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.