Joe Rossiter considers Plaid Cymru’s key economic proposal of creating a new Welsh Development Agency
As we get closer to the Senedd election taking place on 7th May, we at the IWA want to carve out a space for long-form considerations on key policy proposals. This is the first of such pieces.
Plaid Cymru have been fast out the gate in outlining their economic policies for the 2026 elections, with their headline economic strategy, Making Wales Work, published back in April 2025.
At over 100 pages, it is an in-depth and serious set of policy proposals that the party will hope provides the economic scaffolding around which their potential Welsh Government will be built.
Making headlines in recent weeks has been the key proposal of their economic strategy, the creation of a new Wales Development Agency (WDA).
In this article, I will briefly raise some reflections and some key questions which will define and shape what this body looks like.
WDA
Established in 1975 the WDA was responsible for encouraging business development and investment into Wales ‘clearing derelict land and encouraging growth for local businesses’. Its responsibilities included managing public property, attracting foreign direct investment, land reclamation, business support and venture capital.
The WDA was abolished in 2006, with its functions absorbed by Welsh Government. This followed questions over the body’s lack of accountability, poor governance and culture and its use of funds.
In the decades since, those arguing the case for reviving the WDA have persisted, forming the basis for a persistent and contentious debate.
Since then, the devolved state in Wales has gained vastly expanded powers and responsibilities (albeit not vastly greater powers or flexibility over funding). Likewise elements of the original WDA now sit across government as well as with a number of arms length bodies. There are also several pieces of devolved legislation which would impact the delivery of any WDA. In short, the devolved government looks much different to how it once did.
Syniadau uchelgeisiol, awdurdodol a mentrus.
Ymunwch â ni i gyfrannu at wneud Cymru gwell.
Establishing purpose
Rhun ap Iorwerth argued that this new ‘arms length government agency,’ would have its ‘precise remit clarified within the first 100 days after taking office’.
If proposing to set up such a body and as a centrepiece of the party’s economic policy, the purpose and remit must be central. It’s providing an answer to a half asked question. Establishing its remit is vital to the political case for its existence.
Any decision to allocate funding away to another body thus further allocates resources away from a part of government which is already severely under-resourced.
Quite what role the Welsh Government would have in setting goals, direction and purpose for a new WDA is also open to question. You would hope that a new WDA would have a distinct remit and set of metrics to sufficiently guide delivery.
A further important question is what the creation of a new WDA enables to happen that isn’t already happening? For instance, the lack of a WDA didn’t stop the current Welsh Government from organising an investment summit at the end of 2025. The argument for the dissolution of the WDA in 2006 meant its functions would transfer to Welsh Government. The Welsh Government today has even more powers, powers to create legislation in areas which would now otherwise sit within the WDA’s remit (over planning for instance).
So clear answers to the question: why we need a new WDA, what change it will have and what the new body will enable Welsh Government to do – are all important.
Resources
The resources dedicated to any new body will also significantly shape its ambitions.
The amount of Welsh Government’s £27.5bn budget which is solely dedicated to the economy is just £530 million, with this figure sitting across Economy, Energy and Planning. This represents less than 2% of the budget. It’s a small pot to tackle some large systemic challenges.
Any decision to allocate funding away to another body thus further allocates resources away from a part of government which is already severely under-resourced.
Needless to say that any new body would need to be sufficiently resourced to meet its ambitions. An idea of how much money such a body would receive on an annual basis is therefore vital. We know what the size of the next Welsh Government’s budget is; providing a ballpark figure should thus be a feasible expectation.
It has been argued that such a body would, over the longer-term, grow the ability of the state to invest due to taking equity investments in Welsh businesses – which is a fair point. Whilst we broadly agree with this approach, it doesn’t, however, shift the political calculation now in terms of delivering a budget to enable said equity investments at scale.
Gofod i drafod, dadlau, ac ymchwilio.
Cefnogwch brif felin drafod annibynnol Cymru.
Skills
Iorwerth stated that the body would have an identity which more closely resembled a business, with leadership that matches this.Where the senior leadership of such a body would come from is an open question and is also fundamental to how we expect it to be governed. Furthermore, who would fill not only leadership roles, but also delivery roles, when economic policy expertise is so hard to come by in Wales, also brings its own challenges.
There is, however, potential in creating opportunities for staff who do not sit within the civil service itself – a space for those with more experience in managing businesses and innovation, perhaps. The creation of a specific body could also create the conditions to meaningfully grow capacity and the skills needed in delivering economic policy at the devolved level, albeit at arms length.
Interaction with other bodies
A key question facing a new WDA is how it will interact with other Welsh Government arms-length bodies, both proposed and already existing. For example, Business Wales and the Development Bank of Wales are two organisations whose remit may overlap with elements of a new WDA.
How would a new WDA function in the area of economic policy, where ownership is spread across three layers of government?
Plaid Cymru noted in 2024 that a new WDA would potentially function ‘more like a real national development bank’. Taking equity stakes in Welsh businesses, aiming to enable them to grow whilst retaining long-term economic benefit. Welsh Government have already started doing this, with investment into the north Wales tidal energy social enterprise project Morlais being a great example of investing into projects which deliver wider socio-environmental benefits. The lack of a WDA doesn’t stop government from doing this today. If the WDA looks a lot like a development bank, wouldn’t reform of the Development Bank of Wales be an easier change to make?
Added to this mix is the new arms-length innovation body that is also being proposed by Plaid Cymru. As champions of this idea (alongside Prof.Calvin Jones), we are supportive of this. Such a body, as we have conceived of it, has a sharp remit and way of working, which clearly provides a distinct role, structure and mission oriented approach. How this interacts with a development agency is an open question
Rhun ap Iorwerth has suggested that there was potential for the new WDA to come under one umbrella, with a new innovation agency and the Development Bank, ‘although that is yet to be determined’.
A further economic mechanism put forward in Making Wales Work is the creation of a national wealth fund, funded by reinvesting a proportion of income from large scale renewable energy projects. The IWA, in our Sharing Power, Spreading Wealth report conceived of this policy proposal. But how this works with the above bodies, and who has management and ownership of such a fund, presents a further governance question.
Furthermore, the role Corporate Joint Committees in Wales – formed, in part, on the basis that regional economic development and planning would be beneficial – would play in conjunction with a WDA needs to be established. Constitutionally, where are decisions best made about land use, planning, and attracting investment to parts of Wales? Could a new WDA duplicate much of the work that CJC’s are doing?
There is also the issue over where UK Government funding would be channeled in Wales. Currently post-EU funding mechanisms, (primarily), are funnelled through CJC’s. Funding is largely granted when projects have correspond to UK Government’s Industrial Strategy (and chime with areas of comparative Welsh economic strength, like energy, advanced manufacturing, for example). How the next Welsh Government, or a new WDA, would ensure that regional economic strategy speaks to the ambitions of devolved government is important, especially given constraints to Welsh Government’s budget (in both its budget mechanisms and its overall funding). How would a new WDA function in the area of economic policy, where ownership is spread across three layers of government?
All of the above outlines that any new WDA needs to provide clear answers to the broader question of how a Plaid Cymru led government would seek to rewire the devolved state when it comes to economic policy. Any new structure should attempt to avoid duplication, the creation of policy and delivery silos, and enable innovation in delivery. If constituted in this way, such a body could function to provide clarity and coordination amongst the otherwise messy governance picture when it comes to economic development in Wales. A WDA could act to either improve or make worse issues of scrutiny and transparency.
There is clearly a need for change – it’s how you make this change stick and lead to better outcomes that is most important.
All of which is not to say that something needs to change to reinvigorate Wales’ stuttering economy. At the devolved level we have but some of the tools and levers to create the conditions for economic change. This also doesn’t mean that there aren’t things we could be doing differently at the devolved level to shape a successful, fair and sustainable economy.
The role of providing a long-term economic strategy for all bodies to deliver against will also be critical for the next Welsh Government. An arms length body could facilitate delivery of policy and investment against a longer-term set of goals and metrics, attempting to de-politicise some of the inherent day to day trade offs required.
Economic strategy and trade offs
Plaid Cymru state in Making Wales Work that the IWA’s Cenhadaeth Cymru: Mission Wales report:
‘chimes with much of what is outlined below in this economic plan’ …. ‘Its indicative mission on economic performance and equality is particularly resonant with the priorities and approach of this plan, and it outlines a number of critical and overlapping project areas in and through which delivery might usefully be focussed, including by setting targets’
The plan notes the following as potential focus areas: ‘Halve economic inactivity rates, Lift children out of poverty, Tackle regional inequality, Data collection, Procurement, Private and public investment, Decarbonisation of energy and industry, Local and community ownership, and Fair work and real living wage’.
They also propose a separate agency with ‘responsibility for monitoring the performance of the economy against any set of targets announced by the Welsh Government’.
The next Welsh Government clearly has to wrestle with many systemic economic challenges simultaneously. Addressing them all in a single Senedd term is unachievable, especially due to the limited resources and fiscal levers sitting at devolved level. Therefore, setting clear priorities is essential.
Giving an arms length body powers to deliver elements of economic strategy does not mean that trade offs won’t be required. It is the Welsh Government’s role to set the missions; to consider what outcomes do they want to achieve, and what will the focus of resources and efforts be? Clarity from the top of Welsh Government on economic strategy will be vital whatever the governance picture.
Mainstreaming well-being
How such a body would practically embed the Well-being of Future Generations Act in its operations poses its own questions.
CJC’s, for example, now fall under the remit of the Act, meaning that regional economic policy has to deliver against the seven wellbeing goals and five ways of working.
Turning a decades old idea (in the WDA) into a forward looking agenda for radical economic change will take a clear articulation of purpose and remit to be successful.
It is good to see that the proposed WDA would have a long-term outlook – to 2050 at the first instance. But how does a long-term orientation lead to delivering economic policy and investment in a different way? How does it lead to different decisions being made and the navigation of the multitude of trade-offs? How do other issues, like environmental sustainability, interact with the decisions the WDA would make? How does it help to create a sustainable, purpose-led economy fit for the future?
How a body, which was historically about attracting inward investment, can seek to deliver on Plaid Cymru’s focus on retaining wealth in communities and the foundational economy will also take some balance to achieve. Ensuring that such a body also acts to strengthen small businesses (who make up the majority of the Welsh economy) and those delivering social value in our communities also requires attention.
How a WDA would therefore aim to hardwire the National Indicators into economic policy to an extent will come from the remit provided by Welsh Government. This presents the further question as to how this agenda can be managed whilst also ensuring the WDA has a razor sharp remit, which will be a governance and delivery challenge.
Gofod i drafod, dadlau, ac ymchwilio.
Cefnogwch brif felin drafod annibynnol Cymru.
Delaying action?
Finally, as with any significant reform to governance of this scale, a new WDA will take significant time and resources from government to establish. Two recent examples of bodies which have taken time to establish are Medr and the Corporate Joint Committees.
We must consider whether reforming the governance structure may distract attention from focussing on using the existing governance structures (however flawed they may be in your analysis) that we already have. Can we afford the years it will take for this to happen? Are we certain this will deliver value for money? Perhaps the rewiring of our economic governance is what is needed in the longer-term, but it takes time, and communities in Wales have waited a long time already.
There is clearly a need for change – it’s how you make this change stick and lead to better outcomes that is most important.
Conclusion
These are but some of the questions we need to ask ahead of the election. We look forward to finding out more about the policy proposals and what they will mean practically. The creation of a WDA has a number of benefits, but as ever, the practical details around its purpose, remit and governance are critical.
Turning a decades old idea (in the WDA) into a forward looking agenda for radical economic change will take a clear articulation of purpose and remit to be successful. In the above, we have attempted to highlight some areas which will need attention to make any such approach a success.
We look forward to hearing more from Plaid Cymru and other parties in the weeks ahead around their proposals for how they would manage Wales’ economy if in government after May.
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