Plans for new development agency for Wales: A ‘key driver’ or ‘just another quango’?

Ella Groves – ICNN Senedd Reporter

A new development agency will “improve productivity”, according to a Welsh Government minister – but opponents have dubbed it “yet another quango”.

Enterprise, connectivity, and energy minister Adam Price outlined his plans in the Senedd on Tuesday July 7.

He said: “Less than three weeks into this administration, we announced the most ambitious economic goal in Wales in two decades; namely, halving Wales’s productivity gap with the UK within ten years.

“If we are going to meet that challenge, we need a fundamental change in how we approach economic development in Wales. The proposed new agency will be a key driver in achieving that change.”

Mr Price previously faced criticism on his plans when he raised the proposal in the Senedd last month.

Reform’s shadow minister for economy and transport, Jason O’Connell, then described the idea of a new agency as “another unnecessary bureaucratic quango”.

Speaking in the Siambr, Mr Price said: “Creating a new development agency is a crucial part of driving the positive changes in productivity that we need. But it needs to be a much wider, collective effort across Wales.

“We need – collectively and collaboratively – to look at the current landscape and work with local and regional partners to create an economic development system where roles are clear and we’re all working together as one team for the people of Wales.”

As set out in Plaid’s 100 day plan, the party will be establishing an “expert panel” to advise the development of the new agency, which he confirmed will be chaired by Jonathan Lewis.

He said: “The appointment of the chair of the panel to advise on the remit and operating model of the new agency is a key stepping stone in the journey towards making Wales the best place in the United Kingdom to start a business, to grow a business, and to invest in a business.”

The minister told colleagues he would confirm the full membership of the panel in the coming weeks.

“Yet another quango”

Reform’s Jason O’Connell told the Siambr that it was a “shame” MSs were once again debating “the creation of yet another quango”.

Noting the importance of scrutiny for “better government”, Mr O’Connell accused Plaid Cymru of denying the chamber that scrutiny.

He said: “If taxpayers are funding this new development agency, then they deserve transparency. Minister, you say you want the new agency to provide support, advice and guidance, but you’ve said nothing about how.

“So, let me give you a suggestion. Decades ago, Welsh Labour scrapped the Welsh Development Agency, WDA1. They promised a simpler, better support mechanism for Welsh businesses. But instead, we’ve got a patchwork of organisations: Business Wales for advice, the Development Bank of Wales for finance, and now what we’re proposing is WDA2 to sit on top. The current system is too confusing.”

Reform’s shadow economy minister then claimed Business Wales returns £18 of economic value for every £1 that’s invested. He also questioned Mr Price on why he has no plans to bring Business Wales into the new WDA to make things “less confusing and more accessible”.

Responding, Mr Price said his government “absolutely” wants to make sure businesses can access a “streamlined level of support”.

Mr O’Connell also asked about attracting inward investment to Wales, noting the “real test” is whether that investment becomes “rooted across Welsh communities up and down the country”.

He said: “In the last WDA, Wales welcomed major international employers, created thousands of jobs, and celebrated new investment, as short-lived as it was.

“But those companies moved production elsewhere when the government reduced the support. They took high-paying jobs with them, because their supply chains were never truly anchored in Wales, and it was easy to do so.”

The Pontypridd Cynon Merthyr MS drew attention to the Irish economy where “inward investors are expected to work with local suppliers, strengthen domestic supply chains, and create opportunities for already-established local businesses in that country to grow alongside them”.

Mr Price noted his agreement with the shadow minister on the need to be strategic about inward investment.

He said: “Foreign direct investment has a role in any economy, but we need to actually focus it on those areas that will be more embedded – through supply chains, as he suggests – in the Welsh economy that actually build on our existing and possible future strengths.”

“Reinvigorated Wales”

Labour’s Shav Taj said her party shares Plaid Cymru’s ambition for a “new type of Wales, a reinvigorated Wales, a Wales that attracts more investment and ultimately creates good jobs”.

The Labour spokesperson for economic transformation told the Siambr that what the people of Wales want to know is what “meaningful difference” these internal arrangements will make.

She also drew attention to the work of the previous Labour government in ensuring a strong economy for Wales, including setting up the Development Bank of Wales and hosting the Wales investment summit.

Ms Taj said it’s the “practical” questions that are important and pressed Mr Price on when the new agency will get staff, whether they will be new staff or shuffled from other departments, and how much the new agency will cost the Welsh public.

She also pushed for confirmation on the “constitutional status” of the agency, notably whether the Senedd will need to legislate “at some point” for it to get going.

Ms Taj added: “Ultimately, this is about jobs, jobs for the future, high-skilled jobs, and young people in Wales are really watching to see whether or not your government is going to do any better than we did.”

Mr Price responded: “They [development agencies] have played a central role in virtually anywhere that you can think about in the nations and regions that have closed an economic gap, and few of those nations or regions that have had one have got rid of them.

“We’re one of the few exceptions. There may be a reason for that, and I suggest it’s because they are an incredibly valuable tool.

“Do you need to get the design right? Absolutely. The right relationship in terms of how arm’s length it is from government but how close it is from a government – getting that right is absolutely important and it’s one of the key questions that we’ve already done a lot of thinking on, and we will continue as we go through the design process.”

“Every pound, shilling, and pence”

Pen-y-Bont Bro Morgannwg MS, Andrew RT Davies, expressed the Conservatives support for “the principle” but said there was “too much blank space” around the new agency.

He asked Mr Price for a timeframe in which he expects to bring the organisation into existence, whether it be 12 months, two years, or by the end of this Senedd term

Mr Davies also questioned the cost and said: “I’m not going to ask you for every pound, shilling and pence, but can you give an indication on what your thinking is of the type of budget that you will make available to the organisation?”

He continued: “When we look at the old WDA, it had a complete offer, from building industrial sites, gaining the planning permission and promoting foreign direct investment.

“Does this organisation, in your mind, need to do all that, or will it be more specific in what it does about promoting Wales as a destination for inward investment? And when we look at the organisation, are we thinking of an organisation that will look like Natural Resources Wales with a remit letter, or will this be a unique organisation that hasn’t been seen in the Welsh public landscape before?”

Mr Price confirmed the new agency will be a statutory body, and said he plans to bring forward legislation “fairly soon”.

He also noted the Welsh Government’s ambition for the new agency to be operational “as soon as possible”, but said he could not provide a specific date.