Enterprise Zones – The Mystery Continues

The Welsh Government’s much vaunted Enterprise Zones were in the headlines over Christmas, this time for the wrong reasons, after the Assembly Finance Committee issued a scathing report on their (lack of) progress. The December report said the zones remained “something of a mystery” and urged the Minister to place “as much information as possible” in the public domain. That recommendation, in particular, reflecting a growing unease felt by opposition parties about the lack of any meaningful data with which to assess their progress.

My colleague, Andrew RT Davies, has spoken publicly of his disappointment at responses from the Welsh Government to written questions, letters and FOIs on enterprise zones and it is a shame because we fully support the development of carefully crafted and effectively supported Enterprise Zones in Wales. The opportunity to build a consensus is rare and should be valued, but I have been increasingly disappointed with Labour’s management of what should be a flagship policy.

Enterprise zones have received serious investment since they were established – £125 million identified in the Wales Infrastructure Investment Plan for Enterprise Zones, £10 million for business rate relief and a slice of the £57 million cake allocated to superfast broadband – and AMs have a duty to scrutinise Welsh Government spending. However, to date we have been unable to get access to the most basic information about how this money is being spent and, most importantly, what impact those decisions are having on zone performance.

Long awaited KPIs

Just before Christmas the Minister finally published key performance indicators (KPIs) for the zones, after over a year of procrastination and under pressure from all sides of the chamber. These highly anticipated measures are supposed to help monitor the progress of the zones in the coming years but in reality they are so thin on detail it is likely that they will shed very little light at all.

For a start, there are no targets for the individual zones, only a national benchmark. This means that a bumper performance from just one or two of the zones will be enough to conceal wider failures, and that Assembly Members will be unable to assess zones local to their own constituents. I also have other deep concerns which need to be addressed.

Instead of setting a challenging target for ‘new jobs’ created by the zones, the Minister has opted to gauge performance in terms of ‘jobs supported’ – an altogether less impressive measure which theoretically includes any company which has ever had dealings with her government.

The target for investment muddies the water too. By lumping private and public sector spending together, the minister has made it nigh on impossible to assess how much has been generated beyond her own budget.

We want to know how much new private sector investment these zones have attracted, not a woolly figure which includes an undetermined contribution from Welsh Government funds.

To put it bluntly, as currently calibrated these targets give the Welsh Government too much leeway to massage the outcomes.

Regular Reporting

Across the border the English zones encounter significantly greater scrutiny. At present they report on 14 measures and have implemented a detailed monitoring framework designed in conjunction with the zones to ensure they were are able to provide enough data to ensure reliable tracking of performance.

The English Zones report on a quarterly basis, building an information sharing relationship with the UK Government that enables both parties to issue regular reports and detailed additional pipeline intelligence.

Last month it was announced that since their launch in April 2012, Enterprise Zones in England have attracted 212 businesses, secured half a billion pounds of private sector investment, and created nearly 5,000 jobs.

This regular and detailed reporting must be replicated by the Welsh Government if we are to understand the strengths and weaknesses of our own zones.

However, here in Wales we won’t get the first results based on the new KPIs until the close of 2014/15 which is simply unacceptable when you consider that enterprise zones were launched here in 2011.

There have been numerous announcements from the English zones – £650million and 16,000 new jobs over 12 years from Chinese investors in the Manchester Airport City Zone, a £1billion deal with Advanced Business Park to transform Royal Albert Dock (itself providing an additional 20,000 jobs over 25 years) and a £20million Japanese investment in the North East Enterprise Zone creating 230 vital local jobs.

I want to see these sort of announcements in Wales but yet again we are playing a waiting game.

Not simply a ‘bubble issue’

One of the reasons this issue hasn’t been given greater coverage in the Welsh media is because there is a tendency to view Enterprise Zones as a ‘bubble issue’, but in reality this is about jobs and prosperity for the Welsh economy. That’s why it’s so important that we get these right, starting with a substantive and rigorous system to assess performance.

I mentioned consensus earlier in the article and it is a rare commodity in politics. On Enterprise Zones we have a rare opportunity to work together with universal support for a scheme which is patently delivering huge benefits elsewhere in the UK, whilst Wales plays catch-up.

These targets, though disappointing, are a starting point and none of these problems are insurmountable. However, it is time the Welsh Government stopped being too afraid to fail and set out to deliver something altogether more ambitious.

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