Swansea and Newport 'need extra help after budget cuts'

A study claims two Welsh cities are among the most vulnerable in Britain as it tries to bounce back from recession.

The annual report by think tank Centre for Cities say Newport and Swansea might not feel the full benefits of economic recovery for some time.

The report said the south Wales cities were affected by UK government spending cuts, unemployment and low skill level and will need extra help.

The assembly government said it was trying to "stimulate job creation".

According to the Centre for Cities annual report, Cities Outlook 2011, Swansea, Newport, Sunderland, Liverpool and Birkenhead are among the cities most vulnerable to the uneven spread of the economic recovery.

Low-skill levels and levels of business activity, the number of people employed in the public sector and the number of people claiming unemployment benefits mean these cities will need additional financial support from central government, and a realistic local plan of action, found researchers.

The study found that in 2009, 14.7% of Newport residents had no qualifications while in Swansea the figure was 16.1%. The UK average was 7.9%.

In October it was revealed that more than 250 jobs are expected to go if plans to close the existing passport office in Newport are approved.

Welsh Secretary Cheryl Gillan later announced up to 45 jobs would be safeguarded.

Job creation

Councillor Ed Townsend, deputy leader of Newport council, said the loss of jobs at Llanwern steelworks - more than 500 in 2009 - had been a "big blow" to the city but that effort had gone into creating jobs since then.

"We do have realistic local plans recognising the difficulties that we face and a report like this serves to underline those difficulties and gives us more resolve to create more jobs, particularly in the private sector," he told BBC Radio Wales.

"The developer for Newport city centre went into administration and couldn't deliver but in the last week we have shortlisted four developers so in the medium term that city centre development is moving forward.

He added that the council's focus was "very much" on the city centre, and bringing jobs into the area.

Stephen Drinkwater from Swansea University's school of Business and Economics said the city had to compete with other cities to attract new businesses to the area.

"The environment here should encourage businesses to come in, however the right businesses have to be attracted.

"Finance and IT are identfied by Centre for Cities as the growth areas of the future.

"However, there is going to be competition among cities to attract businesses, residents and customers so every city has to compete against each other and provide their own niche area they can internationally lead in."

Alexandra Jones, chief executive of Centre for Cities, said: "During 2011, the UK cities most dependent on the public sector and which have seen slower economic growth over the last decade, will find it more difficult to rebalance towards the private sector.

These cities will need realistic plans of action to ride out the spending cuts and create jobs but they will also need additional financial support from central government."

'Maximising the legacy'

An assembly government spokesperson said it was trying to create jobs against a backdrop of budget cuts of £1.8bn over the next four years.

"We are under no illusion that the recovery is far from secured and decisions on public spending will have a huge impact on all of Wales," a spokesman said.

"When it comes to Swansea and Newport, we are using all the powers at our disposal to stimulate job creation. We want to see these cities recover and thrive.

"This includes maximising the legacy of the Ryder Cup and continued development of SA1."

Electrification of the rail line from London to Swansea would help boost Wales economy the spokesman said.

"Our new economic policy aims to help grow the private sector and encourage entrepreneurs so they can create the jobs and prosperity we rely on.

"It must be remembered that many of the levers to address worklessness such as the benefit system and taxation are not devolved and rest with the UK Government."