Capital required

Finance Ministers of the devolved administrations got together with Danny Alexander for a meeting yesterday. It is unlikely to have been a fun event but such meetings rarely are. The timing was useful if they’re to press the case of their respective countries before the Chancellor delivers his budget later this month

So what did our Finance Minister press on behalf of Wales. What she wants is a greater capital programme so that there is real investment in the Welsh infrastructure.  God knows Wales needs such investment.  So Jane Hutt was right to flag it up as a cause of concern to Wales.

If Wales’s economy is to grow it needs capital investment. It needs an infrastructure that can is capable of sustaining a modern mixed economy. Despite receiving large wads of cash from Europe Wales is still one of the poorest regions of the European Union. 

Not a mile of the railway network in Wales is electrified. The road system in many parts of the country is not good enough to get goods to the market place. 

Money has been squandered on Mickey mouse training schemes without creating an educated work force.

To many of the Welsh housing stock remains either unfit or inadequate. The list could go on and on. None of which would make pleasant reading.

The needs of Wales are great, but the resources to tackle such problems are scarce indeed. The cuts either have or will take there toll on the Welsh Government’s capital spending problem. 

By the financial year 2014-15 the budget that finances the capital programme will be 40 per cent lower than the capital programme of last financial year and is half of what was spent in the peak year of 2009-10.

The Chancellor should take notice of Jane Hutt’s message. Far better to spend on infrastructure schemes in Wales that develop the already over provided for south-east of England. As soon as the economy starts moving again the south-east will become over heated whilst the rest of the Kingdom still suffers.  To avoid this danger it’s the marginal regions that need the investment and not the already affluent English Capital city. 

That Wales needs more is not in doubt. What is in doubt will it make a difference? Cash can be used wisely or it can be squandered. Priorities have to be determined. 

No longer can a little cash be sent to all parts of Wales just to prop up the local politician’s pet scheme and keep the voters happy. Too much has been squandered in the past with little to show for it.

No, now is the time for the Welsh Government to take tough decisions on what needs to be done. The days of populist schemes that don’t contribute to economic growth are over.

Capital and revenue have to be used to build for the future. 

What should the priority be? Carwyn Jones was right when conducting his leadership bid, education was his priority and he was right.  Spending real money on education is important for the country’s  economic future.  The corollary of spending more on education means spending a lot less in other areas such as health. 

If the health budget goes down the governments list of priorities, demonstrations there will undoubtedly be. The question is, will the government stick to its priority or buckle under at the first signs of popular revolt. Time will tell.

The cycle of deprivation that is Wales’s lot can be broken, but only if new approaches are taken. Politicians in the Bay have had twelve years to learn their trade, now is the time for them to show leadership and do the necessary, even if in the short term it proves to be less than popular.