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					 WORKING TOGETHER FOR WALES
               Enterprise, Innovation and Networks
                     Business Plan 2006/07




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Foreword
Wales: A Vibrant Economy sets out the vision and strategic
framework. This Business Plan builds on this and shows how the
new Department for Enterprise, Innovation and Networks is not just
a new name, but reflects a fresh approach by the Assembly
Government in addressing the new economic development agenda.
It is not just what we are doing but is also about how we operate –
enterprising in our actions, innovative in approach and with
strong networks, across our own Department, joint working with
other Departments, partners and most of all, our customers.

We have brought together the best of the merging bodies –
practices, standards, customer service and most importantly, the
people – to form a single, new organisation whose whole is greater
than the sum of its parts. It has a clear vision: A vibrant Welsh
economy, delivering strong and sustainable growth, by providing
opportunities for all.

For the first time, the policy levers, drivers of competitiveness and
comprehensive range of actions are brought together into an
integrated plan. These will be guided by a new Ministerial Advisory
Group, a Tourism Advisory Panel and a Joint Advisory Group on
skills, to underpin the integrated approach to skills development
and a sharpened policy and strategy capability. The consultation
on W:AVE has confirmed the overall framework and has also
provided important pointers for our future plans and actions, which
we discuss later in this Plan.

We are organised to deliver and this Business Plan, the first
integrated Plan of the new Department, sets out our Year 1
delivery.




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Contents

Foreword
                                                                  Page No.

1.       Introduction                                                   4


2.       The Way We Deliver - Enterprise,                               5
         Innovation and Networks

3.       The Context for Delivery – Wales: A                           13
         Vibrant Economy

4.       Delivering Results                                            25


5.       Delivering Effectively                                        47




Annexes

A        Organisation Chart                                            56


B        Summary of W:AVE Consultation                                 57
         Responses

C        Proposed priorities from draft national                       64
         strategic reference framework

D        Enterprise, Innovation and Networks –                         65
         Main Expenditure Group Budget




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Introduction
This Business Plan is the first for the new Department of Enterprise,
Innovation and Networks. It brings together, the range of policy
levers and drivers of competitiveness into a comprehensive and
integrated plan of action.

In Section 2, we take the opportunity to describe the way we work
and outline the new Department, its vision, values and key
objectives. We describe the principles behind our approach and
some of the benefits achieved from the recent mergers.

In Section 3, we review the strategic context in which we will
deliver this Plan, summarise the feedback we have received on the
wider economic development agenda outlined in Wales: A Vibrant
Economy, and the evolving policy context.

In Section 4, we set out the actions for this year, their outputs and
expenditure to deliver results for the benefit of the citizens of Wales.
These are based around the key strands of the economic agenda,
which are mirrored by the three key pillars of the new Department
– Enterprise, Innovation and Networks.

Finally, in Section 5, we summarise the factors that are core to our
delivery - our corporate commitments to social justice, sustainable
development, equality and diversity and the Welsh language, all of
which improve the quality and effectiveness of our activity. We
also report on our methods to raise the quality and value for money
of our activity through research, evaluation and challenge, as well
as outlining how we measure and fund our actions.




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The Way We Deliver – Enterprise, Innovation
and Networks

Vision and Objectives

On 1st April 2006, a new Department was formed, Enterprise,
Innovation and Networks. This was not just a re-organisation, but
a change in the way the Assembly Government is taking forward
the economic agenda and delivering services to its clients.

It has brought together the best of the merging bodies: practices,
standards, customer service and most importantly, the people, to
form a single new organisation, with a clear vision:



   Working together for Wales, to help create a vibrant Welsh
economy, delivering strong and sustainable growth, by providing
                            opportunities for all.



We have organised ourselves to deliver. At our foundation are the
priorities of Wales: A Vibrant Economy:

       Enterprise – to increase employment still further; so that
        over time the Welsh employment rate matches the UK
        average; even as the UK employment rate itself rises; and
       Innovation – raise the quality of jobs; so that average
        earnings increase and close the gap with the UK average;
        and

    Underpinning these priorities are actions to improve our
    Networks – investment in communities, transport, energy,
    infrastructure networks and other drivers to stimulate strong
    and sustainable economic growth.

Put simply, our mission is:



    To help create investment in more and better jobs and an
                   improved environment for growth



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Organised to Deliver – the new Department
The new Department has been organised to deliver through
strategic delivery teams and four strong regions, guided by a policy
and strategy group and supported by corporate management.

   Regions – four strong teams tailoring their approach to local
    needs, opportunities and distinctiveness across the range of
    business services, infrastructure, regeneration and transport
    planning.

   Enterprise – providing business advice and information
    through Business Eye, assisting new businesses, especially
    those with the potential for growth, to get started and enabling
    the development of sustainable businesses across Wales.

   Innovation – unifying the range of technology and innovation
    actions, support for science and research and development.

   Knowledge Bank for Business – providing specialist solutions
    for companies with fast growth potential.

   Infrastructure – identifying, facilitating and developing
    integrated and sustainable property solutions for businesses
    and communities through joint ventures with private companies
    and other public organisations and also by direct activities.
    Incorporating land assembly, acquisitions, remediation and
    reclamation, site development, environmental improvements
    and advance and bespoke property developments.

   Regeneration – bringing together our urban and rural
    economic renewal activities and guiding our activities in line
    with the Wales Spatial Plan.

   International Business Wales - bringing together inward
    investment, trade promotion, joint ventures and account
    management of major, foreign-owned and targeted corporates,
    for more exports, new companies and better jobs. Alignment
    with overseas tourist offices, where appropriate.

   Invest Wales – the nucleus of business finance in the
    Assembly Government including a flexible capital investment
    fund (Regional Selective Assistance, Tourism Section 4 grants)
    appraisals and due diligence.

   Finance Wales plc – the subsidiary company of the Assembly
    Government that creates and manages commercial investment
    funds to address market failure in risk capital funding provision
    for Welsh small and medium sized enterprises.


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   Visit Wales – maximising the contribution of tourism to the
    economy, through developing and implementing the tourism
    strategy and raising quality standards across Wales.

   Marketing – a centre of excellence for co-ordinated and
    targeted marketing across enterprise, innovation and networks.

   Transport Wales – Managing the national transport network for
    Wales and delivering transport programmes and policies,
    championing integrated transport and co-ordinating regional
    transport planning.

   Wales European Funding Office – Maximising the
    effectiveness of European funding in Wales.

   Policy and Strategy Group – leads on developing policy
    solutions that challenge thinking and drive up performance.
    Key activities include: strategic planning, research and
    evaluation, business, transport and infrastructure policy, energy
    Wales, e-Wales, the Heads of the Valleys strategy and
    integrated delivery. The Group will also provide a support
    function for the Ministerial Advisory Group and Tourism
    Advisory Panel.

   Corporate Management – a centre of excellence for corporate
    services, including public finance, risk management,
    government business and organisational development.

To ensure a more unified approach, a matrix management
structure has been in put in place for many of these business areas.
An organisation chart is attached at Annex A for ease of reference.

More effective and efficient delivery
The new Department has been designed to provide more effective
and efficient services to the citizens of Wales.

Making the Connections – Delivering Better Services for Wales, set
out the Assembly Government’s vision for better public services in
Wales. Its four principles are at the heart of our plans.



                        citizens at the centre,
                        equality and social justice,
                        working together and
                        value for money.




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Some of the benefits of the creation of the Department for
Enterprise, Innovation and Networks are outlined below:

Improved Strategic Alignment; Accountability and External
Advice

       Robust challenge of established thinking and independent
        advice on economic and transport policies through the
        establishment of the Ministerial Advisory Group, Tourism
        Advisory Panel and supported by the newly created Policy
        and Strategy Group.

       The first integrated Business Plan for the new Department
        covering the full range of economic development activity.

       More joined up strategic and operational planning with other
        Government Departments. For example, with the
        Department of Education, Lifelong Learning and Skills
        (DELLS) on a more unified approach to skills in supporting
        businesses.

Improving Customer and Stakeholder Service

       Taking delivery as close to customers as possible through
        regional offices across Wales and so improve our ability to
        respond to local needs, opportunities and distinctiveness.

       A single point of contact with customers, with designated
        account managers.

       Delivery of more comprehensive bespoke solutions for
        customers, not just within the new Department but across
        the Assembly Government and partner organisations.

       Bringing together capital grants (Regional Selective
        Assistance (RSA), Assembly Investment Grant (AIG),
        Section 4 Tourism Grant, Property Development Grant) into
        the new Invest Wales business area as a single, flexible
        investment fund for business and an expanded role for
        WIDAB in considering investment projects.

Streamlining Delivery

       Further rationalisation of specialist business support
        programmes into a single, specialist support fund with the
        flexibility to procure from private sector sources.

       Reviewing enterprise functions to deliver a simplified
        provision which is better aligned, more discretionary and
        more responsive.


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       Bringing together International Trade and Investment into
        International Business Wales, with single overseas offices.

       Drawing together marketing activities from across merging
        bodies into a single Tourism and Marketing business area,
        as a centre of excellence for co-ordinated and targeted
        marketing across Enterprise, Innovation and Networks.

Delivery Results

       Developing a set of collectable and measurable Key
        Performance Indicators for the new Department, worked up
        in consultation with customer representatives, including
        Confederation of British Industry (CBI) Wales, Federation of
        Small Business (FSB), Chamber of Commerce and the
        Royal Institution of Chartered Surveyors (RICS).

       Standards on the delivery of services to customers
        developed with the Department for Education, Lifelong
        Learning and Skills (DELLS) and agreed with key
        representatives.

Organising to Deliver

       More efficient, common support functions, such as finance,
        HR, IT, procurement and legal services, through new and
        expanded shared service centres.

       Maximising the strengths of the wider Assembly
        Government in the new Department, e.g. by adopting
        common finance, procurement and compliance systems.

       Developing a new approach to client management from
        principles to practice, placing the client at the centre.

       Establishing a single centre of excellence for due diligence
        and appraisal of business plans for grant applications
        across the new Department.




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Enterprising, Innovative and Networked – the Way
We Work
Enterprise, Innovation and Networks does not simply describe
what we do, but also how we work.


We aim to be:
                    enterprising in our actions,
                    innovative in our style
                    and networked in our approach



The aim is to move towards a continuously improving citizen-
centred organisation with a culture of empowerment and
collaboration and a structure which is flexible.

Being networked in our approach means more than the integration
brought about by the creation of the new Department. It means a
more interconnected approach across the Assembly Government,
and with wider stakeholders.

This is a key principle of Making the Connections – ‘joint working is
vital to deliver public services of top quality; they must be
responsive to the needs of individuals and communities, delivered
efficiently and driven by a commitment to equality and social
justice’.

We have a sound base to work from, for example, working with
DELLS in preparing a new, unified approach to jobs and skills.
Much collaborative work has been done and is underway. The
Joint Skills Advisory Panel will have a vital role in ensuring that
expenditure on vocational education and training is more
responsive to employers. The development of sectoral
approaches that integrate business solutions and training and skills
delivery requirements are critical to success.

There has been considerable collaborative working to date but with
the creation of the Sector Skills Councils (SSCs) Network and the
emerging Sector Skills Agreements (SSAs), there is now a clear
sectoral emphasis within the skills agenda. As an example, one of
the key areas will be joint working on the construction sector,
where we have jointly launched proposals, which include the
development of a sector strategy. One component will be an
assessment of the potential presented by housing stock transfer
across a range of factors including skills development, tackling
inactivity and environmental improvements.


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Another example is joint working to identify and address the needs
of employers. DELLS have streamlined their support for
businesses into one flexible package, the Workforce Development
Programme, which is comprehensive in scope and flexible enough
to cover the requirements of individual businesses. This supports
the performance and productivity of their workforce by utilising
Investors in People best practice.

Businesses accessing this support will experience a minimum of
red tape and benefit from a more streamlined approach, developed
jointly by DELLS and Enterprise, Innovation and Networks.

It also means joint working with external partners and, again, we
have firm foundations to build on. For example, the Heads of the
Valleys Strategy, where there are commitments from a wide range
of stakeholders to work collaboratively to achieve the shared vision
and objectives. Already strong working relationships have been
built by involving stakeholders at all levels in the development and
delivery of the programme, helping to breakdown traditional
geographic, social and cultural barriers.

Underpinning the way that we work are the values of the Assembly
Government, working together for Wales through:



                            Delivering results
                            Valuing people
                            Achieving excellence



Examples of how these values underpin this Business Plan are:

   Delivering results

       Achieving the outputs and key deliverables in this Business
        Plan;
       Tangible benefits from clearer strategic direction, sharper
        customer focus, better targeted and more streamlined
        support for business and regeneration;
       Developing and adopting key performance indicators for our
        activities, including customer satisfaction.

   Valuing people

       Demonstrating strong and accountable leadership within the
        new Department and with customers and stakeholders


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        through regular communication, engagement and
        accessibility;
       Respecting and valuing people equally and being open,
        objective and fair in our dealings;
       Training and development through an HR Strategy aligned
        to our needs and values.

   Achieving excellence

       Providing high quality services and offering innovative and
        original solutions;
       Being passionate about our work and challenging ourselves
        to improve.




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The Context in Which We Deliver – Wales: A
Vibrant Economy
W:AVE – the Strategic Economic Framework
Economic development must be seen in the context of the
Assembly Government’s broader strategic agenda, set out in
Wales: A Better Country. This has at its heart four strategic aims:



                    Social justice
                    Sustainable development
                    Efficient and effective delivery of services; and
                    Fairness and prosperity



Economic development programmes, therefore, need to be
integrated with progress on the social justice, environment, better
health, community, language and learning agendas, at an all-
Wales level and regionally, via the Wales Spatial Plan.

Wales: A Vibrant Economy (W:AVE), published in November 2005,
set out the strategic framework for creating this vision, building on
the continued transformation of the Welsh economy. This
transformation, plus the fresh way of delivering better public
services through the new Department for Enterprise, Innovation
and Networks provided the right setting to revisit the economic
strategy to ensure that it was fit for purpose.

The new framework recognised that sustainable economic growth
is needed to raise prosperity across Wales and deliver
improvements in quality of life.



   A vibrant Welsh economy, delivering strong and sustainable
        economic growth, by providing opportunities for all




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Wales: A Vibrant Economy is not only about the vision and agenda
but is also about the approach. The principles that underscore
W:AVE also underscores the way in which we shall work, namely:




       Ensuring that the mergers deliver more effective and
        efficient services to businesses and individuals.
       Joining up policy agendas across the Assembly
        Government and meeting our corporate commitments to
        social justice, sustainable development, equality and
        diversity and the Welsh language.
       Working in partnership to deliver improvements across
        Wales through the Spatial Plan.
       Focusing support where it can make most difference; and
       Promoting closer working between the public and private
        sectors on business advice and finance, to ensure that firms
        in Wales have access to world-class support.




The Consultation

The consultation sought to engage the individuals, businesses,
organisations and communities in Wales that will ultimately drive
economic growth, to influence the economic development policies
and programmes, including making best use of the new EU
Convergence programme post 2006.

Over 140 written responses were received to the consultation. A
synthesis of these responses has been produced, containing a full
list of respondents. This document can be accessed from the
Welsh Assembly Government’s web site (www.wales.gov.uk). The
Executive Summary is contained at Annex B of this plan. Full
versions of all the responses can be obtained from the Publications
Centre, Room 3.022, Welsh Assembly Government, Cathays Park,
Cardiff, CF10 3NQ.

In addition to the written responses submitted, the Assembly
Government participated in over fifty events across Wales,
including stakeholder seminars, presentations and individual
meetings with groups such as trade bodies, businesses, trade
unions, regional fora, voluntary organisations, statutory bodies and
individuals.

Many respondents believe that W:AVE provides an excellent
framework for policy development and delivery. They believe that
the clear vision, sound economic analysis and the excellent use of



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evidence marks an important step change in strategy and policy
development.

There is widespread support for measuring growth in employment
and earnings as these relate directly to quality of life. While many
recognise that W:AVE is a strategic framework there is an
understandable expectation that this should now develop the
agenda going forward into clear actions plans and timetables.

The main issues raised through the consultation have been
grouped around the following themes:


                    Spatial dimension and local priorities;
                    Economic inactivity;
                    Equality and diversity;
                    Transport;
                    Creating a favourable business environment;
                    Housing;
                    Sustainable development;
                    Public procurement;
                    The public sector; and
                    EU Structural Funds.




   Spatial Dimension and Local Priorities

The importance of a spatial dimension to economic development
was a consistent message from the consultation, be it through a
city regional approach, targeted regeneration or a focus on the
rural economy. Much of the discussion and analysis in W:AVE
focuses, naturally, on the Welsh economy as a whole. However,
W:AVE recognises the importance in addressing local priorities by
tailoring economic development programmes to meet differing local
circumstance. W:AVE presented an all-Wales and a regional
analysis in greater detail than ever before.

The priorities of raising employment and raising earnings are as
relevant in rural areas as they are in urban ones and W:AVE
recognises that the exact balance between different programmes
will vary regionally in line with local differences. This underlines
the importance of local strategies and action plans taking account
of the structural differences between areas.

A strong spatial dimension to planning is being carried out through
the Area Groups established to take forward the Wales Spatial
Plan. Action plans are being developed to help each area achieve



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its potential in ways which are economically, socially and
environmentally sustainable.

The Department for Enterprise, Innovation and Networks is playing
a key role in this planning process, particularly through active
engagement in the regions, where Spatial Plan Co-ordinators are
being appointed to co-ordinate area plans and actions.
Examples of some of the Wales Spatial Plan priorities being taken
forward in the Business Plan this year include developing a
hierarchy of key settlements in each area, waste management,
tackling economic inactivity and regional transport issues.

The need for joined up strategies, actions and delivery
mechanisms was commented upon in the consultation. This is a
key priority of the merger and we have already highlighted how our
co-operative working with DELLS and other partners is advancing.
The Planning teams in the four regional offices will also bring
greater coherence to the spatial dimension of our actions.

Improving the understanding of in and out migration patterns was
also raised and this is a subject that we will seek to explore further
this year.

Finally, it was widely believed that tracking indicators developed in
W:AVE are sensitive enough to detect regional variations to
national trends and provide the opportunity to disaggregate data at
a regional and sub regional level, as well as by gender, age, and
ethnicity, to ensure that positive changes in one area do not mask
weaker performance elsewhere.

   Economic Inactivity

One of the main issues to arise from the consultation centres on
seeing the removal of barriers to participation as liberating
economic potential. Numerous respondents noted that while
overall trends in unemployment and economic inactivity are
downward, there remain groups that continue to face barriers
preventing their full participation in the labour market. Tackling
occupational segregation and gender pay gaps to ensure a
stronger skills base and help fill remaining skills gaps is imperative.
The need to address the harder to reach individuals who are
economically inactive was also raised as well as more measures to
prevent those in work becoming inactive.

We recognise that good support mechanisms need to be
developed to reduce barriers to learning. We also recognise that
emphasis must be placed on preventing those in work from
becoming economically inactive. That is why measures for
safeguarding jobs are one of our core indicators and why our
business support activities address the competitiveness of


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business, not simply job creation. However, more can be done
and we will work with colleagues across the Assembly Government
to find new and better ways to deliver on this.

The contribution made by the voluntary sector and community
organisations to supporting individuals’ entrance in the labour
market and their engagement in learning was noted in the
consultation. The Want2Work and Pathways to Work pilots
received widespread backing from the consultation for continued
support and expansion. This is an area which covers a number of
Assembly Government Departments and one which we shall seek
to develop and influence.

   Equality and Diversity

The equality and diversity dimension of economic inactivity was
raised through the consultation, as outlined above. However,
equality and diversity issues were raised in relation to a number of
other areas:

   Transport – whilst the recognition that a sustainable integrated
    transport system has social benefits, a number of issues
    around accessibility were raised.
   Education and skills – the focus was on further reducing the
    barriers to learning, recognising the contribution of the voluntary
    sector and community organisations, supporting intermediate
    labour market, tackling occupational segregation and the
    gender pay gap and fostering stronger links with the Older
    People’s Strategy.
   Raising earnings and the quality of jobs – the need to address
    gender stereotyping and occupational segregation was raised,
    along with more flexible working.
   Public sector – the importance of the public sector leading by
    example in relation to equality and diversity.
   Enterprise – the benefit of working with disadvantaged groups
    to start and grow businesses was highlighted, as well as ways
    to mainstream best practice into other business support
    services. The development of the social enterprise sector and
    the importance of self employment for older people was raised.
   Structural funds – the importance of equality as a cross cutting
    theme was stressed, along with the opportunities presented by
    the next round of EU Structural Funds.
   Indicators – requests for the Assembly Government to make
    available data on gender, race and disability to allow progress
    to be monitored.

As a first step, a seminar has been held with representatives from
various groups and organisations. This highlighted the need for
greater openness; further research into the social costs and
benefits for business from a more equal and diverse workforce;


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consideration of the role of the public sector, tackling inactivity;
addressing infrastructure needs; reviewing pay gap and
occupational structure issues; mainstreaming and gender
budgeting; learning from best practice and the next round of EU
Structural Funds.

These issues are currently being further considered to find the
most appropriate means across the Assembly Government to take
these areas forward.

It should be noted that a substantial amount of work is already
underway. For example, a new Equal Opportunities & Diversity
Group has been set up in Enterprise, Innovation and Network
Department to raise awareness of the promotion of equal
opportunities and diversity, including compliance with all equalities
legislation, share best equality practices in employment and
service delivery and monitor the implementation of equal
opportunities policies, practices and equality initiatives across
DEIN.

More about the Department’s approach to equality is outlined later
in this Plan.

   Transport

The strategic importance of an integrated and sustainable transport
system to the economy was widely appreciated through the
consultation. The ongoing programme of substantial infrastructure
improvements was welcomed by many respondents. The main
issues raised were around interconnectivity within Wales, with the
rest of the UK and internationally. Specifically in relation to road
pricing schemes, respondents noted the need to ensure that these
should form part of a coherent transport system to reduce
congestion and not act as a revenue raising scheme.

A new Wales Transport Strategy is being prepared for consultation
and will consider improving connections both within Wales,
nationally and internationally, as well as making the best use of
existing infrastructure. The Strategy is about improving access to
services and, therefore, using technology to replace physical
journeys and the land use planning system to minimise the need
for people to travel by private car, are considered alongside more
traditional topics such as improving road and rail networks.

The strategy will focus on the role that transport can play in
delivering our wider policy objectives in areas such as spatial
planning, economic development, education, health, social
services, environment and tourism. The main themes will be:
     achieving a more effective and efficient transport system.
     minimising the need to travel; and



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       promoting more sustainable and healthy forms of travel.

One of the suggested outcomes is improving connectivity within
Wales and internationally and we are developing an indicator
which will measure the connectivity of key destinations - including
journey times, routes available and service frequency. Road
pricing will be considered within the context of the Wales Transport
Strategy and Regional Transport Plans as part of the consultation
process.

   Creating a favourable business environment

Many respondents welcomed the emphasis in WAVE on the
importance of creating a favourable business environment as it is
imperative that the private sector is given room to develop and
grow, and afforded the best possible business environment in
which to do so.

It is here that the Welsh Assembly Government can be most
effective in developing the economy of Wales - by creating a
supportive business environment in which the private sector can
thrive.

Some respondents felt that traditionally, there have been too many
strands of funding support and the targeting funding support
initiatives that are being developed by the new Department are
welcomed

Supporting the five key drivers to economic growth is highlighted
and this affirms the Welsh Assembly Government’s long term
commitment to supporting innovation and encouraging stronger
working links between higher education and the business
community. Higher Education Establishments are contributing to
the development of a stronger, knowledge-based economy for
Wales by encouraging research and entrepreneurship. They
continue to play a key role in identifying opportunities for innovation
through cutting edge research projects, working with businesses to
exploit this research commercially and through their development
of highly-skilled researchers.

Improving skills in all sectors of the economy and at all levels will
be a key to economic prosperity and good progress has been
made in recent years. This will be built on with the joint work on
sectors outlined earlier in this plan and with other collaborative
working with DELLS and other partners. The exploitation of ideas
will also form an important strand of our work going forward, be
they ideas from academia, business or individuals.

The consultation also raised issues surrounding manufacturing and
specifically, the need for a manufacturing strategy. Wales: A


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Vibrant Economy, identifies a need to move towards a high value-
added manufacturing sector, while continuing to sustain and
support the traditional manufacturing base for driving the ongoing
transition. The changes that will need to take place will be the
responsibility of both Government and the business community.
The setting up of a Manufacturing Task and Finish Group in 2004
was an important step to agree a shared understanding of the key
challenges that face the sector. The Group has recommended the
creation of a new manufacturing forum which would have a central
role in developing a manufacturing strategy for Wales and in
overseeing its implementation.

   Housing

A number of points were raised about the impact of housing on
Welsh economy, particularly the opportunities associated with
reaching the Welsh Housing Quality Standard in creating
sustainable jobs, providing training and regenerating some of
Wales’ most marginalised communities. We have jointly launched
with DELLS, proposals for the construction sector, which include
the development of a sector strategy. A key component will be an
assessment of the potential presented by housing stock transfer
across a range of factors including skills development, tackling
inactivity, local sourcing and environmental improvements.

Comments were also received about the importance of supply and
affordability of housing as a critical issue to employment growth.
Opportunities are being examined, in consultation with others
across the Assembly Government, to maximise support to housing
as part of the economic infrastructure. Through Construct Wales
support will be provided to help small companies to access
opportunities which the Welsh Housing Quality Standard will
provide. Through the land disposal programme we will aim to
maximise opportunities for sustainable social housing, having
regard to Wales Spatial Plan priorities, housing supply needs and
the support of regeneration in urban and rural areas. We aim to
work more closely with other Departments, and in particular Social
Justice and Regeneration and DELLS on this important agenda.

   Sustainable Development

Respondents commented that the Assembly Government’s
commitment to sustainable development posed particular
challenges and opportunities for economic development. W:AVE
set out the need to ensure that all economic programmes and
policies support sustainable development by integrating
consideration of the social and environmental impacts of policies
with traditional economic analysis. Pursuing approaches that play
to the strengths of the environment of Wales were also highlighted.



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Some respondents stressed the need to ensure that the strategic
framework set out in W:AVE was not taken forward in a way that
promotes unsustainable growth and resource use. We are clear
that this will not be the case and as W:AVE sets out, we will work
to develop a low carbon economy.


W:AVE makes clear that developing a low carbon economy in all
its aspects, including transport, will become of increasing
importance.

Actions already underway include the work of the Assembly
Government in facilitating investment in clean and renewable forms
of energy generation. Our work here is complemented by support
and advice on energy efficiency for businesses to improve their
resource efficiency by the Carbon Trust Wales and others.

W:AVE has broadened the set of indicators to ensure that for the
first time sustainable development is reflected in assessments of
progress in delivering our economic agenda – for example, by
including the Ecological Footprint, the Index of Multiple Deprivation
and the Index of Sustainable Economic Welfare.

Moreover, the Assembly Government is looking to build on the
success of the existing Business and Environment Action Plan by
engaging a wide range of stakeholders in developing a successor
plan.

   Public procurement

The importance of public procurement to the Welsh economy was
noted in the consultation. The Welsh Assembly Government has
adopted a public procurement policy, the essence of which is
captured within ‘Opening Doors – The Charter for SME Friendly
Procurement’. This Charter has been produced by Value Wales,
with contributions from Enterprise Innovation and Networks and is
part of a programme of actions to deliver a consistent approach to
procurement across the public sector in Wales while at the same
time, addressing issues of particular concern to SMEs.

   The public sector

Some respondents commented that the size of the public sector in
Wales should be tracked and added value from public sector
investment sought. There was also a call for further research into
the costs the public sector might have on businesses, such as,
indirectly raising wage costs.




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The size of the public sector is already tracked and data is
published regularly on the proportion of the workforce accounted
for by the public sector. Moreover, HM Treasury’s Green Book,
Appraisal and Evaluation in Central Government, which we adopt,
sets out good practice on the promotion of value for money in
public sector investment decisions. Proposals for further research
into the public sector will be considered by the Policy and Strategy
Group and views on this type of research for Wales will be sought
from the Economic Research and Advisory Panel.

   Structural Funds related responses

There is broad agreement among the respondents on the structural
funds priorities outlined in W:AVE. Many organisations expect the
Wales Spatial Plan to be key in identifying strategic projects, with
the projects delivered by organisations in partnership at all levels
including regional, sub-regional and local levels. Many respondents
feel that the local initiative element should not be lost in the push
for strategic projects and that the system of match-funding should
be improved and simplified. Also, it was proposed that an equal
opportunities cross-cutting theme should be retained in all strategic
and operational programme strategies.

The Structural Funds programmes for 2007 – 2013 will be vital
components in the delivery of the W:AVE vision. The draft
National Strategic Reference Framework specifies that ‘the Welsh
Assembly Government will ensure co-ordination between
Structural Funds and domestic policies for regional development in
the 2007 – 2013 Financial Perspective. The recent revision of
Wales’ economic development strategy, ‘Wales: A Vibrant
Economy’, will help to ensure that future Structural Funds
investments are fully consistent with domestic policy priorities.’

The draft proposed priorities contained within the draft National
Strategic Reference Framework are aligned to the new economic
agenda and are contained in Annex C of this plan for ease of
reference.

The new programmes will present a balanced response to the
Lisbon agenda for sustainable jobs and growth. This will include
actions to grow the knowledge economy, improve business
competitiveness, increase employment, raise skills and build
sustainable communities, as well as strategic investments in the
economic infrastructure. The programmes are being developed in
consultation with our partners in public, private and voluntary
sectors and aim towards a more strategic approach with a greater
alignment with Assembly Government priorities such as the Wales
Spatial Plan. The Convergence ERDF programme and the


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convergence element of the All-Wales HR programme will be out
for public consultation over the summer. The Competitiveness
Programme will follow in the Autumn.

The different structure of the next Programmes and the alignment
with Assembly Government's priorities should help us to look at
new and innovative ways of match-funding and co-financing
projects that will streamline processes and reduce administration.

In implementing each priority, account will be taken of the need to
address equal opportunities for all and environmental sustainability.

   State Aid

The European Commission’s intention is to modernise the State
Aid framework in order to achieve the Lisbon Agenda objectives of
‘less and better targeted state aid’ and reducing the level of
bureaucracy involved.

The European Commission is currently undertaking a
comprehensive review of State aid policy and has issued a five
year action plan (the State Aid Action Plan) to reform the rules,
regulations and procedures controlling State Aid.

In recognition of the ongoing reform of the State Aid rules, we will
need to ensure that any changes are built into the practical delivery
of our plans, whilst ensuring that the full scope of the rules are
applied in support of the key priorities identified.

Next Steps
We are very grateful to those who have given their time and shared
their views with us both in the written responses and in the
discussions. It is only through openness, challenge and working
together with our stakeholders, that we can tackle this next phase
in the economic development agenda.

What has been presented above is only a summary of the issues
from the responses. Separately, we are already working through
these in more detail and they will inform our ongoing policy
development and planning.

This Business Plan is an important step in the process and has
been structured around the key W:AVE objectives of:

       Enterprise – to increase employment still further; so that
        over time the Welsh employment rate matches the UK
        average; even as the UK employment rate itself rises; and




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       Innovation – raise the quality of jobs; so that average
        earnings increase and close the gap with the UK average;
        and
       Underpinning these priorities are actions to improve our
        Networks – investment in communities, transport, energy,
        infrastructure networks and other drivers to stimulate strong
        and sustainable economic growth.

This Year 1 delivery plan for the new Department is an important
step in taking forward this economic agenda. There are some
activities which will take time to develop, and it will be through
complementary strategies such as the new Wales Transport
Strategy, the Wales Spatial Plan Groups, the e-Wales Strategy,
forthcoming sector strategies and through informing the strategies
of other Departments, for example, The Learning Country 2:
Delivering the Promise. This consultation document on DELLS’
forward agenda endorses the importance placed on skills in
W:AVE, as crucial to both our economy and to the life choices of
our citizens. Importantly, the Structural Funds programmes for
2007 – 2013 will be vital components in the delivery of the W:AVE
vision.




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                                                                        4
Delivering Results
As has been made clear throughout this document, Wales: A
Vibrant Economy provides the framework for the business plan of
the new Department and, in particular, the priorities of:

       increasing employment still further, so that over time the
        Welsh employment rate matches the UK average, even as
        the UK employment rate itself rises;

       raising the quality of jobs, so that average earning increase
        and close the gap with the UK average; and

Underpinning these are actions to improve the environment for
economic growth.

This year one delivery plan sees a fast pace being set with a
comprehensive and integrated programme of activity.

Activities have been grouped to reflect the priorities of the new
Department: and correspond with 18 Spending Programme Areas:
Activities               Spending Programme Areas (SPAs)

Enterprise and                  Entrepreneurship
Innovation                      Innovation and Competitiveness
main priority: investing        Domestic and International Business
in more and better jobs         Promotion
                                Support for Employment Creation
                                Tourism Promotion

Networks                        Regeneration Packages
main priority: stimulate        Telecommunications Infrastructure
strong and sustainable          Property Related Infrastructure
economic growth                 Maintaining Trunk Road Network
                                Improving Trunk Road Network
                                Improving Air and Rail Services
                                Improving Local Roads
                                Improving Integration and Delivery of
                                Local Transport
                                Improving Road Safety
                                Improving the Quality of the Local
                                Environment
                                Supporting Walking and Cycling

Spending Programme              European Match Funding
Areas in support of all         European Funding
the priorities


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This is not a hard and fast categorisation as clearly, for example,
the Property Programme whilst improving the environment for
growth, leads to more and better jobs. In fact, our most effective
actions are those which encompass all the priorities. However,
grouping activities within these spending programme areas in this
way provides a coherent structure through which we can outline
what we are delivering this year.

Over the course of 2006-2007 it is planned to review the Spending
Programme Areas and the Budget Expenditure Lines beneath
these, to create better alignment with the key functions and
activities of the new Department.

In reviewing the information that follows, it should be noted that:

   Those activities where core budget expenditure is over £1
    million have been itemised. Activities below this threshold are
    being taken forward but are not individually referenced, due to
    the scale and scope of this first integrated Business Plan.

   In some cases, activities have secured additional resources, be
    they EU funds, Pathways to Prosperity Funding, self-generated
    receipts or other income. Where this is relevant, the total
    expenditure figure has been provided alongside the core
    budget figure to show the scale of the activity and to explain the
    forecast outputs. In cases where a total expenditure figure is
    shown, the outputs reflect the total expenditure and not simply
    that from the core budget figure. This is consistent with the
    treatment in business plans of the former Assembly Sponsored
    Public Bodies.

   As explained in Section 5, the outputs relating to Jobs Created
    and Jobs Safeguarded are recorded on three different bases
    which reflect reporting requirements, i.e.;

    1. UKTI Jobs Created and Safeguarded are recorded at the
       point of securing an inward investment project for Wales, in
       accordance with UK wide requirements.
    2. Certain grant schemes record the predicted jobs created /
       safeguarded to be supported at the point of project approval
       in accordance with scheme requirements.
    3. The remainder are recorded at the point when the job has
       been created or safeguarded – disclosed as ‘Jobs Created
       or Jobs Safeguarded’.

   Outputs which are initially recorded at point of securing or
    project award may also be recorded when delivered – typically
    in a later financial year. It is important to note that these
    different recording stages are never added together to give a
    ‘total job creation’ position, as this would be inappropriate.


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   Many of the outputs are presented as a range. This better
    reflects the pattern of activity whereby project variations occur
    throughout the operational year and there may be a need to
    respond to unforeseen market opportunities. It is also
    becoming accepted practice across the public sector.

Enterprise and Innovation
Entrepreneurship
The aim of the Entrepreneurship Spending Programme Area is to
enhance and spread prosperity in Wales by helping to create an
environment within which a greater number of sustainable
businesses can start and be developed by a more diverse group of
people and owners. The activities will help businesses to become
more competitive by supporting drivers of business growth.

During this year, a review of our enterprise activity is taking place.
This is in order to focus resources where they have most effect,
reduce confusion and duplication, move to an investment culture
and adopt a more discretionary approach to business development.
As a start to this process, a new General Support for Business
(GSB) service has been developed, which streamlines existing
programmes – new Business Starts and the General Business
Advisory Services.

                                    FINAL BUDGET: £33.310m
Key Activities                                Core    Total
                                            budget Funding
                                              £,000   £,000
High Growth Business Starts Programme         1,407   2,914
Business Eye                                  5,800
All Wales Specialist Support                  1,300   1,823
General Support for Business                  6,802  11,861
SME Equality Project                          1,310   1,771
Potentia                                      1,066   2,838
Regional Selective Assistance and            11,748
Business Improvement Support –
Assembly Investment Grants
Other (including: New Business Starts,        3,877
National Childminders Association,
Promoting an Entrepreneurial Culture, etc)


    Key Deliverables
     General Support for Business service.
     Notification to the European Commission and introduction of
      a new Assembly Investment Grant scheme.


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       Complete the review of Knowledge Exploitation Fund.

    Assembly Investment Grant:
     Support 75 start up projects of which 60% of offers relate to
      key sectors.
     Support 175 growth projects of which 60% of offers relate to
      key sectors.

    Enterprise Development Programmes:
     Jobs Created                                          7,450 - 8,200
     Jobs Safeguarded                                      2,000 - 2,250
     New Business Starts                                   3,950 - 4,350
     New Business Starts surviving 12 months               4,380 - 4,840
     Value of Opportunities created                        £685m - £760m

Innovation and Competitiveness
The aim of the Innovation and Competitiveness Spending
Programme Area is to increase the sustainability, productivity and
competitiveness of businesses in Wales. The activities endeavour
to increase the innovative capacity of the wealth creating parts of
the Welsh economy, particularly among high growth potential
businesses. In addition, at the interface of competitiveness and
sustainability agendas, the Spending Programme Area aspires to
put Wales at the forefront of resource efficiency, including energy
efficiency and clean energy production, and seeks to enhance
environmental welfare and reduce carbon emissions.

                                      FINAL BUDGET: £70.770m
Key Activities                                  Core    Total
                                              budget Funding
                                                £,000   £,000
Knowledge Bank for Business                     4,000
Creative Industries business support            1,500
Innovation and Technology Counsellors           1,550
and Innovation Network
Creative IP Fund                                2,000
Roath Basin Infrastructure relating to          3,000
knowledge economy developments
Micro Nano Technologies Centre                  1,500
Institute of Life Sciences                      1,500
Support for Carbon Trust in Wales to            3,600
reducing carbon emissions in industry and
the public sector
Information Communication Technology            1,500
Support Centre Network
SMART Cymru                                     8,000   8,840
ASTRAEA Development of the UAV Sector           1,000
in Wales


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Information and media technology                             2,252
programmes
Supply Chains and Networks                                   3,605   5,031
Centres of Excellence for Technology and                     1,303   2,204
Industrial Collaboration (CETIC)
Knowledge Exploitation Fund Commercial                       4,759   6,520
Exploitation and Technology Transfer
Phase 2 and 3
KEF Strategy for Entrepreneurship                            3,010   4,297
KEF Strategy for Innovation Objective 1                      1,985   3,246
and 3 areas
Other (including: Design Wales,                             18,600
Knowledge Transfer Partnership,
Programme of economic research, All-
Wales Environmental Goods and Services
Programme, Centre of Excellence in Wales
for Visualisation, Innovation
Communications Campaign, Wales
Innovation Relay Centre, etc)
Finance Wales
Finance Wales Investment and Support for                     6,106   6,649
SMEs

    Key Deliverables:
     Updated Innovation Action Plan, incorporating Knowledge
      Economy, Nexus, Science and commercialisation priorities
      for Wales.
     Completion of funding for the Swansea Institute of Life
      Sciences.
     Review of Knowledge Bank for Business pathfinder year
      and model refreshed accordingly.
     Delivery of the new creative industry sectoral support
      system, assisting 10 significant projects involving
      indigenous companies and three significant inward
      investment projects and achieving £1.5m revenue.
     £2.0m investment in creative industry intellectual property
      by the Wales Creative Intellectual Property Fund with at
      least the equivalent being spent in Wales through investee
      productions.
     Energy Wales strategic development – finalisation of Wales
      energy route map and Wales Microgeneration strategy
      consultation, enhancement of Wales Energy Research
      Centre and update of Energy Savings Wales.
     Evaluation of phase one of the Business and the
      Environment plan and exploration of phase two.
     Jobs Created                                1,700 - 1,900
     Jobs Safeguarded                            2,750 - 3,050
     Private Sector Investment                   £22.5m - £24.9m
     New Products and Processes introduced 1,200 - 1,350


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       Profit Benefit                                      £11m - £12.2m
       Industry/Academia collaborations                    720 - 790
        supported
       Value of Deals supported                            £54.5m - £60.2m

Finance Wales

Finance Wales is within this Spending Programme Area. The
organisation is an arms length subsidiary of the Welsh Assembly
Government that manages commercial investment funds to
address market failure in risk capital funding provision for Welsh
SMEs.

Sourcing its funds from both the public and private sector, Finance
Wales provides tailored, flexible funding packages that support all
stages of business development - from a £1,000 micro loan for a
start up business to a multi-million pound Venture Capital
investment for a Management Buy Out.

Finance Wales also operates in more niche areas – for example,
the Wales Spinout Programme and Xenos Business Angel
Network, which work in partnership with Higher Education
Institutions and private investors. In addition, management of the
£7 million Wales Creative Intellectual Property Fund is undertaken
on behalf of the Welsh Assembly Government.

In accordance with Wales: A Vibrant Economy, the organisation’s
goals are to:

       To improve the availability and accessibility of funding for
        SMEs in Wales

        “Create an investment culture in Wales which encourages
        new sources of commercial funding and an investor ready
        population of growth orientated SMEs”.

       To invest in Welsh companies which demonstrate a clear
        potential for growth

        “By 2008, invest £100 million and leverage £300 million
        private sector funds into 4000 businesses thereby
        creating/safeguarding 10,000 jobs”.

       To establish more sustainable funds for future investment

        “Make a commercial return on both Private and Public
        sector investment funds to ensure a continuing and
        substantial contribution to the Welsh economy with
        minimum public sector expenditure”.



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Finance Wales has enjoyed a successful 2005/06 year with more
than £20 million of direct investment in over 400 deals. The
organisation is seeing an increasing trend in terms of the number
of deals and total investment in Wales’s SMEs – for example, the
Finance Wales Objective 1 area fund is ahead of target for full
investment.

 Investment year              Total deals per           Total value invested
 as at 31st March                 annum                     per annum
       2002                          6                         £0.51m
         2003                          64                          £5m
         2004                          90                         £5.2m
         2005                         297                         £10.4m
         2006                         416                         £21.7m

Over the period of this plan, Finance Wales will be undertaking a
second major fund raising exercise to ensure small and medium
sized enterprise funding needs in Wales can continue to be met
over the longer term. With market evidence pointing to an increase
in the size of the equity gap/market failure of to upwards of £2
million (SBS/HM Treasury – Bridging the Finance Gap, 2003) the
new funds are likely to be larger in size and will operate an as
integrated suite of financial products to allow for more
developmental activity and synergies with existing programmes
such as Technium, SMART and Knowledge Bank for Business.

Key Deliverables for Finance Wales:
   Jobs Created                                            2,150 - 2,400
   Jobs Safeguarded                                        1,500 - 1,650
   Private Sector Investment                               £33.9m - £37.4m


Domestic and International Business Promotion
The Domestic and International Business Promotion Spending
Programme Area seeks to put Wales on the World map by:
becoming a key player in Europe - the ideal location for quality
inward investment, a strong international trading nation and by
raising Wales’ profile on the international stage. The programme
of activities includes attracting inward investment, undertaking
marketing events both in and about Wales and creating an export
culture in the Welsh business environment which contributes to an
improved Welsh export performance.

International Business Wales will realise the benefits of combining
trade and investment through synergies, increased market sector
focus and the effective account management of strategically
important businesses.


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The vision is to attract high quality, long-term foreign (including UK)
investors to Wales, to complement the indigenous economy and to
have a significant positive effect on the economic performance of
the country.

International Business Wales is operating in an increasingly
changing and competitive marketplace. Inward investment cannot
be carried out in isolation from support for businesses in Wales.
Close linkages are being developed within sectors to maximise
potential investment.

The priorities are:

   Supporting Wales’ regional strategies
   Providing new employment opportunities (new jobs)
   Increasing the number of jobs in financial and business
    services
   Moving Wales up the Value Chain
   Build on Wales’ strengths in manufacturing
   Maintaining Wales’ stock of existing investors.

A full programme of services to improve and support the
international trade activities of Welsh companies will be undertaken
with the aim of securing deals with a value of £120 million.

This business plan covers, for the first time, a joined-up strategy
between marketing activities domestically and internationally. The
activities have been presented separately under each Spending
Programme Area for the purposes of this business plan. In
practice, the activities all form part of the new marketing business
area.

For the marketing activities included in this Spending Programme
Area, the priorities are:

   Creating and supporting the communication and signposting of
    the new organisation, especially with regard to the new brand
    values of the Department for Enterprise, Innovation and
    Networks and their impacts upon customer service.

   Strengthening the sector marketing strategies for the new
    Department by ensuring a consistency of proposition
    development and channel execution both in Wales and
    internationally to support trade and inward investment.

   Supporting the achievement of other divisional priorities.




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   Communicating the Wales brand internationally, notably
    through the promotion of Wales through major events such as
    Wales Rally GB and the Ryder Cup.

                                        FINAL BUDGET: £21.983m
Key Activities                                             Core
                                                        budget
                                                          £,000
Inward Investment New and Existing                        2,155
Programme of services to improve and support the          6,478
International Trade activities of Welsh Companies
International Relations                                   1,381
Automotive Marketing including Wales Rally GB             1,930
Motorsport Initiative
Ryder Cup                                                 3,500
Inward Investment Marketing                               2,815
Other sector Marketing (including: Aerospace and          1,120
Defence, Financial and Business Services,
Bioscience Marketing, Information Technology and
New Media, etc)
Regional and Other marketing activities (including:       2,513
marketing communications, sponsorship and events,
public relations support, technium network marketing)
Miscellaneous                                                91

Key Deliverables
   Roll out the new Wales brand and associated marketing
     tools
   Value of Export Deals secured           £120m
   UKTI Jobs Created                       4,600 - 5,100
   UKTI Jobs Safeguarded                   1,100 - 1,250
   UKTI Capital Investment                 £118m - £130.5m
   Marketing - Advertising Value           £760m - £840m
     Equivalent (AVE)
   Contacts generated in key sectors       2,350 - 2,600

Support for Employment Creation
This Spending Programme Area supports new capital investment
projects that create and/or safeguard jobs in the Assisted Areas of
Wales, while improving competitiveness and raising Gross Value
Added.

As one of the benefits of the merger, we are bringing our capital
grants (Regional Selective Assistance, Assembly Investment
Grants, Section 4 Tourism Grants and Property Development
Grants) into the Invest Wales business area as a single, flexible
investment fund for business, with an expanded role for the Welsh
Industrial Development Advisory Board in considering investment


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projects. This will improve customer and stakeholder service and
help to streamline delivery.

Whilst these developments are already taking place, the budget
expenditure lines are yet to be realigned, so for the purposes of
this planning document these activities are itemised under their
existing Spending Programme Areas. However, grants to support
the tourism industry to improve the quality and value of the
extended tourism activity are already within this Spending
Programme Area. It should be noted, however, the reduction in
European and associated match funding in 2006-07, hence lower
levels of outputs from previous years.

                                    FINAL BUDGET: £54.527m
Key Activities                                         Core
                                                    budget
                                                      £,000
RSA Projects and Business Improvement Support        50,236
Tourism Capital Expenditure Investment                3,550

Key Deliverables
   Notification to EC and introduction of new RSA Cymru
     Wales scheme.
   Support for investment projects forecast to lead to the
     creation / safeguarding of 7,000 jobs of which 70% of offers
     relate to key sectors.
   Support for tourism projects forecast to lead to the creation
     of 151 jobs and safeguarding of 38 jobs.
   Achieve a capital investment ratio for RSA of 1:5 for capital
     grant offers.
   90% of RSA offers made to projects with a GVA score at or
     above sector average.

Tourism Promotion
The aim of the Tourism Promotion Spending Programme Area is
for a larger, higher quality and ‘greener’ tourism industry with the
visibility and appeal of Wales as a travel destination being
significantly enhanced.

A separate delivery plan is being produced for Tourism, providing a
detailed explanation of planned activities for 2006-07.

Visit Wales are working to realise the merger benefits of more
cohesive partnership working, better co-ordination, streamlined
processes and access for tourism businesses to appropriate wider
Enterprise, Innovation and Networks services. Visit Wales is
guided by ‘Achieving Our Potential’, the national tourism strategy
and the vision of: ‘A customer responsive, innovative, sustainable



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and profitable industry, which makes an increasing contribution to
the economic, social and environmental well-being of Wales’.

Visit Wales will target its resources carefully, directing them
towards those priorities that will most benefit the industry, within
the objectives of:

   Assisting in raising the quality of the tourism offer in Wales;
   Stimulating growth in the demand for Wales and to position
    Wales as a must see travel destination;
   Use effective partnership working to achieve mutual benefits for
    Wales;
   Encouraging support and reward innovation;
   Encouraging a skilled and professional workforce equipped to
    deliver a quality Wales experience.

The main business areas are:

   Commercial –quality assurance, business support, production
    services, information services, new media systems and the
    Tourism Training Forum for Wales.

   Development – integrating Visit Wales strategies within wider
    Assembly Government agendas and strategies, maximising
    outputs and contributing fully to the Welsh Assembly
    Government’s sustainable development and cross cutting
    themes.

   Planning and Research – market research and evaluation,
    business planning and monitoring, government business and
    performance monitoring of the Regional Tourism Partnerships.

   UK Marketing and Partnerships, growing the value of tourism to
    Wales from the rest of the UK. Delivering integrated campaigns.
    Generating response and brand awareness. Developing sector
    and niche marketing plans and campaigns. Working with
    partners to improve Wales’ performance through specific
    campaigns.

   International, Marketing and Sales Development – increasing
    the value of international tourism business to Wales. Delivering
    consumer, trade and media campaigns in targeted international
    markets. Improving Wales’ coverage in travel trade
    programmes.

   Business Tourism, Golf and Events – developing and
    implementing marketing activity in these three areas of growth
    tourism.




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                                        FINAL BUDGET: £13.339m
Key Activities                                             Core
                                                        budget
                                                          £,000
All aspects of Tourism promotion including Marketing     13,524
Strategy development and implementation,
promotion of the Wales Brand in both the UK and
overseas, lead generation and PR, travel trade
partnerships and product marketing including golf,
fishing, cycling, walking and adventure tours.

It should be noted that, the support for tourism projects through the
payment of grants to improve the quality and value of tourism
activity has already been accounted for in the Spending
Programme Area for Employment Creation. The total expenditure
on Tourism activities in 2006/07 is forecast at just over £20 million.

Key deliverables
   £85m additional spend by tourists as a result of marketing
      campaigns.
   85% of graded properties to be accredited 3,4 or 5 star.

Networks
The Assembly Government has a key role in stimulating strong and
sustainable economic growth through developing the economic
infrastructure, including transport systems.

The new Wales Transport Strategy will work through Regional
Transport Plans and link closely with the Wales Spatial Plan. The
Strategy will help create a sustainable, integrated transport system,
which is critical not only to the economy, but will assist in bringing
about social benefits. For example, enabling people to have better
access to jobs and services, and environmental benefits, giving
people alternatives to the private car and reducing greenhouse gas
emissions.

A substantial programme of land reclamation and property
development has also been designed to ensure a good supply of
sites and premises throughout Wales. In addition, a
comprehensive programme of regeneration is being undertaken to
improve the quality of life and prospects of people and
communities.

Regeneration Packages
The Regeneration Packages Spending Programme Area aims to
improve the quality of life and prospects of people and




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communities, particularly those affected by significant and rapid
economic shocks.

The Wales Spatial Plan will provide the overarching framework for
the regeneration investment activities of Enterprise, Innovation and
Networks. For regeneration to be sustainable it must have
ownership and involvement, through partnership working with
Local Authorities and other public sector agencies, with business,
community groups and voluntary bodies.

In recent years, a range of different approaches to regeneration
have been taken. One example is the ‘tool-kit’ approach which
draws not only on the range of available business support and
capital programmes such as property provision, land reclamation
and environmental improvements, but also acknowledges the need
for capacity building and other softer forms of assistance. The
community regeneration tool-kit provides support to build the
capacity of communities to devise and deliver their own action
plans. A holistic approach to the development of these plans is
encouraged, with the recognition that they will be longer-term in
nature.

This Spending Programme Area covers urban and rural renewal
activities, land reclamation and environmental improvements to
sites and property. Major regeneration activities already referred to
in this document are the Heads of the Valleys and the Catching the
Wave strategies. Other significant regeneration activities being
undertaken this year include:

                                       FINAL BUDGET: £74.512
Key Activities                                Core     Total
                                            budget Funding
                                              £,000    £,000
Community Regeneration Toolkit                1,001    1,431
Rhyl Regeneration                             1,100
Environmental Improvement Activity            3,815
Victoria Dock                                 1,900
Newport Urban Regeneration Company            3,666    3,766
South Coastal Area Regeneration               1,200
Heads of the Valleys Regeneration            10,000
Mid Valleys Regeneration                      1,250
All Wales Urban and Rural Renewal             8,390
Activities (including: Bangor City of
Learning, North Wales Theatre and
Conference Centre, Eryri a Mon Town
Improvement Grants, Neath Port Talbot
Urban and Rural Renewal)
All Wales Land Reclamation (including:        4,175
Tylorstown/Llanwonno Road Tips,
Treforest Tinplate Works, Aberaman


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Phurnacite Works, Gas Works Site Port
Talbot)
Heolgerrig Brickworks redevelopment                         1,000
Ebbw Vale Steelworks sites                                  3,714
Albion Tips                                                 1,250
North East Wales Border and Coast                           1,150
Penarth Headland Link Project and Cardiff                  15,819
Harbour Authority Functions
Waterfront Coastal Development ‘Catching                     2,000
the Wave’
Other regeneration activities                              13,082

At the time of preparing this business plan the bid for the Defence
Training Review is still under consideration. There are activities
relating to St. Athan Aerospace Park which are budgeted for in this
financial year regardless of the outcome of the Defence Training
Review, but clearly the decision on this will have a significant
impact in future years

Key Deliverables
   Implementation of the Heads of the Valley regeneration
     strategy
   Completion of Initial works on Penarth Headland link project
   Five themed projects progressed in the Heads of the Valleys
     area
   Community Groups assisted              175 - 195
   Floor-space completed                  32,750 - 36,200
   Floor-space improved                   30,900 - 34,000 sqm
   Jobs Created                           1,000 - 1,100
   Land Reclaimed                         75 - 85 hectares
   Private Sector Investment              £91.5m - £101.2m

Telecommunications Infrastructure
The aim of the Telecommunication Infrastructure Spending
Programme Area is to work across both the private and public
sector to ensure provision and take up of communications
infrastructure for businesses, public sector, voluntary organisations,
individuals and communities in Wales. The activities will help
ensure that the Welsh Assembly Government fully exploits
Information Communication Technology across all sectors.



                                                FINAL BUDGET: £19.038m
Key Activities                                           Core     Total
                                                       budget Funding
                                                        £,000     £,000
Existing Public Sector network                          4,573


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management (Lifelong Learning Network)
Public Sector Broadband Aggregation                          1,500
(PSBA) Project
Regional Innovative Broadband Support                        1,250   2,593
Project (RIBS) Project
Fibrespeed Project                                           7,928   8,228
Awareness raising and monitoring take up                     1,205
of broadband activity
Other (including: Second Generation and                      2,582
International Connectivity project
development, development of future
projects related to the e-Wales Strategy,
the Broadband Support Scheme and
depreciation and cost of capital). In
addition funding for Intelligent Cities is
currently held within this Spending
Programme Area.

Key Deliverables
      Publication of e-Wales strategy and consultation
      Launch e-Wales observatory
      2nd Generation Broadband available to at least 50% of
         businesses in Wales
      All 35 unviable exchange areas in Wales to offer “first
         generation” broadband connectivity
      25% of Fibrespeed Infrastructure network solution
         completed
      170 -190 Businesses Assisted through the Intelligent
         Cities Initiative

Property Related Infrastructure
The aim of the Property Related Infrastructure Spending
Programme Area is to help to create more and better jobs by
ensuring an appropriate supply of property. This will be by working
with the private sector to meet commercial demand or, where the
private sector does not yet have an appetite for development,
providing property with some measure of financial support.

The new Infrastructure business area will identify, facilitate and
develop integrated and sustainable property solutions for
businesses and communities. This will be through joint ventures
with private companies and other public organisations, the
provision of grant support and also by direct activities. Land
assembly, acquisitions, remediation and reclamation, site
development, environmental improvements, and advance and
bespoke property developments will be an integral part of this
business area.




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In this year, the property strategy is being reviewed and an
evaluation of property activities being undertaken.

                                      FINAL BUDGET: £47.308m
Key Activities                                 Core     Total
                                             budget Funding
                                              £,000     £,000
Advance Premises – North Wales                2,214
Advance Premises – South East Wales           2,110
Advance Premises – Mid Wales                  3,678
Advance Premises – West Wales                 2,642
Indigenous and Expansion Projects –           1,465
North Wales
Indigenous and Expansion Projects –           3,590     5,365
South East Wales
Indigenous and Expansion Projects – Mid         990     1,750
Wales
Indigenous and Expansion Projects –           4,659
West Wales
Ty Mawr Holyhead Infrastructure               1,504     4,193
Parc Bryn Cegin, North Wales                  1,380     3,793
Bute Avenue PFI Scheme, South Wales           6,500
South Coastal Area Site Development           2,020     2,045
Mid Valleys Site Development                  3,303     4,803
Wales Rally GB/Motor sport SW                 1,000
Infrastructure works
Site Development – North Wales                1,416
Site Development – South East Wales             750
Site Development – Mid Wales                  1,000
Site Development – West Wales                 1,131
Property Management All Wales                 5,000     5,700
Other (including: Withybush Business            956
Park/airport regeneration, West Wales,
Welsh Industrial Partnership)

Key Deliverables
      Review Property Strategy for Wales for 2007/8
      Roll out of Sustainable Development Working Differently

           Floor-space completed                   160,500 - 177,500 sqm
           Floor-space improved                    17,400 - 19,300 sqm
           Potential jobs accommodated             1,550 - 1,750
           Private Sector Investment               £115.3m - £127.0m
           Private Sector Investment               £80.75m - £89.25m
            Asset Sales




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Maintaining the Trunk Road Network
The aim of Maintaining the Trunk Road Network Spending
Programme Area is to manage, maintain and operate the trunk
road network in Wales in a sustainable manner, taking into account
the social, economic and environmental needs and obligations of
the nation.

                                     FINAL BUDGET: £232.745m
Key Activities                                          Core
                                                      budget
                                                        £,000
Maintenance of the road network                        28,900
Design, Build, Finance and Operate (Shadow Tolls)      16,000
Renewals of roads and bridges                          27,800
Note: The budget includes for depreciation

Key Deliverables
   1,711km of motorway and trunk road maintained in a safe
     and serviceable condition.
   Reduction in the percentage of the network requiring close
     monitoring and increased asset value.

Improving the Trunk Road Network

Improving the Trunk Road Network Spending Programme Area will
improve and upgrade the trunk road network in Wales in a
sustainable manner, taking into account the social, economic and
environmental needs and obligations of the nation.

                                    FINAL BUDGET: £74.478m
Key Activities                                         Core
                                                    budget
                                                      £,000
New construction and improvements programmes         56,820
Upgrade programme                                     9,406

Key Deliverables
   Construction started pending statutory procedures on the
     A470 Blaenau Ffestiniog to Cancoed, A40 The Kell, A5 Pont
     Melin Rug and M4 Castleton to Coryton widening.
   Continuation of work on A465 Abergavenny to Gilwern and
     A479 Talgarth Relief Road.
   Delivery of upgrade programme including completion of one
     major upgrade scheme, and one major Making Better Use
     scheme.




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Improving Air and Rail Services
Improving Air and Rail Services Spending Programme Area aims
to improve rail infrastructure and rail and air services.

                                      FINAL BUDGET: £23.898m
Key Activities                                           Core
                                                       budget
                                                        £,000
*Support Wales and Borders rail franchise             140,000
Ebbw Valley Rail Line                                  12,609
Phased roll out of CCTV on trains and completion of     5,000
North Wales station improvements

Note: * A further £140m is transferred from the Department for
Transport on 1/4/06 to be incorporated in this Budget.

Key Deliverables
   Launch of new air service from Cardiff to RAF Valley.
   Secure four new domestic and international air routes under
     Welsh Route Development Fund.
   Commence main contract on Ebbw Vale Line to allow
     passenger services to start in 2007.
   Management of Wales and Borders franchise.

Improving Local Roads
Improving Local Road Spending Programme Area seeks to
improve Local Transport Infrastructure.

                                      FINAL BUDGET: £79.852m
Key Activities                                          Core
                                                      budget
                                                        £,000
Grants for local road schemes costing over £5 million  60,043

Key Deliverables
   Start construction of the A486/B4336 Ceredigion Link Roads.
   Complete construction of the A497 improvement between
     Abererch and Llanystumdwy.
   Complete construction of Porth / Lower Rhondda Relief
     Road.




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Improving Integration and Delivery of Local
Transport
This Spending Programme Area seeks to provide an excellent
local transport system which offers businesses and people good
access to markets and jobs, and practical and affordable travel
solutions.

                                       FINAL BUDGET: £88.942m
Key Activities                                           Core
                                                       budget
                                                         £,000
Bus revenue support                                     27,774
Concessionary fares                                     38,448
Local transport infrastructure schemes                  20,700

Key Deliverables
      Development of new strategy to extend the Traws
         Cambria network of longer distance bus service
         throughout Wales and assess potential for extending
         network.
      Continuing to fund the successful concessionary fare
         scheme to provide free bus travel for elderly and
         disabled people.
      Introducing a pilot scheme to test the practical and
         financial issues associated with the introduction of half
         fare travel by 16/18 year olds on buses by April 2008,
         assessment of cost and benefit of introductory scheme.
      Continued support of six innovative bus services.
      Maintain Traveline Cymru public transport information
         system.
      Completion of 30 local transport infrastructure schemes.

Improving Road Safety

Improving Road Safety Programme Area aims to meet the aims of
the Road Safety Strategy for Wales by reducing real and perceived
danger for all road and footway users in Wales; to meet the UK
casualty reduction targets for 2010.

                                       FINAL BUDGET: £12.914m
Key Activities                                            Core
                                                       budget
                                                         £,000
Road Safety Improvement Schemes                          4,401
Grant funding of RoSPA office in Wales and                 363
promotion of road safety including campaigns
Local Authority grants for safety schemes                8,150



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Key Deliverables
   Three road safety campaigns delivered.
   Completion of 10 local road safety and improvement
     schemes on trunk road network and 20 schemes to maintain
     the skidding resistance levels on the Trunk Road and
     Motorway network.
   Completion of 20 additional 20mph zones across Wales.
   Maintain progress towards meeting the casualty reduction
     targets set for 2010.

Improving the Quality of the Local Environment

                                        FINAL BUDGET: £4.075m
Key Activities                                            Core
                                                       budget
                                                         £,000
Environment Improvement schemes (Capital)                1,650
Initiatives to reduce CO2 emissions and air pollutants   2,425

Key Deliverables
   Identification of initiatives which can be taken forward to
     reduce C02 emissions and air-pollutants.
   Completion of five community schemes and two noise
     mitigation schemes.

Supporting Walking and Cycling
The Supporting Walking and Cycling Spending Programme Area
will maximise the levels of walking and cycling as sustainable
transport modes and recreational activities, and their contribution
to the physical well-being, social inclusion, economic prosperity
and accessibility of the population of Wales.

                                        FINAL BUDGET: £9.590m
Key Activities                                            Core
                                                       budget
                                                         £,000
Completion of safe routes to school and walking and      5,600
cycling routes
Funding of cycling infrastructure schemes                3,900

Key Deliverables
   Completion of five cycling infrastructure schemes.
   Completion of 20 safe routes to school and other walking
     and cycling schemes.
   Implementation of Walking and Cycling action plan.




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Spending Programme Areas In Support Of
Activities
European Funding
The Structural Fund Programmes in Wales provide grant aid for
projects that encourage and facilitate economic regeneration and
revival in areas where the decline of traditional industries has
caused serious economic and social problems.

Clearly the main priorities this year will be the achievement of the
full commitment of funds as appropriate for the current round of
programmes and developing and agreeing the Structural Funds
Programmes for 2007-13. The draft National Strategic Reference
Framework document and proposed priorities were referred to
earlier in this plan.

In terms of expenditure in 2006-06, the table below shows the key
activities:

                                                 FINAL BUDGET: £235.362
Key Activities                                                     Core
                                                                 budget
                                                                  £,000
Structural Funding Revenue                                      148,216
Programme and Partnership Support                                 1,504
Structural Funding Capital                                       85,622


Key Deliverables
   Structural fund programmes for 2007-2013 agreed with
     European Commission
   Continued effective delivery of the 2000 – 06 programme
     including full commitment of funds.

European Match Funding
The aim of the European Match Funding Spending Programme
Area is to ensure that strategic projects which are eligible for
Structural Funds can find essential match funding. Support for
projects aimed at promoting sustainable local economic
regeneration and development within, or benefiting the most
deprived areas throughout Wales.




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                                                  FINAL BUDGET: £53.753
Key Activities                                                    Core
                                                                budget
                                                                  £,000
Pathway to Prosperity match funding                              19,000
Pilot funding and facilitation                                    1,665
Local Authority match funding                                    33,588

Key deliverables
   Provide match-funding for priority projects coming forward
      for structural fund support. The progress and achievement
      of projects are monitored against the relevant structural fund
      programme targets.




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                                                                   5
Delivering Effectively
One of the key merger goals is the delivery of more effective and
efficient services to our customers. Earlier in this plan we outlined
some of the ways in which we aim to achieve this goal. For
example:



       Improved Strategic Alignment and External Advice
       Improving Customer and Stakeholder Service
       More streamlined Delivery
       Better organised to Deliver


Core to our delivery are our corporate commitments to social
justice, sustainable development, equality and diversity and the
Welsh language, all of which improve the quality and effectiveness
of our activity. We describe more about our approach in this
Section.

In addition, we also report on our methods to raise the quality and
value for money of our activity, as well as outlining how we
measure and fund our actions.

Sustainable Development

The Assembly Government’s commitment to sustainable
development (SD) will continue to have an overriding influence
over the work of the Department. Of key importance will be
measures to mitigate the causes of climate change, to adapt to its
effects and to promote high levels of resource efficiency.

The recent merger has given an opportunity to bring together the
individual themes for sustainable development previously pursued
by the ASPBs and Transport Wales. For example:

       The Sustainable Tourism Initiative.
       Welsh Transport Appraisal Guidance (WelTAG) and
        Strategic Environmental Assessment (SEA).
       The “Creating Sustainable Places” strategy.

These are being continued and consolidated into the new
organisation.




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Previous work on the Sustainable Businesses theme is being
merged with that of the Business and Environment team.
Following completion of the review of the Business Environment
Action Plan and working under the guidance of the Expert Panel on
Resources Management, a new Action Plan will be developed.
This will aim to maximise the opportunities for businesses to
contribute to the Sustainable Development agenda, as well as
realising the commercial benefits that will result.

The sustainability appraisal tools previously developed and the
new Welsh Transport Appraisal System (WelTAG) will now be
harmonised with the Policy Gateway Tool, to ensure that
opportunities to deliver sustainable outcomes can be maximised.

Equality and Diversity

We are committed to pursuing equality and diversity in everything
that we do – from being an equal opportunity employer, the
development of policy and implementation, through to service
delivery. The former Economic Development and Transport
Department’s Race Equality Action Plan 2005-08 was published in
March 2005. It is a robust plan, with the main focus on collecting
baseline information on issues such as take-up and experience of
services, so that this data can be used to help us better develop
more targeted policies and improved services. We will continue to
progress actions during the year.

The plan will be amended to take account of service delivery
actions of the former merged bodies. The aim is to have a fully
integrated plan by the summer.

Following a screening exercise of our programme areas for
relevance to the Disability and Gender duties we will be formulating
action plans to address what needs to be done in the most relevant
areas. Our plans will be submitted to Ministers for approval in
October 2006.

We have established an Equal Opportunities and Diversity Group
within the Department, whose purpose includes raising awareness
of the promotion of equal opportunities and diversity, including
compliance with all equalities legislation; sharing best equality
practices in employment and service delivery; and monitoring the
implementation of equal opportunities policies, practices and
equality initiatives across the Department. The Group will help in
the development of all of the Equality and Diversity Action Plans.

Welsh Language

A Welsh Language Action Plan for 2006-07 has been drawn up for
the new Department which sets out how we will continue to


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implement the commitments in the Assembly Government’s Welsh
Language Scheme.

The plan has been built up through consultation and dialogue with
regions and business areas and the Welsh Language Unit. The
plan represents a dynamic way forward for the Department to
support and promote bilingualism and to give equal status to both
Welsh and English in all our work.

The plan draws upon and continues good practice in the former
merged bodies. There are challenges for the coming year most
notably the need to develop a bilingual workforce plan by the end
of December, and resources associated with translation services.

A new development is the creation of a Welsh Language Working
Group (Gweithgor Iaith), with a membership from across the
Department for Enterprise, Innovation and Networks teams. The
Gweithgor will have an important quality assurance role ensuring
Departmental compliance with the Scheme, developmental
aspects associated with mainstreaming, application of good
practice and a scrutiny role of new policies to ensure Welsh
language compliance.

As part of the business planning process, project managers were
advised on the need to consider the impact of the activity on the
language and Welsh speaking communities, and the ways in which
the project could produce a positive linguistic outcome. This will be
built on this year.

Research, Evaluation, Review and Challenge

The priorities and activities of the Department for Enterprise,
Innovation and Networks for 2006-07 and beyond, require the
development and better use of evidence. This will be achieved
through rigorous research and evaluation, as well as robust review
and challenge from the business-led Ministerial Advisory Groups.

Within the Department for Enterprise, Innovation and Networks, as
was the case across the various pre-merger organisations,
research and evaluation capacity will be primarily embedded within
policy teams and functions. This approach will enable analytical
support to be responsive and will lead to the development of
specialist knowledge. This will help ensure that research and
evaluation forms an integral part of activity and policy development.

However, for this dispersed approach to be effective, it is important
that research and evaluation is co-ordinated, that there remains an
ability to provide flexible analytical support, and that there is
capacity to undertake strategic departmental-wide research and
evaluation. The Policy and Strategy Group (PaSG) within the


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Department for Enterprise, Innovation and Networks will take
forward this role as part of its remit, and headline research and
evaluation related activities for 2006-07 include:

       Developing a comprehensive Department for Enterprise,
        Innovation and Networks Research and Evaluation Plan for
        2006-07;
       Coordinating a Department for Enterprise, Innovation and
        Networks Research and Evaluation Network;
       Developing an electronic library of the Department for
        Enterprise, Innovation and Networks research and
        evaluation;
       Commissioning four strategic and/or departmental-wide
        research and evaluation projects;
       Completing an evaluation of recent property activities.

Performance Matters

A recent audit of the way in which economic development
performance measures are compiled and used to influence
decisions has been undertaken by the Internal Audit Service of the
Assembly Government in order that the new Department for
Enterprise, Innovation and Networks could draw on best practice
from across the merging organisations and beyond.

The audit concluded that the reporting framework for performance
indicators used in each organisation is robust and enables
management to monitor performance and to take appropriate
corrective action. Each organisation has a clear process to set
targets, monitor them and report on achievements and is generally
consistent year on year in its presentation of figures.

A number of issues to improve practices were raised for further
consideration. The issues relate to differing terminology, support
structures, external reporting and regulatory environments that
require different bases for reporting. These are being reviewed in
line with the changing business model within the Department for
Enterprise, Innovation and Networks.

On this last issue, the different approaches reflect the different
regulatory environments and operational needs. The new
Department records outputs relating to Jobs Created and Jobs
Safeguarded on three different bases, which reflect reporting
requirements. These are clearly disclosed within the Business
Plan and are:

       UKTI Jobs Created and Safeguarded are recorded at the
        point of securing an inward investment project for Wales, in
        accordance with UK wide requirements.



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       Certain grant schemes record the forecast creation /
        safeguarding of jobs at the point of project approval
        depending on scheme requirements.

       The remainder are recorded at the point when the job has
        been created or safeguarded.

Naturally outputs which are initially recorded at point of securing or
at point of project award may also be recorded when delivered –
typically in a later financial year. It is important to note that these
different recording stages are never added together to give a ‘total
job creation’ position, as this would be inappropriate.

It is worth noting, again, that new bases for reporting were
introduced last year for inward investment and property provision
to reflect best practice. This meant a move away from recording
outputs such as jobs created and private sector investment upon
initial occupancy or practical completion of premises, to recording
phased to match the client’s business plan, based on actual activity.

Significant work is underway to develop key performance
indicators for business-facing services for the new Department,
assisted through close consultation with business representative
groups.

A framework for performance tracking is being developed with four
primary areas;



 Macroeconomic Indicators                        Outputs Indicators
An understanding of the broad                  An understanding of the
direction of the Welsh economy              success of interventions by the
                                              Department for Enterprise,
                                              Innovation and Networks.


      Customer Service                      Internal Business Indicators
 An understanding of customer               An understanding of the profile
   perception of the services               of human resources to deliver
delivered by the Department for                      our business
  Enterprise, Innovation and
           Networks

This is work in progress until it has been possible to determine
baseline indicators and test the framework validity.

Preliminary research is being carried out to explore the tracking of
Gross Value Added in our client companies, which would be a
departure from traditional project-based monitoring, and would


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have implications for business processes involving research,
consultation and system development over the medium term.

Risk

During the coming year the Department will continue to develop its
approach to managing uncertainty and risk. This will allow the
identification of opportunities to add value as well as managing the
downside of risk.

Risk is inherently linked to all aspects of the Department’s work,
including strategy, operations and the resource capability of the
organisation. These linkages require trade offs between what the
Department can deliver in order to achieve its objective and the
resources it has available.

The Department continues to seek to develop new and innovative
ways of delivering outcomes and some projects will be more high
risk than others. Consideration of risks pertaining to individual
projects is an integral part of the project appraisal process.

We will continue to refine the Risk Registers and the processes
that ensure appropriate controls are in place to manage risk.

Approved Budgets

The current EIN programme budgets for 06/07 were approved in
December 2005 and were presented for approval on the basis of
Spending Programme Areas (SPAs) and Budget Expenditure Lines
(BELs). These, together with the indicative budgets for the
following two years are shown at Annex D. The approved budgets
show an overall EIN Departmental Expenditure Limit of
£1,057,561k. This is allocated as £453,085k capital and
£604,476k revenue.

The total EIN expenditure limit has been approved as a net figure
and as explained within Section 4, the delivery of many
programmes and projects is reliant on securing funding from a
number of sources, principally, grant funding from the European
Commission and self generated receipts from normal business
activity.

Whilst formal approval of programme budgets has been given on
the basis of Spending Programme Areas and Budget Expenditure
Lines, responsibility for budget management and project delivery
will be discharged through the various geographical and central
business areas across the Department.




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Delegated Running Costs

The programme budgets outlined in Annex D, exclude the
administration costs of running the Department. For 2006/07 EIN
will be required to operate within a total staffing costs budget of
approximately £57m. EIN’s senior management team will be
continually reviewing the opportunities to make efficiency savings,
thereby ensuring that EIN’s programmes and projects are targeted
and delivered in the most efficient and effective manner.

Proposed Future Budget Changes

At the time the budgets were approved, the detailed business
planning processes within the merging bodies were not complete.
Primarily because the business planning timetable and processes
in the each of the merging bodies were different. Consequently, in
attempting to bring the combined resources of the three merging
bodies together, it was acknowledged that there would need to be
a period of review, discussion and challenge, which would be on-
going throughout the months that followed the budget approval
timetable.

The detailed discussions and bidding processes that have taken
place since December and the identification and prioritisation of
projects and programmes have resulted in a need to make various
budget transfers and adjustments between Spending Programme
Areas and Budget Expenditure Lines. The effect of these changes
will be formally recognised in the ‘In Year Budget Motion’
scheduled for later in the financial year.

Significant amongst these changes is the inclusion of the ex-WDA
Land Division income and expenditure. These activities were not
previously reflected within the approved budgets of EIN, as this
activity was a separate self financing operation within the WDA and
as such its income and expenditure did not score within the
Assembly’s budgeting boundary. EIN’s land and property
managers have concluded that it would be reasonable to propose
an income and expenditure target of £39.8m. This will be formally
added to the budget later in the financial year.

EIN’s Infrastructure Activities and Receipts Target

Following the successful operation of the Land Division’s activities
as a self financing operation within the WDA, it has been agreed to
retain and extend this status to cover all other EIN infrastructure
activity relating to commercial property. This would include land
acquisition, disposal, the provision of site infrastructure and
property development and funding. This effectively means that the
Infrastructure activities within EIN are managed on a trading basis,
allowing the retention and recycling of its own self generated


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receipts to be subsequently used to meet the objectives of the
Infrastructure programme.

The proposed additional income target of £39.8m in relation to the
ex-WDA Land Division’s activities, together with the additional
capital receipts already identified as part of the approved budget
would increase the total level of income required to be generated
from EIN’s property activity to £64.8m.

In addition to the above, EIN has entered into two innovative
initiatives to fund projects in the delivery of the overall property
strategy. These initiatives, known as Welsh Investment Strategic
Partnership (WISP) and Dragon Properties LLP are partnership
agreements with the risks and rewards being allocated
appropriately between EIN and the private sector.

The WISP project will deliver, initially, some 400,000 sq ft of high
quality office and high technology business space in key locations
across Wales and the Dragon Properties partnership will undertake
small scale speculative development in the Objective 1 areas of
Wales.

Making the Connections: Efficiency Improvements.

The major areas of efficiency savings are closely linked to the
planned benefits from the mergers and the formation of the new
Department. These are:

    a) A single first point of contact with customers, with designated
       account managers to assist clients in accessing the full range of
       services, from the provision of premises to staff and
       management training and development.
    b) Shifting delivery as close to customers as possible through the
       regional offices and so improve our ability to respond to local
       needs, opportunities and distinctiveness.
    c) Bringing together capital grants (RSA, AIG, Section 4 Tourism
       Grant, Property Development Grant) into the new Invest Wales
       business area, as a single flexible investment fund for business.
    d) Further rationalisation of business support programmes into a
       single, specialist support fund with the flexibility to procure from
       private sector sources.
    e) Deriving synergies from bringing together Trade and Investment
       into the combined International Business Area.
    f) Drawing together marketing activities into a single Tourism and
       Marketing business area.

    In addition, the Property Funding Strategy has enabled a stepped
    increase in property development, as required by the Property
    Strategy, without an increase in Grant Funding. This will contribute
    to non cash releasing efficiency gains.


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HR Strategy

An outline HR Strategy has been developed for Enterprise,
Innovations and Networks, aligned to its business needs and
values. The strategy should enable the Department to support its
staff through building its capacity, culture and talent to deliver
improved services in a dynamic way in line with the objectives set
out in Wales: A Vibrant Economy, the Transport Framework,
Achieving our Potential and WEFO programmes. The
Department’s HR strategy will need to complement the WAG HR
strategy but also provide a distinctive approach to match the
Enterprise, Innovation and Networks context.

The aim of the HR strategy is to move towards a continuously
improving citizen-centred organisation, with a culture of
empowerment, collaboration and a structure which is flexible.

Learning and Development

Our success depends on getting the best out of everyone and we
will only improve our business through the development of our staff.
We will ensure that all staff receive the learning and development
they need to enable them to carry out their jobs effectively in order
to meet our business objectives, and for their longer term career
development.

Health and Safety

Our aim is to provide our people and visitors with the safest and
healthiest working environment, maintain excellent standards in
Health and Safety and to actively seek ways of improvement. We
will ensure that all our staff receive appropriate training about
Health and Safety issues relating to their work and allocate
resources to ensure continual improvements in Health and Safety
and reduction of Health and Safety risks.

A new Health and Safety Strategy for the Department will be drawn
up for 2006-07. This will build on the good practice that existed
within the merged organisations and the network of Health and
Safety Champions in the offices around Wales. An objective of the
Department for Enterprise, Innovation and Networks will be to put
in place the components to achieve the OHSAS 18001:1999
specification framework. This occupational Health and Safety
assessment series will provide us with the ability to measure our
own occupational Health and Safety management systems against
expected levels.




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                                                                                                                                                                                                                ANNEX A
                                                                 Department for Enterprise, Innovation and Networks
                                                                                Structure April 2006
                                                                                                                     Director EIN
                                                                                                                     Gareth Hall




                                                    Director, Policy                                                         Interim Chief                                    Director,
                                                      & Strategy                                                               Operating                                      Corporate
                                                     James Price                                                                Officer                                      Management
                                                                                                                            Sharon Linnard                                   David Childs


  Director,         Integrated         Strategy &         Business       Transport &     e-wales         Energy Wales
Heads of the         Delivery           Review             Policy       Infrastructure   Director           Director                      Finance
  Valleys              David            Tracey             Steve         Piers Bisson    Michael              Ron                         Wales plc
Patrick Lewis        Swallow             Burke             Webb                           Eaton            Loveland                                               Director                   Director               Director
                                                                                                                                                                 Transport                  Tourism &                WEFO
                                                                                                                                                                Robin Shaw                  Marketing              Bob Macey
                                                                                                                                                                                            Jo Jones
                                 Regional Directors EIN


       North &               Mid &             South East &          South West &                      Director,         Knowledge               Director                                    Director,
      Enterprise          Regeneration         Infrastructure        Marina/Energy                   International        Bank and            Invest Wales                                   Marketing
      Vanessa               Geraint                Karen             Eleanor Marks                  Business Wales       Innovation              Sharon                                     Roger Pride
       Griffiths            Davies                Thomas                                             Ian Williams          Team                  Linnard




                                                                                                                                Director            Director       Director Rail       Director             Director       Director
                                                                                                                               Transport             Roads            & New           Planning &          Programme       Finance &
                                                                                                                              Planning &            Network           Roads            Strategy           Management      Corporate
                                                                                                                             Administration       Management       Tony Parker         Damien             Gretel Leeb      Services
                                                                                                                                Simon             Robert Cone                          O’Brien                           Helen Usher
                                                                                                                                Shouler




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                                                                  ANNEX B

                    WALES: A VIBRANT ECONOMY

         EXECUTIVE SUMMARY OF RESPONSES TO THE
                     CONSULTATION

The Consultation

The consultation sought to engage the individuals, businesses,
organisations and communities in Wales that will ultimately drive
economic growth, to influence the economic development policies
and programmes, including making best use of the new EU
Convergence programme post 2006.

Over 140 written responses were received to the consultation. A
synthesis of these responses has been produced, containing a full
list of respondents. This document can be accessed from the
Welsh Assembly Government’s web site (www.Wales.gov.uk). The
Executive Summary is contained at Annex B of this plan. Full
versions of all the responses can be obtained from the Publications
Centre, Room 3.022, Welsh Assembly Government, Cathays Park,
Cardiff, CF10 3NQ.

In addition to the written responses submitted, the Assembly
Government participated in over fifty events across Wales,
including stakeholder seminars, presentations and individual
meetings such as trade bodies, businesses, trade unions, regional
fora, voluntary organisations, statutory bodies and individuals.

Many respondents believe that W:AVE provides an excellent
framework for policy development and delivery. They believe that
the clear vision, sound economic analysis and the excellent use of
evidence marks an important step change in strategy and policy
development.

There is widespread support for measuring growth in employment
and earnings as these relate directly to quality of life. While many
recognise that W:AVE is a strategic framework there is an
understandable expectation that this should now develop the
agenda going forward into clear actions plans, timetables, and
revenue streams.

The spatial dimension and local priorities

The importance of addressing local priorities by tailoring economic
development programmes to meet differing local circumstances is
widely welcomed by respondents, as is the improved analysis of
regional and spatial dimensions.



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Many respondents stress the importance of working flexibly in
partnership with local agencies and organisations to deliver
national strategies at a local level.

Ensuring the effectiveness of delivery and the integration of spatial
plan groups, community strategies, and local authorities so as to
best co-ordinate and target effectively national, regional and local
areas is recognised as a key challenge going forward as is joining
up policy agendas and initiatives across the different departments
of the Welsh Assembly Government and key stakeholders.

Consideration of agglomeration effects as means of understanding
and explaining what contributes to regional differences in Wales is
appreciated, and their potential to deliver greater benefits in north
east Wales and south east Wales is valued.

Some local authorities stress the prime strategic role of city regions
in Wales while others hold that less attention should be paid to
those areas where the commercial markets will continue to operate
unaided and more emphasis should be placed on stimulating
growth in the valleys and peripheral areas. These latter are
pleased with the recognition in W:AVE that those areas, such as
the Heads of the Valleys, suffering from weaker economic
performance will require specific specialist support and targeted
interventions to encourage investment and narrow the divide.

While many welcome the improved regional analysis of Wales
some feel that WAVE could be strengthened by a specific analysis
of the rural economy, and in and out migration patterns across
Wales.

It is widely believed that tracking indicators developed in WAVE
are sensitive enough to detect regional variations to national trends
and provide the opportunity to disaggregate data at a regional and
sub regional level, as well as by gender, age, and ethnicity to
ensure that positive changes in one area do not mask weaker
performance elsewhere.

Economic Inactivity

There is widespread support for our commitment to supporting job
creation and helping individuals to tackle barriers and disincentives
to participation in the labour market, while recognising that that
paid work is not always the appropriate option for some people.

Numerous respondents noted that while overall trends in
unemployment and to a lesser extent economic inactivity, are
downward there remain groups such as older people or disabled
people where unemployment and inactivity has not fallen. The
requirements of certain groups who continue to face barriers


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preventing their full participation in the labour market such as, but
not exhaustively, ethnic minorities, older people, women, lone
parents and carers, people with health including mental health
problems, younger people, agency, and especially migrant,
workers, and ex-offenders should be considers in the design and
implementation of employment policies.

While removing these barriers is or will soon be a legal requisite for
some groups, many respondents emphasised that removing
barriers to participation should be seen as liberating economic
potential rather than state intervention and the Assembly
Government must play a key role in making this distinction. The
potentiality and untapped reserve of disadvantaged groups such as
older people, women or refuges is a point made strongly by many
bodies.

Previous policy interventions to help economically inactive people
have sometimes operated on a tacit acceptance that the vast
majority of Incapacity Benefit (IB) claimants will remain on IB, and
that previously strategies have tended to concentrate on the
easiest to target. Many point favourably to new initiatives in
Bridgend and Rhondda Cynon Taff Pathways area that identified a
cohort of people who first claimed IB in early 1990’s as important,
precisely because these groups may have been previously
disregarded.

The value of the unpaid work which economically inactive people
do must also not be overlooked, for instance, 14% people in
receipt of IB are carers themselves.

It is imperative that good support mechanisms to reduce barriers to
learning and work, such as good quality affordable childcare, and
improving our links to the childcare strategy are developed and
implemented.

Some respondents argue that we should give greater emphasis to
measures preventing those in work from becoming economically
inactive, and greater prominence to the role of occupational health
and other health care professionals in delivering this framework at
both strategic and operational levels.

Our emphasis on the idea that providing opportunities to
economically inactive people through lifelong learning and raising
skills levels is intrinsic to the future successful and sustainable
economic development of Wales is also welcomed. Tackling
occupational segregation and gender pay gap to ensure a stronger
skills base and help fill remaining skills gaps is imperative.

Some respondents wish to emphasise the importance of adult
learning in the voluntary sector and to note the contributions made


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by the voluntary sector and community organisations to supporting
individuals’ entrance in the labour market and their engagement in
learning as a first step back into employment. It is also noted that
more support could be offered for the intermediate labour market
such as volunteering, work experience. Other respondents point to
a need for greater recognition of the added value of employment
and benefits advice services in helping individuals out of economic
inactivity.

Both Want2Work and Pathways to Work are very much welcomed
by respondents, with targeted initiatives tailored to the needs of
specific groups more likely to success than one size fits all. There
is widespread backing for continued support and expansion for
these pilots.

Equality and Diversity

Whilst many of the comments on economic inactivity concerned
equality and diversity as outlined above, a number of other issues
were raised through the consultation process:

   transport – whilst the recognition that a sustainable integrated
    transport system has social benefits, a number of issues
    around accessibility were raised.
   education and skills – the focus was on further reducing the
    barriers to learning, recognise the contribution of the voluntary
    sector and community organisations, supporting intermediate
    labour market, tackling occupational segregation and the
    gender pay gap, fostering stronger links with the Older People’s
    Strategy.
   raising earnings and the quality of jobs – the need to address
    gender stereotyping and occupational segregation was raised,
    along with more flexible working.
   public sector – the importance of the public sector leading by
    example in relation to equality and diversity.
   enterprise – the benefit of working with disadvantaged groups
    to start and grow businesses was highlighted, as well as ways
    to mainstream best practice into other business support
    services. The development of the social enterprise sector and
    the importance of self employment for older people was raised.
   structural funds – the importance of equality as a cross cutting
    theme was stressed, along with the opportunities presented by
    the next round of EU Structural Funds.
   indicators – requests for the Assembly Government to make
    available data on gender, race and disability to allow progress
    to be monitored.




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Transport

The strategic importance of an integrated and sustainable transport
system to the economy is widely appreciated. The new transport
strategy and the substantial infrastructure improvements are
welcome by many respondents. Several see interconnectivity
within Wales, with the rest of the UK, and internationally as an
issue which should be explored further with a view to improving
existing road infrastructure and making the best use of transport
services by way of improved management. The centrality of
improvements in connectivity for rural areas is also singled out as a
matter of concern.

The suggestion that road pricing might be introduced as a tool for
infrastructure improvement raises many concerns from
respondents; they wish to point out that such schemes should not
replace pre-existing budgetary responsibilities and that any road
pricing scheme should form part of a coherent transport system to
reduce congestion and not act as revenue raising scheme.

Some respondents remark that improvements to transport
infrastructure may prove futile unless there are corresponding
improvements in the logistics sector targeting in particular the skills
gaps found in new recruits.

Respondents are generally pleased with the recognition that a
sustainable integrated transport system has social benefits and
that improving accessible transport services for key groups such as
rural communities and people with disabilities is vital.

Creating a favourable business environment

Many respondents welcomed the emphasis in WAVE on the
importance of creating a favourable business environment as it is
imperative that the private sector is given room to develop and
grow, and afforded the best possible business environment in
which to do so.

It is here that the Welsh Assembly Government can be most
effective in developing the economy of Wales - by creating a
supportive business environment in which the private sector can
thrive.

Some respondents felt that traditionally, there have been too many
strands of funding support and the targeting funding support
initiatives that are being developed by the new Department are
welcomed.

Support for HEs’ roles as providers of world class research and
teaching, and suppliers of graduates whose numbers and graduate


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level skills are crucial for the future economic of the Welsh labour
force move should move higher up W:AVE priorities.

The provision of good quality business premises for inward
investment and business investment is key to the knowledge
economy as is ICT as an enabler technology.

High quality of managers and leadership skills are key drivers for
economic growth. Management and leadership skills must be
improved at all levels in all sizes of organisations and not be
confined to senior executives. References to entrepreneurship and
innovation need to be made in recognition that it is people, and
particularly managers and leaders, who are innovative and
entrepreneurial.

The economy of north east Wales is underpinned by a small
number of global manufacturing companies; action to maintain
competitiveness and attractiveness of the area for indigenous
business and diversification is therefore vital.

Given the fundamental issues surrounding manufacturing the
Assembly Government should also develop a specific
manufacturing strategy.

Housing

The impact of housing on Welsh Economy, particularly the
opportunities associated with reaching the Welsh Housing Quality
Standard to create sustainable jobs, provide training, regenerates
some of Wales’ most marginalised communities, could be further
developed in WAVE; the importance of supply and affordability of
housing should be given greater prominence as a critical issue to
employment growth.

Sustainable Development agenda

Respondents commented that the Assembly Government’s
commitment to sustainable development posed particular
challenges and opportunities for economic development. Some
respondents note the need to ensure that all economic
programmes and policies support sustainable development by
integrating consideration of the social and environmental impacts
of policies with traditional economic analysis. Pursuing approaches
that play to the strengths of the environment of Wales was also
highlighted..

Some respondents stressed the need to ensure that the strategic
framework set out in W:AVE was not taken forward in a way that
promotes unsustainable growth and resource use. We are clear
that this will not be the case and as W:AVE sets out, we will work


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to develop a low carbon economy. In particular, the Assembly
Government should be active in facilitating investment in clean and
renewable forms of energy generation coupled with support and
advice on energy efficiency for businesses to improve their
resource efficiency.

Developing a low carbon economy in all its aspects, including
transport, will become of increasing importance as will efficient
waste management

It is proposed that mechanisms are devised to ensure that
programmes and strategies put forward will indeed meet the
Assembly's aspirations for sustainability.

Although not a devolved issue the future Energy Policy will also
have a major impact on the Welsh Economy particularly with the
likely decommissioning of Wylfa Power station and its negative
impact on north west Wales.

Public procurement

The importance of public procurement to the Welsh economy is
noted; it is suggested that the Welsh Assembly Government should
make it a priority to adopt a public procurement policy which would
assist manufacturing and services in Wales and community owned
social enterprises thereby ensuring that a high proportion of Welsh
public procurement contracts are awarded to Welsh firms. It has
also been suggested that we should track the amount of public
sector business being won by Welsh based organisations.

The public sector

The size of the public sector in Wales should be tracked and added
value from public sector investment sought; there should be further
research into the costs the public sector might have on businesses
such as, indirectly, raising wage costs.

Structural Funds related responses

There is broad agreement among the respondents on the structural
funds priorities outlined in WAVE. Many organisations expected
the Wales Spatial Plan to be key in identifying strategic projects,
with the projects delivered by organisations in partnership at all
levels including regional, sub-regional and local levels. Many
respondents feel that the local initiative element should not be lost
in the push for strategic projects and that the system of match-
funding should be improved and simplified. An equal opportunities
cross-cutting theme should be maintained in all strategic and
operational programme strategies.


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                                                                  65
                                                                  ANNEX C

        PROPOSED PRIORITIES FROM DRAFT NATIONAL
           STRATEGIC REFERENCE FRAMEWORK


The priorities proposed for West Wales and the Valleys are:
    Improving knowledge and innovation for growth -
      including Research and Development, entrepreneurship,
      business finance and sectoral development. (ERDF)
    Creating a favourable business environment - including
      transport, Information Communication Technology, clean
      and renewable energy, environmental goods and services,
      environmental protection and improvement, waste, maritime
      and inland waterways (ERDF)
    Building sustainable communities - including business
      sites, urban and rural regeneration and community
      development (ERDF)
    Increasing employment and tackling inactivity –
      including tackling barriers to employment, childcare,
      promoting healthier lifestyles and promoting equal
      opportunities (ESF)
    Improving skill levels – including the transition from school
      to work, improving basic skills and addressing skills gaps.
      (ESF)
    Improving administrative capacity of public
      administrations and services – including targeted
      investments in skills, expanding electronic access, and
      improving dialogue and co-operation (including shared
      services) (ESF)

The priorities proposed for East Wales are more limited in their
focus and are linked to:
     Building the knowledge based economy – focus primarily
       on Research and Development and innovation (ERDF)
     Enhancing the environment - includes community
       regeneration, clean and renewable energy, environmental
       goods and services, environmental protection and
       improvement and waste management (ERDF)
     Promoting accessibility – includes integrated transport
       initiatives and Information Communication Technology
       (ERDF)
     Increasing employment and tackling inactivity (same as
       for West Wales and the Valleys) (ESF)
     Improving skill levels (same as for West Wales and the
       Valleys) (ESF)
In implementing each priority, account will be taken of the need to
address equal opportunities for all and environmental
sustainability.



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                                                                        ANNEX D

                 ENTERPRISE, INNOVATION & NETWORKS –
                   MAIN EXPENDITURE GROUP BUDGET


                                      2006-07     2007-08                            2008-09
                                        Final    Indicative                         Indicative
                                      Budget       Budget                            Budget
Budget Expenditure Line                £000’s      £000’s                             £000’s
            REVENUE BUDGET - Departmental Expenditure Limit

Innovation, Design and Technology -
Revenue                                                       10,884      10,884       10,884
Energy and Environment                                         5,520       6,370        6,370
Economic Research and Evaluation                                 645         645          645
Innovation & Competitiveness - Revenue                        21,391      21,391       23,991
Knowledge Exploitation Fund                                    9,500       9,500        9,500
Finance Wales                                                  6,400       6,400        6,400
Innovation and Competitiveness                                54,340      55,190       57,790

Entrepreneurship - Revenue                                    20,562      21,512       20,512
Finance Wales                                                      0           0            0
Entrepreneurship                                              20,562      21,512       20,512

Public Sector Network                                              0           0            0
e Wales Research and Evaluation                                1,020       1,020        1,020
Broadband Telecommunications                                  14,680      12,680       12,680
Broadband Telecommunications
Depreciation and Cost of Capital                                 282         282          282
Telecommunications Infrastructure                             15,982      13,982       13,982

Property Related Infrastructure - Revenue                     (7,000)     (7,000)      (7,000)
Property Related Infrastructure - Revenue                       6,274       6,274        6,274
Depreciation / Cost of Capital                                32,059      32,059       32,059
Provisions                                                      1,100       1,100        1,100
Property Related Infrastructure                               32,433      32,433       32,433

Regeneration Support - Revenue                                    978        978           978
Transfers from Local Government to CBDC -
Revenue                                                       10,166      10,166       10,166
Regeneration Packages - Revenue                                4,000       1,000        2,000
Regeneration Packages                                         15,144      12,144       13,144

International Trade                                             6,478      6,478         6,478


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                                                          2006-07        2007-08      2008-09
                                                            Final       Indicative   Indicative
                                                          Budget         Budget       Budget
Budget Expenditure Line                                    £000’s         £000’s       £000’s
International Relations                                        1,381         1,381        1,381
Miscellaneous European Support Services                          261           261          261
Domestic and International Investment                        13,863         16,026       16,026
Domestic and International Business
Promotion                                                     21,983       24,146       24,146

RSA - Projects and Business Improvement
Support                                                           241         241          241
WTB Current Expenditure                                           500         500          500
Support for Employment Creation                                   741         741          741

WTB Current Expenditure                                       13,524       13,524       13,524
WTB Current Receipts                                           (400)        (400)        (400)
WTB Depreciation/Cost of Capital                                 215          215          215
Tourism Promotion                                             13,339       13,339       13,339

Winning Wales - Project Budget                                    625         625          625
Pathway to Prosperity Fund Match Funding
Revenue                                                       12,215       12,215       12,215
Euro Facilitators                                                500          500          500
Local Authority Projects - March Funding
Revenue                                                        1,250        1,250        1,250
European Match Funding                                        14,590       14,590       14,590

European Regional Development Fund                            60,676       61,026       61,026
European Social Fund                                          71,895       71,895       71,895
European Structural Funds Programme
Support                                                          779           779          779
FIFG                                                           1,684         1,684        1,684
EAGGF                                                         13,981        15,631       15,631
EU Structural Funds                                        (148,236)     (150,236)    (150,236)
Structural Funds Partnership                                     725         1,225        1,225
European Funding                                               1,504         2,004        2,004

Design, Build and Operate Roads: Shadow
Tolls                                                         16,000       16,000       16,000
Routine Maintenance                                           28,900       28,900       28,900
Programme Support (Maintenance)                                1,915        1,915        1,915
Roads Depreciation and Impairments                           150,168      150,168      150,168
Maintaining the Trunk Road Network                           196,983      196,983      196,983



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                                                          2006-07            2007-08       2008-09
                                                            Final           Indicative    Indicative
                                                          Budget             Budget        Budget
Budget Expenditure Line                                    £000’s             £000’s        £000’s
Studies - Revenue                                                 51                 51            51
Purchase of Land and Buildings (including
costs of transfer of ownership)                                   185              185           185
Programme Support - New Construction and
Improvement                                                     1,256            1,256         1,256
Receipts                                                        (380)            (380)         (380)
Improving the Trunk Road Network                                1,112            1,112         1,112

Revenue Support - Rail and Air                               144,643          144,793       144,793
Improving Rail and Air Services                              144,643          144,793       144,793

Programme Support - Local Transport                            2,020             2,020         2,020
Bus Revenue Support                                           27,774            29,324        29,324
Concessionary Fares                                           38,448            40,648        40,648
Improving Integration and Delivery of
Local Transport                                               68,242            71,992        71,992

Programme Support - Road Safety                                   363              363           363
Improving Road Safety                                             363              363           363

Environment Improvement Schemes                                 2,425            2,425         2,425
Improving the Quality of the Local
Environment                                                     2,425            2,425         2,425

Walking and Cycling - Revenue Support                                  90           90            90
Supporting Walking and Cycling                                         90           90            90

Total Resources - Enterprise,
Innovation & Networks                                      604,476           607,839       610,439

                CAPITAL BUDGET - Departmental Expenditure Limit

Innovation Design and Technology -
Investment                                                      8,000           10,200        10,200
Innovation Design and Technology - Capital                      8,000                0             0
Innovation and Competitiveness - Capital                          430              430           430
Innovation and Competitiveness                                16,430            10,630        10,630

RSA projects and Business Improvement
Support - Investment                                          11,748            11,748        11,748



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                                                          2006-07            2007-08      2008-09
                                                            Final           Indicative   Indicative
                                                          Budget             Budget       Budget
Budget Expenditure Line                                    £000’s             £000’s       £000’s
NLF/PDC - Entrepreneurship Investment                          1,000             1,000        1,000
Entrepreneurship                                             12,748             12,748       12,748

Telecommunications Infrastructure
Investment                                                      3,056           3,056        3,056
Telecommunications Infrastructure                               3,056           3,056        3,056

Property Related Infrastructure - Capital                     12,523           12,523       12,523
Property Related Infrastructure - Investment                  20,352           20,352       20,352
Property Related Infrastructure - Capital
Receipts                                                      (5,000)          (5,000)      (5,000)
Property Related Infrastructure - Investment
Receipts                                                    (13,000)          (13,000)     (13,000)
Property Related Infrastructure                               14,875           14,875       14,875

Regeneration Support - Capital                                29,544           29,544       29,544
Regeneration Support - Investment                              7,671            7,671        7,671
Transfers from Local Government to CBDC -
Capital                                                        5,653            5,653        5,653
Regeneration Packages - Investment                             1,500                0            0
Regeneration Packages - Capital                               15,000           17,000       17,000
Regeneration Packages                                         59,368           59,868       59,868

RSA Projects and Business Improvement
Support                                                       50,236           50,236       50,236
WTB Capital Expenditure Investment                             3,550            3,550        3,550
Support for Employment Creation                               53,786           53,786       53,786

A Winning Wales - Project Budget
Investment                                                             40          40           40
Pathway to Prosperity Fund - Match Funding
Investment                                                      3,360           3,360        3,360
Pathway to Prosperity - Match Funding
Capital                                                         3,425           3,425        3,425
Local Authority Projects - Match Funding
Capital                                                       32,338           32,338       32,338
European Match Funding                                        39,163           39,163       39,163

European Regional Development Fund -
Investment                                                    80,537           53,241       53,241
European regional Development Fund                             3,185           30,131       30,131


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                                                          2006-07        2007-08      2008-09
                                                            Final       Indicative   Indicative
                                                          Budget         Budget       Budget
Budget Expenditure Line                                    £000’s         £000’s       £000’s
Capital
EAGGF - Investment                                             1,650             0            0
EAGGF - Capital                                                  250           250          250
EU Structural Funds                                         (85,622)      (83,622)     (83,622)
European Funding                                                   0             0            0

Repair and Strengthening Programme                             7,592        7,592        7,592
Renewal of Roads and Bridges                                  27,800       27,800       27,800
Purchase of Vehicles and Equipment                               370          370          370
Maintaining the Trunk Road Network                            35,762       35,762       35,762

Studies - Capital                                               1,000        1,000        1,000
New Construction and Improvement
Programme                                                     56,820       61,683       61,683
Upgrade Programme                                              9,406        9,406        9,406
Purchase of Land and Buildings (including
costs of transfer of ownership)                                7,030        7,030        7,030
Receipts                                                       (890)        (890)        (890)
Improving the Trunk Road Network                              73,366       78,229       78,229

Rail and Air Investment                                       12,178       12,178       12,178
Rail and Air Capital                                           8,100       21,600       21,600
Improving Rail and Air Services                               20,278       33,778       33,778

Capital Grants (Local Roads)                                  60,043       52,443       52,443
Roads - General Capital Funding                               19,809       19,809       19,809
Improving Local Roads                                         79,852       72,252       72,252

Capital Grant (Local Transport)                               20,700       15,200       15,200
Improve Integration and Delivery of Local
Transport                                                     20,700       15,200       15,200

Trunk Road s - Road Safety Improvement
Schemes                                                         4,401        4,401        4,401
Capital Grants - Road Safety                                    8,150        8,150        8,150
Improving Road Safety                                         12,551       12,551       12,551

Environmental Improvement Schemes                               1,650        1,650        1,650



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                                                          2006-07        2007-08      2008-09
                                                            Final       Indicative   Indicative
                                                          Budget         Budget       Budget
Budget Expenditure Line                                    £000’s         £000’s       £000’s
Improving the Quality of the Local
Environment                                                     1,650        1,650        1,650

Trunk Roads Cycling Infrastructure Schemes                      3,900        3,900        3,900
Capital Grants - Walking and Cycling                            5,600        4,100        4,100
Supporting Walking and Cycling                                  9,500        8,000        8,000

Total Capital - Enterprise,
Innovation & Networks                                      453,085       451,548      451,548

Resource Budget - Annually Managed
Expenditure
                                                          2006-07       2007-08      2007-08
                                                           Final         Final        Final
Budget Expenditure Line                                   Budget        Budget       Budget

Roads - Cost of Capital                                      338,000      349,000      349,000

Maintaining the Trunk Road Network                           338,000      349,000      349,000

Total Resource - Annually Managed
Expenditure                                                  338,000      349,000      349,000




                                                          2006-07       2007-08      2007-08
Enterprise, Innovation and                                 Final         Final        Final
Networks - Summary                                        Budget        Budget       Budget

Revenue DEL                                                  604,476      607,839      610,439
Capital DEL                                                  453,085      451,548      451,548
Total DEL                                               1,057,561 1,059,387 1,061,987

Annually Managed Expenditure                                 338,000      349,000      349,000

Total Enterprise, Innovation and
Networks                                                1,395,561 1,408,387 1,410,987




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