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Swansea Bay's billion pound city deal has hit crisis point after a key council threatened to pull out.

A Neath Port Talbot Council report suggested leaving the £1.3bn city deal may be the "only logical course of action" unless it starts to deliver projects.

The deal would see investment in 11 major projects across Pembrokeshire, Carmarthenshire, Swansea and Neath Port Talbot.

The package includes funding from the UK and Welsh Governments as well as the public sector and the private sector.

But two reviews into how the city deal recently raised major concerns over progress and transparancy.

Neath Port Talbot Council has asked the other three councils as well as the UK and Welsh Governments, to radically change approach.

On Wednesday, Neath Port Talbot council leader Rob Jones was set to be granted the power to remove the council from the deal if no agreement can be reached to convince it to stay.

Projects in the pipeline as part of the deal include the £168 million Swansea City and Waterfront Digital District.

Elements include a "digital village" for tech businesses on The Kingsway, and a "box village" for start-up companies at the new University of Wales Trinity Saint David (UWTSD) campus in SA1.

However controversy of the Wellness Village planned for Llanelli and the involvement of suspended Swansea University academics in it has hit confidence in the city deal.

City Deal chiefs give backing to two projects worth nearly £200m

The council report from chief executive Steven Phillips said there was no prospect of the council backing projects involving Swansea University.

He said: "Recent events hardly instil confidence in [Swansea University's] governance system and there is no prospect of officers immediately recommending that Members commit Council borrowing to these projects."

Mr Phillips also suggested that the best option would be to abandon the project altogether.

"Given the amount of process/bureaucracy involved is widely accepted to be excessive, there is, in our view, a case for abandoning it completely rather than attempting to refine it," he wrote.

And he added: "It seems incongruous that local authorities have the financial accountability (under the current system) and yet are required to go through a process which clearly isn’t working."

Mr Phillips argued that Neath Port Talbot's economic interests might be better understood as being part of the M4 economic corridor rather than as part of a south west Wales region.

And he argued that most of the projects being considered as part of the Swansea Bay City Deal could be delivered without the city deal.

He concluded: "Recriminations are pointless; but lessons must be learnt. We want the City Deal to deliver; but for all the reasons identified above we do not believe it will without a radical overhaul – of the projects in particular.

"The final sentence of the Government review categorises most projects as “Red”. That has to change rapidly.

"It is up to us to assemble the business case (under the existing arrangements); but it is then up to Government and the region to respond in a timely fashion. To facilitate that we need a different, clearer, way of working.

"But if this cannot be done, we must face facts... The City Region was originally launched in 2013... Despite this huge investment of time and resources, not a penny has been spent on the projects so far and this cannot continue.

"As a Council, if we cannot see a return in the short term (say, a further six months) and in the form of business case approvals then exiting these arrangements may be the only logical course of action.

"For the avoidance of doubt, “approvals” means precisely that. It does not mean “in principle”; subject to “further review” or other caveats or conditionality which in reality would represent many more months of inconclusive dialogue. In these circumstances, what would be gained by continuing."

Cllr Rob Stewart, Chairman of the Swansea Bay City Deal’s Joint Committee, said: “All recommendations arising from two recent reviews into the City Deal have been accepted by Joint Committee, with detailed work on how they can best be implemented now ongoing.

“Among the recommendations that’s been accepted is more flexibility in the City Deal programme, which aligns with our consistent request to bring new projects into the City Deal if they’re beneficial to the region.

“As recommended by the independent review into the City Deal, we’re also hopeful business cases for the ‘Yr Egin’ and Swansea City and Waterfront Digital District projects will be approved by the UK Government and Welsh Government as soon as possible. This will help kick-start an investment programme worth £1.8 billion and over 9,000 well-paid jobs in coming years.

“All parties remain committed to delivering the City Deal, and regional councils are already working to bring forward the second tranche of projects. Neath Port Talbot, Pembrokeshire and Carmarthenshire are doing that now, with the aim of business cases being submitted for approval in coming months.”

A UK Government spokeswoman said: "It is ultimately for the leaders of the four local authorities to decide how they wish to strengthen the region’s Programme Management Office and to consider the roles of their committees.

"Both governments have reiterated their commitment to the Swansea Bay City Deal and we stand ready to release funding to projects which demonstrate confidently that they are fit for purpose and can provide value for public money."

Commenting on Neath Port Talbot Council's position, Russell George AM, Welsh Conservative Shadow Minister for Business, Economy and Infrastructure, said: "I would urge Neath Port Talbot Council to reconsider their plans to leave the Swansea Bay City Deal.

"The regional economy of South West Wales will be boosted over 15 years by more than £1.8 billion, bringing more jobs and opportunities for hard-working local people from Neath and Llanelli to Pembroke Dock and Swansea."