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.
[1] For example 6,400 people commute between Bridgend (in Cardiff City Region) and Neath Port Talbot (in Swansea City Region). This cross-boundary commuting is nearly twice the number as commute from Merthyr Tydfil and Blaenau Gwent to Cardiff (all within Cardiff City Region). (Stats Wales (2016) ‘Detailed Commuting Patterns in Wales by Welsh Local Authority’ https://statswales.gov.wales/Catalogue/Business-Economy-and-Labour-Market/People-and-Work/Employment/Commuting/detailedcommutingpatternsinwales-by-welshlocalauthority)
[2] Team at Leeds Beckett University and York St John University (2017) Maximising the local impact of anchor
Institutions: a case study of Leeds City Region, JRF.
[3] Newby, L. (2017) Connecting major development to jobs, skills and poverty reduction in Leeds City Region, JRF
[4] Team at Sheffield Hallam University and University of Sheffield (2017) Tackling poverty through
housing and planning policy in city regions
[5] Green,A., Sissons,P., Ray,K. Hughes, C. and Ferreira, J. (2016) Improving progression from low-paid jobs at city-region level