Oral - Strategic Regeneration

I want today to set out some principles governing our strategic approach to regeneration. In the 'One Wales’ agreement, the Assembly Government makes a commitment to,

'establish integrated and cross-cutting initiatives aimed at economic development and regeneration, particularly in areas of high deprivation—the existing models of the Heads of the Valleys Programme and Môn a Menai will be exemplars’.
It also makes a commitment to,

'adopt an all-Wales approach to economic development, guaranteeing investment in all regions of Wales, and working within the framework of the Wales Spatial Plan’.

A more strategic, long-term and holistic approach to regeneration is required. Regeneration approaches that fail to address the skills and employability needs of people and communities alongside physical and environmental improvements may leave long-standing social issues such as economic inactivity, poverty and social exclusion untouched.

To deliver these commitments, we need to co-ordinate our regeneration activities in relation to investment in people and places. A Cabinet committee on regeneration, skills, and tackling economy inactivity, chaired by the Deputy First Minister, has been established to assist cohesion across departments, and a regeneration board, which I chair, has been established to bring together programme development between departments. We are therefore actively responding to the Wales Audit Office 2005 report by working together towards a unified strategy.

Over the past year, we have deepened our commitment to the Heads of the Valleys programme. Against an initial annual budget of £10 million, we actually spent more than £15 million in 2006-07 and more than £16 million in 2007-08. We have rolled the JobMatch programme out across the five authorities. We have published our three-year £15 million strategic action plan for Môn a Menai. We are moving our Communities First programme in the direction of strategic regeneration with a new outcome fund worth at least £25 million over the next three years.

We are exploring new funding vehicles. We are interested in the potential of the joint European support for sustainable investment in city areas, JESSICA, initiative that has been developed by the European Commission in co-operation with the European Investment Bank.

A feasibility study commissioned by the European Investment Bank on our behalf has now been concluded. Ministers will be taking decisions on how to proceed in the next few weeks. Although there is a long way to go, I am hopeful that this will show us how we can use European funding alongside private sector funds to deliver additional investment for regeneration.
We have established a task and finish group to look at the scope for a centre for regeneration excellence in Wales. We are holding a Wales regeneration summit next week in Swansea, with internationally recognised speakers from the private, public and third sectors, which will be attended by 250 delegates. Internally, we have undertaken a review of our regeneration spending within the Department for Economy and Transport, to ensure that it is effectively focused on 'One Wales’ and ministerial priorities. That relates to a budget of more than £60 million.

Our regeneration investment must be wisely spent. I want our partners to be clear about the approach that we are taking. We will not trade holistic regeneration and impact for a willingness to keep everyone happy. We will not operate the sweetheart-deal culture endemic in the quango state. This will be a more transparent process. We will ask harder questions of our partners, including local authorities. If our partners want regeneration funding from us for an area, we will want to see their commitment to the holistic regeneration of that area. Similar principles will guide our support for regeneration projects brought forward under the structural funds programmes.

There have been some misleading reports on our internal review of regeneration spending. Contrary to those reports, I do not intend to announce 12 strategic regeneration areas throughout Wales. However, I intend to develop further strategic regeneration areas over time. The number, scale and budgets for these will be determined on a case-by-case basis where we believe we can significantly add value to existing regeneration schemes. Key factors for identifying strategic regeneration areas will be: the contribution to 'One Wales’ objectives and the fit with the Wales spatial plan priorities; private sector leverage in sectors important to the Welsh economy; economic opportunity, which simultaneously addresses deprivation; links to sustainable transport spend; the potential for affordable housing; environmental impact and sustainability; addressing skills supply; and tackling economic inactivity. The capacity of local networks, including Communities First partnerships and local authorities, to deliver on this will also be an issue. In some areas, we may establish dedicated project teams based on the Heads of the Valleys model, drawn from relevant Assembly Government departments and local stakeholders.

Today, I am announcing one new strategic regeneration area, covering the seaside towns of Rhyl and Colwyn Bay. I will be visiting both towns on Friday to outline in more detail how we intend to take this forward. Our overall approach to regeneration will ensure that regeneration programmes support the needs of black and minority ethnic communities, in the light of last year’s Commission for Racial Equality report. It will also promote initiatives that can strengthen the Welsh language, supporting our 'One Wales’ commitment to encourage it to thrive as a language of many communities all over Wales. This new approach will involve necessary prioritisation if we are to make a real difference to the communities that need it the most. We are determined to achieve the maximum and most effective return on Assembly Government investment. We will continue to support a wide range of regeneration projects across Wales. We will continually scope areas that might be included as strategic regeneration areas in the future. I look forward to working with our partners to deliver on this approach.