The Welsh Government should reverse a decision made a decade and a half ago and bring back a development agency for Wales, according to the world’s foremost organisation dedicated to economic progress.
Next week the Organisation for Economic Cooperation and Development (OECD) is due to publish a major report, making recommendations about how to fix the Welsh economy. A draft of the report was leaked to the Western Mail.
Until it was abolished in 2006, the Welsh Development Agency (WDA) was responsible for attracting inward investment to Wales.
The then First Minister Rhodri Morgan decided to scrap the organisation after a series of spending scandals, and as part of the so-called Bonfire of the Quangos, which was aimed at making public spending more directly accountable by bringing functions in-house.
But opposition parties and some business groups have claimed the disappearance of the WDA has put Wales at a disadvantage when creating new jobs.
Among a host of other recommendations, the OECD report says it would be in the interests of Wales to have a development agency again.
It states: "Reintroducing a regional development agency that is strategically oriented to support implementing regional development investment policy, including internationally, could help build capacity in both the public and private sectors.
"By creating a horizontal agency, potentially housed within the proposed Office for Regional Development and Investment, but not responsible to any individual line minister or department, it can operate across sectors and across silos.
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"Doing so could advance regional level policy implementation by building and managing relationships that contribute to productivity and investment, as well as to well-being and regional attractiveness."
According to the report, the overall objective of such an agency would be to support the implementation of regional development and investment initiatives, complementing the strategy and coordination role of the new Office for Regional Development and Investment.
It adds: "On the policy side, this can range from identifying realistic development priorities for the region to providing data that supports performance measurement and policy evaluation, for example.
"On the investment side, it could serve as a one-stop-shop, advising local authorities, entrepreneurs, SMEs, the third sector and other interested stakeholders on the design and eligibility of projects for public funds, and navigating the public financing channels that would support these. Most importantly in the Welsh context, such an entity could contribute towards building trust among stakeholders.
"It is fundamental that such an entity be able to work effectively across Welsh Government departments.”
The report suggests the agency could have a national headquarters, for example within the Office for Regional Development and Investment, with regional arms located in south east Wales, north Wales and mid and south west Wales. It would be essential that such an agency was properly resourced and have decision-making power within defined parameters.
Setting out the Welsh Government’s challenge, the OECD report states: “Addressing territorial inequalities can help improve well-being including income, jobs, housing, health, sense of community and education disparities. The aim of a place-based regional development policy is to help all types of regions thrive and offer their residents a high quality of life.
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“While this is laudable, it can be difficult to achieve. Increasingly, countries are re-evaluating their toolkit, identifying mechanisms that will help them promote high levels of well-being, and by building on local assets and knowledge, undertaking strategic public investment and including a diverse stakeholder base in the process.
“Wales is considering all of these possibilities as it refines its governance and investment approaches to regional development, including through a green growth restart and recovery post-Covid-19 pandemic.”
A Welsh Government spokesman said: “We commissioned this expert report to provide an independent and international best practice perspective on economic development in Wales which will help inform our future work to ensure we deliver for businesses, people and communities across Wales after we leave the EU.
“We’re pleased to see the OECD welcome our moves over recent times to a place-based model of economic growth which is already very much at the heart of our Economic Action Plan and our goals for the future of regional investment in Wales.
“The report provides a range of interesting recommendations to consider when shaping our future approach to economic development and we will be discussing these further with social partners in the coming weeks.”
A former Welsh Government minister, who did not wish to be named, said: “I can’t see the idea of bringing back the WDA being supported. The WDA was out of control, wasting public money on first-class flights and extravagant hospitality. And it wasn’t delivering what it was supposed to.”