UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 34-vi

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

WELSH AFFAIRS COMMITTEE

Globalisation and its impact on Wales

Tuesday 11 December 2007

MR IAN WILLIAMS

MR DAVE GILBERT

Evidence heard in Public Questions 1676 - 1747

USE OF THE TRANSCRIPT

Oral Evidence

Taken before the Welsh Affairs Committee

on Tuesday 11 December 2007

Members present

Dr Hywel Francis, in the Chair

Nia Griffith

Mr David Jones

Alun Michael

Albert Owen

Hywel Williams

Mark Williams

________________

Memorandum submitted by International Business Wales

Examination of Witness

Witness: Mr Ian Williams, Director, International Business Wales, gave evidence.

Q1676 Chairman: Good morning. For the record, could you introduce yourself, please?

Mr Williams: Ian Williams, Director of International Business Wales.

Q1677 Chairman: Thank you very much for your memorandum. Could I begin by asking you a straightforward question: could you outline International Business for Wales' key priorities in terms, first of all, of attracting inward investment into Wales and then, secondly, promoting trade from Wales?

Mr Williams: Of course. When I joined the organisation 18 months ago from Shell, the oil company, I set some guiding principles for International Business Wales. Those are five-fold and they are based around achieving more and better jobs. The first one I set was that all jobs that International Business Wales achieve will pay more than £30,000. I needed to set the standard for the higher paid jobs that we bring in. The second was that all jobs that International Business Wales bring into Wales should pay more than the local average, because bringing in jobs that pay less than the local average would actually decrease the GDP per head. So it seemed to me that I should, at least, set that guiding principle as a priority. The third is the ballast of our guiding principles, which is that we should always pull our weight. What I mean by that is that we should always get more than 5 per cent of all inward investment into the UK, because we are about 5 per cent of the population, so we should get at least 5 per cent of the inward investment. Otherwise my first two principles would be achieved by just ten jobs in the bio-sector, for example. The fourth guiding principle that I have set the organisation is that we should cost the taxpayer nothing. I basically set a very simple algorithm for this because I needed to change the conversation for the staff abroad away from: "Why have we got those expensive people?" to "Why wouldn't we have them?" The way I did this was through "we should cost the taxpayer nothing in-year". The way we do that is an average job coming into Wales would pay, let us say, £24,000. The tax-take in that year will be £8,000, so that is the benefit, just on the personal tax-take, of that job. Let us forget about the job being available for five, ten years, and just take that single year. If a member of staff I have abroad costs - let us say his salary, his overhead, his on-cost, plus all the marketing attached to that role - £160,000, then that person has to achieve 20 jobs in that year. If they do that, I think, they can wash their face. They can genuinely say: "All that tourism work I do, encouraging people to come to Wales; all that work we do on trade, encouraging Welsh companies to export, and all the work we do on external relations is all, in a sense, free to the taxpayer, because I have achieved something". If they do not achieve at least that level there is a consequence to that. We have to be able to match the opportunities that exist in the market with the resources. Where markets are not washing their face (to use that phrase) then we have to make some tough decisions about that. I think that allows people abroad to feel proud of what they do when they achieve. I know it is a simple algorithm but it seems to work and it is a sense of measurement that seems to be catching on. The last one I would have answers the other part of your question, which is about trade, which is at least as important as inward investment. The priority I set the team was that we should have a 25 per cent year-on-year increase in exports out of Wales but out of each region of Wales. I define regions in the old-fashioned way of North, Mid, South East and South West. It means it keeps my focus on the North and Mid as well as the South East and South West. Exports I see are as important as inward investment - it certainly is to Welsh companies, of course. There was a study done a few years ago in Nottingham University (you may have heard of it) which showed that not only do companies who export get more turnover (that is the obvious thing they get) but they also get an improved employee value proposition for their employees; there is more opportunity for their employees and they tend to take technology transfers earlier. So there is a whole load of benefits, undercurrent benefits, to exporting that you do not see, other than just the increase in turnover. I apologise, I have talked a long time.

Q1678 Chairman: Could I follow up with a question about Amazon? It is a small correction to your paper. You refer to it as an investment in Swansea, it is actually in Neath, Port Talbot. I am sure that Neath Port Talbot County Borough Council would be as keen as I would, as the local Member of Parliament, to ensure that they have full credit for that. Could you tell me about the significance of Amazon, in terms of the quality of the jobs? How does it relate to other sort of inward investment that we have witnessed in recent times?

Mr Williams: Quite. I would be happy to, Sir. Amazon is an interesting case, and it was virtually exactly this time of the year, just seven days before Christmas, that my deputy and I flew out to Leipzig to make the initial pitch for Amazon. They had already decided to go somewhere else, and 100 days later we were digging the first sod of earth in Neath, Port Talbot.

Q1679 Chairman: That is to the credit of Neath Port Talbot County Borough Council.

Mr Williams: It is very much to the credit of Neath Port Talbot Council, and Will Watson there was an amazing ally, and the whole team were; we would never have been able to do it. I think that is a point in general. International Business Wales, of itself, does not achieve what it achieves without the help of the councils and, as I say, of the whole team Wales. To get to the point of how Amazon fits into the broader context, you could argue these are logistics jobs, they are not ICT jobs, they are not bio-science jobs, but Amazon is a great company which is very high values for its employees. It pays fairly good money and it pays bonuses based on the performance of an individual and bonuses based on the whole team. It also gives share options to every single member of the team, which I think is fairly new in thinking, and which we encourage. It has grown from nothing ten years ago to one of the great organisations in the world. Certain parts of the demographic do not want to go into call centres but they will do work that has an element of computing work and an element of skilled manual labour, and we are finding already that the take-up for the jobs - this is what Amazon tell us - and the quality of the people that they are picking up is first rate. It has been a very edifying experience all round to work with such a high-quality company. To see that building go up - I do not know if you have seen it yet - it is large and it is very impressive.

Q1680 Mark Williams: In your brief you have obviously got staff all over the place, quite frankly, but are there particular regions of the world that you are focusing on and what criteria do you use to prioritise those areas at any particular time?

Mr Williams: Of course, and that is a great question. If I just go round the world and say why we are focused specifically in certain areas: the US is the number one foreign direct investment country into the UK by a factor, I think, of about five. It truly is the elephant in the room - the large player. So we have to have, in my opinion, a large focus in America. We also have to have good leadership there. Just last year we spent a lot of time getting the right leadership. Geraint Jones, who was a senior banker with Barclays, has gone out there and he is making some strategic changes and focusing on certain sectors, like financial services, life sciences and low carbon renewables out in America. Also, in the East, we have the two giant growing economies in India and China as well as what you might call economies where we have traditionally been strong and still are strong: Australia - where we have just sent Gareth Davis, the ex-British Lion and Post Office representative, who is, again, making a difference because if you send the best people out they bring in good results, and Japan has had a refresh of its strategy and the three people there are starting to get results, as we found with Takao going into Ebbw Vale last year. Of course, focusing on those four countries means that we do not focus then on some of the other countries where we are, and we are having to make some very tough decisions about some of the places where we have been historically, but they are not washing their face. In terms of being able to invest in India, for example, we have gone now from one person in India to six; we have become the largest devolved administration or regional agency in India. To be able to afford to do that we have had to make some tough decisions about Taiwan and Singapore.

Q1681 Mark Williams: What are the implications in those two countries?

Mr Williams: We are closing the offices in those places. We have not seen the inward investment in the last four or five years from those places. It would be nice to be able to keep an office there but if we want to make the kind of investments we would need to make in India and in China, then we have to balance the books, and Taiwan and Singapore are closing.

Q1682 Mark Williams: You mentioned financial services. More generally, how do you prioritise certain industries and certain sectors of the economy? How do you assess that and the change in priorities in the global scene?

Mr Williams: Again, a great question. We are a small country; we cannot focus on every single sector because, obviously, we are opportunistic. When opportunities come we would not throw them away; we will accept and work with any company who wants to work with Wales. In terms of targeting sectors, we have five that we truly work within, and I have created five teams who sit together and live and breathe their sectors. The first five sectors are financial services and business services (so those would also include the call centres, if I am honest); life sciences (so we have a team specialising in bio-science); low carbon renewables and sustainable technologies - not had a massive amount of success yet; we had G24I in photovoltaics last year, but that is a growing sector, and renewable energy is clearly a growing sector; automotive, a more traditional sector, obviously, but one that we refuse to accept there is no future for because it feels from our pipeline that there are great opportunities within the supply chain of automotive and the "accelerate Wales" (?) team is doing some great work in that field as well. Obviously, information technology. I do not know if you have read recently but the Sword company is coming into Cwmbran, and they do contract and bespoke ICT systems for large companies. We beat India for that project, which is quite nice for our team to beat India for a project.

Q1683 Albert Owen: Before I ask you about challenges posed by globalisation, can I take you back to one of Mr Williams' questions in regards to investing in regions. I did not hear you say the Republic of Ireland, which is a near neighbour. I know the old WDA were late getting there. From my regular trips to Ireland there is contact between companies in the Republic of Ireland and, also, with companies in Wales but very little between organisation and structures. Many of these companies are leapfrogging not just Wales but the United Kingdom and going to Europe. So what is your strategy for the Republic of Ireland, which is one of the fastest growing economies, as you know, in Europe?

Mr Williams: It is. I completely agree. We do have two trade missions going out to Ireland - Showcase Ireland. I know we have 28 great Welsh companies going out there. I am afraid the name of the other mission evades me at the moment. I apologise. I know there are 20-something companies going, and I know that because there is a big sheet outside my door that I watch as companies sign up for these missions. That is a start. We have an office in Dublin and are finding that it is one of the more successful offices. I can think of three companies (I had better not mention the names of the three companies for commercial confidentiality) but we have a large pipeline coming out of Ireland. Our Dublin office is certainly not one that is at risk; it is more than washing its face in terms of investment into Wales. I fully agree that ignoring a great, rich market right on your doorstep would be a foolish strategy, and it is certainly not one that I would advocate. Last year, you may remember, in Newport (not in Anglesey, I am afraid), Quinn came in for their second tranche of investment. That is a very fast-growing and ambitious Irish company that we are very proud to have in Wales.

Albert Owen: You mentioned "not in Anglesey", but I see Anglesey as part of Greater Dublin.

Alun Michael: I thought you saw Dublin as part of Greater Anglesey!

Q1684 Albert Owen: It depends which side of the water I am on! Can I ask you what you perceive as the greatest challenges of globalisation to the Welsh economy and to the labour market in Wales? What are you doing to address these challenges?

Mr Williams: I guess the biggest challenge is the fact that activities move on and activities move to countries that have cheaper labour costs than us. The way to challenge that and the way to address it is that companies do not have to leave. The two examples that come to mind immediately would be Sony, for example - Sony in Pencoed, in Bridgend. They have changed what they do and moved up the value chain. They are now doing high-definition, broadcast professional cameras in Pencoed. Part of the reason they are doing that is the fantastic relationship that we have with Steve Dalton, the manager there, the account management that team Wales and International Business Wales provides to Sony and, also, the relationship we have with head office in Japan. Only last year I was out in Japan with the head office of Sony. Similarly, in North Wales, it is Sharp. Sharp have changed what they do in Wales. They are moving into photovoltaics, as you probably know, and again we have an excellent relationship with Sharp to try and help them move into the higher value end of what they do. Again, on that trip to Japan, I also met, in the headquarters of Sharp Photovoltaics, with three top executives. Having that relationship abroad, where some of the decisions are made, and here in Wales, closely staying with the great companies, because activities may move but the great companies we want to keep, I think, is the biggest challenge. In opportunities terms, of course, these growing markets are exciting. Just last week we were in India with the minister for economy and transport, and there was a company called Cintec - I do not know if you have heard of them - but they provide the infrastructure and scaffolding for heritage buildings - so they are actually holding the Konark Temple in India at the moment. Their chief executive came out with us and we took him in to see the minister of tourism. He could not have got that meeting without us being able to facilitate it. The minister of tourism was delighted to see him and the company was delighted to have that opportunity. It is a great opportunity for a company like Cintec. Arup is the other company - the Cardiff company. They are now bidding for a new city south of Bombay; they are designing a new city. The opportunities are just as great as the threats from these countries, I believe. We have always got to do more, of course.

Q1685 Albert Owen: You said earlier on, in your opening remarks, that you set yourself a benchmark of more than 5 per cent because we have got 5 per cent of the UK population. What are you doing differently with these challenges to the rest of the regions and nations of the United Kingdom to achieve that? What is different about Wales? Why would a company in India come to Wales, as opposed to any region of England or even Scotland or Northern Ireland?

Mr Williams: Quite. The teams in Northern Ireland and Scotland are very good, and I have a great deal of respect for them, and meet with them every quarter. The reason Indian companies look at us is, first of all, that they look on us as a gateway to Europe - but then I suppose they do for Northern Ireland and Scotland as well. They then look at the really low staff turnover rates, because in somewhere like Ireland they currently have staff turnover rates of about 40-45 per cent. That means, in effect, you are turning over your staff every two years. That is a huge cost. We have staff turnover rates of around 5 per cent; Wales has the lowest staff turnover rate in the UK.

Q1686 Albert Owen: So how do you attribute that to you?

Mr Williams: I am sorry, I was going through the sales pitch for Wales. I do apologise. What do we do differently?

Q1687 Albert Owen: Yes.

Mr Williams: I hate to use an Americanism, and I apologise, but it is a "can-do" attitude. I think we have demonstrated it best with Amazon. To be able to turn that round in 100 days - admittedly with the help of Neath Port Talbot and admittedly with the help of our team in West Wales - that can-do spirit and saying: "We won't be beaten", is what International Business Wales does. I believe it exists because we have great staff. A lot of staff have been there ten, 15 years; they know what they are doing. That is not attributable to me.

Q1688 Albert Owen: I meant as an organisation. One final point. You have mentioned Neath Port Talbot, and so has the Chairman, on a couple of occasions. Do you think it is partnership with the local authorities that is important in Wales, and it differs, perhaps, from other parts of the United Kingdom?

Mr Williams: I do not know how it operates well enough in other parts of the United Kingdom to be able to comment. I do know the relationship between International Business Wales and the local authority is excellent. I was just in Gwent last week working with the officials and the leader of the council there. So I think our relationship is close, but I am afraid I could not say whether or not that differentiates us from Scotland and Ireland.

Q1689 Mr Jones: Mr Williams, could you tell the Committee how IBW works with other trade bodies, such as UK Trade and Investment, to ensure that Wales reaps the benefits and meets the challenges of globalisation?

Mr Williams: Yes, absolutely. Once again, in India last week, if we were to include the High Commissions in that description of representatives, the support that Jane Owen and Vicki Treadell in New Delhi and Mumbai gave us was superb, and we simply could not operate without the good offices of the High Commission and UKTI abroad. UKTI have huge resources. Personally, I have a very good relationship with the director of UKTI and meet with him every quarter - that is Andrew Cahn. UKTI have offices all over the world and they develop most of the leads - a huge amount of leads - and we have to have a mature and adult relationship, where we find companies where Wales does not have a proposition. It does happen sometimes. We have to share that with UKTI abroad and, similarly, UKTI do that for us with their reporting mechanisms and the great relationship we have. We are also a member of the Committee for Overseas Promotion, which means that we try and get a joined-up message. A lot of companies think first: "We want to be in the UK as a gateway to Europe", and then they decide on Wales. So the UK's proposition is as a springboard for global growth. Ours is the gateway to Europe, the low attrition costs and the pitch I was giving earlier on. We have to be joined up, and I believe we are, very closely.

Q1690 Mr Jones: Are there any aspects in which your efforts overlap and, maybe, even work against each other?

Mr Williams: I have not noticed that yet. I could not tell you categorically, sir, that it does not happen.

Q1691 Mr Jones: No duplication of effort?

Mr Williams: I do not believe so, no. Once again, if we felt there was a duplication of effort we would attempt to cut our own cloth so that we would just take the benefit of UKTI and focus our finite resources in places where that duplication does not exist. Maybe an example would be that we have something running at the moment called the Pathfinder project. That is us dipping our toes in five or six markets where we have never had, or had very little, inward investment. So the markets would be Switzerland, Israel, Mexico, Brazil and Russia - growing markets where Wales has not had a huge impact yet. So we are dipping our toes in there at the moment, to see whether or not there is investment potential. Two of those countries are looking very good.

Q1692 Mr Jones: How do efforts there interface with UKTI?

Mr Williams: We cannot afford to set up an office out there, so the person in my team responsible for Brazil went out to Brazil, met with the Consular General and the UKTI staff, who were tremendously helpful and have agreed to champion Wales, because we are showing an interest. Until we can see that there is something there we cannot go setting up offices everywhere. So it is only through UKTI that we can truly do this initiative.

Q1693 Alun Michael: In your introduction you said that you would be judged by whether or not you win a greater percentage of inward investment to the UK, and you referred to the figure of 5 per cent.

Mr Williams: Yes.

Q1694 Alun Michael: I think it is important for us to understand what we have got already in order to understand what the base is. In your memorandum you say that Wales secured over 9 per cent of all foreign direct investment jobs promised to the United Kingdom in 2006/07. What is the percentage of existing foreign investment in Wales as a proportion of foreign investment in the UK? What is our starting point? How does it compare with other regions, particularly regions of England?

Mr Williams: We have about (I apologise for the "about") 500 foreign-owned companies in Wales, if I exclude hotels and if I exclude retail. That employs about 75,000 people, excluding hotels and retail. (I will explain why I am making that distinction, in a second.) There is no equivalent number, excluding hotel and retail, for the UK, so to do it as a percentage is difficult. However, if I were to take the total numbers where there are data, for example, we have 133,000 people employed by foreign direct investment companies including retail and hotels in Wales. That is 16 per cent of our working population. London has 500,000, including retail and hotels. That is 13 per cent of their population. So we have a higher percentage of our working population working in foreign owned companies. I am afraid I cannot quite answer your question as I know you want - I do apologise - because there is not an equivalent number because we, as IBW, tend to look at the 500 companies that do not include retail and sales because they tend to come because of demand. If the demand is there for the shops and the hotels they will come; it does not really have any impact on what ----

Q1695 Alun Michael: Sure. I would be perfectly happy, Chairman, perhaps, if you would like to supplement the answer on this, because it is asking for some detail. I think if you explain what we are looking at, clearly, especially with the development of the RDAs in England, there is very strong competition from the English regions now ----

Mr Williams: Yes, there is.

Q1696 Alun Michael: The North West would be a case in point, where they have over twice the population and quite a diverse economy and some major centres of population. It is important for us to be able to understand the comparison.

Mr Williams: Quite.

Q1697 Alun Michael: I would rather have a thoughtful response than sort of push you now. It would be useful to have that, in comparative terms, with some explanation, because I think that gives us the starting point for understanding the point you made earlier about the percentage your target is.

Mr Williams: Would it be okay for me to supplement that in writing?

Chairman: Yes, please. It would be very helpful

Q1698 Alun Michael: If I can move on to develop the thought a little bit, you referred to the mechanisms of support that exist to help companies in Wales trade overseas and to make them ready to trade. Can you explain a bit what those mechanisms of support are, in terms a bit like an engineering study?

Mr Williams: They are, I think, three- or four-fold. I believe we are trying to do some fairly innovative things in one of the programmes, as well. The basic programmes are the International Development Programme for new exporters. We do not actually try and help every company in Wales export. Many of them just do not need our help and so government intervention would be a waste of effort. However, SMEs make up the large proportion of our nation and we do help them to learn how to export and hold their hand in the early stages. That is what the New Exporter Programme does. However, what is different over the last two years is that we are changing the way we do something called an International Business Opportunity Programme, through what we call a trade change. We currently have a lot of lead generation consultants round the world trying to find leads for Welsh companies, for Welsh SMEs, and they are on retainers. Now, I know that the behaviour you engender by moving people from a retainer to an incentivised contract based on results is massive, and we have changed the contracts that we have with lead generators from just retainers, whether they deliver results or not, to incentivised contracts, which means they can make, possibly, slightly more money but only on real results that come to Welsh companies. We have also got a position where rather than having one contractor we have two contractors in market, which means that we manage the contractors rather than them manage us. Those are the real mechanisms of support. I guess the other one would be the trade missions. The trade missions, I think, is another really interesting area of how trade and investment, which were previously separate, are now coming together. We support trade missions abroad. For example, Medica is a medical instruments and medical industry exhibition in Germany. We had 52 Welsh companies four weeks ago going out to that. Of course, what we are able to do with 52 companies is work with them and have investment people, as well, selling Wales as well as helping the companies sell themselves. There is no better advocate for Wales than companies who are currently successful - far better than my sales team is, because some people might say: "You would say that, anyway, wouldn't you?" Whereas with real companies being truly successful abroad, I find that is the most compelling evidence that people should be doing business, at least, with Welsh companies. We can then try and encourage them to invest in Wales as a secondary mission.

Q1699 Alun Michael: You say, as well, in your introduction that International Business Wales exceeded its trade target output of £90 million, reaching £147 million in the 2006/07 financial year. Given that you, in your introduction, put the stress on percentage of UK activity, what is that figure as a proportion of UK trade output for the same period?

Mr Williams: Overall, exports for Wales are 4.6 per cent of the overall trade numbers for the UK. So, just about washing our face, I think. That is the overall number.

Q1700 Alun Michael: So it is well in excess of your target but only meets your criteria, just, of the proportion of UK activities?

Mr Williams: That is correct.

Q1701 Hywel Williams: Can I ask a supplementary on that? The profile of UK trade overseas is heavily weighted towards financial services. Is the Welsh economy similar, or do we have a greater emphasis on manufacturing, and does that make it more difficult for Wales to trade overseas, as compared with the undoubted success of the UK economy?

Mr Williams: The relative numbers for exporting would suggest that we are holding our own. The services are becoming more and more important within Wales, as I suppose you realise. I would not say that services are, in a sense, more difficult to sell. I was giving the example of Arup earlier on, who are bidding for the work down in South Mumbai, the new city. That is the sort of service industry in high-tech, high-end engineering where Wales has a lot of skills and is able to compete extremely well.

Q1702 Hywel Williams: Can I turn to the creative industries, which you refer to in your memorandum? You say that your involvement with creative industries is fledgling. Can you tell the Committee what your strategy is for the sector and, also, what are your priorities and challenges that you are facing?

Mr Williams: We are very lucky in Wales that we have the second-highest concentration of television and media companies outside London. That is right: outside of London, it is the second-biggest in the UK. That, in a sense, may be one of our crown jewels, then, the creative industries. We have some of the biggest and most successful independent companies; we have Tinopolis in Llanelli, which is one of the largest independent companies; we have Boomerang, who have just been listed, Cwmdar (?) in the Caernarfon region, I believe. So a large number of excellent companies. What we are trying to do with all our creative companies is account manage them in a way which helps them on the business side, not just the creative side. I think we can leave the creative side to them, I do not think we can add any value there. In terms of business planning and growth plans, I believe that we have a good proposition to be able to give them and a lot of skills that we can add to their teams. We also have experts within the creative business in Wales. So, for example, the Wales Screen Commission tries to encourage film-makers to make their films in Wales. That boosts tourism. We have the Film Agency for Wales, which encourages film-makers in Wales to do deals and to create films even if they do not do it in Wales; at least they are able to do those films anywhere they want but it is Welsh film-makers doing it. We have the Welsh Music Foundation which encourages fledgling producers and rock bands to develop their businesses - but mainly producers, if I am honest. That is the way we operate with the intention of creating the creative business, which I know that every other region is doing as well. So we have to be focused on what we do.

Q1703 Hywel Williams: The creative industries are, essentially, American in character, at least in this country if not in the rest of Europe. What particular challenges does that provide for the Welsh creative industries?

Mr Williams: It is fortunate; one of the advantages is that we all speak English and so our programmes are potentially transferable into the Anglo-American market. What we tend to find is that animation, which does not necessarily link to the language that we use, is one of the great exports. I look at Calon at the moment, I look at DynaMo, two great companies who are exporting a great deal of their product, but I would suggest that the fact that we do have the language skills does help us.

Q1704 Mr Jones: Just a brief supplementary question, to what extent are Welsh companies becoming involved in the rapidly expanding computer games sector, which is projected to overtake the film industry in terms of turnover before too long. Are there any Welsh computer games companies?

Mr Williams: There is Jester, which is our prime success, absolutely, and it is a huge market. We do not have a huge number of companies, unfortunately, but Jester's success has been an inspiration in the computer games industry and one that we as International Business Wales and the Welsh Assembly Government want to support.

Q1705 Chairman: Could I end with a rhetorical question, in a way. If you reflect on where the Welsh economy was 100 years ago, it was very much central to the global economy, if you think of coal, slate, tinplate, flint, copper and the shipping that was associated with it; now today, to use the phrase of Professor Peter Gripaios, who gave evidence to us about two years ago, there is a kind of mentality of fortress Wales rather than a global Wales in the post- devolution era. Do you find that a paradox, that in fact we are less of a global economy now than we were 100 years ago?

Mr Williams: In the industries where we do less exporting than we did 100 years ago - we were the first country to have a £1 million cheque, as we know - is it a paradox? My role is to try and encourage Wales, as we said before, to export, but internationalisation is not just about exporting it is also about technology transfers between ourselves and other universities, it is about licensing, distribution; there is so much more than just exporting which, I admit, we do less of than we did 100 years ago. However, in areas like low carbon renewables we have the opportunity to be at the forefront of development, we have the intelligence, we have the capacity within our universities. Also in bioscience I would say the same thing; the largest bioscience department in the whole of the UK is the Institute of Life Sciences in Swansea, and what an opportunity that is for internationalisation at least.

Q1706 Chairman: I am pleased that you made reference at the end of this session to universities; I suppose that is the key to the knowledge economy.

Mr Williams: I believe so.

Q1707 Chairman: To what extent do you actually see the universities as a spearhead of your work really in terms of globalisation?

Mr Williams: They absolutely have to be. The opportunity to be able to work with the front end companies, the leading edge companies, companies like Wockhardt in North Wales who are looking at doing some contract manufacture in a certain area - I will not go into detail about what they want to do. The fact that they can do that with Welsh universities, with Cardiff University actually, is a bigger selling point to a great company like that than a grant would ever be. That is absolutely where, I believe, we can make a difference, and we are utilising that I believe to a large extent.

Q1708 Mr Jones: Just briefly on that point, to what extent are you satisfied that Welsh universities are turning out graduates tailored to the needs of industry and commerce in Wales?

Mr Williams: I am afraid I do not know; I am not able to make a qualitative comment on the graduate side. I do not hear from my customers that they are dissatisfied with Welsh graduates as such.

Q1709 Mr Jones: I am sorry, that was not the point I was attempting to make. If I can illustrate it, when we visited Xiamen University it was quite clear that the university authorities were working very closely with commerce and industry in that particular part of China to produce graduates who were tailored to the needs of those industries, and my concern is are Welsh universities turning out graduates who have the necessary skills for Welsh industry and Welsh commerce?

Mr Williams: If I have understood properly, is Welsh business engaging with and encouraging the universities? The Skills Councils attempt to and do address this issue more so than I would in International Business Wales. It is not something I am actively engaged in, I apologise.

Q1710 Albert Owen: You mentioned relocating members of your staff to the emerging economies, i.e. India and China in particular. When we were out in China we met about half a dozen people from the British Council and other organisations, but some of them had huge areas to cover. What is your plan for the future, do you intend to relocate these people or do you intend to do joint working with other organisations? Everybody is trying to get a piece of the Chinese cake in the economy there; what is your strategy for China for instance?

Mr Williams: China is extraordinarily exciting, I agree. We are constantly reviewing the number of staff that we have in every market and at the moment the US is generating 540 projects into the UK, China would be about 52. The number of staff we have in China - we have five staff with two in Hong Kong and two coming on board into Chongching which is the equivalent to or more than the other RDAs with devolved administrations. Clearly, we have to work with UKTI who have far more staff in markets, but I can assure you that if the opportunity starts to grow, if the pipeline starts to get bigger, then we will have to meet that opportunity with resources.

Q1711 Albert Owen: Is it not obvious that it is growing?

Mr Williams: Certainly in India, I can see that, and we are addressing that right now, moving from one to six, to become the biggest development agency. In terms of inward investment it is extremely exciting, but potentially the attraction of the UK to China is not as great as it is for Indian companies; India at the moment is about 20% higher than China in terms of inward investment into the UK. It is somewhere where we have to be encouraging, but in terms of more staff I would want to wait maybe two years to see whether the opportunity develops and work with UKTI until that happens. I am not getting a sense from my team in China that they desperately want more staff.

Q1712 Albert Owen: Perhaps there are too few on the ground; that is the serious point I am making. When they were coming in from Hong Kong and everything they were talking about the challenges and saying that they needed extra resources; this is one of the reasons why I wanted to ask that question from the UK dimension. Certainly out in the field they are telling us they need more resources.

Mr Williams: Sure. I do not know if you know the China-Britain Business Council, but we are hiring a person in Cardiff from that excellent body who is helping us develop our proposition in China. We also have two staff who are primarily focused on trade in China in Cardiff as well and we have two lead generators in market in China who are not directly employed by us but are paid by us. Compared to other regions, that is a generous focus, but I take your point.

Q1713 Albert Owen: Be bold.

Mr Williams: Thank you.

Q1714 Mr Jones: I have to add to that and say that I personally, and it is fair to say some of my colleagues on the Committee, were very disappointed at the level of export business that IBW had generated in China. I think I am right in saying that the numbers we are talking about are ₤7.7 million last year and up to the time that we were actually present in China, about ₤4.4 million, which seems extraordinarily low given the incredible dynamism of the Chinese economy. It is not so much a question as an observation but I have to say in all frankness that it did not appear to me that IBW's efforts in China were producing much fruit.

Mr Williams: In terms of exports or inward investment or both?

Q1715 Mr Jones: In terms of exports.

Mr Williams: We run two export missions to China every year and they are always some of the most subscribed, so a great number of people are very interested in dipping their toes into the Chinese market at the moment. A lot of the companies that we work with are, by nature, not the ones who are going to give us the ₤25 million, ₤30 million, ₤40 million export numbers right now, but those companies with the right development and with the right growth may give us those sorts of numbers in the future. ₤4 million is not a huge number for China, no, I would accept.

Q1716 Chairman: Could I thank you for your evidence this morning and also for your memorandum. We look forward now to your subsequent memorandum.

Mr Williams: Of course.

Memorandum submitted by Welsh Local Government Association

Examination of Witnesses

Witness: Mr David Gilbert, Regeneration Adviser, WLGA, gave evidence.

Q1717 Chairman: Welcome, and for the record could you introduce yourself?

Mr Gilbert: My name is Dave Gilbert, I am a Welsh Local Government Association adviser but my actual employment is that I am the Director of Regeneration and Leisure for Carmarthenshire County Council.

Q1718 Chairman: The acoustics in this room are not very good so do not be afraid to raise your voice and almost shout. Thank you for your memorandum, which was extremely helpful and very comprehensive. If I could begin by referring to the memorandum, you note that local government has a key role to play in addressing the increased challenges faced by Wales as a result of globalisation; where do you think the greatest challenges are in relation to globalisation for local government in particular in Wales?

Mr Gilbert: I think there are two or three key issues really. One is the whole agenda around sustainable development; local authorities are at the moment grappling with some of the policies such as TAN8 and TAN15 that really are quite challenging to most local authorities and also there is a big agenda for Wales about how do we spread economic prosperity. I certainly work for a mix of urban and rural local authority and there is a real challenge for us about how do we bring employment into some of the valley locations that inward investment perhaps is not well-geared up to. I certainly see local government having a role in filling many of the gaps, so you have a central government strategy, you have a Welsh Assembly strategy and local government has to plug some of the gaps on the ground. You know, we are right at the lower end of the size and the challenge for us is how do we get economic prosperity for everybody in our communities.

Q1719 Nia Griffith: You refer in your memorandum to an "ever decreasing pool of labour" for Welsh local government; how would this decline be best addressed and to what extent is the decline in the labour pool unique to local government? I say this in the context of so many people thinking and saying people are coming in and they are taking our jobs, yet when I speak to people like yourself you tell me that there are gaps and there are issues.

Mr Gilbert: It is a question of the balance of the skills that you need and giving perhaps more people the skills to do some of the jobs. I have been in local government longer than I care to remember and traditional local government was seen as a very secure job, well-paid, et cetera et cetera. Young people today have a lot more choice and maybe local government does not look as attractive as it used to do. We have to make it a more attractive place to work and we can do that in a variety of ways - we can do it with flexible working, we can do it with added value of facilities that we might provide. We certainly are facing a shortage in some of the key skills; for example, town planners are very difficult to recruit at the moment, social workers are very difficult to recruit at the moment, so it is an issue that really needs to go right down to school level. One of the issues for us generally to grow the Welsh economy is to take a long term view about what sort of skills do we need, be it in the private sector or the public sector, and what we have to do is give the skills that match the employment opportunities as opposed to just courses that you might run. There is an agenda in the future, perhaps, about how do we get a match of skills? I was sitting in on the earlier presentation and one of the questions was about universities; as many of you will be aware we are growing something called a "Technium" concept - there are several in South West Wales and the whole emphasis of that is to try and encourage university graduates to spin out of universities with something that has got commercial value, that can be exploited and can be a wealth creator.

Q1720 Nia Griffith: Can I say, Chairman, that this is particularly surprising in the context of Wales having for years and years and years exported graduates, particularly in areas such as teaching social work and so forth. You are talking now about a graduate shortage but the complaint has always been that there are not enough graduate-type jobs for the young people who do get trained, so this is quite a new departure. Would you say that it is very recent or would you say it is something that has been there for a while?

Mr Gilbert: I would say it is relatively recent. Certainly, if you look at planning and civil engineers, Wales has done a lot of regeneration over the last five to seven years and those shortages are now beginning to show. There are a lot of property-related activities going on across the whole of Wales and one of the consequences of that is that we are facing shortages in those particular areas. Again, the issue is that you can import them or you can try and grow them, and the issue then is have you got the confidence that these skills will still be needed in five, seven, ten years time. I guess that is really about the confidence of Wales and its ability to grow its economy.

Q1721 Mr Jones: Mr Gilbert, your paper refers to the "massive challenge" presented to local government by demographic change and the problems of an ageing population. To what extent would you say that local government is currently able to meet the demand for social care and how does it propose to meet the increasing demands of this ageing population that you mention?

Mr Gilbert: There are real pressures on just about every local authority to do with social care. It is one of those areas where the demand just seems to grow and grow. The challenge for local government probably is two-fold; not to do it all itself but how do we share that perhaps with other agencies, be they from the voluntary sector or the private sector. Also, the focus needs to be more on what can we do at an early stage, possibly to prevent some of the problems that the elderly population presents. If you look at the whole of the health agenda, for example, there is a lot that local government and the health service could do collectively. Also, the challenge in the future is going to be about how do we deliver, and a lot more of that service is going to be delivered, probably in the homes of a lot of the elderly people and probably in smaller packages. The message is that we are going to have to target and to focus to meet that challenge. There is always going to be a resource issue, so I would not come in and say that the only way we can get out of this problem is by spending more money; I do not think it is just about spending more money, it is about doing things differently and perhaps doing things in a more joined-up way with other agencies.

Mr Jones: You mention that in future you can see that there will be increasing emphasis on domiciliary care and you also mentioned the issue of resources; could you possibly therefore comment on the proposals of the Welsh Assembly Government to acquire powers to put a cap upon the charges that local government may make for domiciliary care?

Chairman: That question is out of order, it is not a question in relation to globalisation; could you rephrase that, please?

Q1722 Mr Jones: What is the attitude of the Welsh Local Government Association to proposals made by the Welsh Assembly Government that may potentially put a cap on the services provided by local government to ageing people, the sort of ageing people you expect will increase as a result of the pressures of globalisation?

Mr Gilbert: The local government response to that would be that we would not encourage caps on any of the provisions, we would prefer for us to determine what is the cost that is needed and whether we can justify that cost. If caps do come in there will be an issue then about those that exceed that cap, how will they manage to resource it, because unless resources increase then something else will have to suffer as a consequence of an extra cost being incurred.

Q1723 Mr Jones: Is it your perception that the changes caused by globalisation will put increasing pressures upon Welsh local governments to deliver that domiciliary care?

Mr Gilbert: I am not sure if it is globalisation in that particular case, but there is no doubt at all that the population is ageing and living longer; that is obviously something that we all commend, but it is an issue that collectively the Assembly and local government will have to tackle at some stage.

Q1724 Mr Jones: You have touched on this previously, but could I take you back to the point you mentioned about the decreasing pool of labour and the problems of attracting young people into local government. How do you say that decline would best be addressed? You have mentioned maybe adding value to the work, but perhaps you could expand on that a bit.

Mr Gilbert: Certainly from the point of view of young people the focus is on how you get younger people to get into the professions, or maybe there is another agenda about how do you get people to come back into professions. If you take, for example, town planning, there are a lot of town planners who are actually doing other things now because through the Seventies and the Eighties there was a decline in town planning as a function and there were a lot of qualified town planners who actually went out of the market and maybe there was an option to bring some of those back. Ultimately, it is about making those professions look attractive to younger people so that we do get a good take-up of people going through the professions and coming back into local government. It is not a quick fix, it is something that we will have to do over the longer period.

Q1725 Mr Jones: This is a very serious problem, is it not?

Mr Gilbert: It is a very serious problem and it is a problem that can encourage local authorities to compete against one another, which drives up market rates, and I do not think that is in anybody's interest. One of the things we are looking at is how we can, perhaps, grow our own employees collectively rather than as individual local authorities, so there are quite a few collaborative projects at the moment about recruitment, pools of labour and how do we train. For example, in Carmarthenshire County Council we actually take on young people and put them through a full town planning programme so we rely on the fact that they will stay with us then, and that tends to be successful. We take them on very often as summer students, we then put them through the programme and we keep our fingers crossed that we will actually retain them.

Q1726 Mr Jones: To what extent and in what way would you say that central government could be of assistance in helping to address this problem?

Mr Gilbert: Enough programmes to address the shortages and we all have an interest in a sense to make these professions more laudable if you like. Accountancy, town planning and civil engineering are very good professions and maybe by writing to colleges and schools we need to get the message through that these are very good professions to go into. There is a slight mismatch in that young people do not appreciate, perhaps, some of the opportunities that those professions offer.

Q1727 Albert Owen: You mentioned in your paper the Welsh Spatial Plan and the fact that local authorities have been heavily involved in the development of the plan, but you are quite critical that they have not moved to the next stage from research and strategy to policy and delivery, and you keep saying that this is a very important period for Wales. What sort of policies do you think we need to have that leap forward?

Mr Gilbert: We do need a debate generally about where do spatial plans fit into the overall planning process. They kicked off with a lot of enthusiasm and encouragement and maybe it is just because the process has been relatively slow, maybe it is because there were distractions through the election period. I have had a couple of conversations with the minister responsible for spatial planning and he actually is looking at the value of the spatial plans and how they now might move into delivery phase. A lot of work has gone into preparation, most of the spatial plans have gone through a lot of work about what are their key settlements et cetera and maybe in the new year the minister will announce something about how they will be used as delivery vehicles because they need to be delivery vehicles if they are going to retain the value that has already been put into them, to be quite honest.

Q1728 Albert Owen: You are more or less repeating what the ministers are saying but I want to know specifically, can you give me an example of what you would like to see delivered by this spatial plan.

Mr Gilbert: In the case of South West Wales, which I am very familiar with, the spatial plan can be a very good vehicle for delivery of some of the Structural Fund programmes. If you look at town centre renewal, for example, most local authorities have got issues around town centre renewal. It is one of the spatial frameworks, so the groups on the spatial plan could be very valuable in terms of moving those programmes along.

Q1729 Albert Owen: That is a good example. The lack of affordable housing in Wales is something that all politicians and many groups are aware of within local authorities, particularly for young people, and you highlight in your paper - and I think it is a good idea - the establishment of a Commission on affordability. Could you outline to the Committee what you see this Commission actually doing?

Mr Gilbert: There is a need in Wales for some consistency of approach about affordable housing. In some instances we use the planning framework to achieve affordable housing and in other areas we use maybe discounted land, we use housing associations. There is a need to try and get some consistency. Everybody would agree that the gap on affordability is very large in just about every part of Wales now and I know for example in Carmarthenshire that it is something like seven times income to get the average house. We in the last 12 months have dedicated three specific sites in Carmarthenshire that we owned to go towards affordable housing, and 300 units will be allowed there. We do have a planning policy that says any development of more than ten houses must have an affordable housing element, but there are inconsistencies across Wales, even inconsistencies across neighbouring authorities. It gives confusion to developers, it gives confusion to the affordability part of the equation, and I think a Commission would perhaps give us some good advice about how we might address that and get better consistency.

Q1730 Albert Owen: Do you think we should keep using the word "affordability"?

Mr Gilbert: In the absence of trying to think of a better word for it.

Q1731 Albert Owen: You gave an example there that the average house is not affordable; not to a first time buyer because most people work their way up the ladder, so what I am suggesting - and I think it has been suggested in the past - is that we have low cost housing and there is no stigma attached to that, that people start in low cost and then they would need the land that you are talking about. Do you think the Commission could bring this together?

Mr Gilbert: I think they probably could. There is a debate to be had about this whole agenda of housing - low cost, affordable, social, private - and I think it would add a lot of value.

Q1732 Nia Griffith: We often think of affordable housing in the context of young people but I am meeting elderly couples in terraced housing who need to move to a bungalow, but the only types of bungalow available at the moment are at the upper end of the market, posh-looking three-bedroom detached bungalows and they are desperately looking for something much more affordable. The result is, if they do not get it, that they either need expensive adaptations to the houses or, of course, they go onto the housing list for the local authority. I just wondered if any work has been done really on the needs of that sort of age group that are trying to move into something they can manage, particularly in the context of your earlier comments about more elderly people remaining in their homes.

Mr Gilbert: I am not aware of any work that is under way. I know, for example, on adaptations to houses for people with particular disabilities there is a debate, certainly in my own authority, about instead of giving grants for adaptations we actually provide them but retain ownership, so that if circumstances change they can actually be removed and used elsewhere because there is some evidence that says there is a lot of wastage, where you might spend a lot of money on adaptations, only to find that when the circumstances change you have lost the adaptation. There is some work that is going on around that particular area but, you are quite right, affordable housing or low cost housing is not just for young people, it is for the whole population frankly.

Q1733 Alun Michael: There is quite a significant section of your evidence that is devoted to the issue of migrant workers and migration flows. The Welsh Local Government Association says in that that the lack of accurate figures and the profiles of the migrant worker population are core factors inhibiting local authorities in their efforts to respond to the needs of economic migrant workers. What, in your view, would be the best way of tracking and reflecting those numbers; is it not basically down to intelligence that will be gathered by each local authority in its local area?

Mr Gilbert: It is a mixture, to be honest. I know the Office of National Statistics is actually doing some work around this at the moment and I think the real issue on tracking is for those that are short term workers, in other words for less than 12 months. They are very difficult to track and that, I think, is where the main problem lies for local authorities; we are getting better at tracking the longer term stays, over 12 months, but it is the ones which are there for three months or six months that are quite difficult to track. Some of the pressures that this causes are, for example, English as a second language and if migrant workers stay for a longer period then there are pressures on the education system. What Welsh local government is asking for is some sort of contingency fund to be set up where local authorities can bid, where there are particular pressures to individual areas.

Q1734 Alun Michael: I realise that behind this is a bid for more money, it would not be the Welsh Local Government Association that we have come to know and love if it was not, but I am trying to probe this issue of the figures and I am not quite clear about the implications of your response. In one sense short term workers surely are less of a problem because if they are not coming in and they are not settling then they are not posing health and care issues in the way that long term settlers are; therefore, the information firstly is volatile and is only likely to be available at the local level. Going back to your point about statistics, the UK does not make sense on average and Wales does not with the differences between Carmarthen and Cardiff in terms that the nature of the migrant population that is there for short term employment would be quite different. Can I come back to the point, is it surely not for the local authority to be collating that sort of information, and what do you want to do with that information specifically in relation to the short term migrant workers that you highlighted?

Mr Gilbert: The short term information for us is useful in terms of being able to help them find their way around and finding the sort of services that they need and trying to prevent, perhaps, some of the exploitation on the houses in multiple occupation, so there are issues about the care and protection of some of the migrant workers. I know you have received evidence about issues to do with employment of migrant workers, but I think the local authority has an interest in that to avoid issues, particularly in some of the tensions there might be around local communities. I am not sure I am saying that local government would want more money, I think what I would be saying is that there ought to be some sort of funding set aside to recognise that certain local authorities would have different pressures to others. You are quite right though that the real pressures come if the stay becomes a longer term stay because then you do get into housing, although obviously some migrant workers buy their own houses and there are no pressures there, but in terms of education specifically, that is when it does tend to become a pressure on the local authority in terms of its main cost.

Q1735 Alun Michael: You leave me still with the view that it is for the local authority to collate that within its area because it will best know its area and be able to do that. You made reference in your reply as well as in the evidence to the provision of English language education. I understand in evidence that came from the Polish Welsh Mutual Association there was a suggestion that the current provision is too highly pitched for migrant workers - I take it there they are talking very much about the sort of thing you are talking about, the short term employees, and the drop-out rate is very high. Is that something that the WLGA is working on?

Mr Gilbert: Yes, we are conscious of the fact that we have got to try and design something that actually does satisfy. We are quite lucky in a sense in Carmarthenshire because we have actually got a Polish Welsh Association that actually does a lot of valuable work for us, and that is probably something that I would encourage other local authorities to look at because you do need to get the confidence of the migrant workers that there is somewhere they can actually go that is not necessarily to do with the government as such; that has been a very good encouragement. We have managed to draw down some ESF funding there to provide basic language skills, but you are right that it is a question of pitching it at the right level because if it is only going to be for three or six months the actual level that is required is very minimal.

Q1736 Alun Michael: And again that comes back to the knowledge and judgment in the individual local area, does it not?

Mr Gilbert: Yes, I would agree with that.

Q1737 Alun Michael: You also referred to the misconceptions many people have regarding the impact of migrant populations on Welsh communities; part of that of course is that there can be very different impacts from different communities, particularly within individual local authorities like Cardiff and some other parts of Wales. Has the WLGA pulled together experience across that and can you outline the Association's experience of this and how best to address these misconceptions in particular?

Mr Gilbert: The Association is actually pulling something together at the moment. Speaking from Carmarthenshire County Council, we have actually had a task group looking at this particular issue for Carmarthenshire, and there is actually a report which could be made available to anybody that would want to read it, but it is quite interesting reading that some of the issues that people have got perceptions about are not actually evidenced at all. There were misconceptions, for example, that migrant workers were taking council housing from local people; that in fact, certainly in Carmarthenshire's case, has not proven to be the case. What has happened very often is that housing is being rented quite legitimately and people just have the perception that people are jumping the queue. Also, there is some suggestion - and certainly again I speak for Carmarthenshire where I do have quite a lot of knowledge - that migrant workers were stealing the jobs of local people, but when actually we look at the evidence of that, that is also not proving to be the case. The job vacancies at the Jobcentre are still the same.

Q1738 Alun Michael: You are expanding on the misconceptions but it is a question of addressing them because very often these are quite localised impressions, are they not?

Mr Gilbert: Yes, and that is a question of trying to give local communities confidence that some of these issues are not real issues, and that is something that we are trying to do at this very moment.

Q1739 Nia Griffith: I really wanted to ask much the same thing as Alun has been asking, but particularly in respect of the English classes what is the situation with charging?

Mr Gilbert: The English classes are now provided free.

Q1740 Nia Griffith: That is set to continue, is it?

Mr Gilbert: That is set to continue, yes.

Q1741 Mark Williams: You refer to the crucial role that public procurement can play in relation to the local economy - you talk about relocalising it in your memorandum - not least in relation to the food industry. What proportion of food is procured locally by the local authorities in Wales? In your memorandum you talk about some good local examples in Caerphilly, Ceredigion, Powys and indeed your own authority. How sporadic is the pattern of sourcing food resources locally?

Mr Gilbert: I do not have actual percentage figures although I think some might be available so that may be something I could find out. What we are trying to do though is to procure more and more of it locally, Again, speaking from my own authority we do have a strategy of local procurement for schools; this is not just about getting best value because in fact about three or four years ago we were criticised by the Wales Audit Office for the fact that our school meals were more expensive than other local authorities, but we obviously have tried to defend that position and it is more acceptable that the reason it was more expensive was because it was more nutritious. The agenda for local government is to try and source more and more locally for sustainable reasons, but also to try and assist your own local businesses.

Q1742 Mark Williams: Is that message getting through?

Mr Gilbert: I think the message is getting through, I think there is a lot more acceptance now about the concept of local procurement and we hold regular workshops with local small companies to try and encourage them to bid for work with us. One of the problems associated with bidding for local authority projects is the sheer paperwork of the tender process would put off a lot of very small companies, so we have been trying to break down those barriers. We have had a session of workshops to try and encourage local firms to bid and we are also encouraging local firms to form their own consortia to be able to bid, so I think it is something that has got a very good long term future, this local procurement, where it is possible, even to the extent where local authorities can assist businesses generally to inter-trade, that again is something very important. Businesses do tend to be quite blinkered very often and do not necessarily have the time or the expertise to see where there are other business opportunities and this is something that local authorities can play quite a valuable role in.

Mark Williams: If you could supply any figures you have got on that at a later time, that would be very helpful.

Q1743 Hywel Williams: Turning to broadcasting and creative industries, you say in your memorandum that "the main role of local authorities is Wales is to work with the creatie industries to maintain and create quality jobs and to create suitable opportunities" particularly with young people. Can you tell us what sort of arrangements are in place within local government to achieve this, and what challenges exist in putting such plans into practice?

Mr Gilbert: We are fairly marginal players to a degree, but there was reference made in the earlier evidence to, for example, Tinopolis in Llanelli. Tinopolis in Llanelli is a leading creative industry and has a very good track record in training people locally rather than poaching them from around the rest of the UK and that is something that we look to encourage. Most local authorities were also participants in the Film Commission work that went on because again there is some added value there in terms of Wales as an ideal location for a lot of film sets, which can actually raise the economic base. I did put in my evidence that Carmarthenshire County Council has submitted a Big Lottery project called The Works which is a creative cultural centre; the bad news is we did not make it to the final nine and we did not make it to the final three, although when the synopsis was put out we were led to believe there would be five from ten in the final, but in fact it was three from nine in the final, and one went to Northern Ireland, one went to Scotland, one went to England and I am trying to find out if the fourth place should have gone to Wales on a spatial spread or not, but as you can probably imagine there is quite a sense of irritation in South West Wales that Wales actually lost out at that very final point. That would have been a good example where Tinopolis would have created quite a lot of social enterprise, Coleg Sir Gār would have done a lot of training in media work and it would have been a community-based facility. That sort of ideal is something that we should encourage.

Q1744 Hywel Williams: You say in your submission that the Assembly Government strategy considers economic development and focuses on the high-end business developments and then you say later on that much remains to be done to deliver quality jobs and in the short term specific skills shortages need to be addressed, meaning the sort of things like training theatre technicians. That is rather at the other end of the scale to compared to the near Hollywood production balance.

Mr Gilbert: Yes, it is.

Q1745 Hywel Williams: What are local authorities doing in terms of those sorts of fairly basic skills?

Mr Gilbert: We are certainly encouraging colleges to train at those basic levels. Again, in Carmarthen we have got Theatr Genedlaethol, which is the Welsh language theatre, and that has led to actual courses being laid on for basic skills, because the thing is to get the young people into these industries, and they can then move up. It is getting the seed bed there that encourages them to get a foot on the ladder and that is something that we have been working with local colleges to try and provide.

Q1746 Hywel Williams: Can I then turn to partnership working in the context of migrant workers? You note in your submission that there is a need for far greater co-ordination between the UK Government, the Welsh Assembly Government and local government in Wales. Can you expand on the opportunities and challenges posed by globalisation that a co-ordinated approach could address; what exactly do you mean?

Mr Gilbert: If you take the issue of migrant workers there is a lot of evidence that the UK Government would hold, there is a lot of evidence that the Welsh Assembly would hold and there is a lot of local information that we would hold, and I think maybe there does need to be a better joining-up of the sharing of that evidence. There is probably a need for a better sharing of evidence between the local authorities, and I know that work is something that has started because there are areas around Wales that have got expertise now in dealing with some of the issues around migrant labour, and I am a big believer that best practice is something that should be shared and I think that perhaps we are not all that good at sharing best practice. There is a little bit of we keep it to ourselves in case somebody else finds out about it, and I think that actually is the wrong way of doing it. If we have got something that is worthwhile and is best practice we should be out everywhere telling people about that best practice.

Q1747 Chairman: On that positive note can I end this session? Thank you very much for your evidence this morning and also, once again, thank you for the memorandum you have provided us with. If you feel that in the light of questions this morning you would like to submit a further memorandum then we would be delighted to receive it.

Mr Gilbert: Thank you very much.