8. Debate on the Economy, Infrastructure and Skills Committee report: Enterprise Zones: boldly going?

Part of the debate – in the Senedd at 5:20 pm on 11 July 2018.

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Photo of Russell George Russell George Conservative 5:20, 11 July 2018

I think there is a legitimate question as to whether enterprise zones were actually needed in some of the areas selected by the Welsh Government, particularly in Cardiff, where the committee heard the zone was pushing at an open door in economic terms. In contrast, the committee heard from the chair of the Snowdonia enterprise zone board that the board has realised very early on that they were never likely to be able to deliver significant short-term impacts on growth or jobs. Instead, their focus shifted to exploring the opportunities for the long-term development of the zones, and the committee heard that a number of other zones were also in a similar position.

We felt that this change in focus for some of the zones was not widely communicated, and perhaps more importantly was not reflected in the performance indicators published by the Welsh Government initially at an all-Wales level. Building on the work of the fourth Assembly's Finance Committee and the Enterprise and Business Committee has pushed the Welsh Government to release detailed information on the performance of each zone as regards job creation—the stated objective, of course—along with detailed information on Welsh Government's expenditure on each zone. The committee welcomed the Cabinet Secretary's decision to release the most detailed information of this nature to date, albeit after the final evidence session.

Our report states:

'Over the last five or six years this has been a case study in how a drip-feed approach to the sharing of information with Assembly Members and Committees can prevent clear and objective scrutiny from taking place, while also creating the impression of under-performance and inefficiency. It should not be this difficult, or take this long, for the Welsh Government to publish information that allows the performance and value for money of one of its flagship economic policies to be understood properly and scrutinised effectively. The Committee hopes that the Welsh Government takes this constructive criticism on board in the design and delivery of future policies.'

As a committee we agree that there is merit in a regional approach to economic development, and that a focus on supporting deprived areas is a good thing, and should continue. However, we recommended that the Welsh Government should ensure that, for each individual region and local area, the aims of any future regional approaches to economic development are clear and realistic, sufficiently detailed to allow an understanding of the challenges faced, and accompanied by detailed, open, transparent and appropriate monitoring data. This recommendation 6, along with two others also aimed at increasing transparency and improving the availability of monitoring data, was accepted in principle by the Welsh Government, and it remains to be seen how the Welsh Government will implement these recommendations in practice.

The committee recognised the commitment, drive and professionalism of all involved in the enterprise zone boards. Each of the chairs were powerful and passionate advocates for their areas. The committee did feel, though, that on the whole the enterprise zone concept has not proved itself to date in Wales. The evidence we heard suggests that the zones that have achieved against the Welsh Government's stated aims were those that were already in the best position to do so—for example, Cardiff Central and Deeside—and that specific enterprise zone initiatives only played a minor part in their success.

Other zones that started from a very different place found the incentives to be of some benefit. The committee recognised the fact that these zones, such as Anglesey, Snowdonia and Ebbw Vale, are still very much on a journey, and have been focused on putting the building blocks in place for the longer term. We concluded that the original aims of the enterprise zone policy to create jobs and growth have not been achieved across the board. At the same time, we acknowledged that these were probably unrealistic to begin with, given the varying starting points of each enterprise zone.

The Cabinet Secretary used his appearance before the committee to announce a series of changes to the way that enterprise zones will operate. He mapped a future, which we support in part, but there are areas where we believe he should reconsider. The proposed merger of the Anglesey and Snowdonia enterprise zones has a certain appeal. Both depend on nuclear power developments outside of the Welsh Government's direct control and both are located in north Wales. However, the committee is concerned that this merger risks losing the specific focus on the very different challenges each area faces. Another way forward is possible.

In response, the Cabinet Secretary has suggested it is a matter of timing. I hope that this debate will clarify what exactly that means. I’m not convinced that there will ever be a right time for this merger. It seems to me that allowing both to continue, at least in the short term, might allow both boards to achieve their objectives in a clearer and more effective way. For the Port Talbot enterprise zone, our review has come too soon to be meaningful. For them, we hope being part of this process has focused minds on how they report their successes and ambitions as they develop their plans. I look forward to a good debate this afternoon amongst Members and look forward to the Cabinet Secretary’s response to our report today.