A £1.3bn City Deal for boosting the economy of the Swansea Bay City Region is expected to be agreed in principle on March 1.
It will fund projects covering the local authorities of Neath Port Talbot, Swansea, Carmarthenshire and Pembrokeshire over 15 years.
Also supporting the deal are Abertawe Bro Morgannwg and Hywel Dda University Health Boards, as well as Swansea University and the University of Wales Trinity St David.
The proposed funding consists of:
- £241m of capital split between the UK and Welsh governments.
- £360m of other public sector funding – through local authority borrowing powers.
- £673m of private sector funding.
The investment will deliver up to 9,465 new jobs for the region, contributing to an uplift in gross value added (GVA) of £1.8bn.
It is based around four strands of:
- Internet of economic acceleration.
- Internet of energy.
- Internet of life sciences and wellbeing.
- Internet of smart manufacturing.
So far 11 projects have been identified.
Although these could change, here are their projected costs and job creation:
Life Science and Wellbeing Village = £199.5m
Proposed funding breakdown:
- City Deal funding £40m.
- Public sector financing £32m.
- Private sector funding £127.5m.
- Gross jobs created after 15 years 1,853.
As part of the wider ARCH (A Regional Collaboration for Health) initiative, a life sciences and wellbeing village is earmarked for Llanelli.
The vision is to put the region at the forefront of life science innovation and be recognised as a “destination of choice” for global investment and enterprise in the fields of life sciences and wellbeing.
Its focus will be on integrating business development, education and wellness initiatives, research and development and healthcare initiatives.
It will include:
- An Institute of Life Science which will act as a business and start-up incubator in the life sciences sector.
- A wellness hub that will house leisure and sports provision.
- An assisted living village providing care for out of hospital patients.
- A life sciences and wellbeing centre.
Life Science and Wellbeing Campus Network = £45m
- City Deal £15m.
- Public sector financing £20m.
- Private sector £10m.
- Gross jobs after 15 years 1,120.
The campus network will build on the work on the Institute of Life Science, with innovation hubs and satellite sites created across the region.
Digital Infrastructure = £55m
- City Deal £25m
- Private sector £30m.
A regional digital infrastructure will be implemented to support each of the City Deal’s strategic themes and projects.
The vision is to create a digital infrastructure including gigabit fibre and next generation wireless networks that will enable innovation and entrepreneurship within the region.
It will also include expansion of the provision of 4G and wi-fi capabilities to benefit both urban and rural areas.
There are plans for the region to be a testbed for 5G.
Will not referenced in the latest City Deal document, a pipe from a transatlantic broadband cable landing at Oxwich Bay – giving the region some of the world’s fastest broadband speeds with terabyte of power – could be included at at future stage.
Centre of Excellence of Next Generation Services (CENGS) and Technology Centre = £55m
- City Deal £23m.
- Public sector financing £5.5m.
- Private sector £27m.
- Gross jobs after 15 years 500.
The CENGS project will provide a data analytics capability to turn world class data into commercial systems and solutions. The centre will bridge the gap between research and innovation and the ability to launch, develop and grow commercial opportunities.
Yr Egin digital cluster = £24.3m
- City Deal £5m.
- Public sector financing £16.3m.
- Private sector £3m.
- Gross jobs after 15 years 203.
Based in Carmarthen, Yr Egin will be a digital cluster for the creative industry and tech sectors. Welsh language S4C has agreed to be its anchor tenant.
However, Economy Secretary Ken Skates is currently considering whether the Welsh Government will financially back the project.
Swansea City & Waterfront Digital District = £169m
- City Deal £50m.
- Public sector financing £56.8m.
- Private sector £61.4m.
- Gross jobs after 15 years 1,323.
Based around the centre of Swansea and its SA1 waterfront, this element would help finance incubation space and co-working areas for start-ups and small businesses, as well as the creation of a new City Centre Business District.
This would see:
- 100,000 sq ft of flexible and affordable new office space.
- A digital square and new 4,000-seater indoor arena in the city centre.
- A Box Village for the University of Wales Trinity St David which overtime could extend to more than 200,000 sq ft, and a 65,000 sq ft innovation precinct for start-ups and co-working.
Skills and Talent Initiative = £30m
- City Deal 10m.
- Public sector financing £16m.
- Private sector £4m.
The delivery of the City Deal is underpinned by attracting, creating and importantly the retention of skilled and talented people within the region. The Skills and Talent initiative will provide a regional approach to delivering skills focusing on specific sector skills required in order to meet the demand of the City Deal themes.
Homes are Power Stations = £517.1m
- City Deal £15m.
- Public sector financing £119.2m.
- Private finance £382.9m.
- Gross jobs after 15 years 1,804.
This project aims to create a new industry for the region based around innovative and sustainable energy generation – combined with storage and efficiency.
New technologies developed will be applied across the region, allowing homes and buildings to generate, store and release their own energy.
The initiative will also aim to address fuel poverty faced in communities across the region.
Pembroke Dock Marine = £76.3m
- City Deal £28m.
- Public sector financing £24.1m.
- Private finance £24.2m.
- Gross jobs after 15 years 595.
This project will focus on the development of a marine energy test area utilising the deep port of Milford Haven, an energy engineering centre of excellence and a wave energy demonstration zone.
Factory of the Future = £23.5m
- City Deal £10m.
- Public sector financing £10.5m.
- Private finance £3m.
- Gross jobs after 15 years 1,402.
The Factory of the Future initiative will support SMEs in the region to invest in leading edge technologies and harness the opportunities for the “digital manufacturing revolution.”
It will have two hubs; one for fundamental research for technology solutions outside the daily constraints of industry and one for applied research and translating fundamental work into applications in the factory.
Steel Science Centre = £80m
- City Deal £20m.
- Public sector financing £60m.
- Gross jobs after 15 years 665.
While it will be shaped by any possible merger between Tata Steel UK, which employs more than 4,000 directly in the region at Port Talbot and Trostre, and German rival ThyssenKrupp, this project will look to make the region a world leader in terms of innovation and low carbon emissions in the production of primary steelmaking.
What happens next?
Although another huge step forward, we are only talking about an agreement in principle.
And this has to be seen in the context that no projects have yet started in the £1.2bn City Deal for the Cardiff Capital Region, which was agreed in principle last year.
So, there will be plenty more discussions with the UK and Welsh governments in the months ahead.
The four local authorities alongside the region’s universities and health boards – who plan to deliver a City Deal through a joint committee approach – will have to submit more details plans on each of the proposed projects.
So, there is still potential to refine or remove existing projects, as well as adding new ones.
They also need to finalise with the UK Treasury the term and the interest that the four local authorities would be liable for.
And if the projects hit targets on job creation and gross value added – assessed at gateway reviews over the 15 years of the deal – it could be that they are not liable for the capital repayment on borrowings, but just the interest.
And interest would be paid over the long-term, potentially up to 30 years.
The four authorities also need to decide what they would be individually liable for.
It could be that they agree, like in the Cardiff Capital Region, for repayment to be based on an authority’s percentage of the region’s overall population.
Or, they could decide it should be based where projects reside.
So for example, the property schemes proposed in the City Deal for Swansea, would be a matter for Swansea Council to finance.
But some of the projects will have an impact across the entire region, so making “on patch” calculations slightly more complicated.
The hope is that the projects could be agreed by the summer.