Earlier this week, Glenn Massey produced his report into the performance of International Business Wales (IBW).
This, of course, is quite separate to the forensic examination carried out by KPMG on behalf of the Welsh Assembly Government into the expenditure of its international division.
Rather than rushing to judgement, as most politicians did last week, I have taken time to read the Massey review, and perhaps if others had done the same, their comments would have been more tempered, especially towards hard working staff who were operating within the constraints imposed by politicians.
Key points emerge from the report which shed some light on the approach that has been taken under two Economic Development Ministers – Andrew Davies and Ieuan Wyn Jones – towards foreign direct investment (FDI).
The first, and probably the most important point is that staffing in IBW has been reduced from about 200 to 137 since 2005 – a cut of 32 per cent.
Thirteen staff have been lost at the ‘frontline’ offices, the inward investment presentations team in Cardiff has been closed down and there has been a significant downsizing of inward investment research & analysis team. There has also been a reduction in IBW’s annual budget of 31 per cent since 2005, equivalent to £7.3 million every year, with a reduction of nearly £2 million per annum in the vital area of marketing, lead generation and support.
Therefore, IBW has had to do the job it did five years ago with roughly a third less of the resources. Yet, if we examine IBW’s record on new jobs being brought into Wales in 2009 as compared to 2005, then the numbers are approximately the same, and equates to 6.2 per cent of the UK figure – higher than the proportion Wales would be expected to bring in.
Does this look like failure? Actually, IBW has done exactly what would be expected of it under such conditions, namely deliver the same results with a vastly reduced budget.
In the context of targets, what I find most mystifying is the claim made by politicians that “IBW has left Wales at the bottom of the 12 UK regions when it comes to safeguarding jobs”. Yet, within the report, Massey makes the point that “IBW has no direct responsibility for reinvestment by foreign owned companies in Wales. Given that there are over 500 foreign owned companies in Wales with many of them being major players, this is a major concern in the light of recent reinvestment trends and the current economic crisis likely to reinforce this trend”.
Therefore, politicians are blaming IBW for the failure of the rest of DE&T to look after companies once they have arrived here. That is not IBW’s job under the current approach developed by WAG, where an enormous amount of money organising its support for business into so-called ‘account managers’ to look after companies in Wales, including foreign investors.
Whilst I totally agree that this is the wrong approach to such relationship management, you can hardly blame IBW officials for decisions made by their political superiors to go down this route? As a result, and as Massey points out, “IBW appears to operate in a silo along with other parts of DE&T”.
Whilst much of the focus of the press has been on IBW itself, there has been little, if any criticism, of those in charge of economic strategy. Indeed, if you read this report very carefully, it shows that the primary reason for the lack of branding, a silo approach across DE&T and the focus on RSA as a tool for inward investment are not due to operational failings, but strategic failings issues that are decided at the highest levels of government.
Rather than blaming IBW, the press and politicians should have turned their attention directly onto those in charge of the economy in Wales as this report is more of an indictment of the overall leadership of DE&T by the Ministers and those at the very top of the civil service rather than IBW as a whole. Indeed, one would argue that the First Minister himself set the ball rolling when he abolished the quangos without a thought to how the new world of economic development would function in Wales.
One has to wonder if there are strategic failings regarding IBW - which makes only a very small part of the overall DE&T portfolio - what about the rest of the economic development and transport divisions of the Welsh Assembly Government?
Ieuan Wyn Jones, in his haste to pre-empt the Massey report, has indicated that there will be a review of the economic development function in Wales following this report. It cannot come soon enough, although that review must surely examine his own role and that of his senior civil servant in setting the economic direction for Wales.
Comments
Who was it who advised the Minister at the time of the winding-up of the WDA to set this group up, designed the entire structure and then ran K4B for the first year? Suprise, suprise - Glenn Massey!
If this was meant to be an independent report, why didn't it go out to tender, rather than appoint someone with an obvious axe to grind.
IBW have been of enormous assistance to my company. They are hard working and talented individuals striving to do their best for Wales.
The quickest way to kill any organisation is to demoralise, insult and demotivate their salesforce. The politicians have done all three this week. They should be ashamed of themselves.