Issues & Challenges for CouncilsEconomic Development

Issues and Challenges for Councils

Economic Development

Economic Development is a process to improve the wellbeing of citizens in a range of areas, including economic prosperity, life expectancy and educational achievement. In Wales, the Welsh Government has taken a regional approach to Economic Development. This is set out in its Economic Action Plan. This regional approach has also led to the Welsh Government identifying Economic Wellbeing as one of the functions to be progressed via Corporate Joint Committees in the 4 economic regions of Wales as outlined in the Local Government and Elections (Wales) Act 2021.

UK Government Funds for Regional and Local Economies Growth Deals

Growth deals are a way of attracting investment and funding from both the UK and Welsh Government into a particular region. There is a growth deal for every region in Wales, they are: the Swansea Bay City Deal, Cardiff Capital Region City Deal, Growing Mid Wales and the North Wales Economic Ambition Board. They involve every local authority working directly with both the UK and Welsh Governments on 10-year interventions that aim to improve productivity and economic growth across Wales.

Following the UK’s exit from the EU at the end of 2020, the UK Government moved to take direct control of replacement EU funding for the whole of the UK via its UK Internal Market Act 2020, providing the legislative basis for it to provide funding within devolved areas of competencies such as economic development across the UK.

In 2021, the UK Government announced several new funding and finance programmes and initiatives for local and regional economies. Whilst some of these apply to England only, most are UK wide. These included extending the capital Levelling Up Fund (LUF) across the whole of the UK and the introduction of a revenue pilot for the main replacement EU fund, the UK Shared Prosperity Fund (SPF) the UK Community Renewal Fund (CRF). Both Funds entail a key role for Councils in facilitating and coordinating local bids, and developing their own bids for funding. Both involve a competitive process with all Councils across the UK invited to submit funding applications. All Councils have been placed in 3 Priority Categories for the LUF, based on a methodology determined by the UK Government. Similarly, 100 priority places have been identified for the CRF.

COVID-19 lockdowns & emergency business support

The other significant development that has impacted on local economies during the last Senedd term is the Covid-19 crisis and its devastating impact on local employment, businesses and communities.

The crisis has demonstrated the key role of councils in supporting their local economies, primarily through their involvement in delivering the emergency business support measures that have provided a lifeline to businesses across Wales.

Through their local knowledge and intelligence, councils have demonstrated that they are best placed to deliver support to businesses within their communities.

Councils have also played a key role in supporting their local economies as restrictions have been lifted following national and local lockdowns.