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Swansea Bay City Region: a City Deal 2016-2035

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Swansea Bay City Region: a City Deal 2016-2035 Swansea Bay City Region: A City Deal 2016-2035 THE INTERNET COAST Contents Foreword from Sir Terry Matthews KBE, Chair, Swansea Bay City Region 3 1 The Swansea Bay Offer (Executive Summary) 4 2 Why we need a City Deal and the Swansea Bay vision to 2035 5-6 3 What we want to do 7 4 Economic Context and the Opportunity for Swansea Bay 8-13 4.1 The Internet of Energy (Future Energy Systems) 4.2 The Internet of Health and Wellbeing 4.3 The Internet of Economic Acceleration: Swansea - City of Innovation 5 Applied Skills – A cross-cutting theme 14 6 Swansea – The Regional Capital and Regional Transport 15-16 6.1 Swansea – The Regional Capital 6.2 Regional Transport 7 Governance Model 17-19 7.1 Swansea Bay City Deal Management Board 7.2 Swansea Bay City Deal Delivery Vehicle 8 Initial Economic Appraisal 20 9 Financial Analysis 21 10 Conclusion 22 Swansea Bay City Region Board 23 2 Swansea Bay City Region: A City Deal Proposal THE INTERNET COAST Foreword from the Chair Rt Hon George Osborne MP Rt Hon Greg Clark MP Chancellor of the Exchequer and Secretary of State for Communities First Secretary of State and Local Government HM Treasury, 1 Horse Guards Road, 2 Marsham Street, London London SW1A 2HQ SW1P 4DF 23 February 2016 Dear Chancellor and Secretary of State, It gives me great pleasure to submit a City Deal proposal on behalf of the Swansea Bay City Region. This distinctive and integrated proposition addresses some of the most pressing universal themes and global challenges of our time - energy, health and the transformational economic power of digital networks. We present a vision that has the requisite scale to attract international investor interest. One that remains citizen-focussed and grounded in the geography and assets of Swansea Bay. Our aim is to accelerate growth in our region; for the benefit of Wales and the United Kingdom generally. The proposal is based upon the development of three integrated strands: the internet of energy, the internet of health and wellbeing and the internet of economic acceleration. In essence we aim to innovate, test, trial and commercialise internet based solutions that will transform the future of these sectors in much the same way as the internet has transformed communications and telephony. I should add that this is an area of technology in which I have a great deal of experience. The City Region Board is looking forward to developing the proposals further with the UK Government and other partners. We aim to assemble a funding package in excess of £500m over 20 years from public sources, with significant private sector match funding, to deliver a vision that supports both the objectives of the UK and Welsh Governments on economic growth, social inclusion and sustainability whilst respecting the competencies of each and adding value to both. The prosperity gap between Swansea Bay and the rest of Wales, and the UK, remains stubbornly and unacceptably high. Real transformation will not be achieved by simply doing more of the same. It would be fair to say that for the regional public sector partners, arriving at this consensus and commitment has involved a collective leap of faith. That has immense value. For the private sector partners who want to share this journey with us it is not so much a leap of faith as a leap of logic. I am copying this proposal to the First Minister of Wales, the Secretaries of State for Wales, Business and Innovation, Energy and Climate Change, as well as the Minister for Trade and Investment. Yours sincerely, Sir Terry Matthews KBE Chair, Swansea Bay City Region Swansea Bay City Region: A City Deal Proposal 3 1 The Swansea Bay Offer (Executive Summary) Swansea Bay has: ✜✜A region-wide “can do” attitude towards delivering a network of health science investors and significant assets in the direct “Medi-parks”, Wellness Centres and control of public bodies which offer long- other assets. Building on a new digital term opportunities and value; architecture we will transform the delivery of health and social care in the region and ✜✜Good basic infrastructure including the M4 contribute to the advancement of genomic and the prospect of electrification of the medicine in analytics and diagnostics in the rail line to London (but improvements are UK via network based solutions; and needed). We are also a main gateway from Ireland to the European Union; ✜✜The Internet of Economic Acceleration: To provide UK plc with the resilience of a ✜✜Strong and fast growing universities with new Swansea Bay international internet rapidly increasing capacity for research, gateway between London and North development and innovation; America by developing infrastructure in ✜✜An improving skills base in our labour partnership with the private sector that will market; and simultaneously establish Swansea and ✜✜An incomparable quality of life offer and its hinterland as a ‘City of Innovation’. dynamic international growth profile. In doing so, alongside related developments Using technology, we want to develop: in advanced engineering, we aim to create high technology jobs both through start-ups ✜✜The Internet of Energy: To create a smart and by attracting inward investment in high and efficient “Future Energy System” that growth areas and become a circa £15bn will integrate the region’s multi-billion economy by 2035 with productivity levels asset base in renewable and conventional at 90% of the UK level. energy production and the testing and commercialising of integrated Future To do this, we aim to establish integrated Energy Systems; infrastructure and investment funds in excess of £500m over 20 years to invest in ✜✜The Internet of Health and Wellbeing: interventions to accelerate growth. To advance health and wellbeing by 4 Swansea Bay City Region: A City Deal Proposal 2 Why we need a City Deal and the Swansea Bay vision to 2035 The City Deal provides clarity of purpose, consistency of approach and absolute focus on collective action over the next two decades. We aim to tackle the structural challenges holding back our economy and reduce the gap between our performance and the rest of the UK in terms of wealth creation to the benefit of both. Manchester Figure 1 Situating Swansea Bay City Region and its internal and external context M6 Birmingham M5 M1 M50 M11 M40 M25 M4 Cardi London Bristol M20 M5 Calais Fishguard English Channel PEMBROKESHIRE CARMARTHENSHIRE St. Davids Cynwyl Elfed Llandeilo Haverfordwest St Clears Carmarthen Ammanford Narberth Milford Cross Haven Hands Pembroke CITY AND Neath Dock Tenby COUNTY OF NEATH Llanelli SWANSEA PORT TALBOT SWANSEA Port Oxwich Bay Talbot With a resident population of 688,000 supporting some 302,000 jobs and containing around 22,000 businesses, Swansea Bay is a However, we are underperforming major driver of the Welsh economy. It contains economically and failing to reach our full a core of strong home grown small to medium potential. Overall productivity (GVA) growth in sized businesses and globally significant the City Region has been consistently below firms, leading UK universities and major that of the UK and Wales over the past two tourism assets. The region has benefited from decades and we must respond quickly to this significant investment recently including the productivity imperative. It is the key factor Swansea University’s new £450m Science underpinning our sub-optimal economic and Innovation Bay Campus that opened in performance and remedying the position is September 2015. This is a transformational the unambiguous number one priority of the project for Wales as well as the region. City Deal proposal. Swansea Bay City Region: A City Deal Proposal 5 GVA per employee in the Region was £34,300 ✜✜The city centre of our regional capital is in 2015 (at 2011 prices), 74% of the UK under performing and needs to deliver a average. The sectoral mix of our economy commercial, residential and leisure offer as a whole is geared towards lower value to match the ambitions of the innovation sectors compared to the UK. Also, the nature proposals; and of the jobs within these sectors is generally ✜✜The rural and visitor economy region wide of a lower value than elsewhere (see below). also needs to deliver a step change in Looking forward, the productivity gap between performance if the region as an integrated the City Region and the rest of the UK is whole is to achieve its long term aims. forecast to remain if targeted and collective action is not taken through a City Deal. To achieve this, we must shift towards higher value and higher growth sectors and higher It therefore follows that: growth occupations. The solution lies in the ✜✜We have too few businesses and are not exploitation and integration of 21st century growing our business base quickly enough; internet-based technologies in three key sectors outlined above and explored in greater ✜✜There are not enough people with high level detail below. qualifications and too many with none at all; ✜✜Economic inactivity remains too high across the region; ✜✜Our physical infrastructure is not keeping pace with the needs of growing businesses or our communities. Broadband capacity and digital connectivity is improving, but not quickly enough. Much of our commercial and retail property is low quality and attracts low rents; 6 Swansea Bay City Region: A City Deal Proposal 3 What we want to do To get to 90% of UK productivity levels by 2035, we want to work with the UK and Welsh Governments, (respecting the competencies of both) regional partners and the private sector to: ✜✜Establish an Infrastructure
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