Committee for the
Scrutiny of the First Minister
CSFM(4) 03-13
– Paper 1
WRITTEN EVIDENCE TO
THE COMMITTEE FOR THE SCRUTINY OF THE FIRST MINISTER: MAJOR
INFRASTRUCTURE PROJECTS IN NORTH WALES
Introduction
- The purpose of this paper is to
set out written evidence on major infrastructure projects in North
Wales to the Committee for the Scrutiny of the First Minister. It
covers the national strategic initiatives that are benefiting the
whole of Wales and specific infrastructure investment activity in
North Wales.
Investment in Welsh
infrastructure
- Appropriately targeted
infrastructure investment is one of the main ways government can
contribute to growth and jobs. It is also vital to delivery of
modern efficient public services. For this reason, as a government
we have placed infrastructure investment at the forefront of our
plans to stimulate and strengthen the economy and tackle poverty,
focusing our limited resources through the Wales Infrastructure
Investment Plan.
- The Welsh economy suffered
greatly following the global economic recession. Sluggish growth
has been compounded by significant cuts to our capital budget by
the UK Government – a third lower in real terms by 2015-16.
Over the ten years from 2012-13 to 2021-22, we estimate that the
Welsh Government will have up to £4 billion less capital
available for investment than was available in the previous ten
years. It is likely that economic conditions will continue to be
tough and budgets will continue to be tight. So our priority
remains to do all we can to strengthen the Welsh economy and create
an environment for growth and jobs.
- The Welsh Government approach to
investment planning recognises both Economic and Social
infrastructure:
·
Economic
Infrastructure – we define as physical networks that sustain
and develop economic activity, such as roads, rail, airports,
shipping ports, electricity, ICT, water supply and
sanitation.
·
Social
Infrastructure – we define as physical assets that sustain
and develop people within Wales, such as schools, hospitals and
housing.
The Wales
Infrastructure Investment Plan (WIIP)
- Launched in 2012 by the Finance
Minister, the plan sets out a new approach where we are clear
about:
·
our priorities for
infrastructure investment to stimulate the economy and support
jobs, increasing transparency with a detailed project pipeline for
the next three years and providing a ‘direction of
travel’ for the longer-term;
·
how we will pay for
infrastructure investment through more efficient use of existing
resources and exploring and implementing innovative finance
approaches; and
·
our approach to
developing and delivering proposals that optimise public value
through the use of best practice.
- The first WIIP Annual Report was
published on the 11 June 2013. A notable area of progress
highlighted in the report is improved collaboration across
Government and wider afield to develop a shared strategic
understanding of infrastructure needs and opportunities. The report
also provides details of strengthened cross-Government appraisal
and prioritisation of infrastructure investments, European
Programmes and wider Welsh Government delivery
priorities.
- The investment framework set out
in the WIIP is now being applied to the allocation of our capital
funding. Since publication of the WIIP last year, additional
infrastructure investment of around £1.3 billion has been
steered by this process. This £1.3bn includes additional
investment from capital reserves totalling over £460 million,
financed in part through switching funds we have saved –
through prudent management in other areas of spending – into
capital investment.
- These additional capital
allocations have been made in line with our seven core investment
priorities:
·
£88.7m to
improve the Welsh transport network, plus £29m to protect
infrastructure networks from flood and coastal erosion;
·
an extra £10m
to improve telecommunications networks;
·
£15m to
support the development of the energy industry in Wales;
·
£46m to
develop our Enterprise Zones and wider business support
activity;
·
£99.7m to
support further investment in housing;
·
£98m to
improve the quality of the educational estate, particularly
schools; and
·
£75.3 to
deliver more efficient and economical public services
- In the short term we estimate
that these investments will create around 8,000 jobs during
construction phases. In the longer term, they will boost growth and
support the delivery of more efficient public services. Plans for
additional capital investment will be detailed in the Budget in the
Autumn.
Innovative Funding
of major infrastructure
- We are making significant
progress with the development of new and innovative financing
options in support of the strategic infrastructure priorities set
out in the WIIP. These collaborative approaches have delivered
around £900m of additional investment in priority areas over
the next few years.
- In 2012 we launched the Local
Government Borrowing Initiative (LGBI), which will enable around
£170 million of investment in highways improvements over the
next three years. This is a good example of what we can achieve
when the public sector works together in support of projects that
will both benefit local communities and deliver the kinds of
outcomes that we need to underpin the growth of our economy. In
North Wales, this will result in an additional £45m of
investment in local roads between 2012-13 and 2014-15 - investment
that simply would not have happened without our
intervention.
- Increasing the supply of Social
Housing is another key investment priority. That is why we are
implementing a new mechanism which will deliver an additional
£100m of investment to deliver over 1,000 affordable homes
across Wales over the next three years. This investment will result
in the delivery of almost 200 new homes in North Wales.
- The 21st Century Schools
Programme will see £1.4bn invested in educational
infrastructure across Wales. Through application of the LGBI model
we are boosting investment by around £200m which will result
in the delivery of the programme by 2018-19, two years ahead of
schedule.
- We are continuing the
development of these and other initiatives in collaboration with
public and private sector stakeholders. In addition we continue to
press the UK Government for acceptance of the Silk
Commission’s recommendations. This is essential to strengthen
our levers for boosting growth and jobs. Gaining the ability to
borrow for key strategic investments is paramount if we are to
develop sustainable infrastructure networks for the
future.
Planning
infrastructure investment
- Planning national infrastructure
investment is a complex issue, even more so in Wales, where the
Welsh Government only directly controls certain networks, with
others partly or wholly non devolved. This includes utility
distribution networks, such as water and energy as well as key
assets, such as ports and the foreshore and seabed around Wales. In
addition where Welsh entities own the land asset the consenting
regime for infrastructure investment can also be out of Welsh
control, with large scale energy projects and rail being two of the
most notable.
- All energy investments over 50MW
require approval by the UK Government. The Renewable Energy sector
is a key example, where the complexities of a consenting regime
that is largely non devolved can hinder investment, adding extra
time, cost and risk to what are already challenging projects. We
continue to call on the UK Government to extend Welsh Government
powers to include consenting of Energy projects, bringing us in
line with the other devolved nations. Whilst there are tremendous
prospects for low carbon energy investments in Wales, we are
severely disadvantaged by current UK energy policy.
- In the case of non devolved or
partially devolved sectors, we continue to work in collaboration
with network and service providers as well as the UK Government to
maximise the benefits to Wales. Most notably, through strengthened
engagement with the UK Government we successfully secured
electrification of the Valleys and Great Western main lines as part
of Network Rail’s investment plans. However whilst this is a
welcome step forwards and recognises Welsh infrastructure in wider
UK plans, we are continuing to press strongly for modernisation of
North Wales rail infrastructure as a priority for future rail
investment.
- Where authority is devolved, the
Welsh Government develops investments in collaboration with
delivery partners. We have worked closely with local transport
consortia, such as Taith in North Wales to recognise key local
priorities and develop collaborative solutions. At a regional level we are
committed to ensuring continued stakeholder dialogue, accessing the
knowledge and expertise across all regions and sectors to shape and
refine our approach as we move forward.
- As part of the ongoing
development of the WIIP a comprehensive understanding of current
and future investment plans across Wales is being developed. This
will better inform strategic decisions and maximise the impact of
limited funding, including through community benefits and supply
chain opportunities. The third iteration of the WIIP investment
Pipeline, published last month, includes for the first time a view
of investment schemes across both national government and local
government (http://wales.gov.uk/funding/wiipindex/pipeline).
There are 46 Local Government schemes in North Wales included in
the pipeline involving investment of almost £450m,
demonstrating the significant role Local Government schemes play in
infrastructure investment.
Specific
infrastructure investment in North Wales
- Examples of key infrastructure
investments in North Wales are set out below:
- The Superfast Cymru
initiative - Through collaboration with BT we are facilitating a
£425m scheme (the largest partnership of its
kind in the UK), which will transform the broadband landscape
across Wales, becoming one of the most connected countries in
Europe. It will mean 96% of businesses and homes in Wales will be
able to access the services and opportunities provided by digital
technologies through a fibre-based broadband service by the end of
2015. North Wales has been the first region in Wales to benefit
from this investment, with new fibre broadband cabinets installed
in Bangor this February. Further areas to benefit from the first
phase of investment include Caernarfon, Dolgellau and Menai
Bridge.
- Transport
- We are investing
in the A55, a key transport artery in North Wales. We have
allocated an additional £25m over the next 2 years to ensure
this infrastructure asset remains fit for purpose.
In addition we are
investing £45m in the Wrexham - Saltney Redoubling rail
scheme. This investment will see line speeds improved between
Wrexham and Gobowen and signalling enhanced at Ty-Croes on the Isle
of Anglesey. This is part of our wider strategic objective to
improve north-south links.
- Environment
- We are investing
£160m to protect our infrastructure assets from flood damage.
Over the past 12 months we have allocated an additional £25m
to improve flood and coastal defences across Wales, including
projects at Colwyn Bay and Borth. This investment has reduced risk
to over 520 homes, businesses and significant infrastructure such
as the A55, the North Wales Coast and Cambrian Coast
Railways.
- Energy - Offshore wind farms at North
Hoyle, Liverpool Bay, Rhyl Flats and Gwynt y Mor, will provide
opportunities for the North Wales economy. This significant new low
carbon energy generation will also require an upgrade to the
existing electricity grid, providing an opportunity not only to
future proof the network but encourage an innovative approaches to
community led schemes.
The Energy Island
Programme comprises a mix of energy generation projects – the
Horizon Nuclear new build, the Rhiannon Offshore windfarm and the
next phase of the Marine Current Turbines tidal array. These,
together with other proposed schemes, and the redevelopment of the
former Anglesey Aluminium site and adjoining land, have the
potential to transform the economy of Anglesey and significantly
benefit economic prosperity across North Wales. In total proposed
schemes could bring over £20bn of private sector investment
to the region.
The scale of
investment and potential outputs are such that a strategic and
coordinated approach by the public and private sector stakeholders
is essential. We are working closely across Welsh Government
departments, Local Authorities, the WLGA and the wider public /
private sector, to identify key enabling strategic investments and
to optimise existing economic initiatives such as Deeside and
Anglesey Enterprise Zones.
In February we
granted a Marine Licence to SeaGeneration Wales Ltd for a 10MW
pre-commercial tidal array off the coast of Anglesey. The
£70m project will move us closer towards hosting the first
pre commercial tidal array in the UK by 2015. Once operational the
array will provide electricity for up to 10,000 homes. We are
working closely with The Crown Estate to identify other areas for
wave and tidal testing to establish a new marine energy sector in
Wales.
- Housing – The Welsh Housing
Quality Standard ensures that all existing social housing offers
tenants a decent affordable home. Over the next five years it is
estimated that a further £2.5bn will be spent by social
landlords on improving peoples’ homes.
Cartrefi Cymunedol
Gwynedd is delivering £136m of WHQS investment in Gwynedd,
ensuring maximum benefit to local skills and jobs is gained. This
investment has secured 62 traineeships across the programme with 36
undertaking level 2 or 3 NVQ apprenticeships. They work closely
with Coleg Menai and encourage contractors to use their services
when recruiting apprentices.
In addition we have
provided a £16.5m funding package to improve housing
standards in West Rhyl and create a more balanced housing offer
through changed house type and tenure. Working in partnership with
Denbighshire County Council and Pennaf Housing Group, the project
will see the clearance of 34 unsatisfactory properties, the
remodelling/ refurbishment of a further 46 properties and the
creation of much needed quality green space.
- Regeneration
– In the
Môn a Menai Regeneration Area we have facilitated a
£38m European funded programme to support Coastal and Town
Centres across the region. Funding has been provided for town
centre enhancement schemes in many towns across the region
including Colwyn Bay, Caernarfon, Bangor and Holyhead.
In the North Wales
Coast Regeneration Area, in combination with EU funding £7.8m
has been invested to develop "Porth Eirias", as part of the
multi-million pound Waterfront Project in the town, which also
includes a new coastal defence scheme. Not only is this a
significant investment in local infrastructure, but in addition,
our work to maximise community benefits has resulted in 63% of the
workforce employed on the scheme coming from communities within a
35 mile radius.
- Education
– The
collaborative 21st Century Schools Programme is an initiative worth
£1.4bn across Wales. In North Wales this scheme will deliver
more than £220m of priority capital investment in local
education infrastructure by 2018-19.
- Health - Within the health sector we
are investing over £105m in the redevelopment of Ysbyty Glan
Clwyd Hospital, enabling the hospital to improve the quality of its
care provision, whilst safe guarding and creating much needed local
employment opportunities.
Conclusion
- The Welsh Government plays a
critical role in delivering major infrastructure projects across
Wales. At the highest level our strategic approach to the provision
of major infrastructure projects is proving successful, boosting
investment in Welsh infrastructure, forging new lines of
collaboration and improving the knowledge and visibility of planned
investment both in North Wales and across the whole of the country.
We will continue to engage with key stakeholders to facilitate
future investment ensuring we make the most of financing
opportunities such as European Structural Funds and the development
of our assets including the potential for energy
production.
Rt. Hon. Carwyn Jones
AM
First Minister for
Wales