Venue: Council Chamber, Dudley Metropolitan Borough Council, Council House, Priory Road, Dudley
Contact: Dan Essex, Governance & Scrutiny Manager
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Apologies for Absence Presented By: Chair Decision: Councillor Joe Baker (Redditch), Councillor Ian Davison (Warwick), Councillor Abdul Khan (Coventry), Councillor Paul Moore (Sandwell), Councillor Garry Perry (Walsall), Councillor Izzi Seccombe (Warwickshire) and Councillor Chris Watkins (Nuneaton & Bedworth). |
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Chair's Remarks (if any) Presented By: Chair |
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Minutes - 14 June 2024 PDF 137 KB Presented By: Chair Decision: Agreed as a correct record. |
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Exclusion of the Public and Press In accordance with s100(A) of the Local Government Act 1972, the public and press be excluded from the meeting for the following item of business as it is likely to involve the disclosure of exempt information as specified in the paragraphs of the Act. Presented By: Chair |
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Bus Reform (Part A) - Bus Network Update and Funding from January 2025
Presented By: Chair Decision: (1) Transport for West Midlands commencing negotiations with bus operators in August 2024 to support continuity of the bus network from 1 January 2025 when it was risked losing up to 30% of the existing bus network were endorsed. Transport for West Midlands would aim to bring options back to the WMCA Board as soon as September 2024.
(2) It was noted that the amount required to sustain the network to date had equated to £50m based on 88% of the pre-Covid network, which provided a guide to the cost of maintaining the existing network beyond 1 January 2025.
(3) It was noted that the current level of levy funding to support the transport system in the West Midlands remained lower than other comparable public transport systems in the UK.
(4) It was noted that the agreement to move to audit of the Full Franchising Assessment would permit negotiations with bus operators to consider further grant agreements in the way that had maintained the network to date. In the event of not moving to audit of the Full Franchising Agreement, this would make it difficult to consider grant arrangements in a continued deregulated system due to legal risks.
(5) The risk associated with the scale of the procurement exercise for the provision of subsidised local bus services for implementation in January 2025, and the level to which this might not be able to be supported by the commercial sector in the time available, was noted. |
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Bus Reform (Part B) - Bus Delivery Option Assessment PDF 229 KB Presented By: Chair Decision: (1) The conclusion of the Full Franchising Assessment prepared by the external consultants appointed by Transport for West Midlands that franchising was the most effective and efficient way of delivering bus services across the region as opposed to the current deregulated system was acknowledged.
(2) Authority was delegated to the Executive Director Transport for West Midlands to take the decision to commission an audit of the Full Franchise Assessment as required by legislation.
(3) It was agreed that final due diligence would be undertaken with representatives of all constituent local authorities through the existing governance before the appointment of the Auditor.
(4) The establishment of a Bus Reform Panel, including representatives from each constituent local authority and relevant WMCA staff to oversee the audit process and subsequent steps for bus reform was approved, acknowledging the size and scale of the undertaking and to provide transparent assurances to local authorities that a robust business case existed to support further bus reform.
(5) It was noted that the report did not seek a decision to franchise West Midlands bus services, but a decision to move to an independent audit of the Full Franchising Assessment.
(6) It was noted that once the audit was completed, the Full Franchising Assessment and the proposed franchising scheme would return to the WMCA Board for a decision to move to public and stakeholder consultation for a proposed franchising scheme, and that this was expected to be in November 2024 at the earliest.
(7) It was noted that a decision to implement a franchising scheme could only be made once the independent audit of the Full Franchising Assessment had been undertaken and considered, and the subsequent consultation had been undertaken and considered, which would be no earlier than March 2025 following existing legislative provisions. |
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Wednesbury to Brierley Hill Metro Extension – Phase 2 PDF 299 KB Presented By: Chair Decision: (1) The Single Assurance Framework change request to increase the overall budget by £248.5m, including a new funding allocation of £36m City Region Sustainable Transport Settlement overprogramming to allow completion of the phase 2 of the extension to Merry Hill, amending the funding envelope, scope and timescale was approved, noting that the overall funding package was subject to the Department for Transport approving the business case.
(2) The conditional release of the full funding to complete phase 2 to Merry Hill was approved, subject to the development of a robust and credible plan within the locally-led place based strategy that could secure a contribution to the scheme which would off-set the level of City Region Sustainable Transport Settlement financial over-programming currently required in order to build Phase 2, and would drive up the levels of patronage on the overall Wednesbury - Brierley Hill extension line such that operational subsidy requirements were reduced, eg. through a regeneration and land use planning framework. This would require further WMCA Board approval prior to the release of the full funding.
(3) The advanced expenditure of up to £6m for phase 2 utilities and advanced works ahead of any Government approval of the phase 2 business case was approved, to be released incrementally to minimise exposure. As set out in the financial implications section of the report, this would be funded from the element of the residual scheme funding that was supported through WMCA capital financing and was within total budget envelope for the Wednesbury - Brierley Hill extension already approved by WMCA Board on 9 June 2023.
(4) The Executive Director for Transport and Section 73 Officer (typically referred to as s151 Officer) was authorised to finalise and formally submit the full business case to Government for consideration in order to unlock the required additional funding from the Department for Transport and the Ministry of Housing, Communities & Local Government.
(5) It was noted that phase 1 of the Wednesbury - Brierly Hill metro extension was currently under construction to Dudley town centre (due for completion in 2025) and that costs for this element would increase by up to £15m should the phase 2 element of the scheme not be approved, plus any spend incurred relation to the advanced utilities works.
(6) The work done on developing phase 2 for construction was noted, including identifying cost savings, financial affordability options and the development of a business case, and that work was on-going to realise other financial opportunities to reduce costs further.
(7) It was noted that the outcome of this work recommends that the most economically viable and affordable option was to extend the line as far as Merry Hill with a scheme design that provided passive provision to enable the continuation to Brierley Hill High Street, subject to the development of a further viable business case which would need an affordable funding solution.
(8) It was noted that the funding viability of the business case which the WMCA was being asked to approve was ... view the full decision text for item 8. |
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Transport for West Midlands Capital Spending Pressures and Programme Update PDF 276 KB [Please note that there is a private appendix contained within the report for this item.] Presented By: Chair Additional documents:
Decision: (1) The funding strategy to address the budget pressures on projects to ensure their completion was approved, and authority was delegated to the WMCA Section 73 Officer (typically referred to as the s151 Officer) to revise project budgets accordingly, subject to:
• Project change control documentation being approved in accordance with the WMCA Single Assurance Framework (including appropriate assurance concerning value for money).
• Appropriate Department for Transport consent being obtained for the changes to the City Region Sustainable Transport Settlement programme where Department for Transport delegations do not allow these decisions to be made locally.
(2) It was noted that where projects were subject to formal Department for Transport Minister’s consent, there might be a requirement to place contracts in lieu of this being obtained. Where such action was considered essential (to negate the compounding of cost escalation issues), the WMCA would seek to do so in a manner which minimised the value of any spend at risk until formal consent was obtained.
(3) The Executive Director of Transport for West Midlands, in consultation with the s73 Officer and the Monitoring Officer, was delegated authority to endorse the change control documentation, subject to the values being in line with this report, value for money indicators being in line with expectations, and those change controls not raising additional significant matters or areas of concern.
(4) The early warning of slippage of programme dates for Wednesbury - Brierley Hill extension phase 1 and Rail Package 2 (Kings Heath, Moseley and Pineapple Road stations) were noted.
(5) It was noted that where scheme deferral was being recommended as part of the funding strategy, those projects were still able to access the funds already awarded which would enable development activity to continue and manage any risk of underspend on the wider capital programme. This was subject to a wider review of the City Region Sustainable Transport Settlement programme, the scope of which was currently in development and would be subject to a further report to be brought to WMCA Board at a later date. |
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WMCA Financial Monitoring Report PDF 309 KB Presented By: Chair Additional documents: Decision: (1) The updates to the 2024/25 revenue budget were noted.
(2) The rebased 2024/25 capital programme was approved.
(3) The rebased Mayoral Office budget was approved.
(4) The financial position as at 31 May 2024 was noted.
(5) The continuing policy of transferring in year savings on concessions budgets to an earmarked reserve to mitigate network risks was approved.
(6) The new grant awards to the WMCA and the intended use of these grants were noted.
(7) The allocation of grant to each of the local authorities that were participating in the traffic signal improvements initiative was noted.
(8) The treasury management outturn 2023/24 was noted.
(9) The latest update on the bus network, including the annualised estimated risk of £50m per annum and the ongoing work with providers was noted.
(10) It was noted that in-year savings on the bus budgets will be used to support the bus reform work up to a value of £1.3m.
(11) Authority was delegated to the Executive Director of Transport for West Midlands in consultation with the s151 Officer and the Monitoring Officer for the purposes of entering into any and all necessary agreements/contracts and related arrangements, required and necessary, to secure the continuity of the WMCA’s Swift systems, subject to being within budget and being able to finalise suitable contract terms and conditions.
(12) In light of the recent changes/appointments, authority was delegated to the Interim Director of Employment, Skills, Health & Communities, the s151 Officer and the Monitoring Officer to carry out commissioning of skills funding, including any procurement activity as required.
(13) The work that the UK Shared Prosperity Fund Task & Finish Group had undertaken since the last board, and the principles to be adopted to assist with maximising the regional UK Shared Prosperity Fund allocation, were noted.
(14) It was noted that a further UK Shared Prosperity Fund progress update would be presented to the WMCA Board in September, including recommendations around the approach towards reallocation of UK Shared Prosperity Fund funds where opportunities became available. |
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Presented By: Chair Decision: The plan was noted. |
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Investment Board - 24 June 2024 PDF 175 KB Presented By: Councillor Sharon Thompson Decision: The minutes were noted. |
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Overview & Scrutiny Committee - 1 July 2024 PDF 173 KB Presented By: Councillor Andrew Burrow Decision: The minutes were noted. |
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Transport Deliver Overview & Scrutiny Committee - 8 July 2024 PDF 206 KB Presented By: Councillor Timothy Huxtable Decision: The minutes were noted. |
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Exclusion of the Public and Press In accordance with s100(A) of the Local Government Act 1972, the public and press be excluded from the meeting for the following item of business as it is likely to involve the disclosure of exempt information as specified in the paragraphs of the Act. Presented By: Chair Decision: Agreed. |
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The Very Light Rail Innovation Centre (VLRNIC) and Black Country Innovative Manufacturing Organisation (BCIMO) - Options for Future Delivery
Presented By: Chair Decision: (1) The work undertaken in relation to future options for developing and sustaining the Very Light Rail Innovation Centre were noted.
(2) The report from Amion Consulting was noted.
(3) The four potentially viable options shortlisted were noted, and that initial work had identified a solution with potential to retain the asset for its original and intended purpose.
(4) The preferred option recommended in the Amion Consulting report to confirm Warwick Manufacturing Group as the preferred strategic partner was agreed, and it was agreed that officers from Dudley Metropolitan Borough Council and the WMCA would input and assess the business case that Warwick Manufacturing Group would develop, assess Warwick Manufacturing Group’s proposals for corporate structure and ownership and seek agreement to changes, and support Warwick Manufacturing Group in obtaining grant funding. Dudley Metropolitan Borough Council and the WMCA would establish robust governance arrangements to oversee this work and project manage delivery with a view to any new arrangements being operational from October 2025. Any new entity would need to be financially sustainable and achieve the strategic and grant outcomes.
(5) It was noted that the ‘do nothing’ option had been considered in the Amion Consulting report and the potential implications were set out in more detail within the report.
(6) It was noted that following the conclusion of this work, an update will be bought back to WMCA Board, which was likely to be in or around December 2024. This update would set out any recommendations for future company structure and governance arrangements which better met the objectives of the local and combined authorities and supported the outputs for the wider region. If a viable option could not be achieved, Dudley Metropolitan Borough Council would return residual funding to the WMCA.
(7) It was agreed to continue to ringfence and cap the £1.5m of WMCA reserves (as approved by the WMCA Board on 15 March 2024) and extend the timescale for the Executive Director of Finance & Business Hub to allocate this funding as required for Dudley Metropolitan Borough Council to support the Black Country Innovative Manufacturing Organisation (subject to compliance with Subsidy Control) and to meet the council’s costs in developing the preferred option.
(8) The expected capital requirement (from the City Region Sustainable Transport Settlement yet to be approved) was noted.
(9) It was noted that the preferred option showed an estimated net working capital shortfall of £1.4m up to 2028 (gross gap of £2.9m less ringfenced WMCA reserves of £1.5m) and that it would be the responsibility of Dudley Metropolitan Borough Council and Warwick Manufacturing Group to identify funding to resolve this shortfall as well as identifying funding to settle Dudley’s loan. |
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Date of Next Meeting Presented By: Chair Decision: Friday 13 September 2024 at 11.00am. |