‘Focus must be on value creation not value extraction’
Frank Holmes, founder partner at Gambit Corporate Finance, chairs the Regional Economic Growth Partnership (REGP) which advises the Cardiff Capital Region’s (CCR) regional cabinet and leads on the economic growth plan underpinning the City Deal. Here he l
■ 1. What is the Cardiff Capital Region City Deal and who are the governing bodies involved?
The CCR City Deal is a time-limited economic growth programme spanning 20 years, and attracting £1.2 billion of investment from Welsh Government, UK Government and 10 Local Authorities across the South East Wales region.
Of the £1.2 billion available, £738 million is ringfenced for the South Wales Metro and the remaining £495 million is ascribed to a Wider Investment Fund. The CCR City Deal is overseen and led by the CCR Joint Cabinet comprising the Leaders of 10 Local Authorities and advised by several boards including the REGP, the Regional Business Council and the Employment and Skills Board, with a view to driving four priority themes; business and innovation, regeneration, connectivity and skills and employment.
■ 2. What are the REGP’s principal areas of focus?
The REGP board’s diverse membership is made up of individuals from business, two Leaders from Cardiff and Monmouthshire County Council respectively and representatives from Higher and Further Education, Employment and Social Enterprise.
Our principal role is to lead on developing a 20-year economic growth plan, advise on investment proposals for the Wider Investment Fund, as well as being advocates for promoting CCR within and outside of the region and attracting inward investment, both for relocating companies and private sector funding.
■ 3. What are the main opportunities and challenges for the REGP board?
The REGP is acutely aware that the indicative growth and employment targets outlined could be achieved in isolation or collectively, but with the potential downside of delivering unsustainable growth as opposed to developing a thriving economy which is inclusive and regenerative.
Our strategy needs to address the cultural setbacks of ambition and dependency, plus years of a silo approach to sector and project investment, by adopting a competitive, industry led, government backed (beyond “enabling”) plan which addresses social and regional inequalities and focuses on value creation rather than value extraction.
■ 4. Where do you see the next few years’ focus?
Our immediate priority is to research, analyse, review and collate regional data from a number of sources, both public and private, which will accurately reveal growth challenges and social economic priorities of the CCR. This will identify the most appropriate interventions to boost competitiveness and productivity. Cures rarely arise from misdiagnosis and a fact-based view is more useful for navigating and enabling us to see what we need to do to make it better.
The SME-based economy requires its more ambitious members to be incentivised to grow into medium-sized enterprises with trading horizons beyond the UK and Europe. The public sector base must morph into an asset by generating procurement initiatives, enabling valuable data sharing, creating quality employment, and join with business to drive prosperity. Our HE and FE institutions need to prepare future generation’s skills for the changing world of work, encourage innovation and commercialisation of Intellectual Property through customised entrepreneurship programmes and real engagement with business.
Infrastructure and connectivity, in both transport and digital technologies, are priorities to enable our people to get to work from chosen accommodation. We have an opportunity to leverage and replicate the foresight of creating a CSC cluster ecosystem, with other place making opportunities in fintech, biosciences and engineering expertise in trains, automotive and aviation manufacture, embracing the connectivity of Metro to make this viable.
■ 5. What is the REGP ambition, short and medium term?
The REGP must be ambitious and drive considered investment proposals which will improve productivity, turning economic weakness into opportunity. This will require a lot more than the £495 million under its advisory stewardship. So we are actively looking to establish partnerships with the investor community to create an Investment, Infrastructure and Innovation Fund aimed at supplying long-term capital, coinvesting with inward migrating companies whilst seeking to make acceptable levels of returns, recycling the capital and living off interest, as opposed to deploying grants.
This fund will focus on connectivity and infrastructure, embracing radical innovation opportunities as well as addressing the challenges of artificial intelligence and data economy, clean growth, the future of mobility and an ageing society, all of which will shape our educational and skills needs.