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Home / Latest News / Improved infrastructure key to addressing economic disparities in Cardiff City Region

Improved infrastructure key to addressing economic disparities in Cardiff City Region

The economic disparities  between Cardiff and the Valleys are likely to grow in the next 10 years unless action is taken to improve infrastructure and attract larger firms with HQ functions to the capital.

These are the conclusions of a report by Cardiff Business School, commissioned by Working Links and  the Cardiff Business Partnership – a private sector group of companies representing some of Cardiff’s major employers.

The report looks at economic prospects within the Cardiff City Region (CCR) and finds that they vary hugely, with people in the capital enjoying higher wages and being less likely to claim Jobseeker’s Allowance than those in other parts of the city region.

Cardiff leads the city region in having the largest proportion of highly skilled people. It has the second highest proportion of working age people with a degree in the UK, for example (33% compared to Bristol’s 36%).

In Blaenau Gwent, on the other hand, the proportion with a degree is 9.6% and in Merthyr Tydfil 10%.

The report looks at the rewards available to better qualified and skilled people. It shows that average weekly earnings for full-time workers in Cardiff in 2011 were £498, while in Blaenau Gwent they were £385.

The report, authored by Andrew Crawley,  also points out that outside Cardiff, the city region has a lower proportion of people employed as managers and professionals and in administrative and skilled occupations than the average for Wales. In Blaenau Gwent, for example, there were 28.8% employed the managerial and professional category, compared to 38.9% for Wales as a whole.

The report says: “Providing sustainable economic opportunities, particularly in local authority areas in the Heads of the Valleys, represents a real challenge. In the Heads of the Valleys area, it is difficult to see where sustainable employment opportunities will arise over the next decade.”

It adds that “skills and employment interventions for those in the CCR outside of the Cardiff area are unlikely in themselves to resolve the disparity. Rather, a more realistic view would be to use the relatively strong growth of Cardiff as a driver of the whole CCR.”

However, the report stresses that Cardiff “does not succeed in attracting firms with significant headquarters types functions,” and that “Cardiff needs to attract larger firms with significant HQ functions to the CCR area as a means to boost the CCR as a whole.”

The report says: “It is difficult to see how the underlying concept of the Cardiff City Region will change economic prospects for local authorities to the north…The concept of a city region would need to develop strong links between the infrastructure surrounding education, skills and training provision, as well as physical transport infrastructures.”

Marcella Maxwell, director of Working Links in Wales and Cardiff Business Partnership, said: “The city region approach is more than a geographical expression – to have real meaning it needs to examine the reality of the whole economy as well as economic potential.

“Working Links part commissioned this Skills Report to do just that, and to get at the real issues around skills and employability across the whole Cardiff City Region.

“For the region to work, the report is right to suggest that there would need to be strong links between the infrastructure surrounding education, skills and training provision, and physical transport infrastructures.

“Economic prospects across the City Region vary tremendously. The report demonstrates that Cardiff and Newport will remain the growth drivers for the City region, but it also shows that a particular focus needs to be placed on skills development outside the Cardiff area to maximise potential and ensure the supply of skills meets new economic demand as we emerge from recession.”

Ms Maxwell will soon take up a new role with the Welsh Government.

Eluned Morgan, chair of Cardiff Business Partnership and director of development for SSE in Wales, said: “The report emphasises the fact that the economic structure of the region has changed and the skills provision needs to reflect the resulting changing needs of the economy.

“The report suggests that there is a requirement for a much better dialogue with the business community to gain a real assessment of what the demands for skills are and where employment is likely to be based geographically.”

She added: “Economic prospects across the City Region vary tremendously and we see some weaknesses that need to be strengthened. “

Roy J. Thomas, director of Cardiff Business Partnership,  said: “We have been studying our inward investment performance which has fallen below the standards of other parts of the UK in recent times.

“Better inward  investment performance is essential if we are going to see much needed economic growth. Investors will always look at what human resources are on offer before investing.

“We are discussing this key issue with the Welsh Government and Cardiff Council and much work is needed if they want Wales to attract proper investment and grow indigenous productivity. We cannot live in isolation. Connectivity is key in a global economy.”

Dr Crawley said: “The changing dynamics of the city region require a better  understanding of the capacity of the local authorities involved.

“This work adds to the knowledge of the local skill base, and questions of how skills can be better developed to support the future growth of the region.”

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