North East deal will sharpen competition with Wales

Geraint Talfan Davies looks at how England’s poorest region is getting its act together

Further pressure on Welsh local authorities to extend and deepen their collaboration with each other has come from an unlikely source – the north east of England.

While Welsh Ministers despair at the wariness of Welsh councils in their dealings with one another, seven councils in the north East of England have decided to pool their resources on transport, economic development, regeneration and skills training in a legally binding combined authority that may lead to the re-creation of the Tyne and Wear Metropolitan Council that was abolished by Margaret Thatcher in 1986 – effectively another city region.

The move, aimed at emulating the combined authority that exists in the Greater Manchester area, is the result of pressures created in the last year by three reports:

  • The first, last October, by Lord Heseltine, arguing that substantial funds should be devolved to local enterprise partnerships in England.
  • The second, last November, by the Northern Economic Futures Commission, that looked at the whole of the north of England.
  • A third, just over a week ago – the North East Independent Economic Review – commissioned by the area’s local enterprise partnership, and led by Lord Adonis and a team of experts.

Lord Adonis is pressing the government to pass legislation to give the proposed combined authority a statutory basis. The new authority would run all major transport schemes and would be responsible for “shaping the strategic direction of Newcastle International Airport”.

Many thought that England’s Metropolitan County Councils were abolished in the 1980s because they had become too powerful. It was largely through the work of the Tyne and Wear Council that Nissan established its car plant in the north-east.

The north east of England vies with Wales and Northern Ireland at the bottom of most economic league tables in the UK, and was one of the regions that lost out when the incoming coalition government scrapped England’s regional development agencies, replacing them with more localised enterprise partnerships. Last year Treasury Ministers made it clear that if councils did not get together they would not see money devolved to the region.

The move by the seven councils underlines England’s drive to strengthen city regions, and is in contrast the more guarded approach to the city region concept by local authorities, particularly in south east Wales.

The Adonis report would make for familiar reading in Wales. The report advocates:

  • Creation of North East International to promote the region at home and abroad.
  • Big improvements in transport infrastructure, including faster rail journey times to London, as well as the adoption of an ‘Oyster car’ ticketing system within the region.
  • Creation of a single local growth fund, including a replacement for the EU backed Jeremie Fund (that is currently administered even for the north east by Finance Wales).
  • Creation of a regional business bank, or the location of the headquarters of a  British Investment Bank in the north east.
  • the development of innovation and growth clusters, with strong linkages to the region’s universities.
  • The need to improve urgently the performance of the region’s secondary schools.

Some will ask, what is the relevance of this for Wales? After all, unlike England’s north east, we have our own Welsh Government to provide this strategic thrust. But it does underline how several English regions are beginning to get their act together following the abolition of the Regional Development Agencies in 2010.

Rightly or wrongly, the regions of the UK are in competition with each other. Had Wales managed to agree a coherent economic development policy a decade ago, we might have enjoyed a long period of competitive advantage, vis à vis English regions, in terms of both indigenous development and in the attraction of inward investment. The opportunity was missed. Despite its institutional weaknesses the north-east has had a much better record than Wales on inward investment across the period.

Since 2011 there has been more progress in exploring ideas and shaping policy Welsh policy through a multitude of task forces and sectoral panels, but the outputs of these panels so far have been variable. There is, for instance, a stark contrast between the clear, funded strategies that have emerged on the bio-science side and the opaque work of the creative industries panel.

These developments in the north east of England – that are also being emulated in places like Leeds-Sheffield – demonstrate that we have no room for complacency.

Geraint Talfan Davies is Chair of the IWA.

14 thoughts on “North East deal will sharpen competition with Wales

  1. The only transport links which the Welsh Government seem to want to improve are those in and around south east Wales ie around Cardiff. From earlier contributions in comment sections, Geraint Talfan Davies supports this. However, as the capital of Wales, Cardiff needs to be better linked with other parts of our country and in particular the north. When you talk about Wales Geraint, do you mean what John Dixon terms “Greater Cardiff”? How can you have a strong Welsh economy without a proper road and rail infrastructure linking the north to the south. And in my opinion, but forgive me if I’m wrong, the “Welsh economy” doesn’t mean the same as the “Greater Cardiff” economy. It’s worth reading John Dixon’s blog. He seems to be in agreement with many things I’ve said in recent blog posts:

  2. And shouldn’t the title of this post be “North East England deal will sharpen competition with Wales” or have we already farmed off north east Wales to be part of a Cheshire City Region and is now in competition with the nation it was once a part of?

  3. While it is obvious to everyone in Wales except those with vested interests that our system of local government is too fragmented, there isn’t really any agreement on how many councils would be the ideal solution. My personal preference is for 6 Regions – 4 ‘City-Regions’ covering:

    – Newport & Gwent
    – Cardiff & East Glamorgan
    – Swansea & West Glamorgan (also including Llanelli & Amman Valley)
    – Wrexham & Flintshire

    Plus 2 Rural Regions based on:
    – Greater Gwynedd (including Mon, Conwy & Denbighshire
    – Dyfed -Powys – (Montgomeryshire could go into Gwynedd if more convenient)

    All public bodies including police, health service etc should follow the same boundaries, although there could also be some shared bodies between adjacent regions making three super regions covering North, South-East & South West Wales.

  4. The real question may be: Is the Assembly a mature enough political institution to allow a democratically controlled city-region to develop in south east Wales? The Adonis Report shows that the most likely political development in the future is not a federal Britain but a series of regional authorities in England centred around major cities such as Newcastle, Manchester, Birmingham, Liverpool and Bristol. Newcastle already benefits from flights to the developing hub airport in Dubai. Only last week Manchester airport which will be linked to HS2 announced the contractors for the new £650 million business facilities being developed close to an airport which is potentially far more important for business in North Wales than Cardiff. The danger in Wales in our ‘kick for touch’ safety first political culture is that the closest we get to any meaningful decision-making is the setting up of yet another commission.

  5. The ‘North East’ title is a bit unfortunate, but the article makes some very valid points. As a nation, we have had so many advantages over NE England since devolution, yet are we seeing those advantages deliver a better economic outlook? Clearly not. I believe that there was a more national strategic approach as well as a more sustainable approach in terms of transport planning under the last Welsh Government. However, that appears to have slipped back to a more or less pre-devolution planning line.

    I do hope that the FM for Wales is prepared to shake things up over the coming months, as we do appear to be drifting rather than striving as a nation at present.

  6. It appears that the English are slowly, but surely getting a grip on the structures needed to provide its economy with the people/infrastructures that will allow their potential to be realised. We in Wales are going to face huge economic challenges in future years, and as can be seen from the demise of Rhoose airport in the face of severe competition from Bristol it doesn’t look good. In my very humble opinion we do not have even a regional economy, but sub economies to the major English connurbations to the east of us. This fact, flies in the face of the desire of Welsh nationalists to nave a national approach to these matters, and hence the desire for investment in north/south links when the reality is that there is virtually no contact between the two most populated parts of this region of the UK. The whole structure of Welsh devolution with its ‘nation building’ elements is increasingly leading to an internalisation of our problems, and hence our further relative decline over important areas of our life. There are people with the talent/drive to put things right, and provide an improved position, however they seem very poorly represented in our political elite who are obsessed with a) public services, b) creating structures totally opposed to anything that might extend powers to people, and not failed organizations.

  7. “Despite its institutional weaknesses the north-east ..”

    I would argue the exact opposite! The governing bodies in the North East Region (or EU Region UKC as many of us prefer to call it…) are now able to develop policies along sensible coherent lines BECAUSE they are no longer held back by an incompetent Regional Development Agency and because the good people of the NE voted NO in large numbers on 04 November, 2004 when presented with a referendum for a Regional Assembly which they clearly decided they did not want.

    The leader of the NO Campaign in the NE described the proposed NE Assembly as “a £25m white elephant” and he has been shown by the generalised failure of three of the remaining four Regional legislatures to have been correct in that presumption. The London Region hasn’t obviously had such a negative effect but it isn’t much different to the old Greater London concept.

    The current Regional structure of the UK is an arbitrary construction which was never designed for the management of the economy. This structure was set up during World War II as an emergency governance network in case London, or any other area of the UK, was over-run by Germany. The idea was that basic services could hopefully continue at regional level.

    It is unfortunate that these arbitrary emergency governance regions were ‘handed over’ to the EEC by Ted Heath as part of the Treaty of Rome accession talks. As we should all know by now, the EEC/EC/EU has always intended to over-ride the nation states and a preferred system of regional administration was an early example of that future planning. We were told that it was merely a structure to facilitate EEC/EC structural funding but the concept of UK Government Offices was re-introduced 40 years after their WW2 rationale ended.

    It was always intended that each of the Regions would have an elected legislature, a development agency, and two seats on the Committee of the Regions which would co-ordinate Regional policy at the European level. The people of the NE put paid to Prescott’s plans and arguably saved Yorkshire, the Humber and the North West Regions from suffering the same over-governance as London, Wales, Scotland, and Ulster. Sadly the development agencies went ahead even though the elected legislatures were abandoned. That was ‘Plan A’ to ‘break up’ the UK. It failed, though it has arguably done an enormous amount of economic damage by introducing a bloated unnecessary extra layer of Regional ‘planning’ we don’t need in a small country. The federal UK concept is ‘Plan B’ to ‘break up’ the UK and it seems to be doing almost as much damage – maybe more in terms of competitive political hostility and non-co-operation.

    The death of the Regional Development Agencies has actually freed up both urban metropolitan areas like Leeds-Bradford and rural areas to develop strategies that best suit their own locations. Meanwhile, Wales continues to tread water or go backwards burdened down by too much low-grade public sector micro-management, by people who appear to be mainly clueless, in a Region which is so diverse it is effectively unmanageable from one centre using the existing sub-Regional and Unitary structures…

  8. John R Walker. Thanks for very informative response! The very essence of devolution in Wales is to try and pretend that the real world doesn’t exist, but where it does it isn’t our fault! It’s an exercise in escapism. It is clear that other parts of UK are moving ahead, and one wonders how they do it without a democratic regional body!

  9. Howell Morgan, The main problem with Wales is that there are too many people with your mind-set who view our nation (Wales) as being basically an entity to service the needs of what you believe to be the center of Britain and probably the Universe ie the south east of England. We’re either a place on the one hand where our cream are snapped up by London institutions or organizations based there or on the other hand, a place where England farms off their economically inactive. And you blame all our woes on them pesky nationalists (Welsh ones as opposed to Brit ones of course). Some of us have greater aspirations for our nation… Wales that is.

    PS Offspring still working in the tax payer-supported banking industry in England?

  10. David. The issue is that I do not believe there is such a thing as our nation (Wales), and as yet still allowed to believe it, but for how long I wonder? The City of London is a truly awe inspiring place, and its wealth trickles down to us in Wales, along with the southern poorer, and less fortunate regions of the UK. I don’t believe that there is this conspiracy, whereby the English seek to ‘do us down’, but rather opportunities are available to our young people to go there to work, or not as the case may be. I don’t blame nationalists (Welsh ones), however they are very misguided, and tend to spawn out untruths, and dangerous mis-interpretations of history. Why do you think that ordinary south Walians are so happy that CCFC are to join SCFC in the ENGLISH PL, rather than having them playing in the Konica LoW? It’s called reality, and real politic and this endless diversion into internalising economic issues/social policies is going to end in a disaster. PS. The purchasing of shares in banks was not unique to the UK, as virtually every banking industry throughout the western world would have collapsed, and then a full blown depression. In conclusion before the banking collapse the Welsh nationalists were singing the praises of the RoI, and how their wealth was outstripping ours (Welsh), and seperation from UK would transform us into another celtic tiger. Well, how things have changed with their independence, now reliant of European funding (for Banks), and huge cuts in employment/income for Irish people. We the (UK) loaned them a £1Billion, for which they were grateful. Young people are emigrating from the RoI at almost unprecedented level, and a large number coming to the UK (London) for work! Do you still enjoy mince pies?

  11. Howell, I am sure that the City of London is an ‘awe inspiring place’ but it’s also a gigantic parasite which is slowly killing the host ie the rest of the UK. Not only did it (it’s banks) require close to a trillion pounds to keep the merry-go-round in business, UK economic policy is largely geared to it’s continuation. On top of this, it sucks in top talent who would in more productive countries be involved in medicine, engineering etc instead of creating new instruments for trading stocks or the re-packaging of debts. It (The City) isn’t working for the UK as a whole; we in Wales, the unique nation that we are, need to be rid of it’s influence and go our own way and re-build our manufacturing base.

  12. David. I’m sure you are highly intelligent, but your misreading of economics is astounding. Capital tends to flow to where it can make a profit, and all our pension funds are invested in the City of London, or places like it, and if manufacturing is profitable, then it will get investment. Why did a) Sony, b) Burberry close its manufacturing centres here other than for the fact they could make the product cheaper elsewhere! Ford have invested in Bridgend, but look at the public subsidy which itself comes out of profitable business. Its interesting that the USA is slowly returning manufacturing from abroad, because energy costs reduced by the fracking process, and I’m sure you would support such techniques in Wales/UK so as to reduce our energy costs which would make our industries more competitive.

  13. Howell Morgan – “The City of London is a truly awe inspiring place”

    Sorry, but does anyone really believe this anymore? I don’t think that financial services should be banished – they are too important to our economy for that – but at the same time only the most obstinate supporter could be so glowing. The rest of us recognise that while it is an important sector, it’s wealth hasn’t trickled down (or rather, out of London) and that it’s callous speculation has led to destructive economic bubbles. The truth, I feel, lies somewhere in the middle. Bankers are not monsters but they need to answer the questions the crisis have asked of them, and until they are willing to do so their institutions are far from awe-inspiring.

    As for not believing in our nation, that’s fine for you. But the votes have been cast again and again, and you are in the minority, so having the conversation is not relevant or helpful and it is probably best to let it lie. That’s not to say that Welsh regions should not work with English neighbours, but the barriers to this rest in mindset and implementation, not in the institutions and certainly not in national feeling. Why not save the energy spent on this frustrating debate and invest it in trying to knock the heads of local councillors together until they can’t avoid regional collaborative working? The more we line up the Nats against the Unionists the less we look at our woeful civil society.

    Also, fracking? Seriously? You evidently love capitalism, but you embody its greatest downfall – a lack of great ideas. Until you can suggest solutions other than either burning the earth to a cinder or having the poorest on earth clubbing each other to death in a horrific race to the bottom, you aren’t going to gain any support. I say this not as a Trotskyite or anything like that, just someone who can’t anymore avoid the fact that the market is not allocating things all that well. The North East of England as much as Wales knows that strategies based solely on economic cost will always be unsatisfactory. The trick is to make the market work FOR people and not AGAINST them, but until we can move past the zero-sum game of public vs. private we have little chance of developing anything near as innovative as the solutions we require. Welsh Government, and local authorities, have their part to do, but people with your views need to do more to meet them in the middle.

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