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County Borough of Blaenau Gwent COUNTY BOROUGH OF BLAENAU GWENT REPORT TO: THE LEADER AND MEMBERS OF EXECUTIVE COMMITTEE REPORT SUBJECT: REGIONAL ECONOMIC DEVELOPMENT ISSUES REPORT AUTHOR: RICHARD CROOK - CORPORATE DIRECTOR ENVIRONMENT AND REGENERATION LEAD OFFICER/ RICHARD CROOK - CORPORATE DIRECTOR DEPARTMENT ENVIRONMENT AND REGENERATION Summary Report 1.0 PURPOSE OF REPORT 1.1 To inform Members of the recent report from the Cardiff Capital Regional Board entitled Cardiff Capital Region: Powering the Welsh Economy 1.2 To inform Members of the recently proposed Cardiff Capital Region City Deal from Cardiff City Council and to seek agreement for a Council contribution to the development of a bid to secure City Deal funds. 1.3 To inform Members of the Great Western Cities initiative. 1.4 To support the updating of the South East Wales Regional Framework to provide the basis of a ‘Growth Plan’ for the region. 2.0 BACKGROUND 2.1 There have been a series of reports and initiatives which look to develop the economic prospects of South East Wales by taking forward the concept of cities working with their region to drive growth by harnessing all of the assets and opportunities. The reports/initiatives referred to are: Cardiff Capital Region – Powering the Welsh Economy Cardiff County Council – City Deal Great Western Cities 3 SUMMARY 3.1 The changing global economy requires local authorities and other stakeholders to change the way they respond to supporting the local economy. The growth of the City Region concept provides an approach which is being used elsewhere in the UK and Europe, and if the South East Wales Councils do not respond then they risk being left further behind in terms of economic growth and opportunity. 3.2 The participation by Blaenau Gwent in the city region discussion and development will ensure that benefits derived by the approach will be secured for the community of the County borough and for the other communities in the region. 4 RECOMMENDATION 4.1 That the Executive supports and participates in discussions that take forward the City Region concept and the Great Western Cities initiatives. 4.2 That the Executive supports and participates in the development of the city Deal Initiative including the contribution of upto £23,000 towards the preparation of a City Deal bid. 4.3 That the Executive supports the preparation of a Regional Growth Plan. 1.0 Detailed Report 1.1 Across the UK there has been a move towards an economic concept based on the notion that cities are drivers of economic growth such as the “Northern Powerhouse” and regional devolution to Greater Manchester. This concept is based on linking the city to the region, and therefore cities being highly inter-dependent with their regions, growth being driven by collaborative action. There are academics, and economic development practioners, that argue for the City Region as a solution to regional economic variance and to drive economic growth outside London. In South Wales links have been drawn with the Stuttgart region in Germany as part of the development of the City Region concept. The evidence as to whether the concept is valid is emerging as, where there has been significant growth in cities in the UK, they are growing from a low base given the years of decline. 1.2 As part of this City Region discussion in Wales the Welsh Government announced the two city regional boards to take the concept forward, the Cardiff Capital Region and the Swansea Bay Region. 1.3 The Cardiff Capital Region: Powering the Welsh Economy report has been published by the Cardiff Capital Region Board. The Board’s report provides a wide-ranging view of how the region might develop in the future and concentrates on three main policy themes; connectivity; skills; and innovation and growth. The report provides a useful present-day economic context which, significantly, gives a geographical dimension to the policy challenges, and provides a brief account of some of the main issues emerging from the Board’s statement. 1.4 Economic Context: The Region is described as being economically significant for Wales, generating more than half of the total Gross Value Added (GVA) in Wales in 2012. However, on a per-head basis, the Region lags behind the UK average, (generating only 80% of the UK average GVA per head), meaning that the Region is less productive on average than the rest of the UK, the gap has widened over the last 8 years, which is a cause for concern in the region. This has of course led to the area being eligible for further rounds of European funding. 1.5 The report also highlights the well documented disparity in economic performance between the more prosperous coastal areas and the less developed Heads of the Valleys Region, with a wide variation in unemployment rates and average wages which has been a long running challenge for Blaenau Gwent. Unemployment in the Region as a whole is 8%, slightly higher than the rest of Wales and the UK. Within the Region there is significant disparity between 5% in Monmouthshire and 13% in Blaenau Gwent. Unemployment for those under 25 is 15%, compared to a UK average of 14%. This is driven by very high youth unemployment rates in Blaenau Gwent (26%), Rhondda Cynon Taf (22%) and Torfaen (20%). Average wages also show a wide variation across the Region. Monmouthshire residents earn on average £578 a week, whereas in Blaenau Gwent the average wages is only £398, compared with a UK average of £518 per week. In this respect, the report states that the “Cardiff Capital Region must be as meaningful to the Heads of the Valleys as it is to the City of Cardiff itself”. 1.6 The report acknowledges the importance of manufacturing in the South as well as the Heads of the Valley which supports initiatives such as the Enterprise Zones in both Ebbw Vale and St Athan. Reference is made to the region’s well-known anchor manufacturing businesses, but the overall conclusion is that in many sectors there is a lack of critical mass in the private sector to retain the talent being developed in the Region. With a shortage of large, locally headquartered businesses into the region, employing in excess of 1,000 staff the report calls for an increase in the size of the private sector to help rebalance the economy. 1.7 Connectivity: The development of an integrated transport system is seen as key to delivering the vision for the Cardiff Capital Region, with the proposed metro being at the heart of any strategy. Investment in digital networks is also identified as a priority. Specifically, the strategy identifies the following opportunities: Transport: Augment the Valley Lines Electrification programme to deliver more frequent, reliable and affordable rapid transit service across the Region – regular sub-45 minute journeys from the valleys. This is an issue on which the Council has lobbied on for some time; Build on the electrification of the GWML to provided services to London with journey times of ninety minutes or less and a direct rail link to Heathrow from Reading; Strategic road improvements to address known “bottlenecks”, for example M4, A470 and the Heads of the Valley road; A public transport system, including cycleways and cycle facilities, that encourages their greater patronage as a preferred mode of day-to-day transport; Work with other regions to leverage the demand to improve train access between Wales, Bristol, London and the Midlands; Establish a seamless, multi-modal transport system that allows the user to travel on public transport anywhere across the Region using a single smart ticket; Encourage the airport to develop its commercial propositions to airlines serving major business destinations. Digital: A direct link between the Cardiff Internet Exchange and the transatlantic telecommunications cables landing in the South west of the UK; Consistent and reliable mobile and Wi-Fi service on all public transport into and throughout the region; European leading broadband and mobile services; Consistent data access in all our major towns and cities; Actively leverage the Region’s digital strengths, for example the Cardiff Internet Exchange – one of only 5 in the UK and the closet to the major centres in the US. 1.8 Skills – the aim of the strategy is to develop a globally- recognised, responsive education and training system which is closely aligned with the needs of local and inward investing businesses; it will focus on key industry sectors such as bioscience, advanced manufacturing (and newer ventures in the creative industrial and financial and professional services sectors). The report acknowledges that whilst high levels of youth unemployment and deprivation present particular challenges, upskilling the local workforce and matching skills with opportunities, will bring numerous benefits for both individuals and the local economy. Reference is also made to the fact that the region has a high density of HE institutions catering for 70,000 students with a further 100,000 attending FE college. In addition the following opportunities are identified: A role for regional oversight of priorities in continuing to develop an educational and training system that is recognised globally for its excellence and innovation; Public and private sector to work together to determine current and future business needs, supported by the Employment and Skills Regional Board. A more active role for the private sector to engage with education and training providers to prioritise funding, explore co-investment models and deliver quality improvements; Retain the existing knowledge and skills base more effectively within the Region by actively promoting opportunities and by exploring incentive schemes, such as bursaries for graduates choosing to remain to work in the Region; The Region has the educated and qualified workforce to take an active role in the building of the proposed major infrastructure projects.
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