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Cardiff Capital Region City Deal Response to Wales Audit Office Report

11.02.2019 // Cabinet

THE Cardiff Capital Region City Deal (CCRCD) has today (Monday, February 11) published a report issued by the Wales Audit Office into its £38.5million investment in the compound semiconductor (CSC) manufacturing facility in Newport in July 2017.

Whilst the WAO report acknowledges the commercial considerations and the economic opportunity that drove the need to secure the deal within a limited timeframe, it notes that the City Deal – which comprises the ten local authorities in South-East Wales – moved forward before some of its full assurance processes were in place. The WAO expresses that this may have meant that some parts of the process were ‘compromised’, although it concludes that partners were satisfied with how risks were managed and identified.

In its response today, the CCRCD says lessons have been learned about the process it follows for such considerations – not least because now full assurance frameworks are in place – but insists that it did not compromise itself during the decision-making process.

Peter Fox, Vice Chair of the Regional Cabinet Committee and portfolio lead for the project said: “The use of the word ‘compromised’ suggests that the decision-making was flawed. We do not believe that it was, and the WAO’s wider report does not suggest this in its overall tone and content.

“Given the fundamental recognition at every other part of the report that a full Assurance Framework was not in place at the time, this was an issue of timing and reflected the embryonic stage that the CCRCD was at, during that time. The decision was market led, and beyond the control of government, as often happens in the real world.

“We had to balance choices around action/inaction – and decided to be judged for the former, not the latter. If we look at where we are today with the UK Govt investment in the Catapult Centre, co-located with the Foundry; Wales Government ‘s role in securing EU Commission recognition of the sector by unlocking 1.75bn EURO for research and innovation and within the first short phase, 42 highly skilled technicians now recruited, hundreds of jobs safeguarded and hundreds more new jobs to follow, I think the results speak for themselves”.

Chair of the Regional Cabinet, Cllr Andrew Morgan added: “In spite of the compressed timeline, I remain satisfied that we absolutely complied with the Treasury’s five stage assessment and reflected all the core elements that make up the current assurance process. Nothing was compromised or skimmed over. In hindsight, it is difficult to see how we could have done anything differently and the report is silent on where and how ‘compromised’ process may have exposed us to greater risk. This was an intense piece of work and I am satisfied that the expert due diligence enabled us to make the right decision for our economy and communities – now and in the future. In cases such as these – which I am sure we will see time and again as we try to effect a step change in our economy – you have to balance securing an opportunity to drive change and ambition with robust but proportionate processes and governance. It’s all well and good to have perfect systems and assurance – but these tend to mean very little to people if nothing gets delivered as a result.”

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