Welcome to the Welsh Affairs Committee. I am Ruth Jones, the Chair of the Committee. This is the third oral evidence session in the Committee’s inquiry into the environmental and economic legacy of Wales’ industrial past. I am very pleased that today we have with us Michelle Rowson-Woods, head of operations for Wales at the Coalfields Regeneration Trust, and Mr Meirion Thomas, Wales director at the Industrial Communities Alliance. Thank you both for appearing in front of us in person today; it is much appreciated. Before we begin, does any member have any interests to declare this afternoon? As that is not the case, we will proceed straight to questions. Let me start by asking you both how well you think the former industrial areas in Wales have adapted to today’s economy. How well do you think they are responding to the barriers, the opportunities, the strengths and the weaknesses? I am obviously looking at south Wales, because that is an area I know. Is that specific, or is it part of the broader legacy of the environment across Wales? I will ask Mr Thomas to start.

Thank you very much, Chair. If I may make an opening remark, you have our report, “Next Steps for the Valleys,” which is hot off the press and available on the alliance website. It has been in production for the last nine months. The written evidence that I submitted back in January was halfway through that process, so we have been building up since then. During my answers, I may well refer to some of the evidence in the report. I just wanted to be clear about that. In answer to your question, the challenges faced by the industrial south Wales valleys in particular are the same as everywhere else, in terms of new technologies and a changing economic environment. However, we start from a very difficult base position. Almost no other areas in the UK come from that lower base, so it is even more difficult for our industrial communities in south Wales to adapt to the new economy. Clearly, there is a continuing problem of a lack of jobs. Job creation in the south Wales valleys is much lower than it is anywhere else in the UK. There are figures in our report that verify that fact. It means that a lot of focus is therefore on other aspects of the economic and social situation in the valleys. In particular, we have major issues not just with a lack of jobs, but with lower numbers of people looking for work. We have quite high levels of worklessness within the valleys. Some of that has to do with health inequalities and their continuing impacts, and some of it has to do with the problem of changes in the skills base. There is nothing to say that the education system and education outputs in the valleys are worse than anywhere else, but it means that when young people come through the education system and have an opportunity to go to university or college somewhere, they leave, find jobs, and do not come back in large numbers, which compounds the problem. That is one of the things we need to look at as we move through.

Ms Rowson-Woods, can I ask you about those barriers in particular? Is there anything that you would like to add to what Mr Thomas has said?

It is important to highlight that the coalfield communities were built on a single industry. Within that structure, miners will comment that there were jobs for all at all levels; there were very skilled jobs and manual jobs. Alongside that, the industry built a lot of social infrastructure, and that social capacity is still evident today through recreational grounds, institutes and so on. With the loss of the industry, that skills base has gone as well. We have failed to replace jobs at the level that they need to be. “State of the Coalfields” highlights that in the south Wales valleys alone, 27,000 jobs are needed to bring employment levels up to the UK average. There is also an issue around low skills. In some of the communities we work in, 40% of the population have no qualifications whatsoever, and 40% have no car. So there is both a lack of local jobs and additional barriers to access work. As a charity, we try to tackle those complex needs with innovative and local place-based solutions, supporting people with basic stuff like building confidence and gaining qualifications to move them towards employment, but the fundamental need is for jobs in our communities. We have also seen a policy shift away from regional investment which has further weakened the ability for the valleys, in particular, to attract business investment and jobs. We can support people to move towards working, and we can provide charity services to support people impacted by poverty. Building capacity at the community level to respond to need is a core piece of our work as a charity, but where are the jobs? That is an important point to highlight.

That is something that I am sure we will explore in our evidence session this afternoon. Let me hand over to Gill German.

You have answered part of my question already, but I would like to ask a little more about the poor health outcomes that you mentioned, Meirion. They obviously have an impact on driving out-of-work benefit claims. Can you elaborate on the factors underlying those health outcomes, and what you believe could be done to address them?

A great deal has been written about this in various sources. The way we have tried to look at this—it is in the report, and it was in my written evidence—is that we are starting from a low position. Average life expectancy is two years less in the valleys than for Wales as a whole, and certainly for Great Britain, and that is the same among both men and women. We sometimes think that that must be related to the old heavy industries, but it is not; it is embedded within communities and within families. That is important to recognise. The statistics show that 8.5% of residents aged 16-plus report bad or very bad health, which is considerably more than the Great Britain average of 5.5%; it is getting up towards double that figure. If you look at extensive ill health, 13% of all residents in the valleys claim either disability living allowance or personal independence payments. That is twice as high as the GB average, which is quite astonishing, so there is a really strong base there. It is very important to say that in our work and in the report, we talked to people in communities; this is not just statistically based. We focused on nine towns spread across from Pontypool all the way to Ammanford, and talked to people, community leaders, charitable organisations and so on to find out what is behind these figures. One thing that comes across quite strongly—there is other research around this as well—is the feeling people have that it is almost not worth trying to get the healthcare they need. Communities tell each other, “Actually, you’re not going to get that—so-and-so down the road didn’t get that help, so why should you bother?” and so on. That attitude can become really embedded within small communities and within families. However, there is a much more practical issue, which is that if you are suffering from really ill health and you regularly need to get to hospital for treatments, appointments and so on, it is very difficult if you do not have access to a car. In the report, we talked to people in Merthyr, Maesteg and Abertillery who have set up charitable organisations of volunteers who take people for cancer care, because otherwise they are not going to get there. To get to Velindre from Maesteg, or to get to Singleton Hospital from Maesteg, you might have to catch three or four buses. You might be out all day for an appointment, which would only take you half an hour with a more efficient timetable. These stories that communities tell themselves become almost endemic. People think, “I cannot do this. I cannot put myself forward to look for work. I can’t even get on the looking-for-work register any more, because I just cannot do it. If I got a job, how would I fit in my hospital appointments? How would I actually get to work?” These things are really quite serious, but simply focusing on the health service element is not enough, because these are communities where people live and where people have to travel and support each other to get to their appointments. It is a bigger issue than simply focusing on the health service. There are other weaknesses within the system, and particularly within the south Wales valleys.

Do you have anything to add, Michelle?

Following on from Meirion’s point around cancer rates, cancer incidences are much higher, and the outcomes are much poorer, particularly in the south Wales valleys and the south Wales coalfields. Macmillan Cancer Support has funded us to deliver CRT Together, a programme that provides non-clinical support, but is about enabling people to tackle the challenges that come with a cancer diagnosis. What we are finding is that lack of transport is a key part of that, and it is probably resulting in those poorer outcomes. We have participants who are unable to access treatment; they have had the diagnosis, but they physically cannot get to their appointments. We are seeing that across the two health boards where we work, Aneurin Bevan and Cwm Taf Morgannwg. Some of those communities are served by voluntary transport schemes, which Meirion referred to, but there are gaps. Caerau is a particular gap: again, the cancer inequalities in Caerau and north Bridgend are particularly poor, but even where there is provision, it is at capacity. So there are compounding issues around inequalities that are often impacting our communities and funding to those services. Where services exist, the challenge we have in the charitable sector is covering the costs of delivery. Costs are going through the roof. Often charities are funded solely on the basis of miles travelled, and not the additional cost of co-ordinating transport. You have your volunteers, who do not cost anything, but the actual co-ordination is an additional cost that charities are having to bear, and they are really struggling. The Charity Commission did a recent report saying that in the past couple of years, the demand for services has tripled. We are seeing an increasing demand for charitable services to support those communities most in need, and that system is really struggling. Currently, charities can access some local growth funding; it is important to make that point about future ongoing investment through local growth funding. We are keen to see how the charitable sector can continue to be supported, given the strains upon them and the impact that that has on things like employability, supporting people back into employment, and health inequalities, which are all key to the economy.

It might be helpful if you could speak up a little, because the microphone does not always pick up quieter voices. I would also make a plea for brevity when you do speak. If you are making a point that has already been made, don’t worry, we have that point, but please do augment each other. I will hand over to Ben Lake.

Can I first thank Mr Thomas very much for the report? One of the aspects that was very interesting was the work you did on the commuting time from towns in the former coal belt to the nearer cities. In addition to the problems that you have outlined in terms of access to services for work, I wonder if you might comment on the broader impact on society and community, in the south Wales coalfield and other former industrial areas, of the shift from being historically the centre for work and activity to becoming commuting towns and villages?

We were quite surprised, not just by the extent of commuting out of the valleys, but by the complexity of the inter-commuting. When we looked at the nine towns, for instance, Merthyr, the largest of the valley towns, has net in-commuting. You might expect Caerphilly to have had a lot of out-commuting; it does, but also quite a lot of people move into Caerphilly because of the industrial structure there. It is not simply a question of saying, “Well, everybody just leaves the valleys for work every day,” although sometimes you sit on the A470 and that is the case. But it is an important point to make, because we felt it was really important to try to understand the complexities and differences between communities around the valleys. Of course, this is the new norm. People have always moved in and out of the valleys for work at different times. Even when it was coalmining, not everybody worked in the local coalmine. People still travelled; there were good bus services, and the old NCB organised those anyway. But it is still the case that about one in three of all people in employment are moving out of the valleys every day to a place of work. We cannot be absolutely certain, but that is our estimate. This means that places where people once lived and worked and had their community activities are increasingly becoming just residential commuter towns for other places. That can be very positive; people work, bring their wages back, spend their money on local services and hopefully pay their council tax. These income transfers within the system are really important, but it does have an impact. When we spoke to people in various communities about where commuters went and what their experience was of the impact, we heard that more people are moving out to work every day, and by the time they get back, they do not have much time for community and social activities. Rugby clubs, sports facilities and so on are not used as much as they otherwise would have been, and bonds within the community become weakened as a result of the need to commute every day.

Ms Rowson-Woods, we have heard about the actual connectivity of transport, but regarding digital connectivity, have you touched on any aspect where improving digital infrastructure in some valleys communities might, if not totally reverse the new trend, at least help in terms of business investment or indeed other social benefits?

Digital infrastructure is important. We have seen a shift to digital in terms of health services and welfare reform as well, so it is important that we understand how we could potentially marginalise people further. There are social tariffs providing access to the internet. That is important, but what we are hearing anecdotally is that it is poor and insufficient for what people need it to be able to do. Then there is access to equipment; the digital infrastructure is key, but the skill base and the actual equipment that allows people to access online services are also important. A phone is fine, but not if you want to do job applications. Someone on our cancer support programme did not have a phone, so they were not able to book appointments. We have linked to another charity that will donate phones and an internet SIM card for a period of time when people are receiving treatment. These are the types of barriers that we are seeing as we become more digital. It makes things more efficient, which is good, but we need to make sure that we do not marginalise certain people in the community even further.

I have a question for Meirion. The Welsh Development Agency was very impactful until it was abolished in 2006. How could the Welsh Development Agency’s approach to regenerating former industrial areas inform economic renewal strategies in Wales today?

I will try to keep this brief, but it is quite a long answer. As a declaration of interest, I worked for the Welsh Development Agency; I was an executive director there for a number of years. I was transferred and had moved on well before it closed. It is important to make a distinction here, if I may, between the Welsh Development Agency as an organisation and the Welsh Development Agency as a deliverer of activities and programmes. I have never been one to say that we should bring back the Welsh Development Agency. I knew it from the inside; I knew it could be dysfunctional, cumbersome and subject to interference and influence, which distracted an awful lot of activity. However, it is really important, and relevant to the discussion today, to understand how some of its key practices worked and what they were able to achieve. I will limit my comments to two aspects. One is the land reclamation programme, which was responsible for dealing with the very worst of the coal tip clearances, as well as clearances in the Swansea valley, north Wales and so on, which was very important. The other is the advanced factory building programme. It had the same basic thing at its heart; it was committed to long-term programmes. It was not, “We have a budget for five years,” or “We have a budget for three years.” It was, “We have an indicative budget for 10 years. We are going to do this in the first five years, then we are going to do something else, and we’ll update this every year. We’ll roll it on.” Both programmes were like that. The second thing was that they were consultative. The timing of the programmes was built on a consensus with local authorities; back in those days, it was county and district authorities. They were very much led by engagement with local politicians as to which tip was going to be cleared first: “How are you going to get to this? Why was this a priority? Why are we doing this one first? What do you think about that?” and so on. The programme was published. Everybody knew exactly what was going to happen, and if something had to come forward, everybody knew that something else would have to move back. It was a very open, transparent process, and very successful as a result, because you were not getting involved in any of the interferences that otherwise might have come, or lobbying for this tip as opposed to that tip or that community. There was a similar approach with the advanced factory building programme. There was a long list of sites that were capable of being developed, so everybody knew they had to have services put in first and only then could you think about whether to build small units or large units, or keep it for a major inward investor, and so on. Again, that was agreed and published every year. Any member of the public could look at that. It was available to be done in that way. Both programmes also had a dedicated team of specialists. I was not involved in either of those—I was involved in other things—but these people were real professionals. Some are still around; I have to say that some now work for local authorities, in south Wales in particular. They will often talk about how simple and transparent it was and, ironically, how lacking in political input the whole process was, because officers and politicians were able to put their view in, rubber-stamp it, get the arguments, discuss it with their local people and so on. Those things are really important; it is the practices as opposed to the structures that you need to think about. What are the lessons we might learn from that? Long-term commitment, including long-term commitment to funding, and the desire to do these things are all important. You are not going to solve these problems in a single political cycle; you are talking about two, three, or four political cycles before you actually see some real benefits. There needs to be a recognition that physical infrastructure remains important. We can talk about digital infrastructure, which is really beneficial and really important, but industrial property, the skills to go along with it, transport links and the infrastructure for transport have enduring value. It does not matter what happens to the global economy or what happens to that company or that community; those assets are still there. Public investment in those assets is really important because they can be recycled and re-traded. I mentioned the importance of strategic coherence and co-ordination. The way in which investment is made is also important. These programmes were predicated on what the Labour Government in the 1970s established with the Scottish Development Agency and the Welsh Development Agency, which was that economic development is worthwhile doing in its own right. You might have a market return on investment, but actually what you are looking for is economic development return, because once you put shovels in the ground and start that process, you start to build an investment which will have value, and it will be an economic development return—not necessarily a financial return—for some time to come. The private sector should be coming along behind public investment. We should not expect the private sector to raise its hand and say, “I would like to develop this—can you sell this land to me for nothing?” You should just get on with it.

Do you think its abolition was a mistake? If not, is what has replaced it better?

That is a difficult question; I could be here all day talking about that. But generally, yes, it was a mistake. It needed to be considerably thinned out in terms of its governance, but in the process, the baby was thrown out with the bathwater. Even though many people and many of the experts transferred to the Welsh Government, they were in a different environment that they did not understand because they were not public sector-oriented. They had been working alongside the private sector and were expected to do that because of their role, which was their fundamental job as economic development professionals.

Thank you for being here. I have a question for both of you, which touches on what you have already mentioned around funding and the SPF. Earlier this year, the Government extended the UK shared prosperity fund until March 2026, but at a reduced level, with a 40% cut and no clear successor beyond that point. How is this ongoing uncertainty—with regional funding changing repeatedly over the past decade, and obviously following Brexit—affecting local authorities’ ability to plan for long-term economic growth in their areas?

This short-termism has been very detrimental for local authorities, in a number of ways. First, they are being expected to spend the money and get the projects designed, delivered and operating, which in some cases has been just impossible. Secondly, it has been damaging and detrimental to local authorities’ ability to focus their attention on the capacity to actually deliver. People have had to be taken on with relatively short-term contracts, not knowing whether they will have a job at the end of April. There are still many people across the local authorities in Wales—I have seen the WLGA talk about a figure of 3,000—who potentially might not have jobs at the end of April because of this. What happens to their skills and their knowledge? It will be dissipated all over the place, and it will cost money to put that back. There is a real problem there. As an alliance, we have been aware of this across the UK, with the shared prosperity fund and now local growth funding. We are engaging with Ministers here, officials and local authorities to understand the scale of the problem that is coming down the track—because it will come down the track. I will leave my part of the answer there. I would like to say something about management issues, but I will ask Michelle to continue, because I know she has a particular focus on one element of the programme.

One of the key points around SPF is the loss of regional investment under EU funding. The south Wales valleys are the poorest region in the UK and one of the poorest in western Europe; that focus has been lost, which is a concern, as is the level of investment not being at the previous level. Again, that has an impact upon the ability of the region to become more economically active. The timeline for this current delivery of SPF has been a challenge for us. We have spoken to local authorities about building industrial units, using our proven model of building small to medium-enterprise units in the valley communities where private developers will not invest because they do not get the return. We have been looking for investment to deliver that model, but the timeline has meant that, with the current programme, it has not been possible, despite our track record of delivery in England. The Coalfields Regeneration Trust wants to bring that model into Wales; it is an important model, because the Welsh Government’s own research shows that the lack of investment in small to medium-sized industrial units is affecting the region’s ability for industrial development. That model would create jobs in our communities, remove some barriers around commuting and reduce the requirement for carers. There are a lot more carers in our communities. For us, it is then about creating a space where small to medium-sized businesses can start up or grow. A lot of units are fully let, but businesses cannot then move up into the next size to enable the growth of the local economy as well. SMEs are a significant proportion of employers in Wales, so if we can grow that sector, it would create real wealth in the valleys. Our model does not just create jobs and that much-needed business infrastructure; it creates wealth that, as a charity, we receive through the trading arm, which develops the industrial units. They gift-aid their profitable income back to the charity. In England last year alone, they gift-aided over £3 million back into the charity to support the social and economic programmes that are so desperately needed in coalfield communities. There is an estimate that the GVA of our industrial model in England is around £380 million per annum. A significant amount of wealth is being created through that model in England, and we want to bring it back. It creates business rate income. Our properties generate £2 million a year in business rates, and just under half of that goes back to local authorities. We really want to create wealth in our communities; SMEs are more likely to employ local and spend local. It is about retaining that wealth in our local areas as well. We have approached Government with a £50 million ask—£10 million a year for the next five years—to expand our model into Wales and build our portfolio. The former Chief Secretary to the Treasury, Darren Jones, has written to confirm that he is content to consider funding if it is submitted to the Treasury ahead of the Budget. We are really keen to access that funding, either through MHCLG or through the Department for Business and Trade and their growth mission. There are a few opportunities there for us to expand our business units into a property portfolio. It does require further investment, but the returns are significant for our communities.

We have talked a lot about the physical infrastructure and the need for public money, whether that is the UK shared prosperity fund or the former funds in respect of the European Union. I wonder what role you think there is for local authorities to be more proactive in providing investable propositions to mobilise on top of that, and to work in tandem as a way of regenerating economic growth within the valleys.

I can tell you wholeheartedly that the nine local authorities we represent in industrial south Wales will say that we do provide those investable opportunities, but how they actually come in front of the market at the moment is not generally a direct conversation between the local authority and a private investor. There has to be an introduction process. The Welsh Government perform part of that role, so they will be part of the conversation as well, and the growth deal partnerships will be expected to play a role for the whole of Wales. The problem, as I alluded to in an earlier answer, is what constitutes an investable proposition. Something that is investable from a private sector point of view is different to something that is investable from an economic development agency or a regeneration point of view, and the returns come in very different ways. We understand that the growth deal partnerships have to focus on working with the private sector in order to bring projects to fruition, but there is always the tendency to just accept the private sector view that we want one where the market returns are more certain. That is understandable; it is about risk. That is why public sector investment needs to be available to sit alongside the private sector, to be able to take those risks. That has always been the case. The public sector needs to take the risks and see the long-term benefits of this. The private sector will come in when it recognises that the intangible risks have been taken off the table by the public sector and that it can make some return on its investment.

So the rate of return is not there and, on top of that, there is no facility or mechanism by which those propositions can be passed through to private sector investors—or if there is, it is not working as well as it should.

I do not think it works as well as it should. I did not want to touch on this in my earlier answer about the Welsh Development Agency, but that is what used to be called the Team Wales approach, where the Welsh Office, then the Welsh Government, the WDA, the DBRW in rural Wales and the local authorities would generally be able to co-ordinate their discussions. Unfortunately, we have seen a number of significant investment projects—what you think about them is neither here nor there—which have almost come to the point of signing on the dotted line and then have fallen away. You have to ask yourself, “Why does it keep happening? What is the problem?” I do not know what the answer is, quite frankly, but there seems to be a feeling that there is a lack of commitment, a lack of reliance and possibly a lack of trust that all the parties will actually play their part when it comes to it. That is the harsh reality. There must be some reason why it continues to happen.

It is nice to see you again; we have met before. This probably follows on from what we have just been talking about, but I would be interested to hear from both of you about how you would like to see regional and city growth deals improve to better deliver economic benefits to former industrial areas. I represent Wrexham, which has similar circumstances to those we are talking about today; it has local growth deals that are replacing the SPF. There are investment zones, and there is a really complex landscape of things going on. Following on from what you were saying, how are these focused in the right direction to deliver for the areas that we are talking about today, and what would you like to see improved?

I would start by saying that, particularly in the Cardiff capital region, we are not seeing an impact on the economy, particularly in the heads of the valleys in the northern part of that region. There have been improvements through the metro system, in terms of rail connections and rail electrification, but there are no connections between the valleys that lack rail lines or bus services. There is still a lot of work to be done around transport connections. The northern valleys initiative was launched about 18 months ago to provide £15 million for digital infrastructure, tourism and business infrastructure to the northern valleys, but it is now in hibernation. Across the region, £15 million is not a lot; that money could easily be spent, but very little has actually been committed. I do not know why that is. Clearly, there is a lot of need. Our model is there, and there have been lots of asks from local authorities to the fund, but the investment has not been committed or spent. I do not think the principle that Cardiff and Newport can elevate wealth across the region is going to work, because the population is not on the scale that it needs to be. Cardiff has half the population of the coalfields area; given the number of jobs and the wealth that is needed, Cardiff does not have sufficient wealth to ripple out to the community. We are looking at a different economic approach. There is no silver bullet with this, but we are looking at community wealth building as an alternative to really grow local economies in communities that need solutions to the complex challenges around socioeconomic deprivation. Unfortunately, to date, it has not had the impact that we need.

I would echo those comments from Michelle, particularly regarding the disappointment of the northern valleys initiative in south-east Wales. But we recognise that, logically, building opportunities along the M4, the A55 and various other places makes really good geographic sense. There is flat land, which can be developed, but you do not have that in the valleys, and transport and communications cause other difficulties. Fundamentally, however, the economic development logic of focusing on a limited number of sectors in a limited number of places and then expecting the resulting impact to be able to raise the levels of prosperity in old industrial areas across Wales—whether in the north-east, in the north-west or along the southern corridor—is really a stretch. Cardiff has 300,000 people; the valleys have 750,000 people. That is a big weight for Cardiff. We see the problems with traffic in Cardiff; it is bursting at the seams trying to accommodate it. There is a fundamental problem, which is really around trickle-down economics. You can have trickle-down economics in a geographical sense—great, you should build as much as you can along the M4 corridor—but unless you also provide the transport infrastructure and the skills uprating, and unless you target employment opportunities at particular communities and particular groups within the south Wales valleys, or within north-east Wales in some older towns or perhaps the seaside towns, you are not going to have that benefit. We will continue to argue for balancing the momentum. Let us have some momentum around compound semiconductors in south-east Wales, but at the same time let us think about the supply chains. I know the Cardiff capital region people are doing this, but it is very slow, and they are under-resourced. They will talk about how they have supported a company in Hirwaun that supplies compound semiconductors, but that is just one company, and it has been there for a number of years. We are not getting any momentum from that. It is not so much about trickle-down economics; we need trickle-down momentum. We need to see what is happening, and people in the valleys need to see what is happening. The relationship between the growth deal partnerships and the corporate joint committees is absolutely crucial. It is my responsibility to look at the Welsh situation in particular, but I worry about the Welsh Government having created and really driven forward the CJC idea based on the OECD reports and recommendations. They have created them, and the local authorities are on board with them, certainly in south-west Wales and in the Cardiff capital region. The local authority leaders are fully engaged, but they need to be given the opportunity, resources, support and trust to be able to run these things. Otherwise, you may as well not have them, because you are undermining the very reason why the Welsh Government created them.

Let me bring in Llinos Medi for a supplementary.

There are a few questions from my side that I want your opinion on. Are the growth deals criteria fit for purpose in those areas where we have lost industries? Is it because private sector involvement is challenging in those places? I declare an interest, having been a member of a growth deal area for some years. I would challenge what you have just said, because there was an earlier conversation in which we learned that the relationship between the local authority and the WDA was close because of the way the local authority worked and made decisions. The CJCs and the growth deals take those decisions further, so preparation work and investment will slow the process down. I am not sure how you align those two comments. Are the growth deals made to fail where we see rural deprivation and industrial deprivation because the private sector is not willing and ready to invest in those areas?

There is a fundamental problem with the growth deals in terms of an industrial strategy that focuses on a limited number of sectors, which is appropriate in some parts but not in others. You have to accept that you will not have a market-led revival outside those areas simply by trickling down; you need to have a set of programmes and priorities aimed at getting economic development returns, and that is a fundamentally different way of approaching it. You may still need the growth deal partnerships to focus on the growth parts, but there needs to be another vehicle. That is why the northern valleys initiative in the Cardiff capital region is so disappointing at the moment. It is not through any fault of the people running it; it is simply focused on too difficult a task, and they almost have their hands tied behind their back.

Looking at the northern valleys initiative, I know of projects that could have been funded, that have been developed and gone up to tender, so a lot of work had gone behind them. We directly approached them about developing industrial units in the coalfields of Wales. I worked with the team around introducing local community enterprises as well, alongside the private sector, to get potential investment opportunities for the northern valleys. The issue is around the local business economy and local enterprises actually wanting to access it. It is the focus of what they want to do with our fund. There is a GVA focus. In the communities we work in, as Meirion said, particularly in the north, it is about the broader impact, economic development and social value, so it is shifting, perhaps. The overarching strategy is around growth, but for the communities that need it the most, are you still looking at the same types of industries as before? For us, it is about how we support SMEs and the growth of the local economy, which might be very different from how we grow the economy through more futuristic businesses and new technology.

I would like to ask Ms Rowson-Woods a question first. My constituency contains an old chemical plant, which was absolutely huge. It was the biggest producer of the chemical phenol in the world in the 1920s, straddling three villages, Acrefair, Cefn Mawr and Trevor, and two constituencies, as one village is in the neighbouring constituency. What are the economic and social impacts on local communities when former industrial sites are left contaminated or derelict?

There is a significant legacy there, particularly in terms of coal tip safety. I can think of sites across the coalfields that are contaminated and have been left. As a trust, we work with communities to better understand the opportunities and constraints that exist within those sites. Through Welsh Government funding, the innovation fund is working across sectors to develop a scoping tool for brownfield sites. WDA, with its expertise, did a lot of contamination reports, so there is a lot of public information that should be available on sites. We want to develop an online accessible tool that communities, developers and local authorities can access and ask, “What do we know about this site? What are the potential challenges? What are the potential opportunities?” We are doing that because communities in Wales are frustrated that often there are absent landlords, and there are sites that, through legislation that exists in other parts of the UK, could put a community right to buy on derelict and contaminated land if they identify opportunities for development. That might be community-owned energy or community housing. It is about empowering communities to do more. The frustration comes where they feel like they cannot do anything about it. We are about making information accessible and supporting them in terms of developing plans that they, or other partners such as local authorities, might want to take forward. We are in the process of developing a scoping tool with private sector providers to come up with solutions, for example an AI tool that can interpret complex site information so that the communities and public can better understand the site.

Is there anything you would like to add to that, Mr Thomas?

I find this a difficult question, because yesterday, as we probably all know, was the anniversary of the Aberfan disaster. I was brought up just 3 miles down the road from Aberfan, so I know many people who suffered and had loss through that. It has towered over me in many senses since my early teens. It is almost as if the clocks that you see on Facebook memes that stopped just after 9 am that morning have stopped on our expectation of reclamation of land and derelict sites. Quite understandably, the focus was “Let’s take away the coal tips. Let’s take away the dangerous ones.” As I said, that was a very successful programme. But we have to recognise that as industry and companies move on, we end up with new derelict sites. We need to find a way of programming how we deal with those sites into public expenditure and into the public psyche. In Merthyr Tydfil, you now have a newly derelict industrial site at Ffos-y-Fran, and it is an absolute tragedy that we are left with that site. I am sure it will get sorted out one way or the other, but it is the same sort of thing, because these visible signs of dereliction affect the community, the psyche and people’s expectations of who cares about our community, about this valley and about us as people and families. We have to think about these things in a more holistic way, rather than just seeing it as a pile of muck that needs to be dealt with. We have to think that it is going to have a knock-on effect, and if you do not deal with it, it will be 30, 40, or 50 years before we get round to doing so again. At a different meeting, we talked about the Tata Steel closures, and the alliance members in Wales said, “Whatever happens to that site in Port Talbot, we can’t allow it to continue to be a blight on our communities for another 40 years, as previous steelworks were.” We have to deal with it all now, and it needs to be programmed. It is a really big challenge, and Government need to take that responsibility on.

I had a follow-up question for Ms Rowson-Woods, but you have largely answered it in your initial comments. The question was about what mechanisms exist for communities to acquire local industrial sites and buildings that have been left in a state of disrepair by their owners. You touched on that in your response, but if the ground were contaminated, for example with PCBs, would that be a dead end?

A lot of the coal tips have been utilised for active travel routes, so there are opportunities. On a personal level, my house is on an estate built on an ex-coal tip. What you might think is contaminated and not usable often can be. It depends on what you want to do. There are still options. Community-owned energy is another one. Again, it is about how we can utilise contaminated land to build wealth. If it is community-owned, that money comes back into the local area. Re-wilding is another option. In Scotland, we work with the community to develop place plans. In Scottish planning law, local communities develop place plans that then have to be considered as a part of the local development plan. It is about community voices, assets and land and how things are connected. Again, that is something we could do in Wales to enable communities to have more say and more influence on developments in their local area.

You mentioned active travel briefly. Do you have any other specific examples? You talked about energy or housing sites. Are there any specifics on the valleys that you could refer to, or put in writing to us?

In Blaenau Gwent there has been quite a lot of development on ex-coal tips. Active travel is part of the work going on in Tylorstown. We also need to work with communities, because sometimes they are averse to the reclamation work going ahead. How do we work with them so that there is a broader benefit? It is not just about taking the tip and safety work; it is about the transfer of contaminated stuff off the tip and to another site within a community, and there is often opposition to that. A lot of work needs to be done around engaging communities and working with them.

My question is for Michelle. There are many communities across south Wales, including in the coalfields, that still feel left behind and left out of many projects. Ystalyfera is certainly one of those. What are the risks or limitations of relying on community wealth-building as a means of regenerating these former industrial communities?

Community wealth building is a part of the answer, but not the entire answer. We have done a lot of work in Tredegar town centre utilising a community wealth-building approach, bringing in community use as an option. Often, town centre regeneration is about making it look physically nice. Lots of money has been spent on that, but fundamentally it is about the purpose of towns. We have to get a vision of a town, what its purpose is and what is it being used for now, instead of what it has been used for historically, so there is a shift from retail. In Tredegar, we have done work around tackling bank closures. We have worked with the local credit union, which set up the first high street branch in the county to grow its membership in response to the levels of indebtedness. Obviously, the closure of banks is an issue for our communities. We have taken on another asset on the high street. We created a heritage centre to tell the story of the town’s link to the formation of the NHS. It is a matter of how to utilise community organisations to bring in services and activities that complement the social aspects of our town centres to support that work. A social enterprise based within our heritage centre has now taken on an asset on the high street. To do that, it accessed community ownership fund money and the Welsh Government’s community facilities programme funding, so there is a knock-on effect. In terms of town centres, the community sector is an important partner, so I would champion them in supporting issues we see impacting the high street.

Tredegar is a town. Lots of the smaller settlements feel very left out by the sort of mechanisms that are delivering this support. What can be done for those smaller settlements that are not towns—places like Ystalyfera?

In terms of the regeneration of those towns, we have done a lot of work around community asset transfer support, taking on assets ourselves as an organisation. It is working with the community, with local libraries that are often in settlements within villages, rather than in towns. We see pubs, social clubs or village post offices closing. There are opportunities to work with those, through this community wealth-building approach, to develop co-operatives and community-owned businesses in order to sustain key services in villages and throughout coalfield communities.

I am conscious that we have just over 20 minutes, and we still have quite a few specific questions to ask you. You are giving us such brilliant, comprehensive answers, so Steve Witherden is going to be brief.

No pressure, then. How confident are you that the industrial strategy will boost economic growth in disadvantaged communities rather than concentrating on areas that are already prosperous?

The alliance has done a lot of work on this, and we have talked to Ministers and officials over the past couple of years and before the last election. We have just published—it is on the website—“Beyond the White Paper: How to Revive British Industry”, a follow-up to a paper that we submitted before the election, which set out our thinking on an appropriate structure for industrial strategy. I know we will be able to provide that to you. This version of the White Paper is quite an improvement on the earlier one. We recognise that industry needs stuff to happen at a macro level in terms of getting the right context about fiscal policy, interest rates and so on, but we have some concerns. We focus our attention in particular on the fact that we believe that there is too little emphasis on industry in the White Paper. It talks about a number of targeted sectors. Advanced manufacturing is one of them. Some others are not what you might call industrial sectors in the traditional sense—financial services, life sciences, professional and business services, digital, creative industries—so you have quite a small group of sectors there, such as advanced manufacturing, clean energy and defence. That is really important because advanced manufacturing within this context across the UK as a whole—we know manufacturing is more important in Wales than across the UK as an average—would account for about 29% of all UK manufacturing jobs. Some 70% of manufacturing jobs in the UK are not really covered by this, and the six frontier industries account for only about 240,000 people, which is only about 10% of manufacturing employees. So there is a disparity here, with the notion that this is an industrial strategy that is focused on manufacturing, when actually we will not see a great deal coming back on the manufacturing industries. That is particularly the case in the more disadvantaged areas where, as we said at the outset, skill levels have not kept pace with other parts of the UK and indeed other parts of the globe. We would argue that we need to target manufacturing much more. Small businesses employ more people than large companies across the UK as a whole. With small manufacturing businesses, that is very much the case. We know that most innovation is done not in research facilities, but by people working on the shop floor in the manufacturing sector. If you look at anything that has been written over the last 30 years on innovation as a driver of economic growth, it is about what happens when you allow small companies to have the resource and the space to innovate in terms of product, service and process. That is really important. We also think it is really important to protect sovereign capability. We have blithely cast away world leadership, or at least global capabilities, in terms of some of our leading industries. Across the steel sector, this is something we have been particularly animated about, with the loss of the capability of virgin steelmaking at Port Talbot. These are crucial things for where we need to go with an industrial strategy that does not yet cover the sorts of ground that we, as an organisation representing old industrial communities, certainly feel it should. Something that would make a big difference—it is in this report, and the valleys report as well—is restoring aid to the regions and saying, “We need a different way of providing subsidy here.” It cannot all come through tax breaks on R&D investments or investment zones. It just needs to be simple in the way the old assisted areas map was simple. Everybody, private or public sector, could look at it and say, “If we invest in that particular location, we are going to get some hard cash benefits from that.” I know people complain about inward investment and say, “They just took the money and ran,” but some inward investors stayed for 40 or 50 years. There are three or four companies in Ammanford, or just outside on the Capel Hendre estate, that have been there for goodness knows how long. They are really important inward investors. They did not cut and run when the market went wrong. They stayed because they built a base and a community. Pontypool is another place—

I am going to talk about Ammanford in a minute, but I need to bring in Andrew Ranger next, so thank you very much.

This probably follows on from what you have just talked about. Do you believe that Government policies around the strategic sites accelerator—I will have to slow down when I try to say that—and the AI growth zones will regenerate the communities, given what you have just said?

You probably know the answer.

Yes.

They are too complicated. They just sound like words; that is all they are, really. I cannot work out why they should be any different from anything else that has been done in the last 20 years.

There is, yes. There are a number of opportunities in how we shift to a lower-carbon heating source and how we can tackle fuel poverty. There are key issues that impact our communities. The Welsh Government have mapped the opportunities for mine water heat to identify which areas are most favourable. The next step is to ask where the policy and the investment are to enable more of what we have seen happening in Ammanford. In Caerau, they attempted a heat district system, and there were a number of lessons learned. They did not actually deliver the heat system, because they ran out of time with EU funding, but they developed a toolkit that is useful in identifying why it went wrong. A key thing was that they were looking to utilise the system to heat existing housing, but the housing stock was not energy-efficient, so there were additional costs around that. Then there was the buy-in from the residents. They would have been keen if ongoing utility bills could have come down, but because of the cost of retrofitting the buildings to be heated, that would have been more disruptive. There would have been no energy cost saving because of those additional costs. There were some key lessons learned, but it has been successfully delivered in Gateshead, where they have done big schemes heating 600 houses, businesses and an arts centre. So it can be done, but how do we do it in Wales? If we know that retrofit is an issue when social housing developers build sites and homes where fuel poverty is a significant issue, can there be a priority around how we look into mine water heat for new housing schemes that are coming on board? It is the same with industrial units. There needs to be policy and investment. There is some through the Welsh Government, but the scale is not there to have the impact to enable this. The potential scale is huge, but the funding is not at the same level. There is £10 million capital funding through the Ynni programme at the moment. It is a small sum for what is needed.

I want to continue on the theme of community ownership, but not in respect of the valleys, as I represent Mid and South Pembrokeshire. I have seen great examples of community-owned renewable energy in onshore wind and wind turbines, often requiring huge input from fantastic capable volunteers. What do you think the most important mechanisms are to bolster that renewable energy offering for community and ensure community ownership and benefits?

There are a number of things to consider in terms of post-industrial communities. Social capital, professional skills and so on are often more limited within the communities. There is a greater need for support agencies to work with communities so that they can take up opportunities. It is about improving their social capital so that they can take advantage of opportunities that present themselves. The other thing is around community benefit funds. Ideally, there is shared ownership, but where that is not happening, there is potential for community benefit funds through renewable development schemes. In the coalfield communities of south Wales alone, we have mapped it, and there is potential for £11 million a year through community benefit funds if the industry standard is met and it is paid at an inflationary rate. There is a significant investment that could support economic development on a local level as well as social development programmes. Ynys Môn is fairly good in terms of its set-up, but we find that its strategy on a local level, so what it expects from community benefits, does not happen across all local authorities or from Welsh Government. We need to be clearer to developers on what the expectation is and set it out. Where developers are providing strategy—some do not provide anything at all—there is no continuity. In some communities, they go above the industry standard; in others it is below; and, as I say, some developers do nothing at all. As we speak, things are going through planning, particularly in south Wales, and a significant proportion of those developments are concentrated in the valleys. As they go through planning through PEDW with Welsh Government, if it is not agreed, those opportunities are lost. It is time-sensitive and crucial that we set a policy expectation with developers of what community benefit fund levels should be and the expectation around shared ownership. We currently see a requirement for local ownership, but that is not necessarily being done in the spirit that was intended. We want meaningful local ownership, rather than international companies registering a company in Cardiff and then ticking that box.

You referred to social capital as one of the restrictions on former industrial communities. Do you view planning as one of the key barriers, with the level of complexity that is often required to get these projects off the ground?

I was talking particularly about the communities themselves—community ownership, villages, shops and so on. We do not see that as much in coalfield communities. We see it through shared ownership, where local authorities have cut back on services, and the local community have stepped in, with support from the third sector, and been able to take those on and sustain those services and buildings in our communities. I was speaking from that perspective. But there is an issue around planning. Under the current structure for large-scale renewable developments, PEDW provides the planning consent, but the local community benefit, if that is part of section 106, and the local impact assessments are done with the local authority planning department, so it is a bit fragmented. Then there is a lack of understanding about who does it and then who enforces it. With community benefits in particular, it is complex. With ownership, again, it is a complex plan—massively so for developers. The other day, one said it had taken them 13 years to get a scheme to the point where it had been approved. There is a significant lead-in time in Wales for these developments, and the risk is that they generally come from UK or international developers, so they will develop across the border where the planning system might be more straightforward.

We know that local coalfield communities would use the word “fleeced”. I would not necessarily use that word, but the renewables companies are coming in, utilising the land and promising a sports pitch or whatever. We know there are hundreds of thousands of pounds that could be coming back annually here, and your organisation has been great in getting some gold-plated contracts. My question is: are you sharing that best practice? Local authorities, as you say, are almost reinventing the wheel.

Yes. At the moment, we are looking to work with Community Energy Wales to do a roundtable to co-ordinate what the expectation of the sector is, so that we can work with Government and local authorities and be consistent. That is what we want. If there is an industry standard, community benefit funds and local ownership requirements, we want to be clear on what communities are getting, because if developers are providing something for that community, why not do the same for others? It is about raising the bar and the expectation around this and sharing that. It is also about taking the pressure off local planning authorities, so that they are not expected to do all the negotiating among all the other work that they do.

That is really important. I will hand over to Ann Davies for the final question.

I am hopeful, and this is where the scoping tool comes into it, because there is a cross-sector approach. Again, it is an opportunity for us as a community organisation to raise the bar and say that communities want this to happen. They want safe communities to live in as part of their life experience. But alongside that, we have to make sure that community benefit is a principle that we embed if there are significant sums of public money being spent. A key part of that is community engagement. The safety stuff will be done, and we will ask, “Who is doing the community engagement to understand what the community want and what opportunities there might be?” Then it is up to organisations like ours to provide support, where we can, with the resources that exist. But this is where we would argue that contracts should have a community benefit element to support the work with communities to say, “Well, what do you want to see? What are the opportunities? What are the constraints?”, so there is a broader regenerative impact from the hundreds of millions of pounds being spent in communities.

A lot has been achieved in the last 40 or 50 years that has allowed the beginnings of what we think is a repositioning of the valleys and towns. Certainly, they are green and pleasant on the outside, and increasingly so, and that gives an opportunity for tourism and leisure, and for private house building to start again for the first time in 100 years or so in the south Wales valleys. When new people come in and see new houses being built, it will change the way in which communities think about themselves. But we have to keep going with that process. We cannot stop now. The funding available is very much on a maintenance basis, at the moment, and for removing the most dangerous things. I was responding earlier to a question about the Trevor area. Somebody once said, “Rust never sleeps.” Well, dereliction never sleeps either. Today’s industrial sites may well be derelict in 10 years’ time. As a country, we should think about how we deal with that, not just wait for it to fester.

Thank you so much for the comprehensive and relevant evidence you have provided today. It will be really useful for pulling together the report of our inquiry into the environmental and economic legacy of Wales’ industrial past. I thank both witnesses, Meirion Thomas and Michelle Rowson-Woods.