Excellent article by Y Cneifiwr, first published in October 2017, on the financial risks threatening the planned ‘Wellness Centre’ in a marshy area of Llanelli. Since 2017 even more black, thundrous clouds have clustered over the site at Delta Lakes.
Meanwhile, the people of West Wales face a continuous barrage of cuts to public services.
At first glance initiatives such as the Swansea Bay City Region, or “the City Deal” as it now seems to be known, and the ARCH wellness village at Delta Lakes on the outskirts of Llanelli offer the prospect of many thousands of highly paid jobs. A welcome departure from Carmarthenshire County Council’s love affair with shopping centres, supermarkets and handouts to owners of holiday cottages, punctuated by grandiose development schemes built on wildly optimistic forecasts which somehow always seem to end up making pots of money for a very few, while being a drain on local government finances for decades to come.As always, however, the devil lies in the detail, and seasoned observers of the Carmarthenshire scheme could be forgiven for being more than a little sceptical when they see that we are being led into the new promised land by some old familiar faces whose track records stretch all the way back to prestige developments such as the Princess Royal Arena in Boston, the Technium fiasco(s) and other “won’t cost you a penny” white elephants.
In Carmarthenshire, all roads lead to the door of our teflon-coated chief executive, Mark James CBE, who when he is not doing his day job running the county council, is busy building up his own property empire, setting the lawyers, the courts and police on Jacqui Thompson and now also at the epicentre of both the City Deal and the ARCH wellness village – two originally separate schemes which are coalescing into Mr James’s biggest ever bid for glory.
Politicians and councillors who question these schemes, currently with a price tag of around £1.5 billion and rising fast, know that they will be accused of undermining opportunities to create jobs and transform the local economy, and the likelihood is that Mr James will ensure that they sign off a huge borrowing spree in a blitz of spin and corporate PR which will leave taxpayers in Carmarthenshire and neighbouring counties exposed to huge risks, with any upside being scooped up by private sector fat cats, many of them resident in sunny tax havens.
But there are signs of growing concern among some of the participants, with accusations of secrecy, lack of transparency and byzantine legalistic draft agreements, of “partners” not being kept informed, of chaotic planning, over-optimistic forecasts, spin and what amounts to a plan by Mr James’s authority to fleece his friends and neighbours. Add to that a lack of accountability, an onslaught against what is left of democratic oversight and cronyism.
That does not sound anything like our widely loved and admired council chief executive, does it?
Before we take a closer look at the City Deal and the ARCH wellness village, let’s take a small detour to draw attention to a lecture given the other day by Martin Shipton, chief reporter of the Western Mail and a self-described old-fashioned journalist.The full text of his sobering address on the state of the Welsh media can be found here, and it is well worth reading.
“It is a fact universally acknowledged that a democratically elected administration must be in want of some scrutiny”, he begins before going on to examine how the Welsh Government and so many other of our public bodies like to claim that they are models of openness and transparency while being anything but.
He details Jane Hutt’s shocking responses to the plight of NHS patients; the ways in which the Freedom of Information Act can be and is used to deny freedom of information; the Circuit of Wales fiasco with its strange parallels to what is now happening with the City Deal and ARCH schemes; legal bullying designed to silence the press, and the culture of fear and clientelism which prevents whistleblowers from coming forward.
He goes on to describe the ways in which serious news is being edged out by the revenue-driven click-bait culture of media companies, before ending with a passage from his recent book on George Thomas:
Our society continues to have too much ‘cap-doffing’ to our perceived ‘betters’ and a craving to ingratiate ourselves with them for social and career advancement. There remain, to this day, too many politicians like George Thomas, who combine a self-seeking ambition with the readiness to pretend that Britain persists in being a great power built on the remnants of an empire that makes it superior to all other European countries.
Martin Shipton’s lecture is a cri-de-coeur for journalists to hold the powerful to account and submit them to scrutiny, and is a world away from the media’s obsession with celebrity tittle-tattle, “click-bait” online articles (“10 things you never wanted to know about Katherine Jenkins”) and the unquestioning cutting ‘n’ pasting of press releases churned out by the PR merchants employed by public bodies.
The trouble is that newspaper companies, Martin Shipton’s employers included, find it difficult to understand why resources should be devoted to the sort of hard-nosed political reporting he specialises in, when the punters prefer reading about Katherine Jenkins and Weatherspoon’s menus.
Serious journalism is, in their eyes, expensive and time consuming, and they have a point when you consider the effort needed to try to find out what is going on with schemes such as the City Deal and the ARCH wellness village.
There are countless gushing press releases, slick videos, artists’ impressions and Twitter streams which verge on soft pornography as they record all of the conferences, lavish receptions, “envisioning days” and other junkets associated with these schemes. Everything is brilliant, inspired, fantastic, innovative and imbued with excellence. Take a look as the ARCH Programme’s Twitter feed, for example.
What you will not find are any meeting minutes, reports or sober assessments of the costs and risks involved. Even finding out who the movers and shakers are requires detective work.
Almost the only exception to this is a report published by Neath Port Talbot Council here, which was the subject of a two-page spread in last week’s Carmarthenshire Herald and blogposts by Jacqui Thompson (here) and Siân Caiach (here). There is also an interesting piece on WalesOnline here.
The NPT report, dated 4 October 2017, shows that all is far from well with the City Deal which is relying on four county councils – Swansea, Carmarthenshire, Neath Port Talbot and Pembrokeshire – to stump up £396 million to fund an array of projects, at least some of which should be ringing alarm bells across the region. ARCH is now also touting a very large begging bowl around the region’s county halls, having discovered that the Welsh Government and the NHS are strapped for cash. Who would have thought it?
The City Deal
In addition to the £396 million which is to come from “other public sector” bodies (that is the four participating councils), the UK and Welsh governments are expected to chip in £241 million, with a further £637 million predicted to come from the private sector for the 11 projects which make up the City Deal. The ARCH wellness village is not one of them.
The Swansea Bay City Region has been rumbling away for years, and as far as the public is concerned has so far produced nothing more than a torrent of press releases and snazzy videos. The PR orgy came to a climax in March of this year when Theresa May met Carwyn Jones to sign off an agreement.
This was just before Mrs May went for her famous walking holiday in Dolgellau and decided to call a general election. At the time the Tories had high hopes of winning seats in and around Swansea, including Carwyn’s own backyard.
We all know what happened next, and Mrs May’s love affair with Wales seems to have cooled dramatically, with the ditching of the scheme to electrify the Great Western Mainline all the way to Swansea and a distinctly chilly response to hopes that she would back the Swansea Bay Tidal Lagoon project.
The NPT report notes,
The Welsh Government wants the process led by a Joint Committee of local authority leaders (consistent with their approach to local government reform) whereas the UK Government has insisted upon a private sector led Economic Strategy Board (ESB) as part of the arrangements.
The report then tells us that an ESB was “pretty much what we had prior to 31 March 2017 in the form of the Swansea Bay City Region Board; but the Welsh Government effectively abolished it”.
Hands up all those who remember Jamie Owen telling us that Carwyn had sent Sir Terry Matthews and the other board members packing, in the nicest possible way.
That report was published at the beginning of this month, and for all we know the UK Government is still insisting on a private sector led board, or possibly an even more byzantine arrangement where an ESB exists alongside a public sector led body. Meanwhile, the councils are ploughing on with what they term a “provisional governance structure established in shadow form”.
The trouble is that after six months of wrangling and a draft Joint Working Agreement (JWA) commissioned by Mark James, the councils cannot agree on how the City Deal should be run. Mr James’s draft, produced at no doubt huge expense with the aid of external lawyers, ran to 70 pages, with NPT saying that, if asked, its officers could not explain to councillors how the agreement would work.
Who would have thought that a legal framework drawn up under the auspices of Mr James would be so opaque?
So they have agreed to start again, although the UK Government could yet veto their efforts, especially now that the Tories’ very brief love affair with Wales has ended in heartbreak.
As things stand, this £1.3 – £1.5 billion scheme (and rising) has no formal governance structure, and Mr James has effectively replaced Sir Terry Matthews as the ring master of a shadow body made up of representatives of bodies with very different agendas.
Even less welcome news for Neath Port Talbot, Swansea and Pembrokeshire councillors are reports that Mr James not only plans to siphon off a chunk of the City Deal money for the wellness village in his own backyard, but that he is also proposing to “top-slice” (i.e. pocket) a hefty chunk of the funds for projects outside Carmarthenshire, as well as charging them a stiff annual “administration fee”.
It’s the not the sort of stuff to inspire private sector investors to part with their cash or the sort of thing that will improve relations with the neighbours.
This is just the tip of an iceberg of a catalogue of concerns and problems facing the City Deal and ARCH mega-schemes.
Chicken, and chicken and egg
While the shadow governance team struggles with agreeing the rules of the game, the Welsh Government has told the councils that it will not release its share of the project funding until the business cases for all 11 projects have been approved. Which comes first? The chicken or the egg?
Unless the Welsh Government drops this insistence, all 11 projects will have to move at the pace of the slowest, with NPT adding that this “could also result in the local authorities taking all the risk by funding projects up front with no absolute guarantee that the Government funding will follow immediately or at all, if one considers how they have been trying to re-write the clauses in the JWA”.
In other words, councils are having to contemplate what could be a very risky and expensive game of chicken.
If that were not bad enough, NPT, in common with all other Welsh councils, faces huge budgetary pressure, and the report warns councillors that “the City Deal featured as a potentially significant financial pressure in that [budget, Ed.] presentation (albeit largely unquantified at this stage), so this begs the question of competing priorities for prudential borrowing and finance”.
The bottom line for NPT is that it has many other pressing local priorities, that it lacks the bandwidth and resources to work on this time-consuming project, that the risks are significant and that the extent of its financial commitment is unquantifiable.
And there is much, much more where that came from, including the likelihood that there will need to be significant changes to accounting rules which would have to be approved by the government and
Meanwhile progress on the 11 City Deal projects is mixed. By far the most important of these is something called Internet Coast.
The centre piece of the City Deal and by far the most ambitious project would have as its starting point a trans-atlantic fibre optic cable between New York and Oxwich Bay. This project alone would account for £500 million of the £1.3 billion City Deal package, and Sir Terry Matthews, former chair of the city region board, told the BBC back in February 2016 that the aim would be to create up to 33,000 hi-tech jobs in the region over the next 20 years.
Here is what the NPT report says:
The digital infrastructure agenda was very dependent upon the active engagement of the former City Region Board Chair and his wide senior level network; but the board was abolished and that opportunity put at risk. The simple truth is that the necessary expertise (or contacts) exists neither in the Welsh Government nor local government. As a consequence, little work has been done in recent months to progress the project, although a part-time external adviser has now been appointed.
Unelected Sir Terry Matthews may have been, but he does at least come with an impressive business pedigree. In effect responsibility now lies with the equally unelected and apparently unsackable Mark James, whose first major project was what is now known as the Princess Royal Arena.
In addition to his many and varied other duties and interests, Mr James is also heavily involved with the ARCH wellness village project, about which there are almost as many worrying questions and mysteries as there are with the City Deal.
Here is what the NPT report says:
A major issue is the uncertainty around the so called ARCH (regional Health Collaboration) programme which is linked to the City Deal. A bid was submitted to the Welsh Government by the two health boards in the region in January of this year and we are well aware of the competing priorities for revenue and capital funding within the NHS. The ARCH programme has been asked to look at “alternative sources of funding”; but assumes more than £100 million from the City Deal. Increasingly, we do not believe that the ARCH programme will secure significant medium to long term funding from the Welsh Government. If so, there can be no question of Councils being invited to plug any gap. This uncertainty could, in turn, undermine the ability of projects to attract the even larger required private sector match funding. These matters therefore remain unresolved.
Bearing in mind that this quotation is taken from a report published two weeks ago, it is interesting to contrast what NPT has to say with this message currently fronting Carmarthenshire County Council’s website:
The ambitious project – which will see an investment of more than £200million – is being led by Carmarthenshire County Council in partnership with Hywel Dda and Abertawe Bro Morgannwg University Health Boards and Swansea University.
It is also a key project for the Swansea Bay City Region and is earmarked to receive £40million as part of the £1.3billion City Deal funding.
If, as NPT says, the Welsh Government is unlikely to help fund the wellness village and the councils will not plug the gap, who is providing that £40 million?
The wellness village is just one part of a much bigger collaboration between the health boards and universities, and its origins are shrouded in Delta Lake mist.
According to ARCH’s own website, the wellness village board is chaired by none other than Meryl Gravell, representing Carmarthenshire County Council. It may be that someone has not got around to updating the website because, as a former county councillor, Meryl no longer represents anyone and is even less accountable than she was when she sat in County Hall.
The fact is that the wellness village was Meryl’s baby right from the beginning, and as one half of the Mark and Meryl dream team, there is no need for a paternity test.
One of the first clues as to what was being planned for the Delta Lakes site came in Carmarthenshire’s vast Local Development Plan. Anyone who buried deep enough in the labyrinth of documentation would have been surprised to see that the site had been ear-marked for “private healthcare”.
That was unusually and almost uniquely specific. Normally you would expect to see the much less transparent “employment land”.
The convoluted way that LDPs are put together means that the designation for private healthcare was inserted at least 5 years ago, and it suggests that some very specific discussions had taken place with unknown third parties well before then.
The wellness village, predicated on being a private healthcare development, almost certainly dates back to when Meryl was council leader.
According to the minutes of a Carmarthenshire County Council executive board meeting held in 2016, however, the idea first saw the light of day when the council was approached by the health boards and the universities in mid-2015 – well after the council had adopted its LDP and the private healthcare provision.
Like so much else in this story, things just don’t add up.
The trouble is that potential private investors would have been unwilling to stump up the money to transform a desolate brown field site. Roads, drains and other basic infrastructure don’t come cheap, and so it was an immense stroke of luck that Carmarthenshire decided that the existing leisure centre in Llanelli was no longer fit for purpose, and that the ideal location for a new centre would be Delta Lakes, well away from where most Llanelli residents live.
Around the same time, the council signed an exclusivity deal with a company called Kent Neurosciences Ltd “with a view to ensuring the aspirations of the Wellness and Science Village within Carmarthenshire”. KNS, part of a group of companies based in the British Virgin Islands tax haven, was a remarkable choice of partner, as you can read here.
It then went on to ear-mark another £7m originally allocated for a council care home to fund an “assisted living village” as part of Meryl’s vision for Delta Lakes.
Slowly but surely Mark and Meryl were scraping together the funding to make Meryl’s vision a reality, and the raid on the City Region is a part of that.
Meanwhile, the cost and scope of the wellness village have soared. Early in 2016 it was put at £60 million. By the middle of that year it had risen to £100 million. Now the council puts the figure at £200 million.
Perhaps a little too confidently Mr James told the press a couple of years ago that he did not think he would have to put the project before councillors for their approval, presumably because he was not planning to have to get them to stump up the (borrowed) cash.
Now, to soften them up, they are to be treated to a special slide show. We can expect a report asking them to sign off on a hefty loan not long thereafter.
If Mr James gets his skates on, councillors can expect to be told that not only will the wellness village deliver untold thousands of new jobs, but that the cost of borrowing is at an all-time low – for now, although the Bank of England may have other plans.
Perhaps we should all suspend disbelief, but past experience and the typically Jamesian way in which the wellness village has taken shape, with all its contradictions, mysteries and evasions, do not inspire confidence.