28/06/2012 Dragon's Eye


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Is the Welsh economy suffering in the name of ideology? This is


Good evening. Welsh businesses are missing out on over �2 billion


worth of public contracts because of the Welsh Government's


ideological antipathy and opposition, according to the


employers organisation the CBI. It's told Dragon's Eye that


businesses and services are sufferinging -- suffering because


the Welsh Government is against using private companies to deliver


public services. Arwyn Jones reports. Bong the Welsh Government


and Councils spend billions every year and it goes on all kinds of


services and goods, from furniture to litter collecting. It has to be


paid for and it's big business worth nearly �4.5 billion every


year. Some of those services are provided by councils in Wales, for


example this recycling facility. What if businesses could over the


same service? Perhaps offer it more cheaply, perhaps even offer a


better service. At the moment around half of the money gez to


businesses around Wales. The remainder stays in the public


sector or goes to companies from elsewhere. The group representing


business leaders in Wales the CBI says companies here are missing out


on a key injection of cash, which could help them to grow their


businesses, create jobs and drive the economy forward. They think the


reason lies with the Welsh Government's political stance.


jort of our members would feel that it's ideological and political. A


few businesses would say there is an antipathy and opposition to


using the private sector to deliver public services near Wales. That's


probably the overriding factor for many. They say it's also harming


public services. In many areas it could be delivered better, but I


think people aren't prepared to sit down and find out how it could be


delivered better, saving money, providing better service, because


certain parts are just ideologically opposed to it.


England, the UK Government want to see more of an open-door policy


towards allowing businesses to deliver public services. It's


something which should now come to here, according to the Secretary of


State for Wales. I think the CBI has a very good point on this.


There's no doubt about it, the ideology and the stated policy of


the Welsh Government is to deliver through the state as a machine.


That's such an old fashioned idea. It was interesting to read what the


Prime Minister said the other day, when he was talking about opening


up public services, which is what the UK Government wants to do.


it isn't just about accusations of ideology. Others complain of too


much bureaucracy in Wales. This company employs almost all workers


locally. They've decided that Scotland is a more lucrative market


because the process of working with the Government there is so much


easier. Up in Scotland, according to our experience, there seems to


be less delays within the planning process. That has meant that a lot


of projects are in the development stage now and actually,


construction stage now I mean, and are actually creating jobs for


companies like us. We have managed to win a number of these contracts


up there. If I was a businessman looking for a public sector


contract in Wales the easiest thing to do is go onto this website. The


Welsh Government we're told three years ago that every public sector


contract should appear here. They say they've done. That but we're


told it isn't always the case. This man made that recommendation. He


says there needs to be a change of emphasis in how the purchasing


power of the Welsh Government and Councils operate. The taxpayer


always has to get value for money. That essential. But the key


performance indicators by which procurement officials and officers


are judged often just focus on that to the detriment of wider


objectives. For example, what our research would suggest is that if


the key performance indicators, the standards by which public sector


purchasers are judged when they carry out procurement activity, if


they were different, they might purchase differently. That could


have more benefit for Wales. According to the CBI if the Welsh


Government used more Welsh companies, it could create over


20,000 jobs. That, at a time when they're dearly needed.


Jane Hutt is the Welsh Government's Finance Minister. I asked whether


the CBI's suggestion that the Welsh economy is suffering because


ministers are ideologically opposed to the private sector delivering


public services is true? Absolutely not. In fact, Emma Watkins gave a


speech on procurement, because this is a key lever to grow the economy


and said we were moving in the right direction. Clearly, our


ambition for every public Welsh pound we have that should be there


to support the economy and to support Wales-based businesses.


Statistics prove we are making a difference. Currently Welsh


business gets around 52% of the public procurement budget. Do you


have a target to raise that? We've made progress because it was down


to 35% in 2003. That's gone up to 52%. As Emma Watkins has said for


every 1% you get a thousand jobs. In the latest statistics, when you


look at SMEs and the fact that they are benefiting enormously out of


public sector awards, if we looked at some of the money I announced


with the Wales infrastructure investment plan, for example, RBED,


an important regeneration scheme, a Welsh company, won that contract,


huge opportunities for local business. I'm sure they're very


pleased about that. But the fact is Emma Watkins is on Dragon's Eye


this evening saying that according to some of her members the Welsh


Government has ideological and political opposition to that. If


that isn't true, are there robust targthaets you're aiming for to


increase that, 52% of Welsh businesses getting the public


procurement budget to a higher amount, for example,, a 10% rise


would see an extra 10,000 jobs. Thafrpblgts would be excellent.


We're working to reduce and remove those barriers to procurement.


We've done good work on that and easing the way, simplyifying the


way thaw actually bid, the pre- icalification process. -- Pre-


qualification process. She said it's the outcomes we want, getting


the businesses at the forefront. She's right when shez supporting


the Welsh Government and wrong when she's criticised it? No, this is


about working in partnership. She sits on the economic renewal


council, along with the key players and they recognise, as we do, that


procurement is a key lever. It's interesting because I've asked the


Scottish businessman to come in and review our procurement to say are


we moving fast enough? Because anything we can do, we want to make


sure that Wales-based businesses secure those contracts. On that


point, then, in your programme for government, you promised to


implement the recommendations of a report designed tone sure that


Welsh business had a better chance of getting a bigger slice of the


cake. The author of that report has told us tonight that some parts of


the tendering ro ses are simply unfit for -- process are unfit for


purpose? He played an important part in assisting us and looking at


the barriers to procurement. We now have an open doors charter. We have


got the key policy in Wales which has been heralded as very


progressive, the community benefits policy. That means that anyone who


is investing, who does win contracts has an obligation to


ensure there's a supply chain for local businesss to benefit and for


local apprentices and also for the money to be spent in Wales and that


was recognised in File on Four recreptly. All these people are


crucial to help us achieve our objectives. You have to remember,


we face a situation where we've had a 40% cut in capital budgets.


That's why this is more important, isn't it? Absolutely. We're going


to the private sector, for example, principality is coming in and


funding our Welsh housing partnership. Thank you very much.


A former employee of the All Wales Ethnic Minorities Association has


won her tribunal against the organisation and the man who used


to run it, Naz Malik. Sylvia Bobrowka claimed that Mr Malik


(arecommenda was wound up earlier this year amid allegations of


financial irregularities. I spoke to Sylvia Bobrowka's solicitor and


asked him to explain the judgment. What has been decided by the


tribunal on a unanimous basis is that the allegations that were made


and the claim made against, brought by Sylvia Bobrowka on the grounds


of harassment and victimisation have been well founded, both


against the first and second Mr Malik personally. Now today, all


you've had is the bare bones of it. The reasoning is to come later, as


is any decision about financial compensation. Is Mr Malik


personally liable for any award of financial compensation that might


come? Yes, he is, on the basis that these are allegations of


discrimination and harassment and victimisation forming part of that


discrimination. That being the case, a person can be held personally


flowing, if those allegations are made out as a result of


-- What will happen now is that Miss Bobrowka will have the


opportunity to reduce evidence to show the impact of what is had on


her and that will take the form of medical evidence. She has suffered


greatly as a result of this discriminatory behaviour. That is


partly, the issue of causation is partly an issue of medical


causation and of finding at the remedy hearing which is yet to be


fixed. So, she says this experience has actually made her ill?


Absolutely, yeah. What was her reaction to today's judgment,


briefly? I have spoken to her this morning and firstly, she wants to


make it clear and she's very appreciative of all the support


she's been given by everybody, but from her position, of course, she


welcomes this judgment and the fact it's unanimous judgment against the


respondants, both AWEMA and Mr Malik.


Thank you for joining us. As eurozone leaders prepare for


another summit on the fate of the single currency, Dragon's Eye has


discovered that the banking crisis in Spain is affecting banks in the


UK. Some Welsh public bondies have pulled out of Santander UK. That's


despite the company's assurances that their deposits are safe.


Supporters say that the councils and universities involved are being


prudent. Critics warn withdrawing funds from British banks isn't


justified and can damage public confidence in the industry. Here's


While eurozone leaders are betting on keeping the single currency


together, the markets remain sceptical about the finances of


many European nations and their banks. Spanish banks received a


bail out from eurozone funds. And now it seems the banking crisis is


having an impact closer to home. Public bodies like councils are


under pressure to cut costs while maintaining services. Shrewd


investment plays a part in helping them do that, but it is about


finding the balance between risk and reward. Local authorities in


many cases continue to use a select group of very strong foreign banks,


Australian banks, Canadian banks and suchlike, but there has been a


general movement away from European banks, particularly at the moment


with the eurozone. There was more spare change in play when some


Welsh public bodies found themselves short as Iceland's banks


collapsed with taxpayer money tied up in them. They lost �74 million


in the chaos that followed, although some has since been


returned. If you look at the situation with banks across Europe,


many are in a precarious position and it would be foolhardy to


continue to invest in them. It has perhaps got the attention of local


authorities to look at them this mince more closely. All 22 local


operatives and most Welsh universities were protected from


the media banking crisis in the eurozone by having no funds in


Spanish or Greek banks. That might suggest public bodies have become


less inclined to gamble on foreign investment. Miss University of a


nominal sum of �20,000 in a Spanish bank. Most of the European banks,


to varying degrees, particularly in bigger countries, are backed by


their governments. Those governments themselves,


particularly in the case of a country like Spain, look pretty


secured regardless of the chaos and the markets. The so I think local


authorities in Wales can be a bit more relaxed, I think, about many


of the bigger countries and the banks in those countries, and can


therefore earn slightly more of an interest rate than they will if


they put it particularly in the Treasury's Debt Management Office,


where they will be getting next to nothing. But it emerged that three


was universities and four councils had stopped doing business with


Santander a UK in recent months in response to the Spanish banking


crisis. They include Bridgend, Fincher, Gwyneth and Monmouthshire


councils, and Aberystwyth, and Swansea universities. When you that


-- one university withdrew �1 million from Santander UK in


January as the eurozone crisis deepened. Santander you cases it is


ring-fenced from its Spanish parent company, meaning it could not take


money out of Britain without the agreement of the British banking


regulator. It also says that Santander has not received and does


not need any bail out money from the eurozone nations. Public bodies,


looking at what is going on in the world, probably feel a bit of their


own anxiety. But the truth is that Santander is a well capitalised


Spanish bank, and the British arm is a separate institution anyway.


If they are being overly cautious it is no bad thing and they will be


taking decisions with advice from their treasury management


consultants. So it may be no bad thing. To try to say Santander


sounds a bit Spanish, so let's keep clear of that, really is like third


form financial planning, and not the sort of financial planning you


would expect from the major public institutions. Really, what those


institutions should be doing is taking the best of advice,


certainly acting in a very prudent way, but at the same time relying


upon the new, thermo regulatory arrangements that are in place. --


firmer. Adopting a stance that says we will not deal with this bank


because this bank seems to have a foreign name attached to it, really,


that is pretty silly stuff. Critics warn that the run on Northern Rock


in 2007, even though it was in no danger of collapsing after the


Treasury and the Bank of England backed it, shows what can happen


when the public loses confidence in a financial institution. Northern


Rock was one of the first runs on any bank would have occurred in


Great Britain for over a century. - - that had occurred. Local


authorities have a role to play and that, in the seemingly not making a


hasty withdrawals. I do not think local authorities are doing that.


They are making sound investment decisions on the back of sound,


expert advice from their treasury management consultants.


financial crisis of recent years has highlighted the importance of


confidence in fuelling the world's economy. There is a high price to


pay if conference is damaged. I am joined by Professor Patrick


Linford of Cardiff Business School and an economist. Welcome to both


of you. Do you think that the organisations involved are over-


reacting? I do not know how their deposits are distributed. It is


perfectly reasonable to diversify your holdings, make sure you are


not committed to a single institution. That said, I would be


extremely astonished his Santander were any more vulnerable than most


other commercial banks. But if Santander. It is a large


international bank and most of its profits in recent years have been


made in Mexico and Brazil. Of course, it is exposed to the


Spanish economy, but not just the Spanish economy. As has been said,


its British subsidiary, which it got by buying Abbey National, has a


large UK business. I do not see any particular reason to single out


Santander, but I do not blame people for looking at how their


deposits are positioned and making sure they are diversified and put


in safe places. Patrick Linford, what do you think? I agree with


Gerry. Santander UK is essentially a British bank. You might as well


take your money out of Barclays Bank, or RBS. I think, it is a case


of panic, really, because it is associated with a Spanish bank, and


yet it is a separate UK bank, effectively. What are your thoughts


on what this tells us about the way the eurozone crisis has been


managed to this point? In theory, the Spanish banks received a bail


out from eurozone countries, but the markets did not seem to have


much confidence in that. We are seeing another summit shortly to


try to sort things out. Our examples of people doing things


like this the automatic result of politicians' failure to get to


grips with the crisis? The bank that is being bailed out in Spain


is not Santander. It is Bankia, which is the result of an


amalgamation of lots of local lending agencies which leant


heavily on property, in cahoots with local authorities in Spain. So


it is a highly political bad bank that has been put together out of


all of these banks that made foolish loans, really, with local


authority, local political involvement. So it is a very


special situation. I do not think Santander air is particularly


implicated in this. But in terms of the wider political fall-out of an


ongoing eurozone crisis that the politicians do not seem to be


getting to grips with, are these sorts of apparently irrational


actions to be expected? Well, I'm afraid when you get a financial


crisis people often acted in jumpy ways. So I do not know whether it


is to be expected, but they are certainly not a major surprise. And


I think it is the case that European politicians have failed to


rise to this crisis and to address it at root. Therefore, I think


there is every prospect that this grumbling appendix will go on


grumbling. Of course, we did see some Welsh public bodies burned in


the Icelandic banking crash, didn't we? Has that made people over-


cautious, that experience? Yes. This Euro crisis will go on and on.


-- euro there is no resolution in sight. It is quite a different


thing putting money in European banks directly and putting it into


a branch in the UK which is essentially ring-fenced and a


separate entity. They ought to distinguish those things. Do you


agree? You have said it is sensible to diversify the portfolio and


perhaps that is all that is going on. But if the reason is a concern


about what is happening in the Spanish banks, something Santander


a UK is protected from, are you concerned at the level of financial


advice that some public bodies in Wales are getting? Yes, it sounds


as if they could do with some more professional advice. But does sound


to be the case. -- that does sound to be the case. And your thoughts?


I agree, they are misinformed. Thank you for joining us.


The Welsh Secretary and her Labour shadow are having a row over when


and how to hold a debate discussing proposed changes to Assembly


constituency boundaries. The Labour's Owen Smith was pressing


for a debate on the floor of the House of Commons Chamber. Sarah


Gillan offered him a slot at a special session of the Welsh Grand


Committee at 11:30am on Monday. He objected, she cancelled. This is


Mrs Gillan's side of the story. Well, it was cancelled because the


Labour Party objected to it when it was put in the Order Paper. And I


know the new Shadow Secretary of State is trying to make his mark


but this is really not the way to do it. It is a green paper. It is


there for discussion. It is not even a white paper and it is not


legislation. I have been perfectly open about it. I wanted to offer an


opportunity to Welsh MPs to discuss this, because I have always


supported the Welsh Grande, unlike previous Labour governments who


have tried to push it into obscurity. I have tried to hold it


on a regular basis. Frankly, the rumour came back that they were


going to boycott it and then 11:30am was too early. Frankly, a


Labour government did hold a Welsh Grand Committee at 10:30am on


Monday, but it would seem the modern Labour MP does not really


like to get up and get to work on Monday for 11:30am. After all, the


house sits on Monday to Thursday, five days a week. But it was not


worth having if they were objecting to it. Quite frankly, I cancelled


it. Owen Smith is Cheryl Gillan's Labour shadow. I asked whether this


was about a new shadow Welsh Secretary trying to make his mark.


No. It is about the fact that we have an important suggestion from


Cheryl Gillan in a white paper that we change the voting arrangements


for people in Wales. I felt that was such a significant


constitutional change that we ought to be debating it on the floor of


the House of Commons in Westminster, where ordinarily constitutional


issues would be debated, as opposed to in a Welsh Grand Committee. So I


wrote to her and suggested we do that. And she surprised us by not


even responding to my letter but simply scheduling on a Monday


morning the Welsh Grand Committee. Let me scotched this nonsense that


it is anything to do with the hour at which she had tabled the Grand


Committee. We would have debated it at any time. It was entirely to do


with the location and the prominence we felt this issue ought


to have been given. And quite why Cheryl Gillan has been reduced to


this sort of school ground name calling around what ought to be an


important issue of substance debate on the floor of the House of


Commons with the due prominence that it deserves, is beyond me.


you threaten to boycott? No. I do not know where she gets that from.


It is some room she has heard. I simply wrote a letter, released to


the press, in which I suggest that it was an important issue which


should be debated on the floor of the house in Government time. It is


a Government green paper. She says it is not legislation. It is a


curious green paper because it only has two options, one of which is


not really a realistic option, which is to reorganise the seats in


Wales but still stick with 40 and 20 and do not will arrive at a


point of it being coterminous with the boundaries marrying up with the


new parliamentary boundaries she is proposing. Or else the option she


favours - 30 seats on the list, 30 seats through PR and 30 seats


directly elected first past the post. Why does she favour that?


Because it would favour her party. It is a partisan, self-interested


proposal they brought forward. We wanted to expose that on the floor


of the house and expose the gerrymandering that is being


proposed in respect of the Assembly boundaries, as has been proposed


for the parliamentary boundaries. Could you not also be accused of


partisan political interest? A reduction in the number of


constituencies is damaging to the Labour Party specifically, isn't it,


when we talk about first past the post elected constituent MPs? This


is about protecting Labour's interests in Wales, isn't it?


think it is damaging to Wales to reduce the volume of voices from


Wales are able to speak for Wales from whichever party at Westminster.


Cutting back from 40 to 30 reduces our voice in Westminster, and


devolution was meant to amplify our voice in Britain, not reduce it.


That is something Cheryl Gillan has never understood. This is not about


parliament boundaries, it is about Assembly boundaries and the fact


that she is trying, on the quiet, to slip through Parliament


proposals to reduce the numbers of Assembly members, or to change the


nature of the election of Assembly members. Surely, in any year of


devolution, she ought to feel that, even if the letter of the law is


clear that she can do this if she wants, if she wants to drive it


through with a Tory majority in Westminster, she ought not to. She


ought to seek the consent of the National Assembly when it comes to


making changes that only relate to the National Assembly and the


people of Wales. It is a measure of her disdain for the National


Assembly that she has not sought to do that properly. Thank you.


Apologies for my slip of the tongue. I didn't mean to say Assembly


members, rather than MPs. Once, I got my own name wrong, believe it


or not! Who knows what I will do next week? Join me to find out.


Join Felicity Evans as she takes a fresh look at politics through the Dragon's Eye.

Whether it is your local council, the National Assembly, Westminster or Europe, Dragon's Eye will be probing, scrutinising and shedding light on our democratic institutions.

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