Agenda item

Context:

Members received a verbal update from the Head of Commercial and People Development regarding Skutrade and Circuit of Wales.

Circuit of Wales

We were told that the local authority, along with Blaenau Gwent and Welsh Government started consideration of a deal put forward for the Circuit of Wales last Autumn and we engaged an extensive piece of due diligence in order to access that deal.

The two local authorities came to the conclusion Spring 2016 that the risks were too great to bear. At that point, in agreement with Welsh Government, the two local authorities took a step back from the deal. Welsh Government went on alone to see if they could satisfy themselves with the deal. The Welsh Minister drew the conclusion at the end of March that she was not able to proceed with the deal, the reasons for that are well documented on the press.

The current position is that the two local authorities and Welsh Government have gone back to the table with the Circuit of Wales who have presented a revised deal that is currently being considered.

The incoming Minister is looking over a briefing which has been prepared and circulated this week, we are waiting for a further update on this.  

The Head of Commercial and People Development was unable to go into finer detail at this stage due to commercial sensitivity.

Member scrutiny:

Members raised concerns regarding the demand for the project. The Officer reassured the Committee that the two authorities involved, along with Welsh Government would not have involved themselves in the deal if it was not felt to be of great benefit to the area. The due diligence carried out was extensive, not only commercial, financial and legal, but beyond that, motorsport experts were consulted and market testing was carried out. If a deal was struck, all relevant information will be fed back to Members.

A Member asked why the developer had not gone to the private equity market. The Officer answered that when the company approached private funding originally, planning had not been secured on the site and there were issues with the deregistration of the land. And it was these two key issues which held back the market from coming forward. A private backer was found to fund all but 16 million worth of the funding, however they required a 100% public sector guarantee behind it in order to de-risk the project.

A Member expressed their disappointment regarding the Welsh Government decision not to back the first deal and felt that the funding for the circuit and the subsequent jobs created would negate the amount of benefits paid to the unemployed of the area currently.

A Member asked if the track would be used for motorbike only and was answered that the track was open for all vehicles. As the track has the unique feature of a drop in the track, this lends itself to vehicle testing. The Chief Executive, Martin Whittaker was a former president pf the FIA, responsible for setting up the Abi Dhabi grand prix, he comes with a huge tracks record and most importantly an extremely useful contact list.

A Member questioned that the main social benefits will be felt by Blaenau Gwent and felt that Monmouthshire should ensure they feel the financial benefits.

A Member questioned the lack of environmental assessment available electronically.

Skutrade

A report was brought to committee last March, then to Cabinet which granted delegated authority approval for the Cabinet Member Economy and Enterprise,  Chief Officer for Enterprise and the Head of Finance to sign off on satisfactory completion of due diligence and a business case being brought forward.

Signing this off would have released £90, 000 funding to Skutrade, which the authority would have recouped back over a defined period from the company based on local business accessing and utilising their platform. The deal is predicated on the platform being ready. To date the company have been unable to progress through user acceptance training so we are not at a point where we have a market ready solution.

It is now a case of tracking progress and finalising a business case, until that point we are on hold.

Member scrutiny:

Members sleeked reassurance that funds had not been released and asked if there was as cut-off date for this. We were told funds have not been released and there is no firm date, as it is under constant review.

A Member commented it had been a year since Skutrade was introduced, and was this year delay stopping businesses using a similar, existing product. The Officer commented that his team had been tracking the market and there was not currently a like for like product readily available.