Thursday, 9 February 2012

£170 million of lost opportunity

The Welsh Government announced this week that it is working with the 22 local authorities in Wales on a scheme to use local authority borrowing powers to boost infrastructure investment in Wales.  This looks, in principle, very similar to the proposal floated by Gerry Holtham some time ago, and effectively circumvents the restrictions which prevent the Welsh Government from borrowing.
To that extent, it’s a welcome departure from the usual approach of simply blaming the Tories for everything.  I do have three reservations though.
The first is the scale of the plan – or rather the lack of scale.  Gerry Holtham suggested that it would be possible to use this approach to borrow around £2billion for spending over the five year life of a government.  In comparison to that, £170million looks remarkably unambitious.  It’s significantly less even than Plaid’s rather more modest Build4Wales, which suggested borrowing a mere £500 million from the private sector.
The second reservation is that it seems to be restricted to spending on highways projects.  Whilst I’m sure that at least some of those schemes will be worthwhile, investment in road schemes wouldn’t be my top priority.  And it appears as though the schemes haven’t even been selected yet – local authorities are being invited to come forward with proposals.
And that brings me to my third reservation – the lack of an obvious strategic driver behind the scheme.  Obtaining a large capital sum for infrastructure investment should be a real opportunity to take a strategic view and decide on the most important projects to boost GVA.  Instead of that, we have a bid-driven allocation of resources to local authorities – the availability of the money is driving the spending, rather than the infrastructure needs.
It’s what we’ve seen far too often from successive Welsh Governments.  It’s the same curse which afflicted Objective One funding and Convergence Funding – an attempt to please as many people as possible and share the cash around rather than use it to drive a step change.
Sadly, it isn’t that the Welsh Government doesn’t have strategies – those they have aplenty.  They’re all carefully written, consulted on, amended, approved, and filed somewhere, with all the right boxes duly ticked.  What they are not, however, are drivers of government action.
In going down this route, the Welsh Government was in serious danger of getting something right – it’s a pity that the implementation is another missed opportunity.


Cibwr said...

Surely they should have a grand design on what they want the road (and rail) network to look like in 20 years time, and they should be working towards that plan. Not some ad hoc development dependent on local authority priorities? Or am I missing something?

Boncath said...

National Savings and Investment originated in 1861 as the worlds first postal savings system with the aim of a facility to provide for themselves should against adversity and ill health allowing ordinary .
as well as providing the Government with accesss to debt funding.

The Westminster Goverment has w handed the operation over to a French company Atos IT Solutions and Services.

The Welsh Goverment look at the possibility of setting up our own N S and I with the option to tranfer existing holdings of Welsh residents into a new Welsh scheme

Boncath said...

Some of my message was lost in translation
If Local Authorities can borrow from the PWLB at 3.2% which is public money then why cannot we the public also invest directly in the governance of our own Country