Agenda item

To consider the report of the Corporate Director of Regeneration & Community Services.

Having regard to the views expressed by the Proper Officer regarding the public interest test, that on balance, the public interest in maintaining the exemption outweighed the public interest in disclosing the information and that the report should be exempt.

 

RESOLVED that the public be excluded whilst this item of business is transacted as it is likely there would be a disclosure of exempt information as defined in Paragraph 14, Schedule 12A of the Local Government Act, 1972 (as amended).

 

The report of the Corporate Director of Regeneration & Community Services was submitted for consideration.

 

At the invitation of the Chair, the Head of Regeneration spoke in detail to the report and highlighted the salient points contained therein.  The officer explained that the report provided details of the Loan Agreement and Quadripartite Agreement.  This proposal would be a joint venture between the Council and the organisations named therein.

 

It was noted that the Quadripartite Agreement detailed the roles and responsibilities of each of the partners to successfully deliver the rail project.  In addition, an Implementation Agreement was a contractual document that sat under the Quadripartite Agreement which would deal with the delivery of the project

 

The Head of Regeneration continued by outlining the roles and responsibilities of each of the partner organisations as detailed in paragraph 2.9 of the report.  The document clearly set out that Welsh Government were responsible for the provision of the loan and the financial liability for programme including overspend risks beyond the loan amount.  Welsh Government would also continue to lobby UK Government Department of Transport for additional funding to facilitate the Phase II work (Abertillery Spur).

 

The Head of Regeneration concluded by advising that the Regeneration Scrutiny Committee had considered the report and had supported Option 1.

 

The views of Members were, thereupon, sought (summarised below) and were responded to by the Managing Director, Head of Regeneration, Service Manager – Accountancy, Executive Member Regeneration & Economic Development:

 

-      The Leader of the Labour Group expressed his concern that the decision that had been made at the Regeneration Scrutiny Committee had been without full knowledge of the Quadripartite Agreement.  He asked, should this proposal be agreed whether a press release would be issued to the public (as this was a confidential report not within the public domain) and if so, whether this would disclose the fact that if there was any shortfall or financial liability associated with the loan that Welsh Government would be responsible.

 

The Executive Member – Regeneration & Economic Development clarified that the Council would not incur any financial liability for the loan or if there was a shortfall, this would be responsibility of Welsh Government.  Discussions would need to take place with Welsh Government regarding the funding aspects but the public would be assured that no financial liability would be borne by Blaenau Gwent County Borough Council.

 

-      The Leader of the Labour Group referred to paragraph 6.1.2 of the report and asked whether Welsh Government would mitigate the impact upon the Council’s minimum revenue provision or whether this burden would have to be borne by the Council.

 

The Service Manager – Accountancy confirmed that there would be an impact on the minimum revenue provision but the Asset Development Fee which would be paid to the Council would offset this cost, so there would be no increase in the minimum revenue provision.  Ministers had agreed the annual budget allocated to Transport for Wales would be sufficient to cover the Asset Development Fee in the event that passenger revenue was not sufficient.

 

-       The Leader of the Labour Group referred to the initial report that had been considered by Council in March that made reference to the fact that the modelling demonstrated that the income from 2 trains per hour on the Ebbw Valley line would cover repayments.  However, he pointed out that as far as he was aware no modelling had been carried out and as this was public funding there should have been modelling carried out on the proposal. In addition, he requested information relating to patronage numbers.

 

The Head of Regeneration confirmed that the economic arguments had been set out in the WelTAG report developed for the Frequency Enhancement and Welsh Government was satisfied that the investment in the dualling was value for money.  It was noted that this study had included patronage numbers.  It was pointed out that if the Welsh Government was unsure regarding the viability of the proposal, it would not have been included within The Wales Transport Strategy 2021.

 

The Leader of the Labour Group said he would have liked to have sight of this modelling especially as consideration was being given to a 50-year loan because there could be potential future financial implications that the loan could have on the Council.  He also expressed his concern that the Abertillery Spur had not been included as part of the proposal and said that this needed to be lobbied for.

 

The Head of Regeneration explained that a parcel of land for the Phase II works had been recently been acquired however, Welsh Government would continue to lobby UK government for additional funding to facilitate the Abertillery Spur.  It was noted that the line for the Abertillery Spur had been identified as a section of U.K. government line and a final decision was awaited.

 

-       Another Member said he was grateful for the additional information which had been supplied.  However, the Scrutiny Committee had made a decision and expressed his concern that it seemed that this decision was being overruled by officers.  He stated that if this was standard practice there would be no need for scrutiny in the future.

 

He continued by pointing out that there should have been public consultation undertaken regarding the proposal and expressed his concern that there was no guarantee that the Abertillery Spur would come to fruition.  He added that 60% of travellers using the line came from outside of Blaenau Gwent and asked the reason why Caerphilly and Newport had not been contacted to share some of the responsibility.

 

The Managing Director confirmed that officers had not overruled the Scrutiny Committee, there had been a clear debate at this meeting and Members had asked to have sight of the legal document given the scale of the project.  Whilst legal documentation was normally not provided as part of reports, due consideration had been given to the view of the Scrutiny Committee and this document had been supplied as an appendix to the Council report, therefore, the Scrutiny Committee’s request had been acceded to.

 

With regard to contacting Caerphilly and Newport, the loan had only been offered to Blaenau Gwent.  The report demonstrated that assurances had been provided that Blaenau Gwent would not be taking all the risk, any financial liabilities would be the responsibility of Welsh Government.

 

-      A Member expressed his concern that the Quadripartite Agreement had not been reviewed from a legal perspective and that the report did not provide details of an impact assessment on how the proposal would impact on residents, staff, the environment, businesses and the Council including the impact on the bus services in the Ebbw Fawr Valley or in the Tredegar area.

 

The Managing Director confirmed that a considerable amount of legal work had been undertaken on the proposal.  However, she acknowledged the point made regarding the impact assessment but pointed out that 4 trains per hour into Ebbw Vale had been included as a priority within the Council’s Corporate Plan and this proposal was being brought forward as an agreed Council priority.

 

The Managing Director added that the WelTAG process had included very detailed technical assessments and had assessed the impact across a range of measures before Welsh Government had decided to proceed with the proposal.

 

The Member asked whether the impact assessment could be made available and asked how this proposal would impact particularly on the town of Ebbw Vale as people would travel out of town.

 

The Head of Legal and Corporate Compliance provided an assurance that external reputable legal advisors had been involved in drafting the Quadripartite Agreement between parties and officers were satisfied that the risk to the Council was the lowest it possibly could be in the circumstances.  The agreement had been underwritten and guaranteed by Welsh Government.

 

-      Another Member raised the following points:

 

·        How ‘water tight’ was the legal agreement so there would be no financial burden placed on the residents of Blaenau Gwent in the future. 

 

·        Why had there been no collaboration with other Councils on the agreement because these areas would benefit more from the proposal.

 

·        This proposal would affect the Council’s borrowing going forward and asked why hadn’t Welsh Government given a grant as opposed to a loan because this would restrict borrowing going forward and loans were less favourable from a credit perspective.

 

·        Why had the Abertillery Spur not been included as part of the proposal.  With the recovery from the pandemic how realistic would it be to receive the funding for the Abertillery Spur from UK Government. 

 

·        Details of the impact assessment should be provided particularly, detailing the impact that this proposal would have on towns. 

 

·        The full documentation should have been provided for Members to peruse at the Scrutiny Committee.

 

The Service Manager – Accountancy explained that details of the loan including borrowing would be reported as part of the 6 monthly Treasury Management report (the next scheduled report was due in the autumn) and the prudential indicators would also be reviewed to take account of this funding.  However, it was pointed out that because funding would be received to repay the borrowing, the impact of the loan would be mitigated. 

 

The Head of Regeneration reiterated that the land for the Abertillery Spur had recently been acquired for the provision of a terminus which had enabled Welsh Government to lobby UK Government for funding for the Abertillery Spur.  Funding for these Phase II works had not been included in the loan because UK government owned the line.  It was noted that the Burns Report had identified pieces of infrastructure that could be of economic benefit to an area which could be used to environmentally enhance transport across the U.K.

 

In reply to a concern raised, the Managing Director confirmed that the Abertillery Spur still formed part of the Cardiff Capital Region City Deal phase 2 proposals.  It was noted that the funding from CCRCD would be for the design proposals because Transport for Wales would be implementing the scheme itself.

 

-      A Member expressed his concern and reiterated the earlier concerns that Blaenau Gwent would be taking on all the burden and he was unsure why Network Rail could not have bid for the infrastructure and Blaenau Gwent became involved at the stage of the Phase II Abertillery Spur works.    He was unsure whether the proposal would be value for money as an assessment had not be undertaken regarding patronage and expressed his concern that more people would travel out of Blaenau Gwent than into the area.

 

-      Clarification regarding the cost of the land that had been purchased in Abertillery was sought together with the implications, if the Abertillery Spur did not materialise.

 

The Head of Regeneration advised that a transport grant had been used to purchase the land and provided details of the cost, the purchase figure had been included in a report that had been presented to Council earlier in the year.  If the Abertillery Spur did not materialise the land would be used for other purposes.

 

The Managing Director stated that there was a Welsh Government commitment to achieve 4 trains per hour to Ebbw Vale and this was the reason why Welsh Government was pursuing the project and providing the loan.  A WelTAG technical assessment had concluded investment into the line would achieve value for money.

 

With regard to partnership working, the Council had had a very short timescale in which to respond to the offer of the Welsh Government loan – it was noted that a grant had been sought but at that point in time only a loan was on offer.  The loan had only been offered to Blaenau Gwent and due to the imminent start date of the project (this summer) if discussions had taken place with other parties this would have delayed the project.  The Managing Director reiterated that Welsh Government would take on any financial liabilities and the proposal had to move at pace to deliver the benefits for the community.

 

-      Reference was made to the creation of Community Hubs and that people were now working from home and yet capacity on trains was being increased.

 

-      This was a once in a generational investment which needed to be considered positively and consideration should be given to the message it would send to the funders if the Council did not want to invest in the people or communities or infrastructure to support the green economy which was the way forward.  He was content that the Quadripartite Agreement provided the necessary assurances that the loan would be re-paid.

 

-      A Member said that he resided near a railway line and in his opinion 4 trains per hour were too many and would end up unviable especially with people working from home.

 

-      The Leader of the Labour Group said that there should have been consultation on the proposal to ascertain what the people thought about the increase in the train service.

 

Following a lengthy discussion, the Leader of the Labour Group, thereupon, proposed that Option 2 be endorsed for the following reasons:

 

·        It was felt that Newport and Caerphilly would benefit (probably more than Blaenau Gwent) and were not being invited to share the risk.

·        The loan did not include funding for the Abertillery Spur which was promised but was still as far off as it ever was, particularly in light of a projected reduction in capital spend as a direct financial consequence of the pandemic.

·        The administration had not demonstrated enough clear positives for Blaenau Gwent alone to enter into a 50-year project.

·        Blaenau Gwent had a number of other much higher priorities such as the current backlog of much needed repairs to highways and drainage etc.

·        The loan had the potential to negatively impact on future borrowings for the Council.

·        No data/evidence had been produced to show that the cash box would be sufficient fund the loan, which after all, was public money.

·        There had been no public consultation regarding this proposal.

 

This alternative proposal was seconded.

 

A recorded vote was, therefore, requested.

 

The Executive Member – Regeneration & Economic Development proposed that Option 1 be endorsed.  He felt that the Council was safeguarded in terms of the agreement and said that this was an opportunity and not a liability.  The proposal would not only improve the line to Ebbw Vale Phase I works it would be a catalyst to gain Phase II, the Abertillery Spur This proposal was seconded.

 

The Leader of the Labour Group raised a point of order and said that he would have welcomed the Executive Member contributing to the debate on such an important issue.

 

The Executive Member indicated that he felt that the points that had been raised had been covered as part of the report.

 

In Favour of Option 1 – Councillors M. Cook, N. Daniels, D. Davies, G. A. Davies, G. L. Davies, M. Day, D. Hancock, S. Healy, J. Hill, J. Holt, C. Meredith, M. Moore, L. Parsons, G. Paulsen, K. Pritchard, K. Rowson, B. Summers, J. Wilkins.

 

Against of Option 1 – Councillors P. Baldwin, D. Bevan, M. Cross, P. Edwards, H, McCarthy, T. Sharrem, T. Smith, S. Thomas, H. Trollope, D. Wilkshire, B. Willis, L. Winnett.

 

As there was no stated intention from any Member present to vote in a different way, it was agreed that the vote be reversed for Option 2.

 

In Favour of Option 2 – Councillors P. Baldwin, D. Bevan, M. Cross, P. Edwards, H, McCarthy, T. Sharrem, T. Smith, S. Thomas, H. Trollope, D. Wilkshire, B. Willis, L. Winnett.

 

Against Option 2 – Councillors M. Cook, N. Daniels, D. Davies, G. A. Davies, G. L. Davies, M. Day, D. Hancock, S. Healy, J. Hill, J. Holt, C. Meredith, M. Moore, L. Parsons, G. Paulsen, K. Pritchard, K. Rowson, B. Summers, J. Wilkins.

 

The vote on Option 1 was, thereupon carried.

 

RESOLVED, subject to the foregoing, that the report which related to the financial or business affairs of any particular person (including the authority) be accepted and Option 1 be endorsed, namely that

 

(i)           That the terms of the Quadripartite Agreement as set out in the report be accepted and the Council entered into the agreement to deliver the works to the Ebbw Valley Railway.

 

(ii)         The terms of the Implementation Agreement in line with the Quadripartite Agreement be accepted and the Council entered into the agreement to deliver the works to the Ebbw Valley Railway.

 

(iii)        TfW (Transport for Wales) to provide professional services to the Council in respect of this project be directly appointed.

 

(iv)        That the membership of the Liaison Committee for Blaenau Gwent be agreed.