Actica Consulting tapped to review Swansea's 11 City Deal projects

06 February 2019

A Surrey-based consulting firm has been appointed by the UK and Welsh Governments to carry out an independent review into the City Deal for the Swansea Bay City Region. The initiative has faced criticism for how slowly it has awarded funds to prospective projects.

The Swansea Bay City Deal is a £1.3 billion investment in 11 major projects across the Swansea Bay City Region. The initiatives are spread across Carmarthenshire, Neath Port Talbot, Pembrokeshire and Swansea. Over the next 15 years, the projects based on key themes of Economic Acceleration, Life Science and Well-being, Energy, and Smart Manufacturing are expected to boost the regional economy by £1.8 billion and generate almost 10,000 new, high-quality jobs.

However, the investment drive seems to have stalled in recent months. While 11 City Deal projects have been identified, none of their business cases have been signed off by both Governments, which together could commit up to £241 million in funding toward their execution. The remainder of City Deal funding would be made up of £360 million in other public sector funding – including local authority borrowing – and £673 million of leveraged private sector finance; however, while the Governments withhold the green-light, these funds are also left in limbo.

Actica Consulting tapped to review Swansea's 11 City Deal projects

One of the projects left in purgatory at present is a proposed Wellness Village at Delta Lakes in Llanelli, which is seeking £40 million from the City Deal. The project, which claims it will create 2,000 jobs, has been approved by Carmarthenshire County Council, but the Welsh Government is still weighing up its response to the planning application. The facility would include an Institute of Life Science, a Community Health Hub, a Wellness Education Centre, a Clinical Delivery Centre and new leisure centre.

Carmarthenshire Council has not disclosed how much it has spent on the Wellness Village to date. The Auditor General for Wales, Adrian Crompton, has however confirmed he will investigate the decision making of Carmarthenshire County Council in relation to Wellness Village project. Council CEO Mark James and Professor Marc Clement, the suspended dean of the School of Management at Swansea University, were the drivers of the project.

Independent review

With rumblings of dissent on the matter, in December both the UK and Welsh Governments announced a "rapid independent review" into the City Deal scheme by Actica Consulting to examine the process which has seen projects earmarked for the huge levels of funding. Actica is a consultancy which often takes on major procurement contracts for the UK Government. The review will cover due diligence and governance in relation to all elements of the deal and its implementation.

According to a Welsh Government spokesperson, “The Welsh and UK Governments have jointly appointed Actica Consulting to carry out the independent review of the Swansea Bay City Deal announced in December, and work has already commenced. Further updates will be made available when appropriate.”

A Swansea Bay City Region spokesperson meanwhile stated, "As outlined by the UK government and Welsh Government, considerable progress has been made since the signing of the Swansea Bay City Deal. We will now work closely alongside both governments on the independent review, with all partners remaining fiercely committed to delivering this unprecedented programme of investment.

Related: National charity CTA launches tender for consultant in Wales.

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Private equity firms ramp up sustainability focus

19 April 2019

In line with business leaders across the industrial gamut, private equity firms are increasingly on board with sustainability projects. According to a new study, the investment arms for major funds are implementing a number of strategies aimed at supporting sustainable economic development in line with global goals.

While the business world has finally begun to acknowledge the danger of climate change, effective action plans remain difficult to achieve. The Paris Agreement has stipulated a clear target for the decades leading up to 2100, although massively reducing emissions while not crashing the economy could be a tall order.

Businesses that are able to acquire capital can use it to boost productivity and output, thereby creating a virtuous cycle of development. However, some businesses are better able to utilise resources than others, both in terms of their relative productivity, as well as the value of the respective outcomes relative to costs (including environmental harms). Financing can therefore provide an avenue to select businesses that are aligned with various global sustainability goals, while shunning those that drive little or unsustainable social value creation.

Top moves made by investment arms towards responsible investment

Profit has for the longest time been the central criterion for investment decisions. Yet profit at any cost is increasingly seen as creating considerable social harms, while often delivering only marginal value. As a result, the private equity sector, which was initially sluggish to change its ways with regards to sustainability, has started to see the topic as an opportunity as much as a challenge.

A new study from PwC has explored how far sustainability goals have become part of the wider investment strategy for private equity (PE) firms. The report is based on analysis of a survey of 162 firms and includes responses from 145 general partners and 38 limited partners.

Maturing sustainability

Top-line results show that responsible investment has become an issue for 91% of respondents. For 81% of respondents, ESG (environmental, social, and corporate governance) was a board matter at least once a year, while 60% said that they already have implemented measures to address human rights issues. Two-thirds have identified and prioritised Sustainable Development goals that are relevant to their investment segments.

Change in concern and action on climate-related topics over time

While there is increasing concern around key issues, from human rights protections to environmental and biodiversity protection, the study finds there are mismatches between concern and action. For instance, concern among investment vehicles around climate change has increased since 2016.

In terms of risks to the PE firm itself, concern has increased from 46% of respondents in 2016 to 58% in the latest survey. However, the number who have taken action remains far below those concerned, at 9% in 2016 and 20% in 2019. Given the relatively broader scope of investment opportunities, portfolio companies face higher risks – and more concern – from PE professionals, at 83% in the latest survey. However, action is less than half of those concerned, at 31%.

Changing climate

In terms of the climate footprint of the portfolio companies, 77% of respondents state concern in the latest survey. 28% of respondents are taking action through the implementation of measures to mitigate their concerns.

Concern and action taken on ESG issues

In terms of the more pressing issues for emerging responsible investment or ESG issues, governance concern of portfolio companies comes in at number one (92% of respondents), while 60% have taken action on it. Firms have focused on improving awareness – setting up policies and a range of training modules for their professionals around responsible investment decision making. Cybersecurity takes the number two spot, with 89% concerned and 41% implementing strategies to mitigate risks.

Climate risks take the number three spot in terms of concern for portfolio companies (83%), but falls behind in terms of action (31%). Health and safety track records are a key concern at 80% of businesses, with 49% implementing action. Gender imbalance within PE firms themselves ranks at 78%, which is being dealt with by 31%. A recent survey from Oliver Wyman showed that there is gender balance at 13% of GP teams in developed countries.

Biodiversity is also an increasingly pertinent topic, with risks from pollution and chemical use increasingly driving wider systematic risks around environmental outcomes. It featured at number eight on the ranking of most likely global risks for the coming decade, with its impact at number six. As it stands, biodiversity is noted as an issue at 57% of firms, with 15% implementing action.