ANNEX 1
WELSH LOCAL GOVERNMENT ASSOCIATION
1. The Welsh Local Government Association welcomes
in principle the creation of a single agency through the merger
of the WDA, DBRW and LAW. It believes that this will help to establish
the right framework for economic development into the next century,
ensuring that Wales' development agency has sufficient weight
to compete on the UK and international stage and yet is accountable
and responsive to those who fund it and those whom it serves.
2. If the new Agency is to be effective on both
these counts, it is essential that it has the right functions
and the right organisational structure. These must be durable
enough to take the new Agency into the next century—it could
be damaging if further re-organisation was needed very soon.
3. WLGA is aware that the existing agencies
have undertaken a great deal of work on these matters, and that
the timetable for implementing their conclusions is very tight.
We offer our views on the way forward in advance of any formal
consultation in order that they may be taken into account in the
agencies' and Secretary of State's deliberations.
INSTITUTIONAL CONTEXT
4. The new WDA needs to be seen in the context
of the various institutions, both long-standing and emerging,
which impinge on economic development in Wales. The relationships
between some institutions have begun to be elaborated in the Welsh
Office's consultation paper on an economic strategy for Wales,
but there is scope to develop them further. We also believe that
further consideration should be given to the role of the TECs
including the scope for the rationalisation and transfer of the
services they provide to other organisations. WLGA envisages the
following arrangements, which are also shown diagrammatically
in Figure 1.
The National Assembly
5. The Assembly will develop policies and guidance
for the development of the Welsh economy in all its aspects, ranging
from measures to stimulate business growth to the provision of
vocational training to investment in strategic infrastructure.
As part of this it will give guidance to the Agency.
Local Government
6. Local authorities lead and co-ordinate the
development of their areas and it is expected that they will shortly
be given a new, general duty "to promote the economic, social
and environmental well-being of their areas". Local democratic
accountability and transparency come through the preparation of
local economic development strategies, on which there is widespread
consultation, and through statutory development plans.
Regional Economic Forums
7. The Forums identify key economic issues affecting
a region and help the development of appropriate responses and
initiatives by the member bodies and others.
Economic Powerhouse
8. In this context, WLGA's vision for the new
WDA is of an Agency that promotes and drives the strategic development
of Welsh economy to improve the well-being of its people, working
in very close partnership with other organisations in an open
and accountable way. This ethos must underpin the new organisation.
FUNCTIONS OF
THE NEW
AGENCY
9. The new Agency will need the right mix of
functions to achieve this vision. The Government of Wales Bill
provides for the powers of the existing agencies to be transferred
to the new Agency, creating a potentially very powerful body with
considerable scope to shape the development of Wales.
10. WLGA believes that the new Agency will need
a broad range of powers in order to achieve its objectives. Those
powers must be used wisely to maximise the effectiveness of the
new Agency.
Additional Functions
11. One of purposes of the Agency is to provide
a `coherent range of co-ordinated services to business'. WLGA
believes that the Agency should be responsible for a comprehensive
range of strategic services to businesses and that they should
include:
— the transfer of business support
services currently administered by the Welsh Office to the new
Agency as a priority;
— the transfer of responsibility for
agricultural diversification programmes (e.g. food processing
and marketing) from the Welsh Office to the new Agency;
— a requirement to work closely with
the Wales Tourist Board in ensuring the economic development benefits
of tourism;
— a requirement to work closely with
the training and enterprise councils to ensure complementarity
between economic development and vocational training;
— a requirement to work in partnership
with local authorities in delivering locally determined priorities.
12. WLGA also considers that the Agency should
be required to have regard to the sustainability of development,
both in terms of its strategies and in terms of its projects and
programmes. In the long-term, Wales' prosperity depends upon retaining
and enhancing its social, economic and environmental assets. The
Agency should be at the forefront of efforts to ensure Wales'
future is not compromised by current actions: sustainability should
be an integral part of all its work, not an optional environmental
extra.
Delegated Functions
13. There are other matters for which WLGA considers
that it may be appropriate for the Agency to retain a strategic
responsibility but which, in operational terms, should be partly
or wholly delegated, with appropriate funding, to local government.
These are:
— business sites and property—the
regional offices of the new Agency should agree, through the regional
economic forums, a shared programme for the development of business
property. In urban and industrial areas, it is likely that the
Agency would focus on the development of large or strategic sites
and premises, whilst local authorities focus on small, local developments;
— social development and community
regeneration—if the Agency has responsibility for social
and community development its implementation and associated budgets
should be delegated to and administered by local authorities;
— land reclamation, environmental
improvements and urban regeneration—the regional offices
of the new Agency should agree with local authorities and the
regional economic forums a shared programme for land reclamation,
environmental improvements and the regeneration of towns. Responsibility
for implementation of specific schemes, along with associated
finance, should be delegated to individual authorities. Environmental
improvements undertaken under Section 15 should be wholly delegated;
— business support services—the
Agency should provide strategic and specialist business support
services, through the Business Connect network, but responsibility
for services to local businesses (the bulk of those offered through
Business Connect) should rest with local authorities. Local authorities
should lead Business Connect in their area.
Checks and Balances
14. There are inevitably concerns about the
creation of a `super-quango' and how its very wide-ranging powers
might be exercised. Whilst the Assembly will bring increased accountability
to the new Agency overall and the regional economic forums will
provide a democratic input into the work of regional offices,
WLGA believes that it is essential that there are also
local checks and balances to ensure that the Agency's powers functions
are properly exercised. We consider that:
— all the Agency's strategies, policies
and programmes should be the subject of extensive consultation
with appropriate bodies, particularly local government;
— all the Agency's actions, particularly
the development of land, should be able to demonstrate a general
(rather than site-specific) economic benefit to Wales;
— all the Agency's policies and actions
(including its powers of compulsory purchase) should have regard
to local authority statutory and non-statutory plans, or be the
subject of specific agreement with the authority;
— where the Agency and local government
both have responsibility for economic development functions, they
should reach agreement about responsibility for their implementation.
This should include agreement about the continued ownership of
LAW's land holdings.
STRUCTURE OF
THE NEW
AGENCY
15. We envisage the new Agency having a strong,
strategic centre leading and co-ordinating the development of
the Welsh economy, coupled with dynamic regional offices with
the freedom to deliver development programmes to meet regional
priorities, as defined by the regional economic forums. We envisage
an Agency strongly committed to partnership, which will be reflected
in its structures and operations.
Headquarters
16. The Headquarters of the new Agency has a
major strategic role to play. It needs to assess the existing
and future needs of the Welsh economy and develop new policies
and programmes to encourage and support its growth. It needs to
be forward-thinking, abreast of UK, EU and global trends, with
a comprehensive knowledge of the diversity of Wales and its economy.
It should help to ensure that Wales has a competitive edge in
seeking and securing overseas inward investment, and should guide
and inform support services including those provided by local
government to indigenous businesses. It should not, as a matter
of principle, be involved in the direct delivery of most programmes.
17. Other than administrative matters, we see
the Headquarters of the Agency having two principal divisions:
— International Investment—this
division would continue to lead the overseas inward investment
drive
— Policy and Strategy—this
would be a significant new area of work which would include:
— research and intelligence
— development of all-Wales policies
and strategies (including rural policy, and EU policies)
— development and co-ordination
of all-Wales programmes (e.g. the regional technology plan)
— ensuring the propriety and probity
of the Agency's business, including, in particular, in respect
of dealings in land.
18. We do not believe that matters of implementation
should normally be handled by the Agency's headquarters—almost
all functions can be more effectively delivered through
regional offices where they will be closer to the customer and
other partners in the development process and can be integrated
with other regional services. We understand that the Agency now
intends to retain a central team dealing with land issues, which
will also provide a service to regional offices. LAW's current
responsibility for assessing the supply of housing land could
be transferred to the planning division of the Welsh Office (and
in due course the Assembly), as housing should not be in the remit
of the new Agency.
19. Although the Agency's headquarters has an
important leadership role, it would be inappropriate for it to
be exercised in a top-down way. It is essential that the headquarters
office works closely with regional offices and builds an effective
partnership with local government, through both WLGA and the regional
economic forums. As part of this, we expect the Agency to consult
fully on its draft corporate plan, economic strategy and pan-Wales
policies.
20. It is important that there is widespread
and open consultation about the relative balance of resources
between headquarters and the regional offices, and between individual
regions. This applies not only to the budget allocation to regional
offices, but the relative priority that will be afforded in policy
terms to different parts of Wales, for example for inward investment
and marketing.
Regional Offices
21. The Agency's regional offices should be
the mechanism for the delivery of all of the Agency's programmes.
Their responsibilities should include:
— development of land and property;
— implementation of international inward
investment; in conjunction with local authorities;
— strategic business support services
(including schemes transferred from the Welsh Office Industry
Division) delivered through the Business Connect network;
— strategic funding of land reclamation
and urban regeneration;
— integrated rural development.
22. In order to have maximum flexibility, Regional
Directors should enjoy the same delegated powers as the Agency
Chief Executive and should work with the minimum of operational
constraints from the Corporate Plan or budget.
23. The regional offices are formally accountable
to the Agency Chief Executive and thence to the Board of the Agency.
However in their day to day operations they must be responsive
to local authorities and the regional economic forum for their
area. In order to ensure that a good working relationship is established
and maintained the regional offices should be required to:
— consult regional economic forums
on their regional objectives and targets and their operational
plans;
— take the views of the regional economic
forums into account;
— work within the framework of local
authority plans, both statutory and non-statutory, particularly
the relevant development plan and local economic development strategy;
— establish partnerships with local
authorities.
24. The Association has responded separately
on the question of the boundaries of the regional offices.
Board
25. WLGA has previously argued that 50 per cent
of the new Agency's Board should consist of local authority representatives.
The DBRW and LAW Boards currently have this level of representation,
to the benefit of all concerned, whereas the existing WDA Board
has only one local authority member. The adoption of the existing
WDA's practice for the new Agency would see local authority input
into these functions diminished at a time when accountability
and partnership is supposed to be enhanced.
26. The Board also needs to consider how its
relationships with the regional offices and regional economic
forums can be strengthened to provide accountability at regional
level, for example by establishing regional sub-Boards.
CONCLUSION
27. WLGA believes that these proposals will
create a strong, dynamic Agency which will lead the strategic
development of the Welsh economy, working on close partnership
with local government, the Assembly, and business itself to achieve
the common goal of a prosperous Wales.
