Enterprise zone for whole south Wales valleys urged

The foundations want to "incentivise growth" in disadvantaged areas in Wales, including the south Wales valleys

A new enterprise zone across the whole of south Wales valleys has been urged in a poverty report by two think-tanks.

The £400m a year Wales gets from EU structural funds should also be earmarked in future to ensure the Welsh economy is "rebalanced" to support jobs and growth.

The Bevan and Joseph Rowntree foundations say poverty's impact is costing services £3.6bn a year.

Their report says everyone needs to "get to grips" with its root causes.

"Just as almost anyone is at risk of poverty, so too must we all - government, businesses and charities - take action," said Dr Victoria Winckler, director of the Merthyr Tydfil-based Bevan Foundation.

The report defines a person as being in poverty when their resources are "well below their minimum needs, including the need to take part in society".

It is estimated an average of 700,000 people were affected in Wales in the three years to 2014-15, equivalent to 23% of the population.

The report sets out an action plan between now and 2030, some involving government, but others involving councils, businesses and the voluntary sector.

It looks at encouraging better paid and more full-time jobs but also issues like the cost of fuel bills and rented housing and how to improve training and education to make it relevant to economic challenges.

High housing costs are the cause of poverty for 100,000 people in Wales, says the report

Recommendations include:

• A new enterprise zone across the whole of the valleys area which would use local planning powers and tax breaks to encourage job creation

• Prioritise disadvantaged communities in the strategies for the city regions of Cardiff, Swansea and north Wales

• Refocus Welsh Government business finance support to prioritise jobs within reach of the poorest areas

• Specialist help, including work experience, to help those finding it hardest to get work

• Strengthening how the Pupil Deprivation Grant is used effectively in schools

• Establishing an apprentice charter as part of improving the quality of apprenticeships and ensure they have a clear career progression

• Bringing down the cost of essentials - suggestions include having a collective of people switch energy providers en masse

• Prioritise "genuinely affordable housing" with the number of new homes for social rent still below forecasts

Julia Unwin, chief executive of the Joseph Rowntree Foundation, said: "Poverty in Wales is holding back almost a quarter of the population, damaging the economy and affecting the life chances of the next generation.

"This is unacceptable. The Welsh and UK governments have an opportunity to end this damaging cycle and ensure that everyone in Wales has the chance of a decent and secure life."

She said the Welsh Government had long been committed to action to solve poverty but more needed to be done "to end the problem once and for all".

The Welsh Government said it was taking a cross-government approach to boosting prosperity and building more resilient communities "which is entirely consistent with the recommendations being made in today's report".

A spokesman said it was committed to rising to the challenge and in the taskforce for the south Wales valleys, announced in July, it was "developing a fresh approach to improving prosperity".

"We have big ambitions for Wales and its economy and we will continue to work hard to create and safeguard jobs."

Welsh Conservatives leader Andrew RT Davies said it was important to recognise that challenges exist in communities across the whole of Wales, not just in one area.

"In the past, towns such as Barry and Wrexham, and many of Wales' rural communities, have missed out on the levels of support afforded to other parts of the country and we cannot allow them to be left behind," he said.

Plaid Cymru's spokeswoman on housing and poverty, Bethan Jenkins, called for re-investment in public services and said the report should serve as a "massive wake-up call to the entire political establishment, both here in Cardiff and in Westminster".

Analysis by Sarah Dickins, BBC Wales economics correspondent

Poverty doesn't just hurt those who are struggling to survive but it affects all of us. That is the strong message from this report.

The calculation, that £3.6bn is spent every year in Wales coping with the consequences of poverty, brings home the enormity of the challenge. That represents 20% of the Welsh budget and therefore limits Wales' chances of becoming more vibrant.

Many reports into poverty examine it in a more isolated manner and often places the issues at the feet of the Welsh Government.

This research calls on businesses do their bit too and argues it is in their self interest to do so.

If low paid sectors can be helped to become more innovative that helps the company itself and the income levels of people working there. Similarly, if employees are trained to have higher skills, the better the organisation they work for will perform.

Nearly a fifth of part-time workers want to work more hours

In the 1990s, the belief was that the way out of poverty was through work. This report reminds that this is not always the case. Wales has had lower unemployment than the UK average for many months but still has some of the lowest levels of household incomes.

Wales also has high levels of under-employment - people not working as much as they would like to. The reports calculates that 17% of part time workers in Wales would like to work more hours and it says that while average pay for full time workers in Wales is £12.26 an hour, for part time workers it is £8.12 an hour.

Its recommendations are pertinent as the move towards city region models of economic growth develop in Cardiff, Swansea and North Wales.

It talks about the need for inclusive development, not leaving some communities behind in the rush for growth - a line of thinking that is gaining traction.

Many recognise that the post-industrial communities in the south Wales valleys need special attention to bring more well paid jobs to communities there.

The Welsh Government has launched a Valleys task force. This report suggests that there should be a new enterprise zone stretching across the valleys area. It says it should be able to use local planning powers and tax breaks to help job creation.

The report's own analysis shows that education and skills, from early years to adulthood, are desperately needed to attract higher paying jobs. But that kind of investment takes a long time to take effect.