What to make of the Economic Action Plan

ViewsDecember 12th, 2017

Victoria Winckler reacts to the Welsh Government’s Economic Action Plan, published today.

The Welsh Government’s Economic Action Plan is here at last. Long awaited, this 44 pager at last sets out the framework for the Welsh Government’s efforts to boost the economy.

What are we to make of it?

The very fact that there is – after ten years of absence – a strategy for the economy is in itself very welcome.  At least there are some robust principles, a clear sense of direction and some measures with which to hold the Welsh Government to account. Even this strategy hasn’t been quick to emerge – it’s taken 18 months since the election to reach this stage, leaving just three and half years to achieve the turn-around in fortunes envisaged.

There are three acid tests for any strategy:

  • are the aims and objectives the right ones?
  • will the measures proposed achieve those objectives?
  • how will progress be measured?

Aims and Objectives

The Economic Action Plan is full of the right buzz words. Inclusive growth – tick. Foundation economy – tick. Well-being of Future Generations – tick. Innovation – tick. It certainly has good intentions.

There’s a welcome commitment to reduce inequality and increase ‘fair work’. But it could go much further, for example with clear objectives in respect of specific groups of people (such as increasing the employment rate of disabled people by X percentage points) or specific places (such as creating X thousand jobs in the south Wales valleys).

Crucially we’d like to see the Action Plan including a specific objective of cutting poverty, including in-work poverty.

Proposed Actions

The Action Plan has some new and interesting ideas.

The proposed Economic Contract is a welcome shift in emphasis from the doling out of grants apparently willy-nilly. It’s absolutely right that businesses receiving public funds must do something in return. But the firms that have been good at persuading the Welsh Government to give them millions for the flakiest of projects will presumably be just as good at persuading them that they meet the new criteria. So the new Economic Contract needs to be fiercely policed if it is to be more than a new name for the old system.

The focus on the foundational economy is also welcome, but precisely what this will involve is still sketchy. We hope to be able to contribute to developing effective actions on this in the coming months.

The third headline change is the shift to regional delivery. It’s a welcome move from the one-size-fits-all assumptions of the last ten years and it helps to accommodate the various deals that have either been signed or are in preparation. But designating three regions does NOT amount to a spatial strategy.  There need to be specific measures to deliver ‘better jobs, closer to home’ if all places are to flourish.

Measuring Progress

And last there is the challenge of holding the Welsh Government to account. It rightly quotes the well-being indicators but these are too vague to measure whether the ‘economic action plan’ is doing what it ought to.   We’ll be generating our own measures of inclusive growth that will help to fill this gap.

The elephants in the room

Strategies are always interesting for what they DON’T cover as well as what they do.  The gaps in the Economic Action Plan are almost all to do with the labour market – which is much, much more than ’employability’. This is a long-standing blind spot in Welsh public policy.

  1. Improving skills, terms and conditions for people in work – low pay and insecure work is endemic in Wales, and any strategy committed to inclusion needs to address this. Training and learning for people who are already in work can support progression into higher paid jobs, reduce shortages and boost productivity, but is conspicuous by its absence in this strategy (and indeed others).
  2. Getting a geographical balance – the re-regionalisation of policy is welcome but will not alone address the gross imbalances that exist in the economy. A firm steer from the Welsh Government that it expects the South East region to grow the Heads of the Valleys and the Mid and West Wales region to support rural Powys would help.
  3. Enterprise – there’s surprisingly little about supporting new enterprises, especially freelancers and one to two-person start ups that are the foundation of a long-term shift in Wales’ fortunes. There’s many more expert than me on this, but it’s a gap none the less.

So what’s to like? That there is a strategy, that the strategy talks about inclusion, equality and well-being and that it is framing a new relationship with business.

So what’s to be disappointed about? That there’s some big, big gaps on the labour market and geographical balance and it’s a bit thin elsewhere.

Changing direction is not always an easy task, and we will welcome the opportunity to work with the Cabinet Secretary, his officials and with businesses and local government to achieve the ambitions of ‘economic prosperity for all’.

Victoria Winckler is Director of the Bevan Foundation. 

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