Data from Experian research undertaken for the BBC suggests that the south Wales valleys of Rhondda Cynon Taf, Caerphilly, Merthyr Tydfil and Blaenau Gwent were among the least resilient in Wales.
Whilst the point of the BBC study is clearly focused towards the potential effects of the Comprehensive Spending Review, I wonder whether anyone will actually ask the most obvious question of all, namely does this not demonstrate the failure of the Welsh Assembly Government to make any real inroads into the issues facing our poorest communities?
After three Labour led Assembly Governments, an Assembly budget that has nearly doubled since 1999, and two tranches of European funding worth over £3.2 billion, there seems to have been no real progress in terms of developing a sustainable economy within the South Wales Valleys.
Of course, the knee jerk reaction will be to blame the Conservatives and the proposed reductions in public expenditure that have yet to happen but shouldn’t the Welsh Assembly Government be taking more responsibility for their own policy failings here?
Did no one bother to ask whether the WAG policies of the past twelve years were actually making a difference to the poorest parts of Wales?
Why, with a Labour Government in Westminster and Cardiff Bay, were no serious policy initiatives developed to specifically help the South Wales Valleys? What were all those Labour MPs doing at the time when there were still serious problems within their communities?
Why didn't Labour Ministers in WAG look to lobby their colleagues at Westminster to develop policies which could have included an "enterprise zone" which covered the whole of the Valleys and could have created a more favourable business environment?
Indeed, it is not as if there has not been calls for a more regionally focused economic development policy in Wales before. For example, the Global Entrepreneurship Monitor project did examine the differences in entrepreneurial activity between the various areas of Wales. For example, the 2007 report showed that:
“the most deprived areas of Wales not only have much lower levels of entrepreneurial activity than more prosperous areas, but that there is a long term trend of lower levels of business ownership in these communities. This suggests that enterprise policies have, to date, not acted as a catalyst to regenerate the poorer areas of Wales. The GEM report shows that one the key reasons for this is the negative attitudes towards entrepreneurship by adults in these areas. This is due to lower levels of social contact with entrepreneurs, perception of good start-up opportunities and, most importantly, perception of possessing start-up skills. To address this enterprise deficit, a dedicated programme of training, advice and support should be available to help increase the entrepreneurial intention and activity rates in the more deprived areas of Wales. Such interventions could, if it brought the most deprived areas up to the current Welsh average for entrepreneurial activity, create around 4,000 new firms every year in the poorest communities”.
Yet whilst this report was passed onto government officials with the recommendation that greater resources should be put into the South Wales Valleys to encourage entrepreneurship, nothing was done. I am sure there are many more examples of the evidence staring officials in the face and simply being ignored.
And it would seem nothing has changed.
More recently, I pointed out that WAG's own research demonstrated that within the poorest areas of the Welsh economy, large firms only accounted for 29 per cent of all employment growth between 2003 and 2006. This is despite a grant regime that is more generous than for any other part of Wales. In contrast, for those more prosperous parts of Wales that have a limited ability, due to European regulations, to offer grants and support to business, large firms accounted for 63 per cent of all employment growth. Simply put, the SME sector has been critical in creating jobs within the poorest parts of our economy whilst the majority of large firm employment has been created within those areas of Wales that have limited provision for grants.
Given such facts, one would have thought that the natural policy implication would be to support and strengthen the SME sector within those more deprived areas, yet the new ERP is essentially abandoning any direct support to small firms within the South Wales Valleys.
Indeed, it is therefore disappointing that there is very little detail as to how the new Economic Renewal Programme will help change the economic resilience of the South Wales Valleys over the next few years? In fact, the Heads of the Valleys is mentioned only ONCE in the whole document, and that is in relation to piloting more active, personalised support for unemployed and economically-inactive people.
We have heard the term that "something must be done" in relation to the South Wales Valleys for far too long. Recently, Leanne Wood called for a Minister for the Valleys and whilst it is not often that Ms Wood and I would agree on any matter, I think she is absolutely right on this matter.
At the very least, we need to have a coherent policy from the Welsh Assembly Government on how it could, and should, address the deep economic and social problems of one of our most deprived areas. If we can raise the prosperity levels of the South Wales Valleys, it will benefit the whole of our nation.
Comments
A review of economic policy documents, such as “A Winning Wales”, “People, Places, Future: The Wales Spatial Plan”, “One Wales” – to name just a few – will show that WAG has always expressed (if not explicitly, then implicitly) a desire to improve economic activity in the valleys. Unfortunately, we are now aware of what I think the WDA found out, quite quickly: that creating policy is one thing, but creating economic activity is quite another. I have always believed that the WDAs poor performance, with regard to improving the economic situation in the valleys, was viewed, by Andrew Davies and Rhodri Morgan, as wilful disobedience on the WDAs part, rather than as evidence of the sheer difficulty of carrying out policy in such an area; my belief is, to an extent, reinforced by Andrew Davies’ recent comments, in the Western Mail, where he lays the blame for economic policy failures firmly at the feet of the civil service.
In my experience, achieving successful economic improvements, at any level, is extremely difficult: even in the relatively commercially developed areas of the M4 corridor, or the north and south border regions. The barriers that exist, even in these areas, are likely to be multiplied five-fold in areas of especially low economic activity: It is little wonder that very little has been achieved in the valleys to date. Unfortunately, if my experience is anything to go by, the costs associated with achieving anything meaningful, in terms of economic development, in the valleys, over the next decade (using traditional methods) are likely to be huge and, perhaps, beyond the budget that is available. It is obvious that a new approach needs to be taken in this area… I hate to admit it, but the valleys may be one area where some of the elements of ERP could work?