Cross-border provision of public services for Wales: Further and higher education - Welsh Affairs Committee Contents

Memorandum submitted by CBI Cymru/Wales

  1.  The CBI welcomes the opportunity to respond to the Welsh Affairs Committee inquiry into cross-border public services in Wales.

  2.  The CBI deals principally with cross-sector issues which affect the business environment in which all companies operate. The CBI's strength lies in its breadth of membership, which includes companies of every size, including over 200 trade associations and academic institutions, and from all sectors of the economy—manufacturing, construction, retailing, financial services, e-commerce, leisure, transport and so on. The CBI represents companies employing about 50% of the private sector workforce in Wales.

  3.  This paper is intended to summarise CBI Wales' positions on some current cross-border business issues; they are the policy making process, public services, climate change, planning and higher education.


  4.  The advent of the Welsh Assembly Government has led to businesses having a closer and more open relationship with policy and decision makers; this is to be welcomed. However, a great number of non-devolved services remain the responsibility of Whitehall and Westminster and their delivery is critical for the continued growth of the Welsh economy.

  5.  Even with the Welsh Assembly Government, there remains a need for Whitehall and Westminster to ensure that the services within their remit are delivered efficiently and effectively within and throughout Wales, meeting the challenges Wales presents.

  6.  Incorporating the perspective of businesses that operate in Wales within the earliest stages of policy development remains an important aspect of any successful UK government proposal. Deferring to the expertise of the Welsh Assembly Government should not always be the assumed course of action for Whitehall and Westminster when developing non-devolved policy proposals or considering requests for the transfer of legislative competence.

  7.  Where policies diverge there ought to be greater joint working to ensure both parties make clear to businesses operating in Wales the different funding and administrative arrangements being put in place. We endorse the committee's recommendation that "policy developed in England and Wales should be `border proofed' in order to ensure that policy developed within one jurisdiction does not have unintended consequences for patients in another". We would extent that health-care related principle to policies that impact on the business environment.

  8.  There should be no reluctance from either Whitehall or the Welsh Assembly Government to learn from policy best practice in any nation or region of the United Kingdom. Businesses will invariably locate in the part of the UK which offers the most attractive business environment. Learning from each nation or region needs to be better integrated into the policy making processes that impact on Wales.


  9.  CBI Wales is committed to strong public services that promote social justice while remaining economically efficient and affordable.

  10.  Based on the private sector's experience in responding to customers' needs, we believe that the future of public service provision in Wales lies in a mixed economy, with public, private and voluntary providers all making a contribution and working in partnership.

  11.  Public Private Partnerships (PPPs) have been successful in improving efficiency and service quality. However, the challenge is to create the right environment for PPPs to flourish—PPPs need strong political will, the right commissioning skills and a fair market for suppliers to operate. Wales has benefited from more flexible and innovative non-devolved public services. In non-devolved areas such as criminal justice the role of the private sector has grown and delivered benefits for users, employees and the state.

  12.  In devolved services however Wales has a growing "infrastructure gap" where funding for capital projects has not grown to the same extent as in England. The result is Wales has no "schools for the future" programme, no large road building programme etc. If action is not taken to address these issues the long-term result for businesses is likely to be the emergence of financial, social and logistical disincentives to operating in Wales.

  13.  Further consideration about how the public and private sectors can collaborate more closely to deliver types of PPP projects is also needed and greater cross-border working between Whitehall and the Welsh Assembly Government would certainly assist that process.


  14.  The CBI's landmark climate change task force report—"Climate Change: everyone's business" called for radical UK and EU joint action to reduce emissions. The Task Force—representing over five million employees—is now engaged in a challenging three year plan to reduce greenhouse gas emissions, invest in renewables, work with government and consumers to change behaviour and bring low-carbon products and services to the market to make behavioural change easier and to reduce the time lag for return on investment to enable many more companies to invest in green technologies.

  15.  At the same time, some Welsh Assembly Government policy proposals run the risk of putting additional Wales-only burdens on categories of businesses that are already harshly exposed to tough global competition. Many of these manufacturing companies have also long invested in reducing emissions and are already signed up to further tough EU emission reduction targets. The result is many have already reduced their emissions significantly and have signed up to joint-EU action for further long-term reductions. The consequences for companies of additional Wales-only annual 3% reduction in greenhouse gas emissions being over and above UK Climate Bill need to be understood.


  16.  A clear consequence of devolution is the possibility of divergent decisions on funding for higher education. However, we believe the current £61 million investment gap between the Higher Education sector in Wales and England must be addressed.

  17.  Higher education (HE) is vital in supplying the economy with graduate and postgraduate skills and engaging in research and development partnerships with business. While HE is as yet performing well, Wales cannot hope to fully achieve a "knowledge driven economy" with an underfunded HE sector. It is almost inevitable that underfunding will lead to Wales falling behind EU nations and greatly undermining this major driver to a knowledge economy. It will be extremely difficult to rectify this at a later stage. Action must be taken immediately.


  18.  For many businesses in Wales, planning is a vitally important issue. In cross-border transport infrastructure it is a policy area where the Welsh Assembly Government and Whitehall could significantly improve people's quality of life, better connect communities and enhance the contribution of renewable energy by reforming the planning system.

  19.  There are a number of strategic challenges for the planning system that require a systemic review. Climate change, energy and infrastructure needs will place an unprecedented burden on the planning system. Early action is needed to ensure it is fit for purpose to handle the coming challenges. This has been recognised by the UK government which has taken action by introducing Planning Bill reforms and instigated the "Pretty and Killian Review" into planning applications. The Welsh Assembly Government has yet to do likewise. A more efficient and effective English planning system will be a strong draw for future business investment. Early action to improve Wales' planning system is needed.

  20.  All countries within the UK will need to undertake an unprecedented amount of investment across all its core infrastructure networks over the coming decades. Capacity across the UK's infrastructure networks is being stretched due to increased demand resulting from a period of sustained economic growth. Many core infrastructure facilities, particularly in the energy sector, also need upgrading or replacing.

  21.  Without a more expeditious decision-making process there is a real risk that the UK will develop an infrastructure deficit which will pass damaging costs onto the economy, undermine our ability to achieve a number of environmental objectives and have a detrimental impact on peoples' quality of life. The Infrastructure Planning Commission (IPC) is set to attempt to tackle infrastructure needs by speeding up the process. In contrast, in Wales there are no current plans to introduce similar systemic reforms to speed up Wales' planning system.

  22.  The result of these policy choices may be a growing disparity between the planning system in England and Wales. Where England's planning system will be faster and more responsive, delivering early decisions on vital infrastructure projects, Wales' planning system could remain largely unchanged. If planning in Wales becomes slower and less responsive than England's system there is a danger that this will create a disincentive for businesses to operate in Wales.


  23.  With regard to cross border service provision, be it in transport infrastructure or in education, there is a growing need for greater strategic co-ordination to plan and deliver better public services. The nature of devolution is likely to result in growing differences in key components of the business environment- planning, higher education services and public services. This is understood as a natural consequence of devolution. However key elements of our infrastructure need to be planned cross-border. And companies operate cross-border, and use services cross-border. As the Welsh Assembly Government gains more and wider primary law making powers, there is a growing need to ensure such differences do not become barriers to current and future businesses that operate in Wales.

July 2008

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