City Regions to widen Wales GVA gap?

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I don’t share the near-unanimity with which the report of the Task and Finish Group on City Regions (available here) seems to have been greeted, but then I’ve never particularly been one for going with the consensus.  When I read the report, it reminded me rather of the saying that I remember once seeing on the back of a box of England’s Glory matches – “he drew an unwarranted straight line all the way across from an invalid premise to an unjustified conclusion”.

My biggest problem is that the report starts from the clear beliefs that, firstly city regions work and that secondly, there is a critical mass which makes them work (although the basis for placing that critical mass at any particular level is not obviously evidenced).  Any failed attempt at a city region is then ascribed to ‘parochialism and tribalism’ (evidence in support of that, beyond anecdote, once again not being entirely obvious), and any success by cities which are not ‘city regions’ is explained by saying that “some [cities] are perfectly capable of thriving economically without recourse to the concept”. 

But if not all cities need the concept, and if some of those that do adopt it fail anyway, where is the hard evidence that says the concept ‘works’ and can thus be applied successfully elsewhere, or that identifies in advance which cities need the concept and which do not?  'Knowing' that the concept works and then dismissing any counter instances looks more like an act of faith than evidence-based policy making.  Correlation and history aren’t the same thing as cause and effect.  And without satisfactorily evidencing the basic premise, it’s hard to accept the conclusions drawn from it.

Even where success is demonstrated, the report highlights the different things which different city regions have done to achieve their success.  It surely has to be at least possible that it is those particular approaches which have led to the success, not to the fact that they were undertaken by something called a city region.  Perhaps the same approach by a smaller city, or by a larger nation would have been equally successful.

For sure, there are statements such as “OECD research has shown that the common feature of poorly performing areas is a population with a high proportion of low qualifications”.  But which is the chicken and which is the egg?  Is the area performing poorly because of low skills or have all the highly skilled people left because of the poor performance?  The answer to that question is highly relevant to Wales, many parts of which lose their most highly-educated young people; but if the exodus follows poor performance, then increasing skill levels won’t necessarily improve performance.  Indeed, if it leads to a larger exodus, it could even make things worse.

Then we have the statement, with which I have no quibble at all, that “in Wales, our cities generate only 33% of our income/wealth which is significantly the lowest proportion of all UK nations and regions”.  Where I would quibble, though, is with the very next sentence, “It is a reasonable assumption that this is a key factor in explaining Wales’s relatively weak performance on productivity and average wages.”  I’m not at all convinced that one flows from the other.  If a smaller percentage live in cities, then cities will generate a smaller proportion of income and wealth; that's simple artithmetic.  What matters is not what proportion of Wales’ wealth comes from cities, but what the total level, and level per head, of that wealth is.

So, I’m not convinced.  I am concerned, however, at some of the policy suggestions which stem from this report, given my doubts about the premise.  Take, for instance, this sentence from recommendation number 20: “if city regions are the engines of growth, they must be the principal beneficiary of transport, housing, inward investment and funding”.  Am I alone in seeing something of a chicken-and-egg argument here as well?  If the only way that the city regions are going to provide the growth is by diverting investment from the rest of Wales, then isn’t it just possible that it’s that concentration of investment which makes the difference rather than the establishment of the region per se?

It’s a statement backed up by a not particularly subtle suggestion that the EU funding being allocated to the parts of Wales which are designated as being the poorest should be spent in a way which maximises the benefit to those areas considered the richest.  That sounds like a sort of inverted Robin Hood approach to economic development in Wales.  And it seems calculated to lead to a situation where the GVA gap between England and Wales is reduced, but at the expense of increasing the GVA gap between different parts of Wales.  It’s a Cardiff- and Swansea-centric approach which mirrors on a Welsh scale the London-centric approach which many of us have railed against for decades.

As if to, albeit unintentionally I suspect, underline that point, Rhodri Morgan said this in his column in Saturday’s Western Mail: “it doesn’t make sense to tell potential punters exactly where within the city-region you want them to put their new jobs.  Keep it simple.  Just come to Wales.”  And if I substitute ‘the UK’ for both ‘city-region’ and ‘Wales’, doesn’t it still say much the same thing?  If we want to see more geographical equality across Wales, we won’t get it by putting all our eggs in the Cardiff-Swansea baskets.

It's all one railway line

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In saying that there must be a ‘business case’ for extending electrification to Swansea this week, the Secretary of State has not really said anything new.  The question needs to be asked however – how long does it take to produce one, and why hasn’t it been done yet?  After all, they’ve been in power for two years now, and as I recall, there have been some sort of figures produced before.  Does it really take two years just to review and update work done previously?

Personally, I’m not a huge fan of the vogue for producing ‘business cases’ in any event.  There’s nothing wrong with the concept, but as someone who’s produced more than a few of them over the years, I’m well aware that they have more to do with justifying why the preferred option is the right one than with an objective analysis of the options.  I wouldn’t say that creative writing is the most important skill in drawing up such a document, but it’s up there somewhere.

Figures in themselves are an important part of any story; but they rarely tell the whole story.  And many figures are the result of estimates, which themselves depend on assumptions, which in turn depend on prejudices and preconceptions.  In this case, it seems to me that the government is using the current absence of a business case as a fig leaf behind which to hide whilst they continue to delay.

Another way in which the use of business cases can be used to obfuscate rather than clarify is in the definition of a project.  In the case of rail electrification, the requirement to produce a separate case for Cardiff -Swansea electrification will produce a different answer than if that section were included in a single case for the whole route from Paddington – Swansea.  So the person who decides where to draw the line between projects has a great deal of influence on the final outcome.

It might be argued that splitting the project up into a number of smaller sections is a valid way of determining which bits are or are not viable, but to take that to extremes, a mile by mile analysis would almost certainly conclude that no individual mile was worth electrifying.  And even if the route is split more rationally into station-station sections, the viability of each section will also to an extent depend on what decision is taken in regard to other sections.

The real decision which Gillan and the Government need to justify is the arbitrary one they took to electrify only part of a major route in the first place.  There is a difference between seeing individual projects as part of a wider project to electrify the whole system and seeing it as just a series of projects each of which must be individually justified, and the latter seems to be the view of the government.  It’s a short-sighted way of looking at the question.

Supercities and human needs

Tweet I don't have any issue with the idea of the towns and cities of South Wales working more closely together, as was suggested by a think tank today. Nor do I have any issue with the idea that sensible economic – and even more so, transport - planning should look at cities and their hinterland as a whole, rather than trying to focus attention on small parts of the area. But I strongly disagree with the underlying thinking behind this particular report.

They seem to be starting from a number of premises as follows:

• Globalisation is not only good, it is inevitable
• Globalisation means that cities have to compete with each other on the world stage
• Competing means that cities have to be bigger and bigger

To them, these premises are not even open to challenge. I beg to differ.

In a way, the subject is one which goes to the very heart of my own political philosophy. I believe that human institutions, towns, cities, transport, the economy – all these things and more – should be shaped and driven to meet human needs and aspirations; and on a human scale. It sometimes seems to me as though many of the cold economists are telling us that we, as humans, must adapt to fit the needs of the market – or rather, the needs of globalised big business.

Now some might argue that the two things are not that different. To meet human needs and aspirations requires jobs and resources; business creates those jobs and resources. I consider that to be over-simplistic, not least because there is nothing contained within the statement that requires globalisation.

Globalisation is the current fashionable trend; but just as generals are always said to be stuck fighting the previous war, I think that many economists and supporters of globalisation are supporting an outdated set of ideas. The future lies with re-localising production and consumption, and it will be forced upon us by rising world populations, shortage and increased cost of fuel, and climate change. Above all, the complexity which is being built into our economic systems by globalisation and long supply chains represents a major threat in itself; the globalised economy is actually becoming more vulnerable to catastrophic collapse as a result of a failure at a single point.

So, by all means let's have integrated and cohesive planning between our towns and cities rather than competition; but let's do it to shape our country to meet our needs rather than because we want to compete with Paris or London. And let's start by deciding what we want from the economy, rather than what it wants from us.

PS – I was a little taken aback by Peter Stead's quoted comment, "One is tremendously attached to the Valleys but certainly in the long term the future lies with the ports". What exactly is the fundamental difference between that and the insane suggestion just a few weeks ago that people should all move from the North of England to places like Oxford?