Policy options for the Third Term

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Policy options for the Third Term

• Overview
• Ends and Means

Institute of Welsh Affairs
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The Third Term project

• An independent review of policy options
• Widely drawn groups of experts
• 103 people and eight groups
• Short term and horizon issues
• A balanced scorecard
• Not an an IWA manifesto

Institute of Welsh Affairs
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The first two terms

• Positive
• Assembly survived early instability
• Evidence of positive institutional development
• Much development of strategic frameworks
• Many distinctive Welsh policy initiatives
• All-party consensus now supports the institution
• New legislative powers from May 2007

Institute of Welsh Affairs
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The first two terms

• Negative
• Limited change in measured outcomes
• Delivery issue - implementation gap
• Cross-cutting approaches to policy
  under-developed
• Welsh institutional structures still not fit for
  purpose
• Lack of clarity in financial planning and
  prioritisation
• Scrutiny function ineffective, low standard of
  debate

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Where are we now?

• GDP gap remains stubbornly wide
• Public sector jobs have compensated for
  manufacturing decline
• Economic inactivity rates remain high
• Traditional weaknesses in high value-added
  services remain
• Low productivity in private and public sectors
• Growth in health and education spend lower than
  in England
• especially in capital expenditure
• Biggest percentage increase in economic
  development
• EU structural funds to continue for second period

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Where are we now?

• Public sector in Wales massively dominant
• Need to close implementation gap
• Shape of local government and health structures
  unresolved
• Public sector efficiency targets lower than in
  England
• Low financial ceiling - Browns CSR Barnett
  squeeze
• Resistance to use of private capital under
  challenge
• Use of structural funds to be focused on fewer,
  larger projects

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Key dilemmas

• Economic development v. sustainability and
  climate change
• Social objectives v. the tax/income base
• Creating financial headroom for education
  investment
• Health service reform v. public/media resistance
• Spatial planning tensions
• Reconciling greater use of private capital with
  public service

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Four directions of travel

• Clear red water - progressive universalism
• Scandinavian vision v. Anglo American tax/income
  base
• New Labour-lite
• greater use of private capital within public
  service objectives
• tougher performance management regime
• Nation-building
• emphasis on policies to enhance Welsh civic
  solidarity
• search for motivational effect
• issue of means to be resolved
• Cold turkey
• conscious attempt to rebalance public-private
  sector divide
• challenge to current Welsh consensus

Institute of Welsh Affairs
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Policy options for the Third Term

• Overview
• Ends and Means

Institute of Welsh Affairs