Cynulliad Cenedlaethol Cymru

Welcome to the Economy, Trade and Rural Affairs Committee. Today we are starting our second day of evidence gathering in our inquiry into inward investment. I'll just do a few housekeeping announcements and seek declarations of interest from any Members in the first instance. Any declarations of interest? We don't have any apologies, because all Members are present.

To the witnesses, the microphones come on automatically, so there's no need to press any buttons. And if you require translation throughout the proceedings, the headsets are to the side of you there. And to our guest on Zoom, the interpretation should come through on the system to you as well then. I'll ask you, first of all, to introduce yourselves for the record, if I may, and the organisation or group that you represent, and then we'll go into questions. If I could start with you, Professor Munday, and then we'll move on to you, Janis, and then we'll go to the guest on Zoom.

Hi. So, it's Max Munday. I direct the Welsh economy research unit at Cardiff Business School. I've got a longstanding interest in inward investment, so I'm very interested in some of the questions that the inquiry is asking.

Hi. I'm Janis Richards, and I'm the membership director for Wales for Make UK trade organisation.

Good morning, I'm Jess Hooper. I'm director of RenewableUK Cymru. We're a trade association, representing about 500 organisations with renewable energy interests across the UK, with a specific lens on Wales, where we have about 50 members.

Thank you all. I'll begin the proceedings by asking a general question, if I may, to all three of you: what is your assessment of the inward investment offer that Welsh Government makes to attract companies to come to Wales? If I could start with you first of all, Professor.

I think the nature of the inward investment offer has had to change. If we go back to, I don't know, the 1980s, 1990s, when Wales was very successful in attracting inward investment, so regularly attracting maybe 20 per cent of the inward investment projects and jobs coming to the UK, in spite of just having 5 per cent of the UK employment population, back then the offer was very much based on—. The actual location was very important, because we were one of the closest assisted areas to the ports, to markets in the south-east—three or four hours, five hours by juggernaut to the tunnel. So, the offer then was very much based around infrastructure, fairly competitive labour costs and the assisted areas, and very, very strong—we can't get away from it really—marketing undertaken by the Welsh Development Agency at the time.

Things, I think, now are much more complicated, because, obviously, the inward investors that we're interested in are not just manufacturing companies. I think you're going to hear that there's inward investment by energy companies now, retail and services; fintech inward investment has become more important. Their infrastructure needs are very different; their labour skills needs are very different. So, I think things have needed to change. I think Welsh Government does a fairly good job in terms of your marketing of Wales to inward investors, but, as I say, I think the environment around inward investment has changed a lot since the 1980s and 1990s.

Janis.

I agree with all of that. We have a great heritage of inward investment back some decades ago. We're in a different place now. But I do think, likewise, that the focus that the Welsh Government has—. The investment summit was a fantastic focus for us, but also the focus on priority sectors. It helps to shape the landscape for anyone coming in with investment to spend here in Wales. Our sector clusters, for instance, really strengthen that collaboration that we have here in Wales. But I daresay we're going to go into a lot of depth in these different areas.

Thank you. 

I'd agree with both of those statements. I think I'd probably reflect on the nearer term. So, two key things to note, obviously with a focus from a renewable energy perspective: Wales hasn’t built anything onshore, in terms of renewable wind in particular, for five years, and offshore it's been nearly 10 years—or over 10 years now, in fact. A really good case in point to reinforce that is that, of the CFD allocation rounds—so, the contracts for difference, the revenue support mechanism that’s brought through to support renewable energy—according to the LCCC, which is the Low Carbon Contracts Company, the body that administers those awards, up until last week Wales had seen less than 2 per cent of the contract value. Now, that is going to increase from the round that we saw last week, which will probably bump us up to maybe 4 per cent, but I think, in terms of investment made to date, Wales has not got its fair share of this opportunity.

During that period—. I know we are sometimes loath to compare ourselves to Scotland, but they’re a really good case to look to in terms of the renewable energy deployment that they're bringing forward. They secured £18.8 billion in LCCC investment, compared to only £0.9 billion in Wales. That's a really stark difference. Based on population size, Wales could have been expected to secure £3.6 billion. However, if we'd seized the export opportunity presented from renewable energy and were able to match Scotland's performance, it would have been nearer £10 billion to £12 billion, not that £0.9 billion. I think that really sets the scene for reinforcing where Max and Janis have made those remarks about the change in what we see now compared to what we saw 30, 40 years ago. It's a very different environment and we're not performing as well as we probably could. That’s largely due to, I think, conflicts in policy that we are seeing, particularly around planning and infrastructure investment. There are a few key pillars that need to underpin these things. The intent that’s there and the general aura for renewables is positive, but, actually, when you get down into the detail, it's not quite what we need.

Just briefly, if I may, before I open it up to other Members, you've set the scene for what your view is on what the offer is, and the planning situation was highlighted in our evidence last week, but, if you take the overall success or failure, where is Wales compared to Scotland, England and Northern Ireland in attracting inward investment, in your experience? Are we successful in attracting what we should be getting, or are there areas that we could be doing better in? Professor.

That's a difficult one. I think later on you have questions about the data. I think it’s very, very difficult to establish currently where we are competitively with Scotland and Northern Ireland in particular, because we just don’t have the best quality data on inward investment stocks and flows. My feeling would be that we probably do not do as well as Scotland. I think the renewables points made by Jess are very strong. I think we may have lost opportunities there. I think as well—. There's always this issue, and this goes back 40, 50 years, about the quality of inward investment. In particular, I think Scotland, through time—this might be contested, but—I think Scotland may have been more successful in attracting what I would call higher order functions in its inward investors—so, perhaps more headquarters functions—whereas Wales maybe hasn’t done as well there. That would be my view.

Okay. Thank you. Janis, anything to add, or—?

No, it's not my area of expertise, the other nations, but we do have a policy team and, if you wanted information, I could probably provide that to the committee.

Okay, thank you. Jessica.

I think I'd reinforce what Max has said there. We tend to have satellite offices based in Wales, and with those companies where we do have headquarters, we're actually finding that, because the pipeline in Scotland in particular is so much stronger, our Welsh businesses—. So, the Jones Bros civil contractors is a prime example that we come back to every time: 90 per cent of their business is in Scotland. Now, that's a really disappointing state of affairs. We need that business to be in Wales to bring that investment. We need those contractors to be based in Wales, and, indeed, I think we've seen calls for support for substantial companies, so tier 1 contractors, to come to Wales to act as a hub, to then create the spokes that enable those smaller businesses to flourish around them. And we just haven't got that basis to ensure that they locate here as HQs, as Max said.

Thank you. Alun. 

I'm interested in what you were saying there, Max, about the data and the comparison. I'm interested that the data doesn't exist, because my understanding is that there is some significant data that explores all of these different areas. So, I'd be interested to know exactly what you meant by the quality of that.

But then, going on to why—. I don't necessarily disagree with the conclusion that Wales isn't batting in quite the way it should be, but what I'm interested in is your understanding as to why that is the case. 

Shall I answer that?

Please do. 

With respect to data, in the olden days, we used to have information from the Invest in Britain Bureau, so your data would be telling you about new projects, planned new jobs, planned investment. There was always an argument—. Again going back to the 1970s and 1980s, when an inward investor announced something, IBB would say, 'Well, look, it's going to create x thousand jobs.' Well, immediately, you'd multiply that by about 0.6 to get to the real outturn. 

But there are more subtle issues than that. There's a lot of inward investment—. We can pick up for KLA, Vishay—you can see it, it's quite easy to see. And they'll announce it. It's good for their public relations, and it's important for Wales. But there's a lot of inward investment that we don't so readily see. So, for example, in retail, many of our retailers are foreign owned. They might invest in you. Energy companies: energy inward investment, historically, has been very poorly picked up in the statistics. Construction companies, inward—. So, we're very good, historically, at picking up on the stuff that you can easily see. I think we struggle much more, particularly where Welsh Government is not directly, perhaps, involved, in picking up on things that are more under the surface.

And if I could add just one more point here. It's not clear to me always what we mean by inward investment. Are we talking about from overseas, or are we talking about from the rest of the UK? Because, as far as Welsh economic development is concerned, it doesn't really matter whether that inward investment is coming from the rest of the UK or overseas, provided there's no displacement. So, those would be the data issues. 

I'm sorry, you're going to have to remind me of the second part of your question. 

The second part of the question was at the heart of where I wanted to be, because if there is a differential performance in Governments, then I'm anxious to understand what that is. Why is it—and Jessica spoke about Scotland as well—why is it then that one Government of the United Kingdom is able to outperform the other? What are they doing well, and what are we not doing so well?

If I could use the example of energy, for example, energy inward investment, perception is important. I wouldn't want to mention the names of companies, but I've heard first-hand from some large multinational energy companies that based on their prior experience of investing into Wales, they would tend not to do it again.

Why?

Because of layers of bureaucracy and problems in planning. 

Give me examples of that.

If I gave you an example, I'd—

Okay. But, 'layers of bureaucracy', what do you mean by that?

So, it could be, for example, once you've invested hundreds of millions of pounds, you have sunk costs into the system, then there are extra, perhaps, environmental hurdles that one has to overcome, extra investment has to take place, things that stop you moving from construction—. You know, you've constructed it, but you want to commission it. There could be a gap between construction and commissioning the infrastructure. I think it's a perception. I think those problems are equally there, possibly, in other parts of the United Kingdom, but I have heard managers say this, that they'd not tend to repeat: they would not tend to repeat in Wales.

Thank you. Jenny.

I want to go back to Jessica, first of all, because the picture you paint is very disturbing in terms of us not getting the investment we need in renewables. As somebody who was involved in the Infrastructure (Wales) Act 2024, which has now been implemented, why is planning still being cited as a barrier, given that we've set really clear timelines? And the Ministers will have to come to the Senedd to explain themselves if they don't meet the timelines within the 12 months from start to finish.

Thank you, Jenny. I think there's a little bit of story weaving I can do here. So, to pick up on some of the points that Max has made there, renewables is a really good example to draw on for this. If you look to Scotland and the appetite that they've had, and the policy environment that they've created, it has been incredibly clear. So, 10 years ago, they set out a very clear ambition. They provided very clear technology-specific targets. They said they wanted, I think it was, 9 GW of onshore wind built by 2035. They created a policy statement of about 76 pages, which was in support of, basically, how you would build and achieve that onshore wind figure.

They then created underpinning bodies that support that, and that has had a ripple effect in then ScotWind coming forward, so shifting from the onshore market to the offshore market and the ScotWind leasing that they've done. Because they had those very strong and robust foundations, they've been able to build on those. So, they've created bodies that specifically look to offshore wind to support the development, and specific models and investment mechanisms to support businesses coming into Scotland.

For an inward investor, I think, and there have been multiple international companies looking to Scotland, 'What have you got that supports that?', and the mechanisms that are there are so robust that when somebody—Chinese companies, for example; I think there's French as well—they're looking to the UK and they're comparing country by country. They're saying, 'Okay, these mechanisms that are there are so supportive, so robust.' And the historical delivery is so undeniable that they've sort of said, 'Okay, this is the place to be.'

It's actually the same very much in the north-east. We went up to the Port of Tyne and saw there where similar cluster relationship—Janis mentioned clusters before—how those mechanisms support businesses as they come in. They create a network. There's a very easy access to skills, to grant support, to the local planning authorities. So, that's one aspect. I know, Jenny, I'm not necessarily answering your question here.

So then, to take it to the planning side of things, I think, credit to Welsh Government, we have seen a lot of change, and you specifically mentioned the infrastructure Act coming through. But it's worth bearing in mind that that was only enacted in December, so we're not yet seeing the benefits of that streamlining of consenting.

In the last two years, we've seen around 15 to 20 development of national significance applications come through. Prior to that, in the six years previous, we probably only saw two or three. That gap is where the problem lies; that sort of hiatus in projects being realised, being consented and determined really speaks to the bureaucracy that Max touched on. And that bureaucracy is multilayered: it's there being quite high hurdles in Wales that make us, potentially, less attractive, but it's also there not being adequate investment during that time period to support the pipeline that was there, and the ripple effect of that being that things tended to back up. We've seen them coming through in the last couple of years. I would anticipate now that we'll have a period of uncertainty as the infrastructure consent Order beds in, but credit to Planning and Environment Decisions Wales and Natural Resources Wales—and Welsh Government's investment in those—I think we're in a much better place now to be supported with those projects coming forward.

But the key thing that sort of ties back to my initial point is that we need robust underpinning policy and that's not necessarily there in that case. We do still have some conflicts. I mean, it would be remiss of me not to mention peatland. You have very sort of stringent biodiversity targets, then you have climate targets being addressed by, you know, a desire to have 100 per cent of demand met by renewables by 2035, yet there's a jarring between those two departments. And it's something we've been trying to deal with for three years; three years is a very long time—

Okay—

—in the context where you're up against Scotland, who are delivering at pace. And even now, the UK, you know, the Department for Energy Security and Net Zero have really pulled all the stops out in the last decade—in the last year, sorry—to support wind.

Okay. So, we're not going to pursue the biodiversity versus industry here; we haven't got time, unfortunately. But there was a major policy decision made last week, announced by Ed Miliband. So, mega offshore wind, enough to heat a million homes. What are these barriers, the high hurdles that we need to eliminate, to ensure that we get the investment we need to have the battery storage, so that we can actually use this energy here in Wales?

Are you talking about the CFD there? The announcement that he made around the—

The announcement around Awel y Môr and—

The contract for difference.

—the floating wind off Pembrokeshire.

So, we're in a relatively strong position. So, Awel y Môr, and indeed Erebus, coming forward as part of that allocation round is very positive. I don't think we should underestimate what they mean in terms of Welsh opportunity. The challenge that we've got is that we don't have a particularly consistent pipeline. So, the next round of projects that we're likely to see—. I'm sorry. There's the Mona project, which was also, I believe, probably bidding in that round; we don't know for sure. But if you see—. This week, EnBW have actually announced that they're withdrawing their support for the two projects, Morgan and Mona, that were being progressed off the north coast of Wales. That's quite a blow to the sector and quite a blow to Wales. What's positive is that they're still taking Mona forward. So, we do have a robust foundation of opportunity there; the challenge being, that's one additional project that will probably bid into allocation round 8 and be looking to deliver. We've then got quite a gap until the next offshore wind projects and the pipeline that's available comes through, and those are the floating wind opportunities in the Celtic sea.

Not to understate the positive announcements from leasing round 5, we've got three inward international investments coming forward there, which are very positive for the region, but they're not going to be building until 2035. So, we really need to be thinking about how onshore wind plugs that gap in terms of pipeline. We need a drumbeat of projects. And that support needs to be, you know, triple armed. It needs to think about the infrastructure that supports all of these technologies and then it needs to think about onshore and offshore wind, and how supply chains can be supported in investing to support those three different streams of technology. So, investment in grid, making sure that the steel that's used for the pylons is sourced in Wales, how can we do that? We've got a real need to invest in our infrastructure here in Wales and if we can ensure that local content supports those, that's a really basic underpinning that we can do in terms of economic growth and opportunity.

Secondly, then, in terms of offshore wind, there's a really good drumbeat of projects. I think we've estimated that there's a 7 GW pipeline that could be built out. If we can secure—. I think there's 60 per cent of the contract value that could potentially land from civil contracts and indeed steel to support that. If we can secure that in Wales, then it's a robust foundation for those subsequent contracts that then come through for offshore wind. But we have to ensure that we're supportive of those businesses in investing in that supply chain and in skills and in the growth that they need to make that happen.

Thank you. Janis, how important are clusters as a mechanism for bringing these things together? I mean, just accept—. I mean, push back against Jessica if you disagree, but it sounds like a plan.

No, I don't disagree with Jessica, not at all. Clusters form a really integral part of our ecosystem within manufacturing, which is what I deal with, and from an inward investment point of view, it does make that a lot easier. So, let's look at the compound semiconductor cluster—highly successful.

Okay. We'll come on to semiconductors in a minute. If we need to get the steel made in Wales in order to make this a coherent step forward, rather than just somebody using our seas and all the benefit going to somewhere else.

Yes, absolutely. And that's where, for instance, in Tata, what's coming now is—. I mean, I don't think there's actually a named cluster there, but it is acting in the same way. They are pulling together. Hydrogen is another one. You've got the new hydrogen hub being developed down in Pembroke.

Is it happening fast enough, though? I mean, we're going to need the steel quite quickly. These contracts have been awarded last week.

I agree. Possibly not, and especially with the news in Sheffield, where they're bringing in steel from outside to build in a region where they've actually got the steel there. Possibly not.

Okay. So, what is the role, then, of clusters more broadly, just moving away slightly from the steel conundrum?

I think that the role of the clusters is where businesses are able to support each other, not just from outside. I think it also helps the Welsh Government in coming into those clusters and being able to tap into many businesses, all with a similar interest. They all have the same skills needs. They have a similar supply chain. It makes doing business that little bit easier, and it gives them that support network to help them to develop and grow.

So, taking the example of Jones Bros Civil Engineering, obviously a very important multinational player, what role have they played in enabling other businesses to grow around them in north Wales? 

I'll be honest, they're construction, so I don't really deal with them. Sorry.

Okay. Fine. Professor Munday, perhaps you have a view on that.

Clusters in key sectors—we started to go down this wormhole, I think, in about 1991, as a policy area. 

You're obviously not a fan.

When we think about original cluster thinking, starting with people like Marshall, when he was looking at Sheffield steel industry, things like the Birmingham jewellery quarter, Marshall coming here, coming in and having a bus tour around Wales today, would probably not see any clusters as he understood them. We have bits. We tend to have bits of value chains here, not clusters. We do have some; I don't want to dismiss the idea completely. We do have some genuine clusters of interrelated activity. But it's not like the Dutch flower sector, it's not like the champagne sector. In fact, we just don't have that in Wales. And there are good reasons for that—we're a small economy. We've got to get real on that. I mean, we're 3 million people, and the supply side here is quite limited. We were talking about offshore wind, well, there are going to be limited economic effects in Wales, because we don't have a supply side. We have some little bits. But the high-value components will always tend to be imported in. That's the lesson of history.

So, having said that, where we do have those pieces of the value chain, it is important to build upon them. We've spoken a little bit about the semiconductor sector. Yes, we do have some interesting manufacturing parts of the value chain. We have those higher education institution linkages. We have the compound semiconductor catapult. That's good. People are looking at that now. There's a term we use, a 'triple helix': we've got the companies, we've got the higher education institutions, we've got the devolved Government as well, working together to get results. So, from that point of view, I think that cluster of activity, that is noticed by new inward investors. But there is—I hate the term—a positive vibe, I think, around the sector.

Yes. Certainly, we had very strong evidence last week from CSconnected, that they were attracted in by the skills, the 'world-class skills', he said, from both Swansea and Cardiff universities. So, how are we going to get the people who've come in because they like the pipeline of skills, to enable those inward investors to then use local suppliers rather than bring in stuff from somewhere else? How do we get that virtuous growth out of what is, clearly, local success? Perhaps I can come to Janis while you're thinking about it.

I think that's already happening. In the OpTIC cluster in north Wales, for instance, around St Asaph, a lot of the businesses around that area are in a similar type of manufacturing. What that's done is provided the supply chain for those businesses coming in. It is already happening. Semiconductors are the same. There are so many businesses that have grown over the last five to 10 years around that Cardiff to Newport area. Of course, we also have Vantage coming in with the data centres. I'm sure it's not insignificant that they've got these large energy-intensive—electricity-intensive, I should say—businesses around them that they will then be feeding. So, I think it's a bit of a magnet that's already doing its work.

Good. So—

Unfortunately, the time is going to beat us. I'm sorry to say it's such a rush, but we've only got an hour allocated, we have. If we can follow up with written questions, that would be helpful. Sam.

Thank you very much, Chair. Good morning, panel. We've talked about some of the delivery of projects, but, taking a step back in terms of how effective different layers of Government are working to attract business and investment in the first instance, what's your analysis of that, and where do you think the improvements can be made, starting with you, Professor Munday?

I'm going to upset a few people now.

Please do.

We need to hear it.

Okay. I think, looking back, it was a bit of an own goal getting rid of the WDA, in terms of fleetness of foot. I'm not denying that there may have been elements of their activity that were perhaps a little unwise, but I think the distance between a strong inward investment authority with a very, very strong brand, which is still recognised internationally today—. I accept that we're in a different inward investment environment. I accept as well that resources are a lot, lot tighter now than they were in the 1970s and 1980s. But I think, in terms of marketing Wales overseas, having one strong organisation—. We used to talk in the olden days—. I'm talking like a dinosaur, aren't I, buthe team Wales approach, organised through the WDA, was very, very effective. As I say, with the benefit of hindsight, I think losing that type of organisation was a loss. I think we'd be doing a lot better today if we had some sort of structure from that distance—giving a little bit of distance between Ministers and the marketing, if you like.

Okay. Thank you. Janis.

I do feel that the layers are challenging. It's often difficult to have clarity on exactly what direction you're going. It doesn't help—. As you know, we've got 22 unitary authorities. They work independently. Many of my members have sites on more than one authority, so they're up against different bureaucracy within those. I suppose I don't want to labour on the WDA model, but there was clarity then as to exactly where you went for any support you needed. It is more difficult now. Funding, especially, is quite difficult to navigate.

As in access to funding?

And knowing what's out there. So, I can be on calls with my colleagues across the border, talking about funding opportunities, and I'm Googling to see if we've got it in Wales, or, if we've got it, is it called something else? So, it's quite difficult. I've even tried mapping out funding for myself, but I lost track of that very quickly. So, it's just challenging, and some sort of clarity on that would really help all businesses, of any shape and size.

Okay. Thank you. Jess, you used the term earlier, in terms of delivering a project, of 'jarring' between two departments. In terms of attracting that investment in the first instance, would your analysis be the same for that?

I think so. Slightly going against what Max said, on team Wales, I've had experience of working with team Wales overseas, and there is a strong cohort of individuals that are out there representing Wales and what we can do. I think part of the challenge is that we don't necessarily understand our own strengths and capabilities that well in a cohesive picture. As I think Max alluded to earlier, we have a lot of SMEs—I think it's something like 95 per cent of the businesses in Wales are SMEs. We don't fully understand their capability and their capacity to support a lot of the things that we're talking about, and I think that's part of the challenge.

RenewableUK—so, my parent company—actually did an investment prospectus last year, and they did an analysis of the financial institutions that are available to support. And to support Janis's statement there, it was quite challenging pulling that together, because there are so many different bodies that you can call on and so many different applications of the funding. As Janis alluded to, is it present in Wales and, if so, what does it look like, what's it called? That's a really big challenge, particularly around some of the more nascent technologies that we also represent—tidal being the case in point. They're looking for grant funding to support more. So, potentially, the test and demo projects would be going down the same line, and universities to support these technologies—where can they apply to? And it's not that clear.

I think Max's point around the WDA is a really robust one. We—it was actually in my previous role at Marine Energy Wales—were part of the Celtic sea cluster and working quite extensively with companies in the south-west, and the difference in their ability from having a local enterprise partnership to support them in securing funding and applying to the UK Government for funding pots was stark. There's I think probably in excess of about £20 million that's been directed to regions in the south-west where Wales is missing out. And it's not through, I think, a lack of desire to secure it; it's just not co-ordinated enough—there are gaps that we fall down, there are potential misunderstandings between departments, and there's a lack of resource within those departments.

So, another case in point: last year, the Welsh Government commissioned the task and finish group to look at offshore wind and how we could realise it. An action plan was created in June, I think it was, and an implementation team was promised. We still don't have that implementation team—so, it's the lack of resource that goes behind delivering these things. We're up against it a little bit in terms of time. I know I talked about a 2035 deadline. It seems like it's a decade away, but, fundamentally, we need to be laying the robust foundations to support these businesses now because the contracts—. As Jenny mentioned, allocation round 7 has been allocated. Those contracts and final investment decisions, the contracts that will be let to support those businesses, they'll be in the next couple of years. Those businesses need to be ready to support them.

There's a really interesting example of a collaboration that's come together quite organically in the south-west of Wales called Celtico UK, which I think is 16 to 18 manufacturing companies who've recognised that individually, as SMEs, they probably don't have the clout to apply to some of these big projects, but together they can support some of these contracts. The challenge that they've been up against is securing the funding to support that. They've ended up doing it through quite a convoluted route. Rather than there being a one-stop shop that they could go to that would say, 'This is where that can apply.This is how you can secure that funding', they've had to scrap about a little bit and find little pockets of money to support what they're doing, with contributions from those companies. But, fundamentally, you need to be able to leverage some of that public funding to support that private investment, and that's been really hard to come by.

I've met with Celtico, and I attest to that. Thank you, all three of you. Your answers were so all-encompassing, I've got no further questions.

Thank you. Luke. 

Diolch, Gadeirydd. I think, throughout the session, we've alluded to some of those infrastructure problems, whether they're some of the more bureaucratic ones or physical ones. So, I suppose this is building on much of what Alun was asking, and others: what's the solution here? What do we need to do in terms of infrastructure to make Wales more attractive for inward investment? Janis.

I think if you asked my members that, they'd probably say put an M4 relief road in, which is a barrier. The M4 is a barrier. It does make it difficult for people coming in and out of Wales at those key times. There's not a lot we can do about Wales as the geography it is, we know that, but there are things we can do within the communities around Wales. In mid Wales, we can't be spending billions of pounds when there aren't that many people, but what is there needs support, and it's just finding those areas of support. I do think we do it quite well, because, again, you've got a cluster there that work really well together. They support each other. Also, the data connection—we are tackling those problems. It's taking time, but we will get there. It is happening, and the investment is coming in to assist those technologies.

Coming back to what you said around an M4 relief road, that physical road infrastructure, is that something you are seeing as a barrier for inward investment in actuality? I know there are a lot of people who say that it is, but are we actually seeing it having an effect? 

I wouldn't have any proof of that, not at all. I can only say what I hear from people. I think a lot of what we've talked about here is those perceived barriers. Yes, we do have planning loopholes that we have to get through, but for people outside of Wales, it's that perceived difficulty. We just make it more difficult, and we need to break all that down. We know there are planning changes happening. We know it's going to get better, but somehow, we need to get that message out there, because I do believe—and Jess just alluded to it there—with the south-west working with the local enterprise partnerships, people outside of Wales just see it as a difficult place to do business. It is getting better. We just need to get that message out so that wider communities see that, actually, Wales is a great place to do business.

Many of the economic studies historically have always flagged up roads as important, but I think those were in the days when the dependent variable, if you like, was manufacturing inward investment, and it's not now. With the best will in the world, the extra, I don't know—. You might save 10 or 15 minutes with a relief road. I don't think that's going to be of interest to a lot of inward investors now.

I think the challenges we have now with infrastructure, it seems to me, are in terms of very basic things like access to electricity. We know that on some industrial parks in Wales, there are not grid connections. That could start to stymie new investment. People have got to wait a long time to get a grid connection in.

I think that's going to become more acute when, as Janis alluded to, we have these new Vantage data centres. They use an awful lot of electricity. Okay, they can generate power, but they use a lot of electricity. They don't create many jobs directly. They're important for us technologically. They don't perhaps have the economic development outcomes for Wales we might always want, but they use a lot of electricity. If we're talking about industrial parks with more conventional manufacturing companies, and we have data, who gets the electricity?

I'm going round the houses a bit, but I think the road infrastructure debate is very 1980s, 1990s. I think it's more about electricity and digital infrastructure now. That is more important.

You definitely see, in the case of the steel industry, some of the challenges around electricity pricing as well, and that being a potential incentive for some companies to move elsewhere, when you’re paying less for energy in France or Germany. It really is something to consider now. Jess, if I could turn to you.

I wholeheartedly support Max's statements around grid there. Grid is one of the major infrastructure challenges that we're up against as a sector, and it's been woefully underinvested in in the last 20 years, to be completely frank. To weave in with what Janis has said as well, those mid Wales areas where we're seeing potential for businesses to flourish then being met with challenges for increasing their grid demand, because grid connections can't be offered in a timely way, is suppressing the economic opportunity of those regions, but it does go so much further than that. In our sector, we've produced reports in the last year that essentially say that the renewables investment opportunity for Wales could be up to £46.7 billion. About 20 to 25 per cent of that could be secured by Welsh businesses, but that is entirely dependent on those businesses being able to upscale, and to do that, they're going to need grid.

At the moment, quite a misunderstood position for Wales—we've done a number of focus groups and testing—is people think that Wales has got a far greener electricity network than we actually have. The UK as a whole is supported by about 50 per cent green electrons; in Wales, it's only 30 per cent. That's a stark difference. We're definitely falling behind in that regard. Luke, you mentioned there the cost of electricity being less in some of our European nations. We are so dependent on the gas price for setting that electricity basis that it is costing us dear. It means that those businesses are relocating. Investment in our grid to support projects coming forward, renewable energy projects coming forward, and stabilising and creating energy security for ourselves is fundamental.

The other point around infrastructure that hasn't been mentioned is our need to invest in our ports and to do so rapidly. Leasing round 5 has seen that pipeline come through. There are a number of ports on the south coast that have potential to offer in those respects. What's challenging is that pipeline of certainty coming through. Is 4.5 GW in the Celtic sea enough? Probably not. We need to be pushing the Crown Estate to see a longer, more sustained pipeline, but we also need to be supporting those ports in making that investment in how they bring it through, ensuring that consent is delivered rapidly.

I think when you start to do that—. I mentioned, I think, in my first response, the need to attract a tier 1 contractor. If we can create the right environment with a WDA equivalent, which is a one-stop shop for understanding where investment comes to, create that hub and spoke in, let's say, Port Talbot—part of the free port, really good advantage that we've got there, linked with Milford Haven—that whole region is coming into itself in terms of the opportunity. But we've got to have the foundations to realise that, and I think that's where we're missing. What we can't do—and I think there is a risk of this at the moment—is introduce more hurdles in Wales that make us even more unattractive in the UK setting. We've compared ourselves to Scotland quite a lot in this conversation. They're already streets ahead. We cannot put in place more hurdles that make us more difficult.

There's quite a discussion at the moment around community energy projects. As a sector, we wholeheartedly support the need to bring those forward, but recognition of the commercial-scale projects and the role that they have to play, not only in delivering cheap power but also in delivering economic growth to us, is fundamental.

Just quickly on the ports bit, what would be your assessment on where investment in ports in Wales is at the moment? We know we have the task and finish group that was set up by the Welsh Government to look at this amongst other stuff as well. And again, I come back to thinking about the continent, and some places on the continent being far ahead of us on that port investment to take advantage of offshore wind. It would be interesting just to get your views on where we're at with that investment.

We've got quite a significant challenge there in that I don't think it's necessarily within the Welsh Government's gift. I think as the Welsh Government you need to create an attractive minimised-risk location within our devolved powers. The reserved matters that sit with the UK Government probably dictate this more—the amount of funding that's required, and probably the support mechanisms, and, indeed, that link through to the Crown Estate and, indeed, GB Energy. They are going to be the fundamental fulcrums that enable us to realise that port.

There is, however, still a role for the Welsh Government in saying, 'This is what we want, this is how we're going to support it.' I know you mentioned the task and finish group there. The intent there was very good, but it's sort of dwindled a little. As I mentioned before, we're six months down the line and there isn't an implementation team. Not very many of those actions have been brought forward, and I think that's due to a number of reasons. First, I think it's resourcing within the Welsh Government civil service team. We need to see more and more bums in seats to support the sector, to support those decisions, to create that cohesive team that's pulling it all together. That's missing, to some extent.

One word of caution, I would say, is that we don't need any more reports on these things, and that goes for both grid and for infrastructure investment. We've got a really robust evidence base. We know what the problems are. We need to be thinking about not only how we resource it, but how we fund it, and how we realise that funding to the best possible impact in the time frame that we've got.

It's the land of song, committees and reports, as someone told me previously. I'm conscious of time, so I'll very briefly, if we can, just look at the skills part of this puzzle. We heard earlier that there are certain areas of Wales where our skills offer is seen as world class—semiconductors being one of them. That's certainly, coming back to the perception point, not the messages that we're getting from other sectors, where there are massive shortages. I know this is quite a big, broad question, but, thinking about how we can address some of those skills shortages, where do you think we need to go? Is it more joined-up thinking? Is it too higgledy-piggledy at the moment, all over the shop? What would be your general views? Janis. 

I would say consult with industry. Skills should be based on what industry needs. We welcome the consultation that Medr are currently doing on apprenticeships. It's in our gift to produce world-class, highly skilled jobs, highly paid jobs, but we need to involve industry in that so that the courses, the apprenticeships, whatever the programmes that are being developed, are fit for purpose and fit for future as well, with all new technologies coming on board. We've got 14 colleges all doing engineering apprenticeships, and that needs to double. We need to double the number of bums on seats doing apprenticeships, because these are highly paid jobs. We need to engage those youngsters at a younger age, bringing in schoolchildren into industry to see, get them excited about it. It's not a dirty factory, these are really highly paid, highly technical, often, jobs that can excite children. We need to get them excited early on, and show them just what career paths are out there for them.

Thank you. Any additional comments, Professor Munday or Jess?

I would just underline that comment about pushing STEM at a very young age and giving those youngsters, probably from the age 11 onwards, access to see what engineering jobs are, what contemporary industry looks like, what the opportunities are. I still think, because of parents, grandparents, we're not very good, very often, at communicating the nature of opportunities to our kids and our grandchildren, because of how different industry is from when we were younger.

Alun Davies.

I was listening to that conversation, and I'm thinking we're doing all of these different things, but we started off this conversation talking about some of the impressions gained and lessons learned from the 1980s and 1990s and the rest of it. One of the other characterisations, if you like, of that period of inward investment was that the Welsh Government, or the WDA, or whoever it was at the time, would give people a slug of money, they'd turn up, they'd use that grant, and then they'd go off again. That was both true and not true, of course, but we learned these lessons. You've all, in different ways, been quite critical of the Welsh Government this morning. How does the Welsh Government change to root inward investors in a community and a local economy in Wales for the long term, and not simply the short term?

Think about Sony. Sony came in 1972 or 1973, so they've pretty much been there 50, 52, 53 years now. What did you have? You had colour television production, and then they moved to tube production. And yes, okay, after 2000, it's gone down, but it's still there and they're still doing digital cameras; they're making the Raspberry Pi as sub-contractors. Why are they still there? I would argue that one of the reasons they're still there is because both the WDA, and Welsh Government, in more contemporary times, have worked very, very closely with them all the way through. So, I shudder to think how many thousands of equivalent job years we've had out of the Sony corporation, but a lot of that is down to the good, we could call it, 'after-sales' service, if you like, where officials have worked very, very closely and have supported them.

We talk about embedding, and I know that part of this is going to be talking about supply chains, but we often think about embedding, or, yes, okay, we want to make sure that our electronics producers, our semiconductor, that they try and buy things locally. Yes, that is one element of embedding, and that is important for gaining the multiplier impacts from inward investment, but there is another area of embedding in terms of how Government officials can actually help subsidiary management to embed themselves better in their own corporate cultures, to make those subsidiaries critical to their corporations. And it's on record with Sony that that operation has become more important to Sony internationally, and I think the Welsh Government, and the old WDA, can take credit; that is down to good after-sales service, good support. So, embeddedness is a two-pronged thing.

Does anyone else wish to comment, or are you content?

I do agree. I completely agree, and I think it's using the likes of and using Sony as the example, as a good example for someone coming into Wales from outside of the UK, perhaps. The community that they have there, and the work they do within the community—. It's not just about them being part of a corporation that is actually owned in another country; it is not about that at all. Without Sony there, there is a lot of—. There's, obviously, the supply chain, but the community around Pencoed—. If you have ever been to the site itself, it's fantastic. Their schools engagement is fabulous, and it is a credit to them. We need to replicate that.

Okay. I'm content.

Just on that point, about companies coming into the Welsh market, you raised in the earlier session—just before I ask Hannah to ask the final set of questions—skills. One of the things we learned last week is that skills is a really important after-sales, if you like, commitment that companies seek, from Welsh Government in this instance. Today, for example, Medr have come out and said that there is a £25 million shortfall in the further education budget for next year, and, basically, there aren't going to be the skills courses for people to go on. Would you say that that has been mirrored over successive years, where there hasn't been the opportunity for companies, once they locate here, to get apprenticeship courses going at local colleges and ultimately build up that skills base, and that we need to invest more in the apprenticeship sector? Janis.

Yes, we need to invest a lot more in apprenticeships, absolutely. However, I will say that the larger companies, many of the larger companies in Wales, have their own academies, so they kind of tick their own boxes. It's the SMEs that require those apprenticeships, because they are the supply chain. So, we can't be without them. But, as I say, when you look at a lot of inward investors, if they're big-name investors, they will bring their own academies with them, they will train the people themselves. Then we come back to: where are they going to get the people from? That is another bag altogether. But definitely apprenticeships—we do need to invest a lot more money in apprenticeships. We need it to be an attractive option for children leaving school to go into an apprenticeship.

Thank you. Professor Munday.

Yes. I concur very much. I think there's too much of a willingness, sometimes, in the private sector to blame the state, if you like, for lack of skills. I think that, with some of our bigger inward investors, they have a responsibility to develop their general and specific skills. I think there are plenty of examples in Wales of companies that have done that very, very successfully, in as much as they've taken the initiative with FE colleges, for example, to develop courses. So, I think the private sector should be taking the lead—or sharing the lead, perhaps, would be more appropriate.

Briefly, Jessica.

I think, from my point of view, that there are three things that underpin this. So, pipeline I've talked about already—having that drumbeat of opportunities that come through supports all aspects of this. There are two particular examples across the UK that I'd draw on, and they're both in the north-east. So, Green Port Hull—Siemens invested there in a blade manufacturing facility. The set-up that underpins that is extraordinary. It's two local planning authorities working together, there's university involvement, there's local school involvement, there's a specific cluster being set up to support that. And then similarly in NOF—so, again, in the north-east, based around Tyne—a similar sort of pattern. You've got specific academies that have been set up that work both at school level with STEM subjects for 13 to 18-year-olds and then where they can go subsequently, and specific training academies that support them.

I think where you get that core business located, everything else tends to flock to it, and that's what we're missing in Wales, that kind of fulcrum that pulls it all together, which I've mentioned before already. The other challenge I think we've got across Wales, and I said this about mapping our SME capability, but it's similar for our skills capability—I don't think we have a particularly strong story that speaks to what our skills capacity is.

RWE is a prime example of a company that matches the profile Max was talking about there. They're training their own apprentices; they invest specifically in what they need. Part of the challenge I see there is that a lot of those individuals are then taken out of Wales and they go and work, particularly, on the east coast, where all the projects are. So, it comes back again to that pipeline story. What is our pipeline of projects? What does it look like? How are we supporting them? How then do we tell that story to those businesses and to those universities and to those schools and those children that we're going to be bringing through?

But I think there's also a point here to make that children are our skills force of the future, but there's also the here and now. How do we look to do that skills transfer and decarbonisation, the green skills story, that transition element? We're working within RUK with the military, but also the oil and gas sector. How do we transition people who have a lot of the expertise in other areas that is probably quite transferable into the sectors that we're talking about?

I just think we, overall, need to map that a little bit better in Wales and do it more cohesively. It often feels a little disparate, I think. I get asked to attend a lot of meetings, and a lot of them seem to be along a similar theme, but in different regions. How do we make sure that picture is as cohesive and as connected as possible?

Diolch, Cadeirydd. I'm conscious that I'm in stoppage time.

We're in injury time, but please ask the full slate.

Yes, I'll do my best to get a couple of final questions in to witnesses, if they enable me to. We've touched, I think, briefly on this in previous questions around the importance of the supply chain. So, we want to attract inward investment in Wales—what does that look like? We want to benefit the broader economy, but we also want to make sure those benefits are felt not just across communities, but also within businesses that might already be based here or used to attract other businesses and organisations to Wales. So, just very briefly, do the witnesses have any suggestions in terms of what works well now and what could be done better by both the Welsh and UK Governments? I'm going to go to Jessica first, just because I'm looking at you on the screen where I'm sat.

Sorry, could you—? The connection broke up ever so slightly there.

In terms of support for, basically, enabling supply chains and for those benefits from inward investment to be felt across communities, rather than in one fixed location, are there things that Governments are doing well now, or things that could be done better?

I think there are regional examples we can call on. So, I mentioned already the south-west and the role of the LEP in bringing people together. I know Max was a little bit sceptical about clusters, but I do think some of the cluster models that we've got are incredibly effective at joining people up at skills level, supply chain level, business investment level, to create as cohesive a picture as possible. I think we can learn from countries and companies and areas and regions that have already done that. We don't need to recreate or reinvent the wheel, for want of a better phrase. Let's just ensure that we are consistent in how we're doing it and that we're using a cross-region approach for it, because there's a real risk, I think, of duplication if we don't.

Thanks. Before I come to the witnesses in the room, I'll just follow up with you, Jessica, if I may. I think we touched on the skills opportunity. I've heard already about the recent announcements around contracts for difference in Pembrokeshire and Erebus, and also Awel y Môr, which is quite close to where I live in north Wales. Do you think the foundations there are in place to make sure, again, that we have those local supply chains and the workforce to take advantage of those opportunities? I go back to something that Max said earlier in terms of the responsibility, perhaps, of some of these big companies to also invest in the skills agenda too, because I know there's a good example, which I use, in Coleg Llandrillo in Rhyl in north Wales, where they've got their centre of engineering excellence, where they've worked in partnership with RWE. So, are there other things that you think we can be doing and we need to be doing now to make sure, once those projects are on stream past the construction phase, that, actually, supply chains are benefiting local businesses, but also that we can be upskilling that workforce for the future and providing those opportunities close to home?

It comes back to pipeline. Those two examples are brilliant examples, Awel y Môr being an RWE project, and I already touched on RWE's apprenticeship scheme and what they're doing. They're very well embedded in the north Wales region; the work that they do is critical. I think similarly for Erebus. Now, Erebus is a 100 MW test and demo project. It is a critical project for the region in demonstrating what the capability requirement is. It's a relatively small project in the context of things, but we cannot underestimate just what that means for the region. We need to work with our skills providers, and there are a number of activities already under way in the region that have been supported by the companies behind that. So, Blue Gem Wind have been a key player in something called Destination Renewables, which has been going into schools and thinking about those STEM subjects that we've touched on already. They've done, I think, a number of supply chain analyses around the area, and I think this is supported by the Crown Estate's activities, particularly around the supply chain accelerator and looking at businesses. The challenge we have got with Erebus is, as I say, it's relatively small. It needs to be delivered by 2030. That allocation round 7 has a cut-off date of 2030, so it will be operational by then. In terms of creating an aspiration and inspiration, it's phenomenal. What it can deliver for the region will be visibility of what the requirements are, what sorts of people will be involved in it. We do have reports that already speak to that, and Awel y Môr is an extension to Gwynt y Môr; that project has been built out.

There are examples that are following through and we're continuing to deliver on, but what we need beyond those two projects is a pipeline that fills the gap out to 2035. So, I am reiterating a point that I made before, I'm sorry. But I do feel that onshore wind can, to some extent, help to plug that. Some of the expertise that you're going to need will be around electricians, engineering, welding. It goes from every level. It's your blue-collar workers right through to your white-collar workers. We can draw on that as long as that pipeline is a constant drumbeat, well understood, and we are mapped to how we deliver that. And it's not easy to do and I think Welsh Government has a fundamental role in doing that, and the task and finish group looks at offshore wind in its entirety, but it needs to gel a little bit more, I think, with the onshore wind opportunity and what that looks like.

Thanks. Max, any reflections?

It is the supply chain. Yes, we're very, very interested in our multinational inward investors buying as much as they can in Wales, but I think, increasingly, particularly with high technology companies, with supply chain and embeddedness, we may need to think more in terms of a UK plc view. So, when we attract an inward investor, when we work with them in after-sales service, I think, yes, we point them to opportunities in Wales, but I think, with some of our industries, we have to take a UK plc view, and I think that would involve Welsh Government working with UK Government to identify supply chain opportunities—so, perhaps a bit less parochial.

Thanks. And Janis, finally, to you.

Yes. Going back to an example that Max used earlier, we've got a great example in KLA, who work, obviously, closely with as many Welsh suppliers in their supply chain as they can. But, through their academy, they're training people from their supply chain. They train people from local businesses, coming into their site for the training, and they're also working really closely with Swansea University and have recently launched semiconductor-specific courses. So, we have some really good examples in Wales, and I think inward investors need to know that these things are going on, that they can tap into them.

Sorry, could I add one more point? Sorry, Janis, had you finished?

Yes.

It was just something that occurred to me, and I've been incredibly guilty of it throughout this session—I think we've got to stop thinking about Wales in isolation as well. There are opportunities that are beyond our borders. We have capability that could deliver into that. We've got to think about how we work with those other regions. So, there will be specialisms that we potentially don't have here in Wales that are present in Scotland, or, indeed, in the south-west, and I think mapping to those—. They're well understood; they probably have more advanced clusters than we do. What gaps can we plug and how can we use those in the context of supply chain opportunities, SMEs, to make sure that, if there is a lull in the Welsh market, we can pick up an opportunity that goes beyond our borders?

Okay. Thank you. We've gone into penalty shoot-out time now, we have. [Laughter.] We've done extra time. Thank you very much for your evidence this morning. It is greatly appreciated. A record will be sent over to your good selves to have a look at of the evidence that you have given. If you have any issues with it, please raise it with the clerking team, otherwise that will form the official record for our report. Thank you all very much. We'll now go into private session while we change the witnesses for the next panel.

Good morning and welcome back to the second session of the morning, collecting evidence into our inward investment inquiry. We have three witnesses before us. I will invite each witness to formally introduce themselves and the organisation they represent, for the record, and then we will go straight into questions. I'll ask you, Mr Poole, to introduce yourself first, if I may, and then I'll go to our guests on Zoom, starting with Councillor Stewart, and then Councillor Hughes, and then we'll open up for questions. Mr Poole. 

Thank you, Chair. Ken Poole. I'm head of economic development at Cardiff Council. I've been with the council for 12 years, previously with PricewaterhouseCoopers in Cardiff, where I worked for just under 30 years with them, primarily on inward investment, with businesses and development agencies. 

Thank you. Councillor Stewart.

Thank you, Chair. Councillor Rob Stewart. I'm leader of Swansea Council, and also chair of the Swansea bay city region. 

Councillor Hughes. 

Councillor Dave Hughes, leader of Flintshire County Council. 

Thank you. Gentlemen, this inquiry is on inward investment and the Welsh Government's offer to the world to come and set your business up here in Wales and create quality jobs. What is your assessment, as a scene setter, of that offer, and its success in attracting inward investment, compared to other parts of the UK? Mr Poole, I'll begin with you.

Thank you. If you have a look at the broad statistics that are produced by both UK Government and private sector advisers, they make quite an interesting comparison. If we have a look at, first of all, the UK Government stats, they suggest that, over the last year or so, Wales's performance has improved, attracting more jobs and more investment. Within that, there's a lot of safeguarding—safeguarding jobs, for example—and a broad range of sectors. But I think we're particularly interested in what is the new investment within those figures. And if you have a look at Wales's performance over the last five years, it's broadly steady—we're attracting about 20 new greenfield investments per annum. That's comparable to most of the other regions, apart from Scotland, which is a step ahead of us in terms of their success in attracting investment.

While safeguarding is important, and in the current climate, it'll continue to be important, particularly for key industries, I think a good benchmark for success is to look at these greenfield investments. What are we bringing in, and are they in the right kind of sectors that we want for Wales to grow and to prosper, particularly in the new economy or frontier sectors? Now, we're doing well in some, but not doing well in others. And I guess as we go through the analysis, we'll be able to establish perhaps why we're not doing as well in some of those sectors.

The final summary point I'd like to make is that, when we look around Wales, we don't have a sub-regional analysis of those figures to share and to debate, which I think are available, and that would be particularly useful. But I think what those figures will show is that the M4 corridor is doing reasonably well, and north-east Wales are doing reasonably well, but the rest of Wales may not be doing as well. And I guess that's an area that we just need to expand upon in this debate and analyse the sub-regional importance of the Wales offer, and whether we're focusing enough on some of those sub-regional strengths, particularly on the M4 corridor, particularly Cardiff, particularly Swansea, and north-east Wales, as part of our offer to industry.

Just before I invite Councillor Stewart in, you said that we don't have that sub-regional data, and then you said that we do have it. So, I presume that Welsh Government have got it, but it's not shared with partners and organisations and made public. 

Yes. And from a partner perspective, we'd obviously welcome that kind of data being shared: what kind of businesses—. We know, from a Cardiff perspective, what businesses are moving in, but it would also be very useful to understand where else in Wales they're doing well and why they're doing well, and what businesses are going to certain parts of Wales, presumably because the offer in other parts of Wales is attractive to those businesses. But I think it'd be very useful to share that kind of data, rather than work on a global Wales figure within which there's a number of anomalies and challenges.

Thank you. Councillor Stewart.

Thank you, Chair. Very similar in terms of what Mr Poole has said, I think it is a mixed picture—there are some real positives there. Just talking at the present time, from a Swansea Council perspective, we've benefited significantly from the schemes and the programme from Welsh Government, specifically for us. One of the big things that has helped has been the Transforming Towns assistance from Welsh Government, helping us to leverage in private sector investment and to help grow and restore the city centre economic base. So, that has been a real positive for us, and that's been critical for us, establishing a billion-pound pipeline of investment for the city.

Obviously, on a regional level, the Welsh Government's investments don't sit alone. We're grateful as well for the assistance of schemes like the free port, et cetera, which surrounds Swansea as a local authority, but obviously will benefit significantly the region.

The other big schemes that have been assisted for us in our area have been the ongoing discussions between the private sector consortium working to bring the tidal lagoon to Swansea, and that's obviously a private sector-led investment now—potentially a £6.5 billion investment. And, again, there were roundtable discussions just before Christmas with Welsh and UK Governments on that, a revised and revitalised scheme, which again is people wanting to come and invest in Wales. We've also got the beginning of the investment from Skyline, in terms of the New Zealand company and, again, packages put together there with ourselves and Welsh Government to ensure we landed the adventure park, a tourist attraction for Swansea and south-west Wales, and that will provide around £50 million of investment into our locality and see around 0.5 million visitors come and contribute to the tourism economy in Wales. So, they're multifaceted interventions proving to be successful.

Not all things are positive, though, because there are some challenges. As I said, when I've been at the committee previously—transport infrastructure in our area is a real drag on investment, and that is something I really want to see Welsh and UK Governments support us on, because we've now got the worked-up plans ready to go for rail. Obviously, we're going to be the first area of Wales for bus transportation and franchising in 2027, so getting some of our transport barriers knocked over would be really helpful, in terms of helping us to continue to see growth expand in our region.

Thank you. Councillor Hughes.

Thank you, Chair. We have been very successful in north-east Wales here, but that's about getting into the companies and asking them what it is exactly they want and understanding the supply chains. I'm currently speaking with Airbus now about the runway and saying, 'Look, we've got a perfect opportunity here. Can we have a freight port here where we can fly stuff in?', which would be a massive advantage to companies that want to come here. Because where we're situated at Broughton, we've got access to the M56, access to the M6. We could cover as far as Carlisle or go down as far as Birmingham. And then we've got the A483 and the A55, so it's an ideal place for us, actually, to develop something like that and being welcoming.

In my past, I used to be the training manager of Aerospace years ago, and then I moved to the college and headed up industrial links. So, it's about getting out there and talking to the companies and being welcoming and trying to—. We've got one with Knauf where we're looking at a £200 million investment, but it's making it easy for them to do. Companies don't understand what you need to do about the planning and everything else. They're not interested in that. They have a board meeting and say, 'That's what we need to do.' So, we have to make it easy, so that when companies come here we're open and we do all the stuff that they don't understand. They understand what they want, and that is, 'I want to open a new factory, and these are the machines I need to go to put in there.' But they don't understand the infrastructure on how they're going to get there. And I think that's the trick to it. We've had breakfast meetings. We've had a breakfast meeting where we've invited companies to come in and asking them what's their supply chain, where they're getting their materials from. Can we actually attract companies to come here and be in north Wales? It's not rocket science, it's just that more communication is needed.

It's also sharing our successes around. I do feel, sometimes, the communication isn't right. At one time, when we had the Welsh Development Agency, we had people going out to the companies and talking to the companies and bringing back in the information about what they need. If I look at the education system, I think, personally, that the colleges teach archaeology. If you speak to the industry and the modern things that industry are actually bringing in, colleges can't keep up with that. So, what we have to do is understand exactly what the companies need. You can link that back to the schools and say to the schools, 'Are the schools delivering the qualifications needed to access courses in colleges?' So, we should be talking it all the way through. Our schools should be delivering the qualifications that industry need. And the big thing with that is, when you talk to industry, sometimes you meddle too much with education and those in industry don't understand what the qualifications really mean. We understand GCSE and everything else, but when you start talking baccalaureate and all that, they don't really understand it.

So, it's a bit of a mishmash with it all, you know. But I think the trick is that you actually go out there and talk. I mean, I've got meetings with Gareth from Airbus; I've got four meetings this year put in the diary already. We need to keep talking to them, finding out what it is they need. They are looking to take on 100-odd apprentices next year. So, it's about keeping them warm, showing that you're willing to help them, and working with them, not against them.

Okay. Thank you, Councillor Hughes. Hannah.

Diolch, Cadeirydd. I think it fits in quite nicely to turn to the role of local authorities in particular in relation to attracting and securing that inward investment into regions across Wales. I'm going to just turn to you, Ken, because you're in the room with me and I'm looking at you, in the first instance, but if you'd be able to each expand on the role that you play as a local authority in attracting that inward investment into the area, and whether there is more you think that local authorities could be doing or should be doing, and what support might be needed to enable you to do that.

Thank you. Local authorities are at the bottom of the supply chain in terms of inward investment management. The Department for Business and Trade and Welsh Government are responsible for highlighting and marketing and promoting and bringing inward investment in, and then when an inward investor arrives, working with partners, and particularly local government, to land that investment. But, obviously, over the years it's been a process that has faltered. I don't think all the projects are shared, for example. We tend to get those projects that declare an interest in a local authority and then we're brought in. Perhaps we should be brought in a lot earlier, when a range of projects are looking at Wales, and then work with Government to highlight why Cardiff, for example, should be put forward as an investment location for company X, Y, Z.

So, being at the end of the chain has meant that Cardiff has had to also pursue its own strategy, based upon the priorities of the council and the priorities of the city. So, that's meant us not just working effectively with Welsh Government and UK Government, but also developing links and processes with the private sector and with other partners, like universities, for example, in terms of promoting the city for levels of investment. A good example is the partnership programme that we've developed recently with the Cardiff capital region, working with private sector partners, whereby we're looking to develop a programme to attend various investment events, both in the UK and overseas: the UK's Real Estate Investment and Infrastructure Forum, for example, at Leeds, which is becoming a very popular investment location for both private sector businesses and Government; MIPIM in Cannes in the south of France, for example, is an international exposition to attract investment. And also, developing our own strategies in terms of—. Well, our proximity to London is something I think we've progressed particularly well. You know, we're not that far away from London. So, we have regular events in London to meet investors, to promote Cardiff. We have one coming up as part of Wales in London week.

So, we've had to develop our own strategies because we have certain priorities for the city, particularly in terms of financial services, particularly in terms of the hospitality sector. So, therefore, we've had to develop initiatives to actually raise our profile within those markets. But the overall responsibility still lies with the Department for Business and Trade, UK Government, the Office for Investment, and the Welsh Government. There are changes taking place in those relationships that I think we need to be cognisant of and perhaps begin to think about, 'Are we able to develop and improve those relationships to develop more investment projects for Wales and, in turn, for Cardiff, for Swansea and north-east Wales as well?'

Thanks. I'll go to Councillor Hughes next.

Thank you. I mean, I'd like to think what we need to do is capitalise on the industry we've got here, and we cannot be everything to everybody. So, I would be looking at centres of excellence for different things. If I look on what we've got here, wing manufacture, where would you go for wing manufacture other than Broughton? And what's the latest in the wing manufacture? What are the supply chains needed to supply the labour to actually do that? If I talk about JCB, what's JCB doing? What are their next projects? Toyota, engines. What are we doing about engines? So, if we have centres of excellence that really home in on some of those places, then people will go, 'If I need to do any training or I need to understand it, that's where I need to go, because they've got the technology', and working with the companies for them to show us what the technology is.

It's very difficult. We need to get the supply chain closer to where it needs to be, and I think that's one of the failings that we have, that we don't quite understand what is it that industry needs in the area. We're good at manufacturing up here. We might not be very good at the tourism. So, why don't we concentrate on manufacturing and whatever? It seems quite simple to me, but it's difficult to actually achieve.

Before I go to Councillor Stewart, what would you say are the main barriers? So, if the various layers of Government were able to remove one of those barriers, what is the biggest obstacle, do you think, that's standing in the way at the moment?

The biggest barrier is, actually, understanding what's needed, and then breaking down those barriers. I mean, with Knauf, when we talked to them, it's a planning issue, with SuDS and everything else. What we must do is cut through all that, make sure that we give them a good service and we're open for business. We're not going to hold back on it. We need to make sure that whatever they're wanting, and it's in our gift to do it, we do it. But you've got to act quicker, because in business, they make a decision and they go with it. Sometimes, decisions are made and we fight it off manfully. 'Well, we'll have another paper on it.' Well, you don't need to do that; sometimes, you need to be turning around and saying, 'Let's cut through some of this.' When we look at some of the bureaucracy that we have to do to get things through, it's 'Industry, go away.' They turn around and think, 'Oh, that's too hard. That's getting too long.' They'll make a decision, yes, they want to come and work here, or they want to set up here, but if you're talking one, two, three, four years, they just go away and go somewhere else where they can get a better service. So, I do think some of the bureaucracy—. Yes, we need bureaucracy, yes, we need to be thinking we've got to be seen to be doing it all, but sometimes, it just takes too long. We need to really push through it.

Okay. Thanks. Councillor Stewart, just on that question around the roles of local authorities in attracting inward investment, what's working and what could be capitalised on more than it is now?

Thanks, Hannah. I'll try and run through it in that order, if that's okay. I think the stuff that's working, both at local, regional, national level, is, obviously, post Brexit, one of the things we did locally and regionally was to try and reactivate the friendship relationships we had with a number of cities and regions across the world, to try and turn those into more productive economic relationships. We took delegations to Japan, to China, to Germany, to lots of places where we could build those city-to-city links, or region-to-region links. Because, again, for areas like, for instance, China and India, where we've got university collaboration going on, they were very interested in having the sub-national links working effectively. Again, things progressed from those and those have proved to be valuable for us.

As others have mentioned, we're at the regular trade shows. We used to go to MIPIM, we're now at REiiF, and we've been there since the start. We were very pleased to see this year a Welsh presence at REiiF, as a Welsh platform there. Previously, we've been part of the western gateway, and, at MIPIM, we've joined the capital region in terms of being able to provide investment opportunities to those shows. But, of course, that's only possible if you've got the relevant projects and initiatives locked in, in terms of investable opportunities for the people that you're planning to meet and talk to at those shows. So, those things work really well. Again, I think the Welsh investment summit, just before Christmas, was a real boost for Wales. That went really well. We were really pleased to be pitching our Porth Copr investment there, as one of the five projects, and, again, we've had some good follow-ups on that. So, those things work really well. I think, from a local authority and a regional perspective, we've been keen to try and strengthen our relationships, region to region, or city to city, with places across the world that have real opportunities for us.

In terms of the weaknesses, I guess, or things that we could do a bit more of, or could have some help on, I think, for us, one of the things is the soft landing support for businesses that want to invest. At the moment, if you look at the directory, and it is only a directory that exists at the moment, which people can look at if they are looking to invest in Wales, it doesn't give a huge amount of information about where those opportunities may exist in Wales. I think that's something UK and Welsh Government could strengthen. And also some further support from the Development Bank of Wales for the property fund. In terms of commercial property in our region, we've got an occupancy rate of nearly 97 per cent. So, it's not the existing buildings that are a problem, but it's those new greenfield sites or brownfield sites that potentially we could bring to market and get people to invest in. That would really be helpful.

I've said for some time, which won't come as a shock to the committee, in terms of our city deal and our regional arrangements, we don't have growth fund flexibility. That is something we are asking for, to be able to invest in opportunities as part of our regional arrangements, because our city deal, obviously, was a locked down city deal and was designed differently from the capital region's growth deal. So, we're very much looking forward to being able to achieve that, if we can, because I think that's something, certainly in our region, we would like flexibility to do.

Mr Poole.

When we talk about inward investment, it's not just about bringing new investment in. As the other speakers have highlighted, it's the importance of looking after what we have and embedding them further in the economy. That's one area that we as a council try to focus on is looking after our investors—both large investors, but also investors in key sectors. That's an increasingly challenging task because of the need for resources. But as the leader from Flintshire highlighted, it's important that we keep in a regular dialogue with those investors. Their businesses are changing and we need to keep on top of it. So, the strength of our aftercare service is particularly important. That's an area, I think, where we're going to find challenges in terms of highlighting who we need to look after in depth and how we find resources to look after those. Because there's often a danger with aftercare of it becoming a tea-in-the-afternoon-type discussion: let's have a cup of tea, and let's move on. The challenge is developing a meaningful relationship with those businesses.

So, we're actually working with them to embed them deeper in the economy. Companies across Wales, like Sony, for example, which has been here for a long time, or Panasonic in Cardiff, which has come through a number of iterations and is now in a research and development phase, it's all about working with them and aftercare services. That's a challenge we're going to have to focus on. But we can't be winning new investment into Wales and, at the same time, letting our existing businesses slip out by the back door for lack of effective aftercare services. That's an area that, from a local authority perspective, is becoming increasingly important, but challenging from a resource perspective.

If I could ask Jenny to come in on her questions, because time always beats us on these things.

Ken Poole, you obviously took action to work directly with local businesses and universities, as you perceive them the bottom of the food chain compared with the DBT and the Welsh Government. I can see that that works to some extent, but when it comes to things like developing the heat network in Cardiff, based around the steelworks around the corner, you're then lacking the support you need from the DBT or other departments to actually develop it properly into a Cardiff-wide or a Newport-wide system. There's lots of great stuff done locally, but at the end of the day it has its limitations.

The role of the DBT, from a local authority perspective in Wales, is that they're out there, they should be out there, working with our embassies throughout the globe and bringing investment projects into the UK and into Wales. From a Welsh perspective, the DBT then should be passing those investment projects on to the Welsh Government. That's the area that they focus on. The heat network is a Cardiff initiative that we're developing to help improve the competitiveness of our businesses, but also our communities as well. That's a separate project that we've been working on.

Where we need more help, from an inward investment perspective, is more projects coming through the pipeline from DBT into the Welsh Government and ensuring we can begin to land more of those projects throughout Wales. As I said earlier, we do 20 projects a year, greenfield, which is in line with most other regions. Can we do more? Our concern, I guess, with some of the changes within DBT and the Office for Investment is will they benefit Wales or will they not benefit Wales. That's something we need to be looking at.

But the UK Government holds the major purse strings.

They're the ones with the contacts with the embassies overseas, and they're the ones who are supposed to be targeting those contacts and bringing them into UK plc, and then divvied up around the regions. 

My question is how are we going to get around this overcentralised system where we are at the end of the food chain—Wales as a whole, not just the local authority. 

We weren't at the end of the food chain many years ago when we had more engagement in the inward investment marketplace ourselves from Wales, when we had arm's-length organisations promoting Wales, and there were a lot more resources. People look back at the days of the Welsh Development Agency and they were well advanced, but today there's even more competition. We're dealing with projects currently, particularly within the defence sector and within the medical sector, where you have very active agencies, many of whom were never, ever in the marketplace for investment. But also you have across England, for example, city regions. You have Scotland investing, Northern Ireland, putting more resources into this field of inward investment. And it is an expensive programme, inward investment.

Sorry, Mr Poole, I didn't understand the point that you made when you said that other agencies were involved that wouldn't have been involved. I think you were referring to a Welsh aspect there, but then you moved on to England. What would those agencies be that we—

Let me clarify. In terms of, first of all, countries, there are many, many countries now who are actively involved in chasing and targeting investment that weren't there a number of years ago. What you have within the UK is that many of the emerging city regions are now seeing the prize potentially available from a foreign direct investment perspective, and are investing significant sums in building up their capacity and marketing of their city region. We know Scotland are doing even more. Invest in Ireland are doing even more, the Irish development agencies are doing more, they're putting more resource in because they see that the prize here could well be significant, particularly the growth of the defence budget, for example. So, there's a lot more activity, a lot more investment, a lot more resources being put into this area. Why? Because the prize is significant, as we can see from some of the major investment projects that are circulating at the moment.

Can I move to Rob Stewart? We used to have something called the south Wales industrial cluster. It's gone very silent. That was a way of Swansea being part of a much bigger region that is beyond where it is thought the inward investment is working. Because we talked about the M4 corridor, and north-east Wales, but how can we get these megaprojects, which are linked into energy, and get the cheaper energy that industry needs to want to come here? 

Maybe the ‘south Wales industrial cluster’ term doesn't get used, but I think the work certainly hasn't stopped, and it's done through different structures these days. In terms of Wales, we've got corporate joint committees, we've got city and growth deals. We did have the western gateway collaboration, and certainly from a Swansea perspective, we still have the city links with Cardiff, Newport, Bristol and Bath in terms of the south-west region, in terms of how we potentially can make our voice louder in terms of some of the opportunities and some of the asks that we have.

In terms of those new industries, we've got floating offshore wind taking place at the moment with the allocation of the licences from the Crown Estate. There were announcements on that last week. Further ones, obviously, will be announced in due course, with the potential not just for the benefit to Pembroke, but to Swansea port, to Neath Port Talbot and ports across Wales. Put that into things that people can physically imagine in their minds, and you're looking at structures being floated out of—

I don't need convincing. These are very significant developments.

But it's important. When you say ‘floating offshore wind’, people don't understand exactly what that can mean, and we're talking about structures going out of Neath Port Talbot docks the size of the Shard every few weeks, with thousands of jobs related to that, both in assembly and manufacture—

Yes, but the challenge here, as we heard from RenewableUK, is yes, these things are going to be developed, but are they going to be using Welsh businesses to develop that pipeline, to develop the port, to develop the construction, or are they going to be bringing in labour from somewhere else? Surely that is the role. Yes, those are very important announcements, but how are we going to capitalise on that to ensure that it becomes a catalyst for regional development? 

Yes, absolutely, and that's critical to our approach through the city deals and through the corporate joint committees, because you're quite right—getting the award is one thing, but can you then take advantage of the potential investment, do you have the skills pipeline coming through, are you preparing people—

That's what we want to know.

The point is that is exactly the strategy. If you had the opportunity to look at the investment strategies for south-west Wales, that is critical. We have the skills and talent project within the city deal, which is absolutely pointed at that, and obviously the work that's going on currently in terms of the Celtic free port and the preparation for the outputs of that. They are all focused on how do we prepare ourselves for the economy that we're creating, and making sure that we're taking steps now to fill and prepare the people coming through our education systems ready for those economic opportunities and those sectors. Energy is a key one of those. So, absolutely that work is going on, it's critical, it's a golden thread, if you like, through the deal—

It is, but RenewableUK have said there's a danger that these projects are going to have to be built by 2030, that's their remit, and that—. Can you convince us that—? What Jessica Hooper said from Renewables UK is that we simply don't have the businesses to capitalise on it. We've got Jones Bros up in Ruthin, but they're doing most of their work in other countries.

You're putting me somewhat at a disadvantage because you've had the benefit of a conversation with her that I haven't had, but all I can say is, given the recent change in Government in London, we're seeing a very different approach to investment in Wales through the Welsh Government, a different collaboration. We have for some time, as I've said at previous meeting of the committee—I'm sure other chairs have said the same—had economic growth deals that are trying to address those potential shortfalls before they occur. What I can't—

Concretely, what has the new UK Government done to strengthen the priorities for your area?

I'm sure you've seen the multiple investments around Port Talbot steelworks and the potential that that provides in terms of preparing the port to be able to take advantage of things like floating offshore wind. That's a tangible one. We've had—

Building out the port, capturing the heat? 

With respect, I think you should put those to the port owners and to the UK Government. They're not under my control. I am supportive of those things and, as chair of the region, we are trying to do that, but I think you're directing your questions at the wrong person. 

Okay. All right. It's just that—. It's really what is the role of either corporate joint committees or, indeed, these clusters in ensuring that the investment is secured. Councillor Hughes, what can you tell us about how what's happening in north-east Wales can be embedded, rather than a company comes in, they take what they need and then they're off again somewhere else? 

We operate a one-stop-shop approach for businesses, and this is very effective, although somewhat lessened by the limited Welsh Government engagement. Businesses like local connections to speak to day to day and who can help them make local links and navigate the wider public sector offer—

Okay. Speaking on Awel y Môr, which is something concrete that's happening, how is that going to benefit your regional economy as opposed to them bringing in labour from elsewhere? 

I've asked the question in Anglesey with the work that's going on there. We need to be looking at the workforce ready to actually meet that need. Skills gaps are significant in the manufacturing sector. With an ageing workforce and rising skills needed, just replacing those due to retire in the next 10 years is a major challenge.

We have to be bringing on apprenticeships and everything else for the skills needed for the future, and that's where I keep saying about linking in with those businesses. What do they need in the next 10 years, or whatever? We need to be thinking then about apprenticeships coming on, skills training and whatever we need to actually meet that need. That's how we're going to attract businesses in. They'll come if you've got the labour here to actually do it. 

At the moment, because we've had manufacture here for donkey's years—we had the steelworks, we had Courtaulds, everything else that we had going here—we've got a workforce that tend to be aligned to manufacture, and that's how we sell businesses to come. We operate a one-stop-shop approach for businesses, and, as I say, it's very, very welcoming, because they like to have somebody they can speak to on a day-to-day basis if they need to.

Sam.

Thank you very much, Chair. Councillor Stewart, you quite neatly summed up one of the issues, I think, in describing the plethora of organisations and bodies that exist in Welsh public life: CJCs, Swansea bay city deal, there was the western gateway, there's also Business Wales and the Development Bank of Wales. It's quite messy, isn't it? If you're an inward investor looking at Wales, where on earth do you go? 

It's not quite as messy as it used to be, because western gateway is no more and, like most regions around Wales, we brought our city deal and the CJC structures together in the south-west. The capital region have done the same thing. We've taken steps locally and regionally to work with the Welsh and UK Governments to simplify the structures in Wales. That has taken place and it is much less complicated and messy, to use your term, than it was a few years ago. 

But I think the challenge for us is to make sure that we have a visible voice, both at the national table and at the international table, and we have something that is investable, is clear, and that, as Councillor Hughes and Mr Poole said earlier, we have those sectors that we can become excellent in or that we have a unique selling point for, and are able to sell those effectively, in a joined-up way, with Welsh Government. I think there has been a fair degree of success in doing that, albeit that there are still things that we can do to improve them.

One of the things that we've lobbied hard on, for instance, is making sure that, in a major show like UKREiiF, there is a formal Welsh pavilion there, where the city regions can come together and can sell a comprehensive set of investable opportunities. That's a real step forward. It means then that Wales has a formal presence at a premium UK international trade and investment show.

The opposite of 'messy' would obviously be 'neat', and you're saying it's getting a bit neater. Wasn't it neater still when there was just the WDA doing this advocacy on behalf of all of Wales?

I think, like many things that are no longer, some people look back with rose-rimmed glasses to what the WDA was. It had successes, let's be clear. My personal view is I would quite like to see us have regional development bodies in that respect, with further controls over what we could do, but I wouldn't be advocating the full reintroduction of the WDA.

Okay. Mr Poole, the same sort of question to you, really. It's quite messy. If you haven't got a footprint in Wales already—and I take your point about managing and looking after those that already exist within Wales, but—if you're looking at Wales and you Google 'how to invest in Wales', you're going to come up with a lot of different search answers, aren't you?

You are. And, going back to the point my colleagues made earlier, I think it's important that we understand our sub-regional offers, first of all. What's the strength of south-east Wales, south-west Wales, north-east Wales? What kinds of businesses are we able to pitch for? It was interesting, the National Audit Office did some work in England a couple of years ago, and that's what they suggested was the weakness of the English offer—the fact that there wasn't an understanding of the sub-regional offers. So, that's the first point.

The second point: I think some of this can be fixed relatively easily. A single front door. It's about governance wiring. It could be handled effectively so we make it easier for the user, give him or her a better experience of a front door, a single point of access, and being signposted in an effective and seamless manner, which I think is some of the challenge we have. So, that can be done.

In south-east Wales, I think we have a good relationship with Welsh Government, we have a good relationship with the city region, and I think we work effectively in signposting in an effective manner. Having a plethora of agencies doesn't mean you have to bring them all in on an enquiry. What the investor will be looking for is confidence from you, on the other side of the table, to guide them through in a seamless and effective way. I think that's part of the challenge, and I think we have some significant successes in south-east Wales that reflect that approach.

Okay. To flip that on its head, then—and taking on board what the previous panel mentioned around some of the complexities on energy projects around planning and some of the hurdles that are thrown at some of these projects—previously, last week, we heard evidence of a different route—rather than just signposting, a specific case officer or a case worker to lead on a project. What are your views on that, Mr Poole?

I think it's first class, and that's what has to happen. When we look around the UK—and we know various regions and cities quite well; we're part of the UK core cities group, we know who our competitors are—there are a lot of vanilla-flavoured offerings around. Some cities, some regions, present themselves as being 'the only experts in this particular sector', but we can begin to unpick that. But what they're looking for is an adviser on the other side of the table who can address those issues, who can bring in planners when required, who can bring in the private sector—property people—when required, who can bring in the Welsh Government from a funding perspective, or the Development Bank of Wales. They don't need them all in that room, but they have to have the confidence in a project manager, and I think that that is essential in landing some of these investments.

What could distinguish us from many city regions—many regions across the UK and outside the UK as well—is improving the way that we handle inward investment projects, by demonstrating to them that we can get them through these processes, and that we can remove the barriers fairly effectively. There are some good examples in Wales of how that's worked, and there are examples of where it hasn't worked. But that's an area where we can noticeably improve our offer very, very, very quickly.

Okay, thank you. And then, Councillor Hughes, the same question to you, really, regarding that plethora of organisations out there, the signposting element of it, and whether a single, one-stop shop—. And you say that there's something similar that you're delivering up in Flintshire. Just your views on that, please.

Yes. When we say a one-stop shop, that means that you are going to get some person that's going hold their hand and take them all the way through all the problems that may occur. So, once you've got that, and once you've got the confidence of companies, then they'll work with you. It's about understanding the company and saying, 'Well, okay, what is it that you want to do?'

We have been talking now with Padeswood, and we're going to put a new siding in Padeswood for trains. Now, that's got a massive effect for all of north Wales, because the cement that we make at Padeswood could be integral to what we're going to build on Anglesey. We can actually get the trains coming from Padeswood up to Anglesey, and we can do four trains a day, going through to Liverpool. So, even though you're sort of looking at it and you're saying, 'What's for the future?', now, if we do put that line in—that siding in—it will mean that Heidelberg can actually transport cement over to Europe even, no problem, because we can get access to the main line. At the moment, they can't; it's all done by road. So, it's looking at things like that and saying, 'What will it actually give us?' To me, it's a good investment to actually do that, because it should benefit all north Wales, in the fact that we can get trains now to join the main line.

Okay, thank you. Councillor Stewart, I'm just going to come to you for two further questions with regard to the written evidence that you submitted. First, you call for better soft-landing support for inward investors—I just want to pick your brains a little bit more on what that means, and what you think that envisages—then, secondly, expanding the Development Bank of Wales as a commercial property fund. Can you just elaborate on those two points, please?

Yes. So, on the first one, when we have looked at the registry, clearly, investable opportunities in Swansea aren't even shown on there. So, it appears to be out of date, and then, even if you are on there, the information that's on there is pretty limited. So, what we want to see is an overhaul of that, essentially, and it updated and accurately providing information that's helpful to potential investors around what would be available to them and what the opportunities are in Swansea, in the region and across Wales. So, I think that there's an opportunity to improve that significantly. So, again, when we looked at it, it was quite clear that there were things that could be on there that weren't.

In terms of the Development Bank of Wales, that is, again, looking at how we can help stimulate further demand—sorry, further capacity. Because demand, as I outlined, is really strong in our area. We're getting to capacity in terms of commercial premises. There's an opportunity here for further inward investment, building new industrial facilities in appropriate locations and getting that under way as quickly as possible, and making that easier to do. Coupled with that, which isn't in the report, obviously, are the points that have been made by my colleagues around that you've got to have a planning system that works effectively to support that to make sure that we can deliver. We've had some challenges, as you know, in our region recently, with Natural Resources Wales's approach to the nitrates issue, which has caused us and is causing us some significant concern. So, there are a number of things around that that would make it easier and more viable for investors to bring forward their plans for our communities and our locations in Wales.

Okay, thank you. Mr Poole, you just had a point.

Yes. If I could just add to that point, I think one of the barriers to attracting inward investment, certainly in Cardiff and south-east Wales, and I'm sure across the rest of Wales, is the property situation. I think that's why Swansea are talking about more effective investment from the Development Bank of Wales. We have no new grade A office property being built in the city, and, in terms of advanced manufacturing, no new manufacturing units being built in the city. The economics don't work. So, that's going to be a barrier to investment. We can bring all the projects in from the globe into Wales, but if we haven't got enough property, and we haven't got the right kind of land in the right place, that is going to be a barrier. And that is a significant issue that I think we're dealing with across the board. If you want to bring new tech in, high-quality, added value service businesses, we need high-quality offices. And that's something that we haven't got, because the economics for building in Cardiff and in Wales are just not there from the private sector, and we haven't got a public sector intervention strategy at a significant scale to replace the private sector.

Just before I ask Luke to conclude the questioning, that can't be right, what you just said about grade A office space. The Welsh Government bought a plot of land on Callaghan Square for £7.2 million, you as a council were under-bidders; it's standing idle, it's doing nothing. So, what's happening?

Chair, what I'm referring to is exactly that. There are sites available, but there's nothing coming out of those sites. The economics of building grade A space are just not there—the inflation, interest rates, construction costs. The private sector tell us that, in Cardiff, for example, grade A rent is advertised at around £25 to £30 a square foot; the private sector developers tell us that unless those rents hit £50 a square foot they can't build.

Yes, but the point you made was about public intervention. The public has intervened by buying that piece of ground for £7.2 million—

But we need to go further, Chair. We need to go further. There needs to be investment to support either the private sector, make up the funding gap that's there, or intervention on their own. In large parts of Wales, I would suggest, where the private sector may not be interested, the public sector, Government, would have to intervene to create the product in those locations.

Okay, thank you. Luke.

Diolch, Cadeirydd. I know we're in injury time right now, and I do have a number of questions, but, luckily, a lot has really touched on what I was going to ask around, so I'm happy for some of those to be submitted as written questions.

But there's just one question I want to specifically focus on, and just get some general views on it before we end this session, and that's around skills. Because it isn't just in this inquiry—I know that Jenny Rathbone raised this earlier—it isn't just within this inquiry that we've had evidence on the issues around skills and some of those skills gaps. We've had it consistently now over the last couple of years within various different inquiries and debates in the Senedd Chamber. And I've got some sympathy with where the Welsh Government finds itself at the moment, because funding is a real issue; we lost our European funding for apprenticeships. But I'm also then seeing a lot of fire being turned on Welsh Government—partly by myself, I will admit, but—by other, outside organisations, whether that comes from local authorities, whether that comes from businesses.

So, I'm really interested to just understand from you guys what sort of work is happening right now, working with Welsh Government, to address some of those gaps within the skills sector, particularly on apprenticeships, and where you see perhaps some additional funding coming from. Is it a partnership between Government, local authority and private sector? Is it leveraging the city deals, corporate joint committees, in a better way to pool some of that cash for the skills agenda? So, just some general comments on that before I hand back to the Chair. Yes, go for it, Mr Poole.

It is quite a complex area, but I think there are significant successes. What we've tried to do, from a Cardiff perspective—and it goes back to the approach I highlighted earlier, guiding and advising companies—as companies are interested in what can be delivered for them, I think what we've tried to do is, working with our partners, the Welsh Government, CCR, tertiary colleges, Cardiff and Vale College, for example, is set out a skills pathway. There are plenty of initiatives taking place. Yes, there's not as much resource as we would want. There are complexities around apprenticeships, for example, and how we are different to England, that cause all sorts of challenges. But I think there are a lot of interventions taking place and it's setting out the pathway. So, how can we actually aid them by moving through that pathway? That's what we are working on with a number of big projects, like Rolls-Royce, for example, by starting off and saying to them, 'We'll begin this process at school level. We'll actually go into schools with you. We have an initiative called Cardiff Commitment, and we'll help you raise the profile of your business and your technology at a school level, at the earlier stage', then working with schools, then working with colleges, and working with universities. So, it's setting that out in a clear manner.

I think, when it works reasonably well, you see the pathway develop. Unfortunately, we have some large-scale redundancies, and you get a taskforce come in, and they set out a number of initiatives and link the business in. So, I think we should be doing a lot more of that with other businesses and making the pathway a lot clearer and a lot simpler. We can't ignore that we do need more resources, but I think there are solutions that we can work effectively on, but resource is the one. It's a personal view. I'm all in favour of perhaps direct intervention with businesses. Businesses know what they need. Many businesses have their own internal training bodies set up within the organisations. I think, sometimes, a direct intervention with some of those businesses could be quite effective.

Great, thank you. Councillor Stewart.

Thank you. I'd make the same point. If we thought the previous structures were messy, the funding arrangements are extremely messy. I think all power to our teams to try and make sure that they can spot and bring together the various different parts of the funding into a cohesive programme. For us, that is something we've been successful on.

You've got the city deal skills and talent funding, which is being rolled out, with lots and lots of projects and initiatives within that, supporting people to get the qualifications and the skill in the sectors that we need. You've got shared prosperity funding. I've got the shared prosperity funding update with me, actually. So, in the most recent update, we've got 999 new jobs created as a result of the investment, 929 safeguarded, around 3,000 enterprises receiving support to help train people, a further 2,500 receiving support to take more people into employment, 3,200 getting access to further skills training, and then 7,800 getting support to gain the qualifications they need to progress in the sector that they're in. Again, that's just the shared prosperity bit. Obviously, as I said, there are other ones being brought together there.

There is a lot going on that we are tracking, but the funding mix is always a challenge and, again, these schemes are time bound. Shared prosperity was three years. We're now going into the local growth fund. That is a year, with a further two years' clarification needed. Planning long term means that we need also the security of that long-term funding being there.

Like Mr Poole said, we've got the Swansea pledge in Swansea. We relaunched that a week or so ago with businesses. That is making sure that businesses are going into our schools, because we've got the mantra of, 'If you don't know it, you can't do it.' So, we're trying to make our learners aware of the opportunities within different sectors for them to gain employment, get them enthused, and get them on a pathway that we need them to be on for the future of the economy that we need. That's working really well and we have some great business investment as part of that. Again, I won't take up any more time, because I know we've used a lot of time there.

The Chair's leaning forward and staring intently at me. [Laughter.] Councillor Hughes, just very briefly, some final comments from you and then I'll hand back.

Councillor Hughes, did you want to add anything to it, and then Jenny Rathbone had a supplementary that she wanted to put. Okay, we'll go straight to Jenny's question.

Councillor Stewart, you mentioned the western gateway in your earlier remarks and I failed to pick you up on why is it that you closed it down. Was it just because the UK Government threw its toys out of the pram? I mean, they withdrew the funding, and you, obviously, at that point decided this wasn't an effective vehicle for selling Wales to inward investors. Is that correct?

No, that's a mischaracterisation of what happened.

Okay, let's hear what happened. 

Essentially, the UK Government did make a decision that it wanted to support growth in different ways, and, obviously, it's put in new structures that it wants to support. The funding that was there to run western gateway ceased, so, if you like, the employees and the structural arrangements around the western gateway office obviously ceased. But what we've continued to do is continue to deliver the strategies and the aims and ambitions that were drawn up as part of the plan under western gateway, both as part of what we do as city regions but also as part of our over-the-border collaboration with Bristol and Bath and other regions across the border.

So, that work still continues even though you've dismantled the structure.

Yes.

Okay, because it's dead confusing for inward investors with this constantly changing landscape, which at the moment appears to be much more corporate within public bodies as opposed to collaborative with the private sector.

Just a point on that, Chair, if I may. All of the structures that we've referenced here around Wales—so, the four regions—have their private sector boards that work alongside them, and we work collaboratively with a number of private sector representatives within our region. I know the capital region have exactly the same. I'm sure north Wales does as well. So, again, it is a private-public collaboration.

Thank you.

Thank you, everyone, for your evidence today. There were some other questions we were going to ask about local procurement in support of businesses. If we may send them in written form to you and if you could provide answers, if you feel able to, please do, because that would help us with our findings. The transcript will be sent to all three of you for you to have a look at. If you have any concerns over what is in that transcript, please raise it with the clerking team, otherwise that will form the official record of your evidence this morning. Thank you very much.

Could I invite committee members to look at the papers to note? Any issues from the papers to note? No.

Can I move the motion to move into private session? Thank you. We'll move into private session. Thank you.