Today, we are setting out the plans that will guide our economic recovery from the coronavirus pandemic. The COVID crisis has shown us very clearly the importance of an economy that is more resilient to external shocks. It has underlined the critical role played by key workers, and the importance of everyday goods and services to the well-being of our communities and to our economy. The limits of low-cost, long global supply chains became apparent very quickly in the early stages of the pandemic. Our orders for personal protective equipment from lower-cost countries too often went unmet. Yes, factories in China can make masks cheaply, but that is of little comfort when the supply chain proves fragile, breaking down when you need it the most.

As we begin to look beyond the pandemic, it’s essential that we draw lessons from the way our economy has fared in the face of the crisis, and set a path for recovery that makes our communities stronger. Today, we set out in our economic resilience and reconstruction mission five priority areas for recovery, and the first one is strengthening the foundational economy. That means making more of the goods and services that we rely on in Wales. This will not only make us safer, but it will create better jobs closer to home, and a growing band of Welsh firms that are rooted in our communities but capable of trading and exporting beyond our borders.

We have made progress in highlighting the role of the foundational economy in the last two years. We set out to experiment, to test approaches. We set aside £4.5 million to fund more than 50 trials in a variety of sectors to test interventions. In Blaenau Gwent, we supported housing associations to look at the local supply chain to help local firms to benefit from spending on new homes. In Carmarthenshire, the council, the health board and the university are working with food producers to get more local food onto local plates. In Treherbert, we’re helping the community to take control of the landscape around their town for generations to come, to use surplus public land and forestry to make a living—the excellent Welcome to Our Woods project, Skyline. Alongside this, we're supporting the creation of a wood centre of excellence to make sure that, instead of using Welsh trees for low-value products, as is so often the case now, like pallets and garden benches, whilst simultaneously importing large amounts of forestry, we can instead use them to build high-quality timber houses in Wales. Innovation and productivity are as important in the foundational economy as in the tradable sector.

We’re using the fund to grow food using new technology, using artificial intelligence to help develop new care models, using procurement to improve the quality of work in social care, and using microbusinesses and social enterprises to develop a more sustainable model for this key foundational sector. We're even importing the Sardinian model of alternative finance into north Wales through the Celyn, an alternative currency that can help stop money leaking out of our economy. It's worked there, so why shouldn't it work here? These are all trials, and we have set up a community of practice to help the projects to learn from each other. We are as interested in learning from what they are struggling with as we are in what’s succeeding. We might be the first Government to say that failure is fine, so long as we learn from it. We’ve set aside a further £3 million in the coming financial year to scale and spread what’s working in these trials, because we know that best practice is often a poor traveller, and we hope that the next Welsh Government will work on getting these innovations into the main stream. 

We’ve been learning too from the successes of elsewhere, from Preston council and others in England and Scotland, in building community wealth. Over half the Welsh public services boards set up under the Well-being of Future Generations (Wales) Act 2015 are currently working with us to identify those agents for change in their local economy—their local anchor institutions like the further education college, the hospital and the police station that are going nowhere and are currently spending much of their money outside of their areas. Line by line, we are going through their spending to see what opportunity there is to redirect money—public money—back into their own communities to stop the leakage and to help build resilience for our towns and villages in these tough times. Through this work, we've identified that half of the money spent on food by the NHS in Wales goes to food producers and suppliers outside of Wales. In each food category, there are local suppliers who could be sourcing that product.

Procurement is not just a tool for accountants; it's a key lever for social and environmental justice. We are now doing a major piece of work to build in resilience to our food system to support local suppliers and to cut food miles. We are sitting down with some of the major food distributors, like Castell Howell in Cross Hands in my own constituency, to understand how we can work with them to increase the number of made-in-Wales products that they sell into restaurants and schools. We are only just getting started on this wide-ranging and ambitious programme of reform. There is huge potential in the foundational economy agenda to build resilience in our local economies, to create better jobs closer to home and to build stronger local businesses. There is much, much more to do, and this is why we have placed it at the front of our list of measures to guide our journey out of recession. Diolch.