had followed due diligence and showed good governance with its procurement of the Llanelli Wellness and Life Science Village.