Future Business Support 3 July 2001

Alison Halford:

I am pleased that a tribute has been paid to Val Feld. Her pioneering work has eased this burden. She was particularly helpful to me, as I have only been a member of the Economic Development Committee for a short time. We all hope that she will be back soon.

The Committee’s challenge was to facilitate service delivery, rather than administrative reform, as the main tool for delivering the £150 million of annual Government aid to Welsh business. The transparency and reliability of funding is a key issue. Are there not too many different pots of money at present? Should not businesses have a single stream of finance upon which they can rely? At present, businesses must apply to various trusts, bodies, services and agencies, all of which have with their own deadlines, contact numbers and expiry dates. We need a transparent, traceable and accountable funding process for every business that we help. I agree with the report that such funding complexities act as a straightjacket to economic growth, but I remain to be convinced that all the recommendations will solve this problem.

I agree with the Deputy First Minister that a single regional gateway must be the way forward. The complex administrative issues must be simplified. There must be proper cross-cutting deliverers and it is important that busy businesses have time to find out what help is available. They need good information fast and they need support to help them grow and survive. It takes time to get the hang of running a new business, be it an art gallery or a new internet start-up, and we need to provide tailored help and predictive and responsive support.

The key to the success of this report will be ensuring that national standards are matched in local delivery. Business Support in north Wales is in some respects a model for our reforms. It acts as a single, local one-stop shop for business help. A recent survey found that it had a 91 per cent approval rating. However, the profile of local Business Connect gateways remains low in general. Therefore, I welcome the development of a business gateway network throughout Wales.

The WDA, as we know, has worked hard to develop a worldwide reputation. It is fitting that that body be given the responsibility for the day-to-day activities of the gateway. However, like people, organisations sometimes lose momentum and focus. That is why it is important that the WDA conducts an internal reorganisation and lays down targets as required in ‘Betterwales.com’. It must embrace new technology, weed out moribund staff and be at the forefront of new and innovative ways of delivery.

In many senses, our future depends on how the WDA delivers. It must be independent, it must allow regional consortia to run themselves on a day-to-day basis and it must act impartially. This is an innovative step forward and I support the motion.

Janet Ryder:

I will pick up on some cross-cutting Committee issues, rather than business ones. I will consider the future of business support in rural areas. The Agriculture and Rural Development Committee has been conducting a review of this, and recently published its report, ‘Diversifying the Rural Economy’. The review considered business support for rural areas. It was much wider than business support for farmers only; it was for the whole of the rural economy. Should that not have been considered jointly with the Economic Development Committee’s business support and development review? Would it not have been sensible to join them together? Perhaps joint meetings should have been held around Wales, especially in rural areas, to take evidence. The Economic Development Committee held meetings outside Cardiff, but was the Agriculture and Rural Development Committee offered the opportunity to participate in those meetings? As far as I know as a member of the Agriculture and Rural Development Committee, it seems that the two reviews were conducted separately, similar to the way in which the two European documents—the rural development plan and the Objective 1 single programming document—were prepared. There does not seem to have been the joined-up approach about which we hear so much from the Government. The Assembly must get much better at joining up approaches across Committees.

However, there is an amazing amount of similarity in the language deployed in the Economic Development Committee’s report on business support and in the Agriculture and Rural Development Committee’s report. In the latter report, there was a call on Finance Wales to address the needs of developing rural businesses by giving special attention to the needs of new entrants to farming. In line with that, Plaid Cymru would like to see Finance Wales allocating responsibility for assisting rural businesses to one of its members of staff.

In the same report, there is also reference to the poor image of Business Connect, and the possibility of a new brand name. That again confirms that there is concern about that name. We need assurances that it will be adequately re-launched and rebranded and sold to rural and urban communities.

When I consider the situation in rural Wales, I wonder what on earth the Economic Development Committee can do. One of the recommendations for the National Assembly to follow-up in the Welsh Affairs Select Committee’s report, ‘Social Exclusion in Wales’, was

‘We welcome the growing awareness of the extent of social exclusion in rural areas. It is vital that funding of services, from both UK Government and the National Assembly, should reflect the needs of rural areas.’

Consider what has happened in rural areas since then, and how much the situation has changed. That report was published long before the effects of foot and mouth disease devastated businesses in all sectors of the rural economy.

I am sure that Members are all aware that the report published yesterday illustrated the effect of foot and mouth disease on businesses in Wales. It showed that business failure rates have shot up by 42 per cent since Easter due to the huge drop in tourism. The figures showed that Wales has by far the highest rate of businesses going bust in the UK, with 15.9 per cent of businesses going under since January. That surely demonstrates the devastating knock-on effect that the disease has had on small businesses. The number of business failures in Wales has leapt from 304 in the first quarter of this year to 432 during the second quarter.

As Wales is by far the worst affected area, additional resources and support must be given to support rural areas. As a result, you would expect the Government of Wales to propose definite recommendations in its response to the Welsh Affairs Select Committee’s report. That paper will be discussed at tomorrow’s meeting of the Local Government and Housing Committee. In the Assembly’s response to the report, the point that I quoted earlier will merely be ‘noted’. After all the mounting problems in rural areas, no course of action has been set and no structures have been put in place to help businesses. The paper is simply to be noted. Is this a reflection of how this Labour/Liberal Democrat Government view rural areas? What specific actions does the Government in Wales intend to take to tackle those issues? An effective strategy to deal with the problems of rural areas is lacking. In effect, there are hardly any references to rural areas in the draft national economic development strategy. The Government should ensure that adequate and practical measures are developed to offer employment to young people who wish to stay in their communities. This was the Government’s opportunity. We must judge whether or not it has taken it.

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