The next item is a statement by the Deputy Minister for Economy and Transport on the foundational economy, and I call on the Deputy Minister to make the statement—Lee Waters.  

Diolch yn fawr, Llywydd. One of this Government’s key areas of focus is on nurturing the everyday parts of our economy. The industries and firms that are there because people are there, the food we eat, the homes we live in, the energy we use and the care we receive: these are the foundations of our economy. They account for four in 10 jobs, and £1 in every £3 that we spend. And they are well-being critical. That is to say, the fallout from their disruption goes beyond economic impacts and would undermine safe and civilised life.

As we head into increasingly challenging economic conditions, our focus on the foundational economy is intensifying because it's the part of the economy that can be more resilient to external economic shocks. Even if a change in the global economy tips the attitude of a large multinational company against investing in Wales, the foundational economy remains. And fostering it is within our power—the levers are devolved and can be pulled relatively quickly.

My colleague Ken Skates has set the direction in the Welsh Government’s economic action plan to shift away from a sectoral approach to economic development to one focused on place. The plan's emphasis on inclusive growth places a greater importance on making the communities we live in stronger and more resilient.

Over the last year, we've been working together to design an approach to nurture the foundations of our local economies, focusing not just on economic outputs, but on the quality of people's experience of everyday life. This is part of a movement that is taking place in cities and regions across the world. In Barcelona, the city region is developing a strategic plan for foundational basics, and in Austria their equivalent of the Trades Union Congress has a foundational campaign under the slogan 'a good life for all'.

But the Welsh Government is the first in the world to adopt the foundational economy approach at a national level, and, in fashioning a distinctively Welsh approach to this movement for change, we are focusing on three key areas. Firstly, experimenting: we've created a £4.5 million foundational economy challenge fund to trial ways of growing and improving this part of the economy. Over recent weeks, we've announced 52 innovative projects across Wales that we are supporting, from food and social care to construction and regeneration, and from applicants in the public, private and third sectors. They are now experimenting with different approaches, and we'll be creating strong communities of practice to spread what works, and to learn from what doesn't. And I want to include projects in the Arfor innovation fund. These schemes, which we agreed with Plaid Cymru as part of the last budget agreement, are focused on supporting the Welsh language through the local economy, and they fit within the foundational economy approach. So, it's important that they are part of the learning networks that we are creating.

The Deputy Presiding Officer (Ann Jones) took the Chair.

Dirprwy Lywydd, I'm anxious to avoid creating 52 pilot projects that risk fizzling out. That's why our second focus is on spreading and scaling best practice. The foundational economy agenda is a practical expression of the principles laid out in the Well-being of Future Generations (Wales) Act 2015. So, I'm working with the public services boards as key partners to help apply what works to all parts of Wales.

Initially, we will focus on spreading the success achieved by Preston council in using local purchasing power to build local wealth. We're appointing a partner organisation to work alongside public services boards to maximise the social value of procurement. Together, they will identify local providers for goods and services. But we don’t just want to copy Preston’s progressive approach to procurement, we want to go beyond it. As we scale up, we're aiming to develop an approach that avoids displacement and a crude postcode approach of local invoice counting, and we want an approach that emphasises supporting grounded firms across the supply chain.

It’s time that we in Wales reclaim the leadership on this approach. We can point to a number of examples where we have pioneered, from the Can Do toolkit in housing that was developed in Wales 10 years ago to the more recent work on Better Jobs Closer to Home that my colleague Julie James initiated, building on work from the Wales TUC.

Wales was ahead of Preston in many ways, but sustaining the early promise has so far proved elusive. I should be clear with Members that I am concerned with the capacity and capability of the Welsh public and private sectors to respond to this challenge, and the pace at which we can mobilise our efforts, but if we can spread and scale success and sustain that change, this time around, we can claim genuine leadership for Wales on a global stage. To that end, within the Welsh Government, I have now created, with the finance Minister Rebecca Evans, a cross-departmental delivery board to make sure that our internal wiring is connected.

We are trying a new approach and we cannot afford to be timid. If we leave the EU at the end of January with a deal, or without one next December, then the Welsh economy will be hit by a storm worse than the 2008 crash, and the Thatcher de-industrialisation. We therefore need an approach that can build resilience into our local economies to try and cope with that. Each economic crisis disproportionately makes women worse off, reinforcing the case for an approach that supports the everyday economy that so many women rely on for work.

The third pillar of our approach is crucial in this: supporting grounded firms, building the so-called ‘missing middle’, and aggregating local demand to help us do so. My aim is to increase the number of firms rooted in their local economies, including micro firms, SMEs, social enterprises, co-ops and community interest groups, which, in the tradable sectors, are capable of selling outside Wales, but have decision-making grounded in our communities and provide access to fair work opportunities for people across all parts of Wales.

Too often, growing Welsh firms are lost to us when founders cash out. Through our development bank and through Business Wales, we're already doing a lot to build and retain firms in Wales and I’m working with a sub-group of the ministerial advisory board to see what more we can do. We've had great success in supporting firms to grow fast. Our accelerated growth programme is bringing real added value to firms, as I discovered when I met—[Inaudible.]—in Burry Port in my constituency just last Friday, who are getting support under the scheme. And it is generating £17 of benefit to the Welsh economy for every £1 we are investing in it.

We’re now looking at what more we can do to provide patient support to slower-growing, sustainable firms too. In just over a year’s time, the funding we’ve used to fund our Business Wales support services disappears as we leave the EU. We are still waiting to hear from the UK Government what, if any, funding will come in its place, as they promised to do. But as we design the shape of the next iteration of business support, we will ensure that we build in the lessons from our work on supporting grounded firms in the foundational economy.

Dirprwy Lywydd, good progress has been made so far, but as we implement this approach, it is demanding new relationships and new ways of working within and across Government, as well as between Government, businesses and communities. The Welsh Government is kick-starting change, but the dividend will only come at scale if we have alliances for change. We must see co-ordinated working across departments in Government and between public bodies that cuts through the different agendas and budgetary rules that can get in the way.

Gains can be made from procurement, but much larger gains can be made by thinking laterally about how we co-ordinate public sector budgets. And this is a challenge for us all, but an opportunity too, not least for local leadership. Preston Borough Council took action themselves, and I want to see public services boards themselves prove their potential, not by waiting to be asked, but using their powerful local partnerships to bring this agenda alive. The Welsh Government will do our bit, but we can't do it alone. The communities that we all exist to serve demand that we get this right. Diolch.

Thank you. Russell George.

Thank you, Deputy Presiding Officer, and can I thank the Minister for his statement today and for the advance copy provided as well?

The Minister will be aware of the Economy, Infrastructure and Skills Committee's work on procurement and how that can play a part in the foundational economy. The committee is yet to make any recommendations or bring forward its report, but a key message that was coming through is that good practice doesn't seem to travel well in Wales. Given the range of activities supported across the different projects and the different timescales, outputs and outcomes, how does the Welsh Government intend to monitor and evaluate the wide range of projects in order to be able to come to a view on the ones that represent good practice and should be shared and scaled up?

In the past, Business Wales has focused on job targets and economic growth, so I wonder if you, Deputy Minister, would agree with me that the next focus of Business Wales should support companies in the foundational economy and that the next scheme should look to support companies to develop long-term business models in a broader range of issues such as productivity and turnover, as well as targeting those traditional measurements, as well, of GDP and employment levels. What other internationally recognised social, economic measurements will the Welsh Government use to measure well-being and monitor the success of specific projects?

I know that there's been a real challenge in small firms growing to medium sized, and a recent development bank report suggested that only a small number of medium-sized firms were growing. The Federation of Small Businesses's report on Wales, 'Wales' Missing Middle'—and you referred to the missing middle yourself in your statement today—also highlighted that Wales is dominated by those microbusinesses and multinational businesses. So, how will the Government's approach to the foundational economy address this, what I think is an anomaly, and help those small businesses grow?

How are you going to develop Welsh supply chains under your economic action plan to support the foundational economy when awarding grant funding to anchor companies to encourage inward investment? I wonder also, Deputy Minister, do you feel that the sectoral approach to the concept of a foundational economy provides adequate flexibility, building cross-sectoral alliances, ensuring that the concept of the foundational economy does not operate in different silos, but reflects the different economic necessities in different parts of Wales that will actually deliver those practical solutions and services that people want? I very much am someone who's a supporter of the foundational economy approach, so you'll have my support in that regard.

And my final question would be this: how should local procurement be defined, and how should local spend be monitored? And if you aren't in a position to be able to answer that question or offer that definition today, when do you think you'll be in a position to be able to do so?

Well, thank you very much. First of all, to address one of the final points about the support being offered, which I appreciate, Members will remember the movement behind this policy agenda came from this Assembly as part of a civil society movement. It was from the universities, it was from the third sector, and from business organisations, as well as a cross-party effort that the impetus for this came, and I value that and I hope we can retain that. So I welcome his support for the concept of it

The detail of it—we are finding our way as we go. The Basques, I'm told, use an elegant phrase, that they lay the road as they travel. I use a less elegant phrase, that we were making it up as we went along. This is what I was referring to, specifically this experimental approach, rather than saying, 'We have a template, we know how this works.' The whole point of this agenda—that's why it is both exciting and slightly terrifying—is that we are iterating and developing in real time, and there's a risk to that, as I can testify, but that is the policy intent behind it. It is a different approach and has clearly attracted some controversy, but I think it's the right one, given the uncertainties that we are facing.

The Member has asked me seven or so meaty questions, and I won't be able to do justice to them properly, but I'll try, briefly, Dirprwy Lywydd. In terms of the inquiry by the Economy, Infrastructure and Skills Committee, I look forward to seeing the report and to contemplating your recommendations, because this is something that is open for shaping and for influence.

The question Russell George poses about monitoring and evaluation is a very reasonable one, and that's something that we are currently thinking through with the sub-group of the ministerial advisory board that I've set up, which is a genuine advisory board, where we invite challenge and input from a range of civil society organisations and academics. So, we are creating these communities of practice. They're not siloed, as he said at the end; this is not a sectoral approach within the foundational economy. It is explicitly a sector-neutral approach. In the original economic action plan, there were sectors identified; we've moved beyond that now into having an agnostic view on sectors, and looking across the whole of the foundational economy. If you look at the full list of projects that are published on the Business Wales website, there's a real range there, including some policy projects as well to test the boundaries of our thinking.

In terms of his question about jobs targets in Business Wales, that, also, is a live question, and something I'm discussing with the advisory board—how we can measure this. He mentioned the challenge we have moving from micro to medium-sized companies, and the stats are arresting: 95 per cent of Welsh businesses have fewer than nine employees; the medium-sized firms, which are between 50 and 249 employees, make up less than 1 per cent of all Welsh businesses, but they account for a turnover larger than all of the 95 per cent of businesses. So, we've got a small number of firms punching above their weight in the Welsh economy, and what we want to do is to increase the size of the micro into the small, the small into the medium, and then, as they're medium, keep them rooted in Wales. Things like employee ownership are an attractive option for making sure they remain grounded in our economy.

Working across supply chains, he mentioned, is again the key challenge here, and this is the work we need to do now with the public services boards, and use data to properly understand it. The Better Jobs Closer to Home project that Julie James led on has done a lot of work already with some very committed civil servants within the Welsh Government to properly understand the data of where spending falls, the gaps within that and how we interrogate that to make the most of it. So, that's what we're going to be working with across the public sector.

What I'm interested in doing as well is—we've had a large number of private sector firms bidding into the challenge fund, I want to now explore how we can develop this agenda with larger private sector firms, so the large anchor firms are using their spend, their discretionary spend, to tie into this agenda so we're making the most of that funding as well. This is not a public sector only agenda.

I think I've tried to cover the majority of the points. The definition of, forgive me—

Local procurement.

Yes. Was it: how is local procurement defined? As I said, we're looking to move beyond Preston's model, which tried to define it within spending within the local postcode, to taking a relational approach. So, in Carmarthenshire, for example, there's a very exciting project to get local food into local schools and local hospitals. Now if, for example—I'm just using this for illustrative purposes—they weren't able to source all of their produce in that project or any other within their local postcode, but could source it within a grounded firm in another part of Wales, that would be a good thing. So we shouldn't be too narrow in simply looking at postcodes, because that can have distortive impacts. The example we've mentioned in the Economy, Infrastructure and Skills Committee, for example, is were a local authority to spend money in Kwik-Fit to buy some tyres, that could look good as a local postcode procurement, but the money wouldn't stay in the area—it would go out of the area to Kwik-Fit. So it's possible to manipulate these figures to flatter, to deceive, and so we want to take a more intelligent approach, and that's why we want to take time working through how that works in practice.

May I also thank you for the statement? The Deputy Minister will know that he and I broadly agree in this area. I'm pleased to see the role played by Plaid Cymru in that regard and I'm pleased that we, in our agreement with the Government on the budget, could put the foundation in place, with £1.5 million if I remember correctly, to build upon that foundation. I'm pleased to see that there are some developments happening as a result of that work done a few years ago by us. I'm also pleased to see mention of Arfor, which again is an idea that we developed specifically on rooting development and economic prosperity in our communities here in Wales, and I look forward to seeing further developments as pilot projects and so forth hopefully do come to fruition in ensuing years.

I am pleased that there is also mention of the need to work cross-departmentally within Government and there’s reference by the Deputy Minister to this new group, run jointly with the finance Minister, Rebecca Evans, to ensure that the internal wiring of the Government is done properly. I am surprised to a certain extent that there hadn’t been that kind of cross-departmental working happening already. Perhaps you could explain more as to what exactly you’re referring to here. Is it just that cross-departmental work on the foundational economy, or is it something innovative in terms of the economic development department and the Government’s finance department? Because I would assume that that should have been working cross-departmentally already, if truth be told.

Just a few questions. One, how do you expect to see local government and those working in economic development on the ground responding to this agenda? If I give you an example from my own constituency, and I don’t expect you to respond to the particular example, and I won’t even name the company, but where you have a company that is rooted in one part of Wales that feels that they are being persuaded to move away in order to grow, but they want to remain in that area, it’s a company in the foundational economy engaged in construction and the maintenance of homes, and it’s a large and successful company, but they want help in order to expand, in order to grow deeper roots in their own area—they perhaps want more land on an industrial estate. But what would you expect the attitude to be from economic development teams to assist that kind of company?

Then, in terms of targets, yes, there’s a major element of experimentation in what you intend to do in this area, but you do have to have some idea of what your targets are. So, what kind of indicators of success should we be looking for? It might be difficult to put robust KPIs in place when you are experimenting and trying new things, but surely there is something that we could look at in a year, two years’ time, which will determine, yes, we are seeing success here in terms of the impact on GDP or the jobs created, and crucially the level of salaries in those posts.

And also in terms of targets, I would welcome your comments on what we are aiming for in terms of targets for local procurement. We in Plaid Cymru have talked about aiming at around that 50 per cent of public funding in Wales spent in Wales and looking to raise it to around 75 per cent, which is still quite modest in our view, but in setting a target and reaching that target you're talking about creating 40,000 jobs if you take that figure of 2,000 jobs for every 1 per cent of additional GDP spent locally. So, will you be willing to set a target for where we are going in terms of increasing local procurement?

Thank you again. I'll try and take those points in order and again reiterate the point that the support for this agenda has come from across the Chamber, and I appreciate that. And in fact, as I mentioned in the statement, the initial £1.5 million commitment to an experimental fund came from the negotiations and agreement between the Welsh Labour Government and Plaid Cymru. I'm delighted that I've been able to treble that with the support of the finance Minister and the economy Minister and the First Minister through this budget round.

And in terms of Arfor, Eluned Morgan, the Minister for international development and the Welsh language, and I recently met with the leaders of the Arfor programme from across Wales, and had a long discussion with them about how that project works, and it struck me then that we were creating a silo here, that there was so much in common between this agenda and the foundational economy agenda, we need to mesh them together. And the learning from their projects needs to cross-pollinate into the others and vice versa. So, I'm committed to doing that. So, we, I think, are making connections as we go.

His surprise that Government works in silos was rather sweet I thought, but large organisations tend to do this. Procurement, for example, cuts right across the work the finance Minister is doing. It does cut right across the agenda, so there is cross-Government working already in place around that. What I found when I came in post, the schemes that I was responsible for not only fell outside of our department but outside of our group within Government, and it was very difficult for the civil servants, given the structures they work in, to communicate effectively with each other. That's why this group specifically on the foundational economy has been set up. I've set up another group, which met yesterday with the finance Minister, on artificial intelligence and data-driven innovation, similarly, to try and cut across the horizontal axis of the Government.

So, this is part of the learning that we have here, that this has been one of the barriers to spreading and scaling in the past, and I've cited the frustration of pilot projects showing enormous success in the past. I mentioned the Can Do toolkit, where we were ahead of the pack, but that inability then to embed that into common practice and to work across boundaries, both in central Government and in local government, has been a hamstring and that's something that we need to cut through. But I'm under no illusion how difficult this is and how difficult this is going to be, and it may not work. I think we have to confront the fact that it may not work, but I'm being open and honest about that, and having named that danger, we need to make sure it doesn't happen.

You mentioned the dilemma of how do you allow firms to expand whilst keeping them grounded. And I think this is why we need to take a regional approach to economic development, how local authorities must collaborate. They don't have the bodies they used to have in economic development departments, and they must share with neighbouring authorities in the regional footprint, as we'll see under the local government Bill, and co-locate and work with the Welsh Government's new regional economic teams and chief regional economic officers so we can take a regional approach. So, even if the small firm in the hypothetical example given isn't able to grow on the exact footprint it was founded, it can still do so within the region. [Interruption.] That is something that is going to be hard to achieve, but, clearly, we'd want them to grow in the place where they are rooted. It's difficult to generalise on a hypothetical example. If the Member, who's heckling me to say it's not good enough, wishes to give me a specific example, which he may not want to do publicly, I'm happy to meet with him and discuss the specific example, because it sounds like the sort of problem we want to avoid, and I'd like to work with him to see if we can figure that out.

In terms of KPIs and targets, there's always the risk of unintended consequences to targets because in the past, certainly when Jane Hutt was finance Minister, we achieved over 50 per cent of procurement. Bearing in mind that in the public sector, in most organisations, 75 per cent of funds goes on staff, and most of those staff live within a reasonably small catchment area of where the firm is based. You can, without too much difficulty, come up with figures that look very impressive on local procurement, but don't actually tell the full story, so I think we need to have a more nuanced and intelligent approach to targets. We're experimenting here. I'm reluctant to commit to KPIs and targets at this stage because I don't want them to have a distortive effect. We need to monitor closely how this is working, and then once we've learned some lessons, at the next stage we may be in a position to set some targets. But in terms of the broad question—and I daresay I hope the report of the EIS committee has some thoughts on this—'How do we know what success looks like?' is a good challenge, and certainly Russell George mentioned earlier that we have the truism that good practice is a poor traveller. I think, in the first instance, getting a dozen or so public services boards embracing this agenda and applying it consistently across its boundaries, that would be success, given where we're starting from. Beyond that, I've got an open mind as to how we work out some of the granular metrics for measuring success. I agree with him that, in the medium term, we do need targets and KPIs, but I'd be reluctant to put the cart before the horse. 

Thank you. I am going to have to ask for shorter questions and shorter answers. I've got five speakers and roughly 15 minutes left, so I'll let you do the maths on that one. Jenny Rathbone.

Thank you. I'm very pleased that you want to tackle this issue of good practice not travelling. When I was chairing the European programme monitoring committee, there were excellent bottom-up programmes that could have been applied to other, very similar, communities, and I know that Huw Irranca-Davies is working on this in the current programme, but we really cannot afford to discard good practice. So I'm hoping that the Carmarthenshire public services board will be leading the way, given that they were very successful in winning a contract for the foundational economy in food procurement. 

I think I'd just like to focus for a moment on your chilling warning, that if we leave the EU at the end of January with a deal or without one next December, which of course is the Farage/Johnson plan, then we have very little time to prepare our economy for the absolute storm that is likely to result, which is far worse than anything that Mrs Thatcher achieved in her de-industrialisation rush.

I agree that public services boards can be key partners to help apply what works in all parts of Wales, and it's great that you have that ambition, but I'd also like to ask you about the role that community councils could also play. Yesterday, the Public Accounts Committee was scrutinising Government officials about the role that community and town councils have been playing, and we've known for some years that far too many of them are sitting on unspent capital, rarely consult their communities and are not seizing on the opportunities that they could be using to strengthen their own small-scale economies. However, yesterday, we did hear about the good practice of, for example, Solva Care in Pembrokeshire, which is delivering a much more person-focused approach to the care of the elderly. And it was delightful to hear that community councils—. I think they're probably fairly rare, but there are community councils who've set up community-owned renewable energy schemes. Hallelujah. How are we going to ensure that all community councils are thinking along these lines and using the opportunities of the natural resources all around them to enrich their local communities?

Thank you. Well, in deference to the warning of the Dirprwy Lywydd, I'll try and keep my answer brief. I'm aware that some community councils did bid into the challenge fund, but I don't think any were successful. It was a competitive fund and there were far more quality schemes than we had funding for, even after tripling the budget. But I think, in my statement, I set out the challenge for public services boards in this, and public services boards should include community councils. I agree with the point that Jenny Rathbone makes about the contribution they have to make in this. And the fact that many applied shows there's an appetite there amongst some of them.

I think the danger we have under the public services boards is that they become strategy factories. And there's a good deal of scepticism that they have yet to deliver anything of substance, and I think this is their opportunity. It's going to be a stretching target for some of them, but they've got to prove their worth. This is an agenda entirely in keeping with the mandate that they have. So I'm discussing with the future generations commissioner developing some joint guidelines between us to allow us to maximise the potential of the public services boards to get the most out of this agenda, and I will take the point that she makes about the role of community councils into consideration as we go about that task. 

Thank you, Deputy Minister, for your statement. I'm afraid much of what I have written here reiterates a lot of what you've said, but I'll make no excuses for that, because it just shows that perhaps we're all thinking along the same lines.

So, the importance of the foundational economy cannot be overstated, with a UK figure of 40 per cent of the workforce, and accounting for £1 for every £3 we spend. And it is recognised that, in many places, the foundational economy is the economy—it's the food we eat, the homes we live in, the energy we use, and the care we receive. Despite the scale of employment, these jobs are often characterised by low wages, highly precarious patterns of employment and poor working conditions. So, these are failings which have to be addressed if this foundational economy is going to work. There's no doubt that a revitalised foundational economy would have the potential to deliver a social benefit to all disadvantaged communities, by providing more targeted economic activity that also has the added potential to deliver on environmental benefits that arise from a more localised economy, where goods and services travel less distances.

Whilst there has been a broad acceptance of the foundational economy, the Welsh Government's decision in their economic action plan to have just four sectors—food, retail, tourism and care—I believe is too narrow. Should we not have included construction and energy generation in that? It was mentioned in your earlier statements, but you didn't actually include it in the last one. We, of course, welcome the moneys allocated under the challenge fund, reaching £3 million, and the last allocation in October of £1.077 million, taking the total to over £4 million.

In your announcement today, you talked about the third pillar and building the missing middle in order to increase the number of firms rooted to local communities. You need to first ensure that the infrastructure is in place to enable goods to move quickly and efficiently. This would not only encourage new companies to locate in communities, but it would also facilitate those who are already there to grow. Local councils, as has been mentioned, can also play a major part in keeping things local by ensuring tenders are within the reach of local microbusinesses, perhaps by breaking them down into modules, rather than large tenders that are called only by large companies, who are, very often, not only out of the locality, but often out of Wales itself.

We acknowledge that progress has been made in strengthening the foundational economy in Wales, but this must not be based on expanding the public sector, but also on nurturing the private sector. As an aside, you mentioned the fact that this may not work, and I think, in doing that, you are running the risk of being a politician who tells the truth.

Thank you for the comments. They say that imitation is the sincerest form of flattery. So, the fact that I recognised so many words included in your statement is testimony that that is true. I recognise that there is a lot of common ground here. Just to address two specific points that you made—you talked about in the economic action plan that we identified four foundation sectors, and you said that was too narrow, and I think, as I mentioned in my statement, the fact that we've now gone beyond that and taken a sector-neutral approach, so we're no longer restricted to just four, and that the enabling plan on the foundational economy we committed to in the EAP will not be restricted to just the four and we'll take a broader view, reflects the fact that our thinking has moved on.

On the point about tenders being of a manageable size, I entirely agree, and that's the work Rebecca Evans, as finance Minister, is doing about reforming procurement to open it up, and to upskill the profession, to being able to offer tenders that encompass small firms. One of the projects we are funding through the challenge fund is with Swansea Council. It's a very modest scheme, but it is to design and specify contracts from the council to maximise opportunities for small businesses to bid for work—for example, construction-based contracts. There's a similar bid from the housing association in west Wales, Pobl, to open up its work for one-person traders and odd-job people, as part of the experimental fund too. So, we've been monitoring those two closely, and the whole point of the experimental fund is that we're trying these different things, and if they work, we'll be demanding of the public services boards to adopt or justify. Now, clearly, we're not saying everything's going to work everywhere—you can't lift and shift something that works in one area automatically into another. But I think we will be turning that on its head, and saying to local authorities, 'It works here—you need to give us a good reason why it won't work with you, or we expect you to adopt that good practice.'

Deputy Minister, as you know, I've always been a leading proponent of the foundational economy, and it's really great to see you now, as a member of the Welsh Government, working to embed some of the ideas that we worked on so closely as backbenchers.

So, I'm holding here the draft national development framework, which the First Minister, in the foreword, describes as setting out

'where we think we should try to grow and the types of development we need over the next twenty years to help us be a sustainable and prosperous society.'

When completed, this is, I would argue, perhaps the most important document that the Government will be producing. So, it was a surprise to me to see that there is no mention of the foundational economy within the draft NDF whatsoever, and that does give me some cause for concern. What would be your reply to that?

Thank you very much. And I absolutely must acknowledge the role that Vikki Howells played, with a number of other colleagues, in supporting this agenda to date. And I am keen that we continue to work together on it, and it's only right that that role is a challenging one. So, I welcome the question, which points out that there's still some room to go to break down those silos. The NDF is not a unique example; there are some other policy areas where I think more can be done. Our food strategy, for example—I think there's room to include the foundational economy agenda within that more than it currently does. And that's what we are going to have to work through within Government. So, I'm glad you've raised that specific point. I will raise that specifically with the Minister, and I will write to you with a reply.

I think this will be welcomed by not only all the Labour colleagues here, but also the Labour and Wales Co-operative colleagues as well. The idea of developing community wealth-building initiatives that are bolted down in your community is something we've long supported. So, I wanted to ask about two specific areas that I'd like the Minister to expand on briefly—one is the Project Skyline, which we hosted here recently. The initial exemplars they took through were in Caerau, Treherbert and Ynysowen. Some of the funding has been put towards building on this now, and taking this forward. The idea that communities, in all that they survey within their valley, can have a stake in managing and owning and generating the rewards from that, and reinvesting in their community, is tremendously exciting. So, I wonder if he could expand a little bit on that, and how we might take that forward. That's a sort of oven-ready one, in a sense—as some other politicians might suddenly use that phrase at the moment.

The other one is, if there were other initiatives, community-based initiatives, that wanted to take forward similar ideas—so, for example, I've got a local company, a high energy-intensive user, that is willing to gift land and their surplus energy and heat in order to do something totally different from what they're doing: horticultural enterprises, run by social enterprises, right on their doorstep. It's something we've talked about for a long time, in terms of local food networks and the south Wales Valleys growing. How would they get involved in this foundational economy approach, which is based around those community interest groups, co-operatives, employee ownership, and so on? How could they even start to take this forward within the framework that he's done?

And finally, Minister, you said that brave thing—this may not work. I would say to you: (1) I've never heard a Minister say that before, but I think, in trying these things, and then applying the co-operative principles—which are prove that it works, and then scale up and teach others how to do it—this will work.

Thank you very much. To address those points quickly, Project Skyline I think is a very exciting project. The first phase, as you know, was a feasibility study, looking at how communities could manage the landscape that surrounds their town or village. And the Green Valleys community interest company worked with Treherbert, Ynysowen and Caerau. Now, they've successfully put a bid into this fund, for the next phase, working with Welcome to Our Woods, to look at Ynysowen and Caerau, to take it into the next phase of development. And in itself it's an iterative experimental project. So, I'm very pleased that they emerged successful, and I'll be watching that project with interest.

On horticulture, I agree there is huge potential. I am meeting soon, I hope, with the Cardiff capital region to discuss how we can work together to look at the potential of horticulture, particularly within the Valleys taskforce. The Valleys taskforce itself has made a significant contribution to the experimental fund, and so there are a number of earmarked experimental projects in the taskforce area. We are setting up, through Josh Miles from the Federation of Small Businesses, a sub-group of the Valleys taskforce to look at grounded firms and the foundational economy to see how we can have a specific Valleys focus on that. And so I'd encourage the Member to give me more information about the company he mentioned to see whether or not there's potential for us to develop that further.

Thank you. And, finally, Dawn Bowden. 

Thank you, Deputy Presiding Officer. Certainly, Deputy Minister, I welcome the steps that you've already taken, especially in conjunction with the Valleys taskforce to invest and quickly spread best practice and innovation that we find in the foundational economy. I'm not going to go through all my preamble, because I'm conscious of time, but I know that amongst some of the beneficiaries in the initial round of funding are projects led by the Bevan Foundation, and they include developing a community regeneration think tank in partnership with the Wales TUC to help increase fair work in foundational sector businesses, and I'm going to be watching that with interest, because I know what I'd like to see come out of that. But can you tell us more about your expectations of this project and the benefits that you believe it can deliver to communities in the south Wales Valleys?

Well, as I say, the money we've announced, for example the £10 million through the Valleys taskforce for bringing empty homes back into use and, as we wanted to expand that to look at empty shops as well, has huge potential within the grounded firms foundational economy space, because it's mostly going to be local firms who are going to be doing that work. I went with Vikki Howells to see in Ynysybwl one of the first projects funded under that and, clearly, from that example it was local tradespeople who had done the work. So, I think, from the work that we're doing under this project and from the allied work through the Valleys taskforce, which, as I say through this cross-Government group we're trying to look at as one thing, there's big potential.

You mention the work of the Bevan Foundation and the funding they've had for the Wales TUC. There are two projects that have been funded. What I expect from that is challenge to this agenda. This isn't an easy or a flabby agenda. There's some real difficult policy dilemmas in this agenda and some thorny issues. The traditional view has been that the foundational economy is characterised by low pay, low productivity, low-value industries and activities and we shouldn't be trying to prop them up, we should be trying to go for the opposite, which would be fast-growing firms and high productivity. And my response to that is to say, 'We don't want to grow the foundational economy as it is, we want to change the foundational economy.' I see no contradiction. I don't see why there shouldn't be high productivity innovation within the foundational economy. I don't see why there shouldn't be artificial intelligence and robotics in the foundational economy. But there is an issue around fair work and low pay and lack of employee organisation and recognition that does characterise many parts of these economies, and that's something, through this work, we need to challenge.

The work that Preston did, for example, in identifying the local anchor institutions—five of the six local anchor institutions they identified through that work ended up as living wage employers. So, I see this as really improving the way that that part of the economy works. But we absolutely have to acknowledge that, as of today, there are many parts of the foundational economy that are not the way we'd wish them to be. So, I want this to be a disruptive force within the foundational economy, not a comfortable one. 

Thank you very much, Minister.