The real costs facing government in Wales

Walk together. Work together? The classic Whitehall civil servant still works in departments that rarely communicate with each other. So could Wales be different?

WE DON’T yet know the details, but the Welsh budget is certain to be put under extra pressure in the years ahead and the state of the Welsh Government’s finances is focusing the minds of politicians and officials alike in Cardiff Bay.

Tough decisions over spending on Welsh schools, roads, hospitals and other areas are likely to get even tougher in the next few years. This situation will be a major test for a concept I believe in passionately: sustainable development. Of course, I am delighted that it’s been adopted by the Welsh Government as its “central organising principle”, but what we really need now is to turn it into reality.

So why does this matter when our finances are stretched? Because this is an opportunity to use smart, joined-up thinking that will not only squeeze more value from the public purse but also to improve our well being now and in the long term. The risk is that if we don’t do this, we will suffer in the short term from poorer services while storing up greater problems for the future.

There are two big ideas that we need to take on board: policies that deliver multiple benefits and acting for the long term.

On the first of these, it’s high time for government in Wales to take a more joined-up approach. In the SDC, we talk about government too often operating in silos. If  different departments don’t work with each other enough, it can result in poor decisions and wasted money. Taking a cross-government approach is going to be absolutely vital in the next few years, so that every pound spent delivers many benefits. Government policies don’t stop at departmental walls. For example, the money we spend on school dinners affects the economy (suppliers), the health and future life chances of children, their ability to learn and, of course, there’s the carbon impact of producing the food. If we promote cycling, do we do this to cut congestion and boost the economy, tackle air pollution or improve fitness? Let’s get policies working together.

On the second idea, we only need to look at our past to see why proper costing and planning are needed. For example, looking at health, Wales’ legacy of heavy industry, smoking and poor diets are taking their toll. What has this cost us over the years? How could things be if we had done things differently? As we plan for difficult times ahead, let’s consider the real costs of our decisions. Where we face cuts, let’s consider what this will mean in the future. There will be some areas where it is sensible to make savings. In others, the cheapest option now may carry a high price further down the line.

This week, the Welsh Government gave us a good example of what sustainable development can mean in practice. Environment Minister Jane Davidson launched the first round of projects under the Arbed (“save”) scheme, investing £30million in improving energy efficiency and installing renewable energy devices in some of our most deprived communities. This scheme delivers on both of these big ideas. It tackles social (improving living conditions), environmental (reducing carbon emissions) and economic (providing jobs and lowering energy bills) problems. It also builds long-term resilience, as a one-off payment to help with heating bills simply wouldn’t have the same impact as systems that provide comfortable homes at low cost for years to come.

Our challenge to government as we mark Sustainability Week is to use the kind of sustainable thinking used in the Arbed scheme across all areas of government. This shouldn’t be limited to green projects – we need to see this long term, maximum value approach in every department and every policy. As things stand, we are some way off achieving this. A report by the Wales Audit Office produced in January reinforced our concerns, stating that: “Sustainable development is seen as one of a number of competing priorities, rather than the means by which the Welsh Government manages its competing priorities”.

This is why as a commission we are committed to helping the Welsh Government succeed in embedding sustainable development as its central organising principle – putting it at the heart of everything the government does for the benefit of everyone in Wales, both now and in the long term.