People often ask why I bother writing this blog, given that the audience it reaches is very small.Well, apart from the fact that it gives me ideas for my two weekly columns in the Daily Post and the Western Mail, it hopefully enables those who are interested in some of the issues surrounding the Welsh economy to also comment on current issues of note.
One such comment was posted on the article regarding the new Economic Renewal Programme launched by WAG on Monday.
Whoever has posted this comment obviously has thought through his concerns carefully. More importantly, this demonstrates an enormous hole in the entire process behind the ERP.
As the commentator notes:
Another problem is that the lack of consultation.
WAG like to say that they have have the biggest consultation excersise, but this is a front. The reasons why:
1) The consultation document did not ask for specific policy questions regarding the re-organisation of the DE&T. I'm shocked to see the changes after reading the inital consultation document. The ERP answers questions that were simply not asked in the consultation process.
2) For such big changes within the department, why wasn't there an on-going dialogue with the major players? One consultation response is not enough for such a major restructure. I dont think that the business community expected such changes, and this is poor engagement. Quality not quantity of consultation is the key.
3) The ERP as it stands now should be going out to consultation. There is no formal way to respond, and no period of consultation. Such major change, such as scrapping FS4B, IBW, SIF, should go out to consultation.
4) Where was the consultation when choosing the sectors? The ministerial advisory group seems to work in a silo away from the other players. Where was the engagement with the wider business community when choosing the sectors which will benefit from the ERP.
5) Does the wider business community suppport the new strategy?
6) Where are the details so we can debate the document and reply?
7) Is there a detailed list of what will and won't be changed in DE&T?
the list could go on...
Indeed this is only pointing out some of the failings in the consultation process. As I said, for changes so vast to the DE&T, just to offer a consultation document and no real further engagement is a shambles and a kick in the teeth for all those businesses who will be hit.
One consultation document does not make up for the changes that are being made.
I have not got the time to write further or I would comment on the actual document itself.
My main point is this.....SMEs are ignored.
To take support away from supporting SMEs is shocking. They new approach from WAG is to support big business and hope they drag indigenous Welsh businesses with them. Making larger companies the driver in Wales when they only account for less than 1% of businesses here.
It looks like to me that the CBI have a special hotline to IWJ. Maybe he's scared of David Rosser?!
I don't agree with you, Dylan, very often...but I totally agree with you this time. Well done DE&T for ignoring 99% of businesses in Wales.
I couldn't agree more and one can only hope that someone within the Assembly will take up these points to stop us sleepwalking into economic disaster.
Comments
From the comment in the Western Mail very few care what happens to IBW. When do the inward investment figures come out.
One question for you Dylan, the largest inward investment project in awhile was Amazon with almost 1000 jobs. What sector would that be under?
another 200 jobs are going in swansea today - can ieuan tell us which large company in Wales will replace these jobs?
The loss of IBW is yet another knee jerk reaction by civil servants. With corporation tax coming down over the next four years, the UK will become a very attractive place to do business. In such an environment, WAG should be doing everything possible to ensure that we get projects into Wales in this short window of opportunity. Asanon says, Scotland and Northern ireland must be rubbing their hands with glee at the prospect of having no Wales presence overseas vying fro international projects.
The twin engines of the Welsh economy are entrepreneurship (in both new and existing small firms) and inward investment. Therefore, you have to ask why on earth WAG has scrapped support for both.
One other point about IBW - the staff I have met are amongst the hardest working in DET and they put some of their colleagues in Wales to shame. For them to be treated in this manner, especially after the way they were literally treated as criminals by senior management in DET, is nothing short of shameful.
Interestingly, retail businesses are mostly ignored in the ERP. Although WAG mentions wanting to care for the wellbeing of communities, how are towns around going to keep their local shops open and vibrant when there is no support for this sector from WAG? It has always been an underfunded sector, but now there is even less help available. Has DE&T got a plan how to help town centres and small shops with FS4B being scrapped? - the answer seems, yet again, from WAG that they will support infrastructure and this will then help local shops. Well, it will also benefit the Tesco in towns across Wales, and to a greater extent. How are SMEs going to compete?
It says a lot about the mentality of WAG when they use the stats from the CBI and their usual strap line - that just under half of private sector employment in Wales is in big businesses. Obviously they have taken the views of the CBI hook, line and sinker. WAG does not know how many people are employed by SMEs, but it is way over a half of private sector employment. SMEs are hardly mentioned in the ERP, neither does it mention how many businesses in Wales are SMEs.
Shockingly, the ERP states that it does not want to help individual businesses as it will disadvantage others. This was a justification to scrap the FS4B. This is a disgrace. How about the towns all over Wales where local shops are closing and there isn't another butcher/corner shop/bakery... against? They are the only ones in the town and at risk of closure. Also, how about the help for businesses who want to compete against the Tescos of this world to survive? No help for them? Of course not, this would be bad news for DE&Ts friends in the CBI.
DE&T like to mention that broadband will be available to all businesses in the next 6 years. In fact, this has been repeated so many times that it made me realise that this is about the only firm commitment from the ERP. Lets scrap FS4B, IBW, SIF..... and so long as we have a broadband target, then this will make up for it? Of course it wont. Where are the targets and aims to we can really evaluate the ERP?
One of the most important support for SMEs in particular is Business Rates reductions. Surprise surprise, this is hardly mentioned in the ERP - only small section which mentions what has already been announced months ago. Business rates may not be in IWJs portfolio, but considering his 'aim' of working with all departments, and the fact that there is such a heavy amount of input from other departments....why is such an important issue as rates being basically ignored? Oh yes, I forgot....business rates are less of a burden on bigger businesses, so there was no real need to consider rates reductions for those pesky SMEs.
The ERP says that we should not favour Welsh businesses in procurement opportunities. Indeed, because of European law, you can't do this. But there are ways of making sure that Welsh SMEs can win contracts. This seems to be ignored. All that is mentioned is that SMEs should be supported to fill gaps in the markets in Wales. No plans of how and when to do this....or how this is possible without FS4B or one-2-one support. Yet again, no details on how to help Welsh SMEs, instead a warning to them not to expect any favours from government. After all the work of the procurement taskforce (which I was a bit dubious about at the time, but looking back, it seems like the good ol' days, they must be worried how this is going to work.
cont........
Also, sectors that have been chosen as the special 6, don't include retail/agriculture/tourism..... Basically the sectors which have a high% of SMEs in them. I wonder why that they were not chosen by the elusive ministerial advisory group.....
SIFbeing halved into the 6 sectors and infrastructure will hurt SMEs..
These 6 sectors will have panels which will write the sector plans. These panels will consist of academia and businesses. Although. Although having business input into these sector plans is vital, I'm worried that SMEs wont have the resources to be able to be on these panels. Bigger businesses can afford the time to do this, but a small busness/owner manager would struggle to do this. How is DE&T going to ensure fair SME input into the groups writing the sector plans?
DE&Talso want to build relationships with businesses which have high number of employees- Big business yet again. On the other hand, the ERP suggests that SMEs are local businesses and therefore they should be catered for locally. Maybe through Local Authorities at a time when their budgets will be cut. It is clear in the document that WAG want to deal with big business and leave SMEs to others to deal with. This is shameful.
One last point I would like to say here (though I really could go on) is agriculture. There is a large segment on this in the ERP on how DE&T are going to support the rural economy. Well, talk about re-inventing the wheel.....the work that is mentioned is already planned by the Rural Development plan. Talk about stealing clothes.
What DE&T need to do desperately
1) The DE&T need to map what has changed in the department and what they indent to replace it with. We have no idea what is being lost or put in its place.
2) They also need a further round of consultation with stakeholders to see their reaction to the ERP. Some things the business community might be in agreement about, but in others they definitely are not. This ERP document needs to go out to consultation. Why have they not done this?
3)This needs to be done by the end of the month as the implementation plans are being finalised by then. Of course, they must feel though they dont need to wait for industry reaction as they have had the nod from the CBI.
4)DE&T need to thoroughly explain how help for SMEs will change and how much help they will gain / lose as a result of the ERP. Basically, show how SMEs if they will be better off of not.
I, and many others in the SME sector are worried about the ERP. DE&T might be happy that the CBI are supporting them, but the main business sector has been ignored and is now being left with uncertain support from the government, when they need that support the most.
Yes, IWJ has abandoned SMEs. If he would like to explain otherwise, I will be willing to listen.
I hope for the sake of Wales that I am completely wrong about the ERP.
I certainly didn't and I still can't believe that the Minister has allowed such a strategy to be adopted.
Can I also suggest that you write directly to the Deputy Minister with your concerns and copy your AM into the correspondence. It will be interesting to see how he responds
Entrepreneurship policy - gone
Inward investment - gone
Support for large firms who can afford to pay for their own broadband - £50 million
Treble gins all round (especially at the CBI)
I will let you know what he says when I write this up properly and in a more readable format.
Sorry for such a long post...I didn't realise I had such a long rant. Anyway, I hope that some people from DE&T read it here, and maybe it might be of use to your good self.
Anon
The sooner these civil servants are put to paper shuffling duty away from real businesses the better.
Now, if only Wales could reduce its corporation Tax level down to a sensible 10% or so .. ?!