The Covid-19 pandemic and subsequent lockdown has knocked the world’s economy out of shape, and with it many of our previous calculations and expectations about what investments would be needed and what funding would be available over the next five to 10 years.
Here in Cardiff Capital Region we’re not exempt from the economic fallout of the pandemic, and have to face the prospect of a severe and possibly prolonged recession. Recovery may come quickly or it may take a little longer; either way we need to be ready to help our businesses and communities make the most of it.
Before Covid-19, Cardiff Capital Region was concerned to boost and direct investment into key sectors, to help the region overcome its poor inequalities and its underperformance compared to other parts of the UK.
The aim of the Cardiff Capital Region City Deal has always been to make the region more connected, competitive, and resilient, and to address the social and geographical inequalities within it. As the region emerges from slump into recovery, this aim has become more important than ever.
An evergreen fund for strategic premises
It was in this spirit that the Regional Cabinet recently reviewed its investment plans, which had last been assessed shortly before the lockdown happened in early March. In a Teams meeting on May 18, the Cabinet reaffirmed some of the decisions it had already made, and agreed to some other ones in the hope they will be a further spur to recovery.
The most significant recommendation is for a Strategic Premises Fund, of possibly up to £50m, which is intended to support otherwise viable industrial development projects where there is evidence of market failure affecting financial viability. The hope is that this will help bring forward schemes that otherwise might struggle to progress without this type of strategic support because they cannot get all the funding they need in the current environment.
There will be particular emphasis on projects that support innovation and job creation and make use of brownfield sites to create Grade A or equivalent space, and the fund will also aim to leverage private sector investment.
It will be an evergreen fund, with payouts in the form of fully repayable loans, so that it can continue to plough back returned investments into new schemes in the future. The Regional Cabinet has agreed to spend £45,000 on developing an outline business case for the fund over the summer.
A suite of proposals to help the region
The Cabinet also agreed a number of other proposals, while rejecting some which it felt did not meet the Capital Region’s core objectives. One proposal was for seed support for a fintech trade body, to underpin the development of a Cardiff HQ and satellite outlets in Bridgend and Cwmbran. The Cabinet agreed this should proceed to a strategic outline case.
The Cabinet also called for the bringing forward of a business case on the Building Local Wealth Challenge Fund, designed to support SMEs and the foundational economy.
Another proposal has come from an established company which wants to spin out a new AI/data product based on an already existing one. The Regional Cabinet followed the advice of the Capital Region’s Investment Panel that this should proceed to the next stage, on the basis that the proposers have strong credentials and that any investment would be securitised against the parent company.
These latest decisions, on which there will be more information in the coming weeks come in addition to ones taken in March, when the Regional Cabinet agreed to fund a £45m Housing Investment Fund, the scaling up of the CCR Graduate Scheme, design work and technical specifications for Metro Central, a Life Sciences Park at Junction 32 of the M4, fibre provision and the roll-out of 5G.
Altogether, the package of approved investments adds up to an ambitious programme of support for innovation, resilience and connectivity in the Capital Region; and comes amid a recognition that, in a time of crisis, the region must do whatever it can to help its people, businesses and communities to not just survive the crisis but to emerge stronger and better equipped to prosper in the new world.