A PLAN FOR PROSPERITY A BUSINESS AGENDA FOR GROWTH AND OPPORTUNITY FOR ALL

Transcription

1 A PLAN FOR PROSPERITY A BUSINESS AGENDA FOR GROWTH AND OPPORTUNITY FOR ALL

2 Stepping up: Fixing the funding ladder for medium-sized businesses 3 Foreword: Time for bold leadership To increase prosperity and opportunity for all, more businesses must see our small nation as the best location to run a business. This can be achieved but only if all parts of government become drivers of growth, rebuilding ageing infrastructure, equipping young people with the right skills and supporting innovation. Delivering these priorities takes leadership, political courage and determination but will lay the foundations for long-term competitive advantage business stands ready to work shoulder-to-shoulder with the Welsh Government to make this vision a reality. The last few years have been challenging for our communities and the firms that underpin them. Overall, the government has responded innovatively to choppy economic waters, opening its doors to the business community with an unprecedented degree of joint working. Business and government have worked together, developing sector plans, running enterprise zones and city regions. While this approach has not been perfect, it has been appreciated by the business community. Since 2011 there have been several positive progress in some key economic areas, such as a commitment to build the M4 Black Route, planning reform and a reinvigorated push to attract inward investors to Wales once again. But there is much more to do. Action must be taken now if we want the Wales of 2020 to be more prosperous, more sustainable and more vibrant than it is today. As our economic recovery begins to widen and deepen, we must grasp the opportunity to place our nation on a firm foundation. This begins by continuing to bring down the deficit and every region and nation must play its part. As a small nation with a modern and highly interconnected economy, we have it within our power to be a more nimble and prosperous player on the global stage. But only if we look outward to a world full of opportunity and choose to sail with and not against global trade winds. Only a more competitive and productive economy can increase prosperity and opportunity for all. The government must explore new ways to give people a hand-up. We need to help people develop their skills throughout their working lives so they can move up the skills ladder to what has become the new middle of the jobs market. Improving the productivity of our nation is the route to raising standards of living for everyone in this country our future prosperity depends on it. Devolution continues to alter the balance of power in Britain. The government s responsibilities have grown, gaining increased powers over tax, borrowing, planning and energy. The next government will need to take important decisions on income tax as well as getting to grips with a reserved model of devolution. Business has worked constructively with the UK and Welsh governments during devolution negotiations and we expect this to continue. With important law-making powers already in the hands of the government it is time for a relentless focus on delivery. In this manifesto we set out a plan for prosperity, a plan in which growth extends opportunity to all. Emma Watkins Director

3 4 A plan for prosperity: A business agenda for growth and opportunity for all Creating a Wales that works for everyone Over the last 16 years the Welsh Government has worked hard to encourage growth. As the economy grows, we must boldly carve out Wales place in the world to increase opportunity and prosperity at home. Our private sector is too small, unemployment too high and our productivity continues to lag behind the rest of the UK and parts of Europe. Business and government must work together to deliver a more competitive and prosperous economy, which would not only increase employment but sustain our communities, relieving pressure on the state and supporting wider social and environmental ambitions. In Wales significant challenges remain unaddressed and opportunities for growth remain untapped. Now is the time for bold leadership delivering a whole-government plan to energise our economy, identifying fewer priorities and delivering them with a laser-like focus. Working with our members, the CBI has identified the four priorities to deliver sustainable growth: Economy: Unleash business potential to grow and invest People: Close the education and skills gaps to lift the economy Place: Build infrastructure to drive up economic growth Delivery: Make the Welsh government a driver of growth The UK single market must be protected Promoting our international competitiveness goes hand-in-hand with building upon the strengths of the UK s single market. Companies choose to invest in the UK because of the single set of simple, common rules that are essential in allowing firms throughout all regions and nations to do business with ease and without complexity. To increase inward investment and support high-growth SMEs, the government must protect the core, unwavering strengths of our union: A common business tax regime A single regime for financial regulation A single energy market in Great Britain A cross-border set of employment law in Great Britain Government should consider these four pillars as the foundation upon which to build the economy of tomorrow. To give business confidence in the Welsh business environment, the St David s Day Agreement for further devolution should be delivered promptly and any new proposals based on their economic impact should be assessed. To increase opportunity and prosperity Wales must carve out its place in the world.

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5 6 A plan for prosperity: A business agenda for growth and opportunity for all 2020 vision: Delivering a more prosperous nation Unleash business potential to invest and grow Work with business to develop an economic strategy before the end of December 2016 that enhances competitiveness and productivity through a more attractive business environment and greater support for MSBs. By summer 2016, commit to developing a tax roadmap that maximises certainty and strengthen the attractiveness of Wales as a place to do business within the UK s single market. Boost Welsh regional competitiveness by devolving economic growth drivers to three dynamic regional development corporations for North Wales, South East Wales and South West Wales. Help Welsh businesses punch above their weight on the world stage by making the case for the UK to remain a member of a reformed EU and, through a close partnership with the UKTI, deliver enhanced MSB export support and an ambitious programme of trade missions. Close the education and skills gap to lift the economy To ensure every child has a flying start implement the recommendations of the evaluation of the Foundation Phase and focus more early years spending on parenting support and structured childcare in areas where educational performance is low. By the end of 2017 implement reforms to our school and college systems to deliver rigorous, rounded and grounded young people, require the study of maths and English up to age 18, ensure computing is a core subject and provide every student with the option of a first class vocational A-level. Align skills provision with the needs of the Welsh economy, supporting vocational degrees, increasing the take up of STEM courses and apprenticeships through a new STEM strategy; and ensure vocational training and apprenticeships receive Wales share of the funding raised by the UK apprenticeship levy.

6 7 Build infrastructure that will boost economic growth Transfer responsibility for the Wales Infrastructure and Investment Plan to an independent Welsh infrastructure commission by 2017, which should be responsible for the long-term planning, funding and delivery of all nationally significant infrastructure projects. Within the first 100 days, publish a timetable to deliver critical transport infrastructure including the M4 Black Route, the South Wales Metro, rail electrification and targeted improvements to the A40, A477 and A55. Ensure the Planning (Wales) Act is fully implemented and delivers real and significant improvements to the delivery of national infrastructure and the performance of local planning authorities. Make the Welsh Government an enabler of growth By the end of June 2016, develop a wholegovernment competitiveness strategy, led by the First Minister, committing each minister to develop a departmental competitiveness plan with challenging KPIs. Within the first 100 days of the assembly term, work with the Wales Office to enhance cross-government working on trade and infrastructure, creating a Wales Growth Council and Wales Growth Unit that brings together Welsh business leaders with officials from the Welsh Government and Wales Office for the first time in a united effort to enhance competitiveness and drive growth. Commit to placing public service reform at the heart of a whole-government strategy, commission an efficiency review of devolved public services by December 2016 and create at most eight local authorities by 2018.

7 8 A plan for prosperity: A business agenda for growth and opportunity for all Economy: Unleash business potential to invest and grow In this global race for jobs, Wales needs to put in place the right conditions for business to drive growth, unleashing their potential to invest, invent, export and expand. Accounting for 4% of UK economic output, Welsh employment and productivity are both below the UK average. Despite these factors Wales exports substantially more than other UK nations and has recently achieved its best FDI performance in over 30 years. With a resurgent manufacturing sector, innovative business clusters and robust start-ups, there is a huge amount of potential that targeted action by the next Welsh Government could unlock. An ambitious vision for our economic future is needed to drive growth and prosperity Wales needs a new economic strategy to ensure we capitalise on new opportunities for growth. The economy has changed considerably since the government responded to the global recession by working with business to develop the Programme for Economic Renewal. The government has reacted to the changing needs of the economy but its response has too often lacked the coherence of a wholegovernment approach. (See page 22). Wales now needs a strategy that embraces the new economic climate, leveraging existing and soon to be devolved government powers to increase our nation s competitiveness. This must align all government activity behind the common goals of boosting competitiveness and enhancing productivity by rebalancing the economy towards trade and investment, developing growth sectors and empowering regions to drive forward their local economies. Key to rebalancing the economy is unlocking the potential of our medium-sized businesses. With annual turnover of 10m- 100m these firms have been the forgotten army of our economy for too long generating 26% of private sector revenue and 12% of employment, despite making up just 2% of our businesses. They have huge potential to scale-up but business support aimed at small businesses or large international corporations often doesn t address their needs. Financing is a key issue, with equity finance underused, despite it being one of the most effective ways for these firms to access capital. As our economy grows, we must grasp this opportunity to place our nation on a firm foundation.

8 9 EXHIBIT 1 A PRO-GROWTH ECONOMIC STRATEGY MUST: Make growing the private sector the government s overarching goal Improve the business environment to attract more investment, boost entrepreneurship and encourage business start-ups Tailored support to unlock MSB growth Prioritise investment in economic infrastructure Increase STEM courses to meet skills gaps Empower regions to drive local growth and employment Support energy intensive industries to remain competitive Meet the growing global demand for low-carbon goods and services to grow a sustainable economy at home Wales needs to be the most attractive place to build a business and create jobs. A business environment that is just 10% more competitive would be enough to boost growth. This is easily achieved by a commitment to measure all government policies against their capacity to generate and deliver economic growth. Devolved taxation must be used to drive growth To ensure business knows the government s long-term plan for tax, the government should develop a devolved tax roadmap will signal the start of the first devolved taxes in over 800 years. While the government has made good progress, working collaboratively and openly with business, business is looking to the government to commit to using their powers over business rates, stamp duty and potentially income tax to implement reforms and drive growth. Ensuring that the administration of tax by the Welsh Revenue Authority does not add cost or complexity will be an important factor. The government must grasp this opportunity to give Wales a strong reputation as a pro-growth nation. A modern and efficient tax system, avoiding duplication or confusion with existing UK processes and procedures will allow measures to be developed that benefit Wales, but to ensure our economy remains competitive, require a high threshold for change. The government should work with business to create a tax roadmap that reduces uncertainty to give businesses confidence in our nascent tax regime. Adopting the CBI s devolved tax principles and processes (Exhibit 2) would support this aim. To ensure that devolved taxes do not create unintentional barriers to trade or investment, the government should demonstrate the benefits or any changes may outweigh the additional administrative burden. The Office for Tax Simplification should be empowered to comment on whether proposed legislation meets the government s own tax principles that underpin the roadmap. To protect Wales reputation as a place to do business, it is essential that all tax proposals should be accompanied by a full cost/benefit analysis.

9 10 A plan for prosperity: A business agenda for growth and opportunity for all EXHIBIT 2 BOOSTING CONFIDENCE IN THE DEVOLVED WELSH TAX REGIME: Principles Driving growth should be the core objective Consistently applied tax rules Any changes to long established principles must bring real benefits and not simply increase administrative burdens Policies must be forward looking and able to anticipate changes in business practices Processes Any major changes in devolved tax rules must be based on UK coordination Allow sufficient time for meaningful consultation with relevant stakeholders Ensure sufficient recruitment of relevant tax specialists within government Achieve UK-wide agreement on a few key components of any devolved tax administration and collection reforms Dispute resolution should be well coordinated between HMRC and the WRA Use secondments to share expertise and increase effective policy making Empowering our regions to deliver local growth and jobs Our nation s strongest regions need dedicated regional development corporations (RDCs) to drive forward their region s economic future. South and north Wales have always been drivers of prosperity and employment. As local devolution in England empowers local authorities to drive forward their own growth, Welsh regions must not be left behind. In much of Wales, the existing governance landscape remains confused and contradictory. With a population of just three million, we do not need 25 planning authorities, 22 local authorities and dozens of government organisations delivering separate strategies. In recent years, the government has taken positive steps towards regional working, creating city regions in south east and south west Wales. After a slow start, the city regions are starting to make a difference on the ground but they lack the powers and resources some of their English cousins enjoy, as a result, Cardiff must not miss out on the opportunities that a city deal could bring. The early implementation of local government reorganisation will encourage a more strategic approach to growth, and this must be matched by the government adopting a regional approach to economic planning. The government should enhance the powers of our city regions, creating regional development corporations (RDCs) for South East Wales and South West Wales. And due to the vital role the region plays in our nation s economy, a RDC should be created for north Wales. Working under the guidance of the Welsh Government, each RDC should develop and deliver a long-term regional economic strategy in partnership with business and Strategic Development Plans as set out under the Planning (Wales) Act. Empowered to enhance economic competitiveness and renew local infrastructure, they should manage their region s enterprise zones, sector specialisms, anchor companies, and identify local skills needs. Free from local bureaucracy, the RDCs must be outward looking, forging dynamic partnerships with neighbouring English cities and exploring opportunities for UK growth deals.

10 11 GROWTH S REGIONAL ROOTS: EXHIBIT 3 CARDIFF CAPITAL REGION Formed from the 10 local authorities of South East Wales Population of 1.5m 34,000 firms employing 659,000 people Generating 50% of Welsh GVA EXHIBIT 4 SWANSEA BAY CITY REGION Formed from the 4 local authorities of South West Wales Population of 685,000 20,000 firms employing 280,000 people Generating 20% of Welsh GVA EXHIBIT 5 NORTH WALES REGION Formed from the 6 local authorities of North Wales Population of 688,000 53,000 firms employing 309,000 people Generating 9bn of Welsh GVA Wales must take its place on the global stage To bolster trade and inward investment, the government should forge closer ties with UK Trade and Investment (UKTI) and make the benefits of remaining within a reformed EU clear to the people of Wales. Despite inward investment increasing once more, many businesses believe the government needs to forge a more dynamic relationship with UKTI and develop a property strategy to create a pipeline of strategic sites that are required by our existing and emerging industries. The government should develop enhanced export support for mediumsized businesses, an ambitious programme of trade missions and greater UK support to secure inward investment projects. While most businesses believe that the benefits of EU membership outweigh the costs, they are equally clear that the EU is not perfect and must change. The government must ensure the voice of Wales is heard in the debate on EU membership as the UK grasps a window of opportunity to reform the way the EU works for the better. Businesses want to see the EU focussing on facilitating growth and jobs rather than lifestyle regulation ; building a single market fit for the 21st century; signing trade deals with large established markets, such as the US, along with high growth emerging markets; and improving the process for assessing new regulations and reducing the cumulative regulatory impact. The government must ensure the voice of Wales is heard in the debate on EU membership.

11 12 A plan for prosperity: A business agenda for growth and opportunity for all The EU has shown signs of progress towards this agenda and the government must keep the pressure up to create an EU which better supports businesses to create jobs and growth for the benefit of all. Continued membership of a reformed EU with access to and influence over the EU single market remains fundamental to our nation s economic future. Being part of the EU $16.6 trillion market is an important factor in attracting many global businesses and their supply chains to Wales. Government must attach as much importance to thinking through how policies will be implemented as to the development of the policies themselves.

12 13 How to unleash business potential to invest and grow: Work with business to develop an economic strategy before the end of December 2016 that enhances competitiveness and productivity through a more attractive business environment and greater support for MSBs. By summer 2016, develop a tax roadmap that maximises certainty and strengthen the attractiveness of Wales as a place to do business within the UK s single market. Unleash Welsh regional competitiveness by devolving economic growth drivers to three dynamic regional development corporations for North Wales, South East Wales and South West Wales. Help Welsh businesses punch above their weight on the world stage by making the case for the UK to remain a member of a reformed EU and, through a close partnership with UKTI, deliver enhanced MSB export support and an ambitious programme of trade missions.

13 14 A plan for prosperity: A business agenda for growth and opportunity for all People: Close the education and skills gap to lift the economy Improving education is critical to the long-term prospects of the Welsh economy and its people. Many of the reforms that are underway are steps in the right direction and have the support of business, but there is still a long way to go. We need to ensure that reforms are delivered and that they drive improvements in outcomes. In doing so, our colleges and universities have a vital role to play as the facilitators of the higher level skills that can boost an individual s earning potential and improve productivity in businesses. Give our young children a flying start with greater access to childcare and a creative curriculum in primary school If the next generation of young people are to progress to secondary education with a solid grounding in reading, writing and maths we must ensure the Foundation Phase (for 3 to 7 year olds) is achieving its intended aims. The government should implement the recommendations of the evaluation of the Foundation Phase and ensure schools have the necessary resources and freedoms to implement improvements. It is widely recognised that raising the quality and availability of childcare is key to improving children s early development and increasing flexibility on child-to-staff ratios is one way of managing costs provided that quality is protected, for example through the requirement of higher level qualifications. The government should focus more early years spending on parenting support and structured childcare in areas where educational performance is low. Raising the quality and availability of childcare is key to improving children s early development. Achieving a step change in our schools will boost employability and fill skills gaps The government needs to create a school system that delivers young people with key attitudes and behaviours as well as knowledge and skills needed for the world of work. To deliver this, we need to develop a clear definition of what we are asking schools to deliver, and then ensure that the entire system- including the recently reviewed curriculum and qualifications system- is aligned to this. The Welsh education system has been faced with high levels of scrutiny and criticism following a string

14 15 of poor results in the OECD s PISA tests with the lowest average scores in the UK, as well as below the OECD average. While figures have improved in recent years more needs to be done; empowered school leaders and teachers is central to achieving change on the ground. With unemployment for young people at 20.2% compared to 17.8% for the UK as a whole, the education system is clearly not working for too many young men and women. Wales needs a long-term vision for education that delivers young people who are rounded and grounded and better prepared for life outside the school gates. To support this aim, the study of maths and English should be compulsory for all staying in education to the age of 18, schools should be required to offer separate sciences as an option for young people at GCSE, and faster progress should be made on implementing computing as a core subject. Schools also need to be incentivised through reform of Estyn and the introduction of outcome measures to focus more acutely on the development of key attitudes and attributes. Aligning skills delivery to economic demand will improve productivity and lead to better outcomes for all Delivering more routes to higher level skills, particularly science, technology, engineering and maths (STEM) skills, will be vital for our future knowledge-intensive economy and Wales cannot close our productivity gap without boosting the take-up of such courses. STEM skills are the anchors of our economy and will increase young people s life chances. From university qualified STEM professionals and college-educated STEM technicians to better STEM courses at school, vocational A-levels and more STEM-related apprenticeships, we must achieve a step change in delivering these vital skills over the next few years. We need to better align higher and further education funding with a Welsh STEM strategy. Given the wider economic value of these skills and the cost of delivering many of these courses, public funding should be more tilted towards these subjects. Additional funding for high-cost STEM courses should be protected and made more visible to studentsespecially women. We should look to fund more crossover courses for both young-people and midcareer workers, to help reduce the time taken to fill the skills gaps. As an apprenticeship levy is rolled out across the UK, the Welsh government must ensure a share of the funding raised directly supports vocational training and apprenticeships in Wales that deliver the higher level skills that businesses and the economy need. Wales needs a long-term vision for education that delivers young people who are rounded and grounded with robust employability skills.

15 16 A plan for prosperity: A business agenda for growth and opportunity for all Improving the productivity of our nation is the route to raising standards of living for everyone in this country - our future prosperity depends on it.

16 17 How to close the education and skills gaps to lift the economy: To ensure every child has a flying start implement the recommendations of the evaluation of the Foundation Phase and focus more early years spending on parenting support and structured childcare in areas where educational performance is low. By the end of 2017 implement reforms to our school and college systems to deliver rigorous, rounded and grounded young people; require the study of maths and English for all staying in education; require schools to offer GCSE separate sciences; faster progress should be made on implementing computing as a core subject and provide every student with the option of a first class vocational A-level. Align skills provision with the needs of the Welsh economy, supporting vocational degrees, increasing the take up of STEM courses and apprenticeships through a new STEM strategy; and ensure vocational training and apprenticeships receive Wales share of the funding raised by the UK apprenticeship levy.

17 18 A plan for prosperity: A business agenda for growth and opportunity for all Place: Build infrastructure that will boost economic growth Infrastructure is a critical element of our nation s economic and social fabric: affordable homes for people to live in and raise families; roads and railways that unite communities, take people to work and enable businesses to move products to market; reliable digital connections allowing information to be shared at speed; and energy to power it all. It s easy to take these things for granted and too often we only notice when things do not work as expected. We need to take difficult decisions today to meet the needs of tomorrow, building homes for the future, powering the economy and keeping the lights on, and connecting our people and businesses to each other and to the world. Wales needs a strategic long-term plan for infrastructure insulated from the political cycles that hamper and constrain progress. Infrastructure is key to boosting competitiveness, accessing markets and alleviating pinch points Building infrastructure is by its nature difficult and complex. It delivers significant benefits but requires hefty planning and financing and the length of projects transcending political cycles brings the prospect of disruption and political headaches. Difficult decisions have been delayed. Business is looking to the next government to take these decisions without delay. The right planning system can boost growth by helping firms respond quickly to changing needs. We are currently falling behind our competitors, with little significant economic infrastructure built over the last decade. Despite positive announcements about funding for a new South Wales metro and rail electrification, these still remain warm words rather than tangible outcomes. The fragmented process for prioritising and funding projects in both Wales and Westminster has been a significant barrier to delivery and it needs to be addressed as a priority. It is currently divided between a number of government ministers and their departments, each with their own decisionmaking process, annual funding cycles and constraints. The Wales Infrastructure and Investment Plan (WIIP) was a step in the right direction but we need a more ambitious and effective approach to rebuilding our nation s aging infrastructure. With the government gaining new powers over taxation, borrowing and energy, now is the time to take a truly long-term approach to meeting our infrastructure needs.

18 19 EXHIBIT 6 UNLEASH GROWTH BY GETTING WALES BUILDING OUR LONG-TERM INFRASTRUCTURE PRIORITIES M4 Relief Road- Black Route South and North Wales electrification Relieving pinch points on the A55 South Wales Metro Smart Severn Bridge tolls Targeted improvements to the A40 and A477 to improve access to West Wales Transferring infrastructure planning, financing and delivery to an independent infrastructure commission has many advantages. A long-term infrastructure plan would bolster our construction sector by ending our current feast or famine approach and allow a holistic approach to planning our infrastructure, achieve economies of scale and give business the confidence to invest. A gear change in investment is required to upgrade our transportation network Modern, sustainable and reliable transport infrastructure is an essential part of any competitive economy. Businesses small and large need modern, attractive and reliable infrastructure that connect them to the world s major and emerging markets and a wide pool of talent. Despite these factors, our nation s transport network is under strain with roads congested, ports overlooked, key rail links reaching their limits and continued uncertainty over the Severn Bridge. A long-term plan for infrastructure should begin by removing pinch points along the A55, dual the A40 and A477, deliver the South Wales Metro and push forward with rail electrification in north and south Wales. Positive developments are on the horizon, including the electrification of the Great Western Mainline and repeated government promises to deliver the M4 Black Route. These promises represent the right direction of travel, but to make a tangible difference we need to see decisions made swiftly and visible progress. Any decision to postpone or cancel the M4 Black Route would have long-term consequences for the government s reputation within the business community and not just in Wales. Within the first 100 days of the new government, a timetable for the construction of the M4 Black Route should be published to give businesses the confidence needed to invest in Wales. EXHIBIT 7 A GREEN LIGHT FOR THE M4 BLACK ROUTE WILL PACK AN ECONOMIC PUNCH Unblock a vital but congested economic artery to Europe Increase prosperity and employment across south and west Wales a region which is responsible for 70% of Welsh GVA Support long-term economic growth by enhancing Wales reputation as the place to do business Benefits to the wider economy of over 600m - according to government calculations

19 20 A plan for prosperity: A business agenda for growth and opportunity for all Land-use planning must be proactive to deliver national infrastructure priorities For many businesses, planning is a vitally important issue. Done well, planning can create towns, regenerate communities and drive growth and opportunity nationwide. The right planning system can boost growth by helping firms respond quickly to changing needs. There are currently a number of strategic challenges facing Wales planning system and without a faster planning application process there is a real risk that Wales will miss out on growth opportunities. The Welsh planning system is in a similar condition to regimes in other parts of the UK. This presents the government with a major opportunity to gain a competitive advantage if improvements are made quickly. The Planning (Wales) Act is an ideal opportunity to drive through these improvements, rebalancing the operating environment towards enabling- not prescribing. The Act has introduced several positive reforms- placing the government in charge of national infrastructure, creating a national and regional planning framework and an independent body to improve the planning system. The government must now ensure the Planning (Wales) Act is delivered fully and achieves the step change in planning performance that we urgently require. With England shortly to embark on further planning reform, the Planning (Wales) Act does not mean our work is done, Wales must commit to ongoing monitoring and improvement. Wales needs a more ambitious and effective approach to rebuilding our nation s ageing infrastructure.

20 21 How to get building infrastructure to drive up economic growth: Transfer responsibility for the Wales Infrastructure and Investment Plan to an independent Welsh infrastructure commission by 2017, which should be responsible for the long-term planning, funding and delivering of all nationally significant infrastructure projects. Within the first 100 days, publish a timetable to deliver critical transport infrastructure including the M4 Black Route, the South Wales Metro, rail electrification and targeted improvements to the A40, A477 and A55. Ensure the Planning (Wales) Act is implemented fully and delivers real and significant improvements to the delivery of national infrastructure and the performance of local planning authorities.

21 22 A plan for prosperity: A business agenda for growth and opportunity for all Delivery: Make the Welsh Government an enabler of growth With difficult decisions ahead, Welsh politicians must prepare for the opportunities that come with a growing economy. As growth returns to Wales, government and business must work together to explore new export markets and encourage further inward investment. To do this, we must focus our limited resources, delivering change in order to maximise growth and jobs. All spending should be directed on the areas that will secure long-term prosperity. Government departments must work together to become generators- not inhibitors - of growth with high-quality public services such as education and health at the heart of a healthy, skilled and productive society. Wales needs a whole-government growth strategy to deliver a more competitive economy The government must be an agile partner in driving the economy forward, demonstrating Wales is open for business. Business wants to see the government make progress towards a more joined-up and nimble approach to supporting growth, one that focuses on ambition and delivery. This should start with the next government committing each department to challenging annual growth objectives. To support effective delivery, each government minister should develop a competitiveness plan which is subject to annual appraisal. The Programme for Government was intended to be a unified government plan of action but in reality it has not met business expectations. It is essential that the next government has a clear plan and timetable for how the government will go about implementing its policies and when they will be achieved. This wholegovernment competitiveness strategy should be led by the First Minister and give a sense of the key priorities for improving national competitiveness, focusing government resources on the most-pressing matters. With an agreed plan and set of priorities, we must ensure that the machinery of government can deliver it, placing people with the right capabilities and commercial experience in roles to oversee it. To support effective delivery, each government minister should develop a competitiveness plan, outlining how their department will improve the attractiveness of Wales as a place to invest and meet the growth strategy s objectives which should be subject to annual appraisal.

22 23 The Welsh Government and UK government must work together for Wales to thrive With a population of just 3 million, Wales is the right size to be nimble, quickly responding to market demands and reaping the rewards. While devolution has given rise to many opportunities it has also created artificial barriers that have occasionally hindered the UK government and Welsh government working together. While joint working does exist, it is often ad hoc, temporary and buffeted by political cycles. Wales needs a more certain and effective approach. Creating a shared vision for Wales could unleash a new wave of growth. The government s Council for Economic Renewal and the Wales Office s Business Advisory Group have both been valuable forums for government and business engagement but they meet separately and work in isolation. To drive economic growth, a closer and more dynamic partnership is needed which ensures growth opportunities do not fall through the governance gap between Cardiff Bay and Whitehall. The government should work with the Wales Office to develop new and compelling offers for inward investment and export support, advised by a Wales Growth Council. To ensure the council has the data and information to make change happen, it should be supported by a group of officials from both governments. Our nation s economic renewal is too big a job to be left to one government- let alone one department to achieve. We must all work together towards a common goal. Reforming public services will be key to unlocking growth enhancing investments Business has an ambitious, long-term plan for Wales in which opportunity and prosperity are shared by all. High-quality public services such as education and health are integral to a healthy, skilled and productive nation. These services are today under threat from a cocktail of challenges. The scale of the challenges and the pace at which they need to be addressed has yet to be gripped by any political party. Wales needs no more than eight local authorities and action should be taken in the first 100 days of a new government to deliver this goal by Tasked with meeting increasing public demand and expectations with reduced budgets, cutting across the board will not result in better outcomes or modernise services. The government must create a bold new vision for public services, assessing what needs to be done and how best it can be delivered to achieve the outcomes Welsh citizens want and deserve. While there has been progress, successive reforms have left public services unable to keep pace with innovations and improvements made elsewhere. Business wants to see a coherent re-engineering of service delivery, improving outcomes for users and delivering benefits to front-line staff. This process should begin with an efficiency review of devolved services that identifies inefficiency and highlighting where artificial boundaries create undue cost and complexity.

23 24 A plan for prosperity: A business agenda for growth and opportunity for all The government has progressed plans to reform local government, with proposals to halve the number of authorities across Wales. But business believes Wales needs no more than eight local authorities and action should be taken in the first 100 days of a new government to deliver this goal by Wales needs a more intelligent approach to devolved public sector procurement. The government should ensure their procurement principles are implemented effectively with a more commercial approach adopted to maximise the value of the Welsh pound. Only a level playing field will give small and medium sized businesses a fighting chance to expand their business and contribute to a growing Welsh economy. The government should ensure a more commercial approach is adopted to maximise the value of the Welsh pound.

24 25 How to make the Welsh Government an enabler of growth: By the end of June 2016, develop a whole-government competitiveness strategy, led by the First Minister, committing each minister to develop a departmental competitiveness plan with challenging KPIs. Within the first 100 days of the assembly term, work with the Wales Office to enhance cross-government working on trade and infrastructure, creating a Wales Growth Council and Wales Growth Unit that brings together Welsh business leaders with officials from the Welsh Government and Wales Office for the first time in a united effort to enhance competitiveness and drive growth. Commit to placing public service reform at the heart of a whole-government strategy, commission an efficiency review of devolved public services by December 2016 and create at most eight local authorities by 2018.

25 For further information on this report, or a copy in large text format, contact: Leighton Jenkins Assistant regional director T: +44 (029) E: leighton.jenkins@cbi.org.uk Copyright CBI 2015 The content may not be copied, distributed, reported or dealt with in whole or in part without prior consent of the CBI. Printed by Duncan Print on Amadeus 100 pure white silk, containing 100% recovered fibre certified by the FSC. Duncan Print is certified to ISO and registered to EMAS environmental management systems NEZ052. Product code: