Next Welsh Government ‘must work closer with businesses to drive economic growth’

Martin Shipton

Job recruitment professionals say they want the next Welsh Government to put much more effort into helping private sector companies create economic growth in Wales.

Speaking to Nation.Cymru during a growth summit in Cardiff, Neil Carberry, chief executive of the Recruitment and Employment Confederation, said: “We’ve had a two-year downturn in recruitment and clearly unemployment is rising generally, but it’s particularly challenging in Wales. There’s a real sense that the market generally has turned in the rest of the UK, but there is real caution in Wales ahead of the election in May.

“Our members are telling us that their clients in Wales are sitting on their hands a bit because they want to see what happens next. They want a real push to see a much more robust economic growth strategy from whoever ends up in power in Cardiff Bay.

“I think the impression in the business community in Wales generally has been, and partially by definition, that the way what was the Assembly was created started was as a spending base, but not a tax and spending base – and that there has been too little focus for too many years on how are we supporting Welsh businesses to grow and create jobs in Wales, boosting prosperity here and boosting the tax take in Wales so it’s easier to address things like public spending shortfalls.

“Will the incoming government understand the importance of the private sector to Welsh prosperity? There’s some great stuff that’s gone on in Wales. The South Wales Metro is a great example of infrastructure investment. But equally, a lot of what we get back from members here is a sense that Wales is a little bit behind the curve on economic development – and they’d really like to see a new government address that.”

Traffic delays

Mr Carberry said that “pretty much every business in Wales” was concerned by traffic delays on the M4 because of logjams at the Brynglas Tunnels in Newport. He said: “South Wales particularly exists in a competitive space with the south west of England. The more accessible place Wales is to its markets, the more effective it’s going to be, the bigger the travel to work areas really matter in terms of things like drawing talent in. If we think about the success that the Metro is likely to be, getting more people within striking distance of being hired in growing businesses in central Cardiff, exactly the same applies to goods in and out on the M4 and to people commuting by car.”

Looking more broadly, Mr Carberry said devolution could drive economic growth, citing the example of Greater Manchester: “Look at the cranes on the skyline. Businesses love the Manchester Baccalaureate, for instance [described by Greater Manchester Mayor Andy Burnham as a game-changing new plan for technical education] and some of the stitching together of skills and opportunity that Greater Manchester is doing right.

“Lots of places want to be like Manchester, but the point is that there is a depth of alignment between the private sector and the public sector and charities and education providers to say: ‘Look, these are the four or five growth sectors for this city region. We want everyone to pull together and make it a success. I think there’s a lot more of that that Welsh businesses are up for. But I think there’s a bit of a sense that Cardiff Bay talks at Welsh business, rather than talking with Welsh business. A change in that tone and a focus on how we get things done would be a positive move forward.”

Public sector

Mr Carberry acknowledged that the public sector was essential, and that it provides many jobs in Wales. But he added: “Ultimately that public sector employment is sustainable because there is a lot of private sector employment as well. And I think particularly with some of the youth unemployment crisis that we have, we’re not going to solve that by pushing all of those young people into subsidised jobs in the public sector.

“We will solve that by creating opportunities for young people in Wales. And you have great examples. You look at the creative economy in Cardiff that is a hugely powerful sector. So the question becomes, rather than thinking up what we’d like to do, we’ve actually got a kernel of something already. How do we supercharge that? How do we make sure the next decision about where something goes to in terms of studios or creatives favours Wales? It comes down to engaging with businesses and understanding how businesses make decisions and commercial decisions in particular.

“One of the things that I quite often say to civil servants in London is: ‘If your policy rests on, ‘if only everyone would’. you should rewrite it because everyone is not going to. Businesses have really clear decision making models. You should design economic policy with a view to influencing those decision making models. I think it would be really good to see the incoming Welsh Government choose to bring some experience of commercial decision making into its teams because that would help too. Not to say policy should go one way or another, but to understand how businesses will react to different things.”

Educational standards

Mr Carberry said his members believed there was also a need to improve educational standards in Wales: “I think that businesses in Wales generally feel that Wales has fallen behind England a little bit in some of the focus on the fundamentals in the education system, and they would like to see a greater focus on that because ultimately Welsh success is not going to be dug out of a hillside in the 21st century.

“Welsh success is going to be driven by Welsh people and therefore getting education right really matters. I think that the voice of parents is aligned very closely with the voice of businesses as well. What can we do to really make sure that Welsh kids are getting the start in life that enables them to navigate what is an increasingly complex transition from education to work in every country in the world – much tougher than either you or I faced.”