Where does power lie in new plan for economy?

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Insiders at the Welsh Government told me they felt the new economic action plan did not get the attention it deserved last week.

There was a sense it had been trumped in the media by another report on the day calling for up to 90 assembly members.

One senior advisor gently pointed out that while one was a report about something that could be a long way off (more AMs) the other would become reality next year.

Fair to say the headline writers struggled with some elements of the action plan (there were no zingers in the 48 pages) and it may also have struggled against the background noise of Brexit and the continuing fallout from the death of Carl Sargeant.

But this was a big moment for the Economy Secretary Ken Skates who was facing growing questions about why it had taken 18 months, a third of the current assembly term, for him to set out his plan for the way he wants to support companies.

Simplified approach

There had been some in the business community who were expecting this roughly six months after his appointment, rather than 18 months - so there was a feeling of better late than never.

One of the main headlines is that the nine priority sectors will be replaced by three broader priority sectors going from the relatively specific: advanced manufacturing, to the nebulous: enablers, as well as four foundation sectors (these are areas such as the care sector and retail which tend to be forgotten in economic documents) as well as three regions.

Ken Skates insists it signals a simplified approach to "iron out the lumpiness" as he told Radio Wales but, on paper at least, it appears to be more, rather than less, complex.

There is also no one over-riding concept or theme here, instead advanced manufactures are included alongside nursing home owners as potentially able to receive support.

That may prove to be an advantage and certainly avoids the 'one-size-fits-all' accusation.

Image caption Ken Skates was facing questions about why it had taken 18 months to come up with the plan

There is also the added question of where will the power lie? The regions, the broad sectors or the foundation sectors?

The regions will headed up by chief officers; it will be interesting to see whether these will be the individuals calling the shots on the ground on where and how the financial support for companies is rolled out across Wales.

During previous launches of Welsh Government economic plans (yes I've been there and got the t-shirt on that one) there has tended to be an obsession, possibly among journalists, about whether the focus will be on grants or loans.

That debate appears to have moved on and, probably sensibly, it gives flexibility on the kind of support, even though the trend is heading towards loans rather than grants.

Another clear difference from the past is the move away from the focus on specific sectors such as life sciences, which benefited from its own £50m Welsh Government investment fund, and the creative industries.

Kicking

The language of sector-specific support has framed the debate on economic development in Wales for years, and that will now change.

The overall plan was given a kicking by the opposition parties for failing to include any targets.

Ken Skates' defence is that they all too often act as a diversion and provide an unwelcome focus on the parts of the country that do well anyway.

Be that as it may, the decision not to provide targets provided a target in itself for the opposition parties and I assume Mr Skates had priced that in before it was launched.

Another big headline was the new contract, or conditions, being expected from companies in areas like up-skilling in order to receive help from the taxpayer.

Onerous

My sense is that while there are many conditions attached they will not be that onerous.

For example, if a firm is to receive direct support it has to align to one of the so-called Calls for Action which include in no particular order: decarbonisation, innovation, entrepreneurship, skills development, automation and research and development.

In other words, if a company is deemed to have real growth potential and is liked by officials then they will find something there that ticks the box.

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