Thursday, 21 October 2010

How this week's announcements affect Ynys Môn

This week has seen not just the Comprehensive Spending Review but also the the first Strategic Defence Review since 1998 and some significant announcements on energy policy. Lets take a look at them in the whole and see how Ynys Môn has fared:

Energy Policy

Last week the Health and Safety Executive announced a two year extension to the lifetime of Wylfa's existing pair of reactors -- hugely good news for Anglesey. Furthermore, whereas Chris Huhne this week scrapped the Severn Barrier project in South Wales, Wylfa was given Preferred New Nuclear Site status. Ynys Môn couldn't have asked for more.

Strategic Defence Review

Although all three services will be pruned back, the Treasury has confirmed that one of Anglesey's largest employers, RAF Valley, will remain in service. So far so good.

Comprehensive Spending Review

- Welsh Assembly budget 

According to the actual Treasury documents released yesterday the Welsh Assembly budget (excluding depreciation figures) will rise from £13.3bn in 2010/11 to £13.5bn in 2014/15, which is equivalent to a cumulative reduction of -7.5 percent in real terms over that period. Considering that the average departmental cut over the same period was -19 percent, as Betsan Powys says, "there is no question that on the revenue, or day to day spending side, the settlement [for Wales] is better than the scenario they had been planning for". With cuts at less than 2 percent per annum it will now be up to Carwyn Jones and the rest of the Assembly Government to stop whinging and start doing what they are paid for: i.e. governing.

- Public Sector job losses

This may come as a surprise for many readers, but Anglesey actually has a rather well balanced economy in terms of not being overly reliant on just one sector:

Workplace employment by Industry - click to enlarge
source: WAG Regional Economic & Labour Market Profile, Aug 2010

Only 28% of working adults on Anglesey are employed by the public sector -- which makes Anglesey's much less reliant on the public sector than either Wales as a whole (35%) or even the United Kingdom (31%). As a consequence of this, Anglesey's economy will hopefully be far more resilient to any unfortunate public sector redundancies than anywhere else in North Wales bar Flintshire.

- Local Authority Spending

Due to cuts in local authority budgets, BBC News research suggests that Anglesey County Council's current budget shortfall of £3.3m will rise to £10m between 2011-14. It remains to see what effect this will have on council headcount and services, but we should note that this shortfall if true will be the joint smallest in Wales.

With respect to the council I would personally judge that the most significant cause for our concern is the ongoing instability and indecision caused by the political problems at Anglesey County Council. Not only is it not conducive to inward business investment, the absence of a clear planning policy framework is having serious consequences for potential developers with the effect of "locking jobs in filing cabinets". Without up-to-date planning policies Anglesey will continue to stagnate.

- Health

The coalition government has specifically ring-fenced health spending and will ensure it rises above inflation.  However the recently leaked McKinsey report revealed that that Welsh NHS is poorly managed politically, in addition it appears the formation of the Betsi Cadawaladr University Health Board has meant that all North Wales hospitals (including Ysbyty Gwynedd) are now suffering due to the significant budgetary problems at Ysbyty Glan Clwyd. WAG says it may not have the budget to ensure that health spending Wales will be protected -- if so it will be time for it to reconsider whether Wales can continue to afford free prescriptions and so on.

- Incapacity Benefit

The current long-term sick who are paid incapacity benefit if they have paid National Insurance contributions will now only get their benefit for one year before being means tested and either losing all their benefit or moved on to a lower Job Seekers payment. The below diagram compares the current take up of out-of-work benefits throughout Wales (source DWP data here):

Precent of population on out-of-work benefits: click to enlarge

As you can see on these indices Anglesey is pretty much in the centre ground in Wales and faring far, far better than some of the South Wales valleys where almost a third of the population is on some kind of out-of-work benefits. Even so with 8.9 percent of Anglesey residents claiming incapacity benefit, we will have to see what effect this clamp down on incapacity benefit will have here.

- Pensions

By the year 2020 men and women will not receive the state pension until the age of 66. Pensions will be protected and a temporary increase in cold weather payments for pensioners will be made permanent and other payments including free eye tests, prescription charges and bus passes remain. As Anglesey has a larger than average population of retirees, this is a good thing for us.

- Overall

Obviously this is not a comprehensive review of all of yesterday's announcements and there are other spending categories (e.g. policing) for which I have not been able to track down accurate figures yet -- so if you have any more accurate information please do post it below.

As many readers will know I have argued for some time that in order to secure our future economic growth, action needs to be taken to reduce the deficit and tackle our national debt. Accordingly, including the contribution from the permanent levy on banks, I also accept that all regions must bear their fair share of that pain -- including Anglesey. My first impressions are that although yesterday's measures are tough, when we take those decisions in the round and include the recent announcements concerning Wylfa and RAF Valley, it does not superficially appear that Ynys Môn has been disproportionately hit. I could be wrong though and would be interested to hear if anyone does think that Anglesey will be disproportionately affected?


TGC said...

It's a lovely post, but I have to take issue with the following statement:

"Anglesey's economy will fortunately be far more resilient to any public sector redundancies than anywhere else in North Wales bar Flintshire"

On a simple numbers-for-numbers assessment, that's probably true. But what it fails to take into account is the availability of alternative, probably private sector jobs to fill the gap.

Lose your job on Anglesey, especially if you are in a 'professional' position in the public sector, and the chances of getting something equivalent in the private sector is effectively nil. That isn't the case if you live further east, where access to Chester and employment markets is much easier (and less costly).

The Red Flag said...

I wonder if you could just clarify your figures for public sector for me Druid :- Only 28% of working adults on Anglesey are employed by the public sector -- which makes Anglesey's much less reliant on the public sector than either Wales as a whole (35%) or even the United Kingdom (31%).

The figures off the Government for public sector employment are (expressed as a % of available workforce actually in current employment):-

UK 21.1% broken down by region as:-

England 20.1%
Scotland 25.2%
Wales 26.6%
N. Irleand 29.7%

Which are an all together more believable set of percentages. I wonder if you could tell me where you got yours from? (Mine are ONS).

Maybe different departments are not counting the same things the same way (wouldn't surprise me)

The Druid of Anglesey said...

TGC - it's a very fair point and indicative of Anglesey's decline over a long period. It also reinforces how important sorting out the council's problems are in addition to the completion of a strategically forward-looking planning framework. One cannot be done without the other and currently they both conspire to create a business-unfriendly environment on Anglesey, no matter the good work of the Economic Development department.

Red Flag - the figures come from the Assembly's own latest Regional Economic and Labour Market profile for North Wales, downloadable here:

See Table 19.

The Red Flag said...

Well there you go Druid. One part of the Government (WAG) says one thing, another (ONS) says another.

Why does that come as absolutely no surprise to me at all.

The Red Flag said...
This comment has been removed by the author.
The Red Flag said...

ruid - You can see in this report that your assertion that Anglesey is not as reliant on public sector jobs as most (if not all) of Wales is quite correct.

You'll enjoy it I think. Although only six pages it's very informative - especially the graphics (which we know you like)

The Druid of Anglesey said...

Red Flag - very interesting, many thanks.

Anonymous said...

Senior Officers in the IACC planning Department are extremely worried about the announcement...they anticipate a reduced departmental budget and almost certain job losses........!

The Red Flag said...

Druid my apologies - the link was incomplete

Anon 20:34 - by virtue of that report there will be at least 323 jobs lost on Anglesey in the public sector by 2016.

Between the Lines said...

Druid, I can understand about the Severn Barrier being scrapped. I attended a seminar regarding tidal power a few years ago. The problems with the barrier were plenty, this was from the design consultant. Turbine gearing due to ebb and flow tides, sedimentation due to lack of suspension energy for sediments, upstream sedimentation turning the Severn estuary into a delta.

No one has mentioned schemes on research to make this sort of scheme feasible and affordable. With a little thought we could make this a working solution to the future.

I am amazed the energy island guru Albert Owen hasn't thought of it???

With the School of Ocean Science on the island, the solution is staring us in the face. Let us invest in proper research into tidal lagooning and wave power. Let us get the true energy island potential released.

The Red Flag said...

and swipe from 'http' or the url will be incomplete

Anonymous said...

The best thing that could Have happened in this Country would have been to let the banks collapse, because we are all paying for it now!

Anonymous said...

The Welsh Assembly have sat and watched the funding for Wales evaporate in front of their eyes, this global economic mess was created by greed, and the greed continues, we will never learn, our future has been drawn out in the Cameron Cabinet and as far as they are concerned, our resources are spoken for, nuclear and water, but our people's future has been ignored.

Anonymous said...

As most of the WAGs have never had to make a business survive how on earth could they help a nation survive. IWJ offers a good example with his "we don't need exports policy". There is something about them which sounds like bankers.

Anonymous said...

Certain contributors here are unable to reconcile the truth and they pick and choose their way through life.

Reality was that Tony and Gordon were driving the gravy train

Fact....they ran out of fuel a long time before they declared the train was chuffed out.

These guys were the subject of MI5 files in the 1970's because they had dangerous you know why!They betrayed Britain and some of you are denyers!

Anonymous said...

Now we Know why Anglesey County Council is allowed to get away with so much corruption when we see the above posts.

The Red Flag said...

As most of the WAGs have never had to make a business survive

There is an awful awful lot of truth in that. I had my own business years ago and I know for a fact that unless you've done it yourself you have absolutely no idea.

I employed half a dozen people (which is actually more than the overwhelming majority of most SMEs). During my time every sngle politician I met (of all main parties) didn't know what they were on about and as a rule spoke bollocks.