Welsh regions 'behind EU average', figures show

Published on Friday, 25 February 2011 09:23
Posted by Scott Buckler

The economic performance of west Wales and the Valleys is falling further behind the European average, according to the latest EU figures

The figures show gross domestic product (GDP) fell by 2% in 2008.That is despite billions of pounds' investment of European funding over a decade in the region.The Welsh Conservatives called it a "damning indictment". The assembly government admitted the figures were "a mixed bag".

New figures from the European Union's Statistical Office show GDP in 2008 in west Wales and the south Wales valleys was 71% of the average of other European regions.That's a fall of 2% on the previous year and it remains the lowest anywhere in the UK.West Wales and the south Wales valleys have seen European aid poured in over the past decade, in a bid to raise prosperity.

The top of the Heads of the Valleys is fairly typical of the type of areas in west Wales and the south Wales valleys which have had EU funding over the last 10 years or so.It has suffered the loss of its main industries including, of course, in Ebbw Vale, the steelworks.

The site of the former steelworks is being redeveloped, partly with convergence funding. The new Universities Heads of the Valleys Institute, launched last year, has some of its courses funded by the European money. And across the region, training schemes for businesses, town centre redevelopments, new roads and rail links are partly funded by European money.

But the questions these new figures pose are what impact is all that investment having on the long term prosperity of these areas.The most recent figures for the number of people claiming jobseekers allowance in Blaenau Gwent was the highest in Wales at 6.9% of the adult population.

These latest EU figures will be very disappointing for those who run the schemes.

Mike Theodoulou, chairman of the Mid and West Wales Business Chamber, was on the negotiating team that helped secure the funding.On Radio Wales he posed the question:

"Was the money used in the right way? Some of it was, some of it wasn't. Not enough direct support went to business. And I think that's a lesson that we have got to learn."Too much went to the public sector to administer initiatives and schemes."Now, if you analyse the creation of jobs through the use of Objective 1 money, you'll probably see that the vast majority of the jobs created were in the public sector"

Welsh Conservatives have called on the assembly government to explain why the regions are faring so badly compared to other areas, despite the financial support.

'Match the prosperity'

European funds are spent in two areas: regional development focusing on business competitiveness, and strategic infrastructure, and the social fund, which is about increasing the skills of the workforce.

Welsh Conservative shadow minister for the economy Darren Millar AM said: "This figure is a damning indictment of the economic situation Labour-Plaid has put us in."It is the lowest percentage of the EU27 average in any part of the UK, and it puts west Wales and the valleys on a par with areas like Yugozapaden in Bulgaria and Alentejo in Portugal."We should be doing so much better, particularly as this area has received European funding."

A Welsh Assembly Government spokesperson said: "They [the figures] show the need for Wales to continue to work to match the prosperity in other parts of Europe and the ongoing role of European funding in supporting our economy.

"However, it must be remembered that Wales is maintaining an employment level above its historical average, with the level up 123,000 since the creation of the assembly.

"Employment in Wales has increased by 10.2% since devolution, compared to a 7.4% increase for the UK as a whole over the same period."

Source: ©BBC News

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