1. This paper is jointly submitted by the Bevan Foundation and Joseph Rowntree Foundation. We welcome the opportunity to submit evidence to the Committee’s inquiry on this important subject. The Bevan Foundation is an independent charity that develops evidence-based ideas to make Wales fair, prosperous and sustainable. The Joseph Rowntree Foundation (JRF) is an independent organisation working to inspire social change through research, policy and practice.
The current position with regard to the signed Cardiff Capital Region and Swansea Bay City Deals and the next steps planned to take them forward.
2. How the ‘deals’ were arrived at, engagement with partners beyond local authorities and how partners might become involved in future is unclear, as are the next steps. This is disappointing given the potential scale of social and economic change brought by the deals. Now the deals are signed and the new authorities in place we hope that there will be greater transparency and engagement with a wide range of partners.
The intended impact of the City Deals and the way in which this will be governed, funded and monitored.
3.
The
intended impact of the city deals agreed to date is relatively
narrow, comprising a target number of jobs and increased GVA. Even
within this focus, the deals do not consider issues such as the
quality of jobs, for example their pay and skill levels, or their
location within the region, for example in the most disadvantaged
areas.
4.
We
suggest that the intended impact should be broader to ensure that
everyone and all places benefit from growth. JRF has developed a
range of indicators which it is using to monitor growth in
Manchester and Leeds City Deals: it includes measures of low
earnings, worklessness, housing supply / affordability and
educational attainment as well as indicators of output, number of
businesses and of higher-skilled
occupations.
5.
The
Bevan Foundation hopes to work with JRF to develop appropriate
indicators for Wales’ city and growth deals. Ideally they
will be adopted by the authorities delivering the deals.
6. We would welcome greater clarity on how the impacts are to be monitored. It is vitally important that arrangements are transparent and enable accountability: this includes matters such as who is responsible for decisions, that agendas and minutes of meetings are publicly available and that there is a programme of engagement with a wide range of stakeholders and the community. Engagement with people experiencing poverty is a vital part of this.
The potential benefits offered by a possible Growth Deal for North Wales and Mid Wales.
7. The key features of ‘deals’ are that they cover a functional economic region, have clear, shared goals, secure significant capital investment and are delivered through interagency working. These features are good practice and we can see no reason in principle why ‘deals’ should not be adopted in north and mid Wales. However, the characteristics of these areas may mean that a different approach which relies less on capital investment would be appropriate.
The degree to which the growth and city deals could solve or exacerbate existing inequalities, both within and between regions.
8.
There
is strong evidence that increasing GVA and employment do not,
alone, necessarily improve prosperity for everyone. For example, in
London high levels of GVA per head and employment co-exist with
high levels of poverty.
9.
It
is often those who are already well-placed in the labour market who
benefit from investment and new opportunities, while others, for
example people with fewer skills, do not gain. Nor can it be
assumed that the benefits of economic growth will trickle-down from
one group of people to another or from one place to another, with
the result that some people and places are bypassed despite overall
gains.
10.
It
is also feasible that growth in GVA and employment is accompanied
by increases in the cost of living, for example if pressure on
housing supply results in higher housing costs. The result can be
that people on low- to mid-level incomes face increased outgoings
and so are no better-off.
11.
We
are not persuaded that sufficient emphasis has been given in city
deals to date to reducing poverty and inequality. We suggest that
the proposals to achieve growth, such as to establish an ‘arc
of innovation’ along the M4 and support the semi-conductor
industry in Cardiff’s City Deal or to focus on life sciences,
energy, smart manufacturing and tech & creative industries in
Swansea’s City Deal, should be accompanied by explicit
measures to ensure that all people and all places benefit from
greater prosperity.
12.
We
have termed this ‘inclusive growth’, which we recommend
should be at the centre of the city deal strategies. Our paper
‘Prosperity
without Poverty’
identified the proven ways in which inclusive growth could be
achieved in Wales (see Box 1) and we strongly urge the city deals
to adopt them. In particular, action needs to stimulate improvement
from the bottom up, for example by stimulating growth in
Wales’ most disadvantaged areas and by raising skills amongst
people with few qualifications, as well as to maximise economic
potential at the other end of the spectrum.
13. In terms of inequalities between regions, there is a risk that the deals will compete with each other, resulting in ‘race to the bottom’ e.g. on wages and business incentives (including business rates). There could be unanticipated effects such as the displacement of economic activity across boundaries. This is especially important as the boundaries between all of Wales’ deal areas are ‘fuzzy’.[1] There need to be safeguards in place to prevent this occurring.
The degree to which the growth and city deals co-ordinate with Welsh Government strategy
14.The
Welsh Government’s economic strategy is keenly awaited. Its
Programme for Government includes ‘prosperity for all’
as a key commitment - if the growth and city deals are to
co-ordinate well with the Welsh Government’s strategy then
the city and growth deals will need to ensure they include active
steps to ensure growth is inclusive alongside boosting GVA and
employment.
15.It
is also important that there is clarity between the various actors
about roles and responsibilities in order to avoid confusion
amongst businesses and the public, possible duplication and
conflict.
16.We hope that the Welsh Government’s strategy will, when published, provide a clear direction, robust framework and common purpose in the city and growth deal areas.
We would also welcome comparative views on approaches taken by other growth deals and regions across the UK.
17.In
Leeds City Region, JRF is involved in ‘More jobs, better
jobs’ partnership, which has to date considered how best to
use the combined purchasing power of anchor institutions,[2]
how to capture the of major capital developments,[3]
the role of housing and planning policies in inclusive
growth,[4]
and how to improve progression from low-paid jobs.[5]
18.It
is important that city and growth deals in Wales build on the
learning from other parts of the UK.
