If you were designing the institutions of a small country from scratch, you would put the third sector closer to the centre than we do. Closer to the data. Closer to the policy. Closer to the money. The case is empirical, not ideological: in Wales, charities, social enterprises, community businesses, housing associations, cooperatives and the people who run them are already delivering the work that holds a great deal of public life together. We have built the rest of the system as if that were a happy accident, rather than the load-bearing wall it actually is.

This essay makes the case for treating the third sector in Wales as national infrastructure. Not in rhetoric, where we already do, but in design.

The scale

The most-cited figures, synthesised by the Wales Audit Office from Welsh Government and Wales Council for Voluntary Action data, put the Welsh third sector at over 32,500 organisations, 230,000 trustees, 1.13 million volunteers and 51,000 employees. The Bevan Foundation, drawing on WCVA, puts the sector's contribution at around £3.7 billion of economic value and 79,000 jobs, comparable in scale to the construction industry. WCVA itself estimates that volunteer time in Wales is worth approximately £750 million a year. These figures come from different years and different methodologies; what they have in common is that the order of magnitude is unambiguous.

The third sector accounts for roughly one in ten of all jobs in Wales. In health and social care alone, WCVA estimates that voluntary organisations directly employ around 59,000 people. The sector is a major employer, a major economic contributor, and a major civic actor. None of that is contested.

What is too often missed is that around two-thirds of third sector income in Wales comes from non-public sources. The sector is not, as is sometimes lazily suggested, a creature of government. It generates the majority of its own income through public giving, trading, lottery funding and grants from trusts and foundations. The relationship with the Welsh state is real and important, but it is partnership, not dependency.

What the sector already delivers

It is easier to itemise what the third sector does than to summarise it. Citizens Advice Cymru handles hundreds of thousands of cases a year on issues that would otherwise sit with under-resourced statutory services. Community Housing Cymru members manage over 158,000 homes across Wales, providing affordable housing to roughly one in six households. The sector is the largest single contributor to volunteering infrastructure for the NHS and social care, organising the supply of unpaid labour that the formal system has come to rely on. Food banks, mental health services, community transport, advocacy, end-of-life care, youth work, sport, language: in every one of these areas, the third sector is doing work that no other actor will do at the scale or in the manner required.

The Bevan Commission's 2024 paper on the values and value of the third sector in health and social care captured this well. The sector, it argued, does three things at scale that neither the state nor the market does adequately. It does proximity work, the work that requires being in a place, knowing the people, holding institutional memory that public reorganisations routinely lose. It does boundary work, sitting in the gaps between systems that do not talk to each other. And it does patient work, the kind that does not fit a funding cycle and cannot be reduced to a quarterly output measure.

These are not romantic claims. They are operational ones. The sector delivers a set of capabilities that the formal system, structurally, cannot replicate.

The settlement that has not kept up

For all that, the conditions in which the sector now operates are not the conditions of a partner with standing. Short-term, restricted grants. Procurement frameworks that disadvantage smaller organisations even when those organisations are demonstrably better placed to deliver. Reporting requirements that scale faster than the capacity of the bodies expected to meet them. A measurement culture that asks the sector to prove its value in a vocabulary borrowed from somewhere else, then treats the resulting reports as evidence of disorganisation when they fail to match the format.

Inflation, the cost-of-living crisis, the end of EU structural funding and the long tail of pandemic-era pressures have made all of this worse. WCVA's most recent reporting describes a sector in which inflation, recruitment difficulties and shrinking core funding are testing the sustainability of organisations large and small. Volunteers are stretched. Reserves are depleted. The need for longer-term, flexible funding is now urgent rather than aspirational.

The Welsh Government has begun to respond. The revised Code of Practice for funding, the New Approach for Volunteering in Wales co-designed with WCVA, and continued investment in Third Sector Support Wales are real and useful steps. They are not, by themselves, the change of settlement the sector needs.

What other nations do differently

Wales is not the only country whose third sector has run ahead of the policy architecture that supports it. The countries that have done most to close the gap have done so in roughly the same way: they have treated the sector as a partner with standing, given it multi-year financial settlements, built measurement frameworks with it rather than for it, and matched the capital instruments available to it with the work it actually does.

Ireland's Pobal is the cleanest example. State-funded, but operationally arm's-length and independently governed, Pobal administers multi-year programmes across community development, social inclusion and early years on a scale and stability that no Welsh comparator possesses. Scotland published its first ten-year social enterprise strategy in 2016 and has continued to operate on a long-horizon basis since. The Netherlands works through Social Enterprise NL in a co-governance model with municipal partners. Australia's Social Traders and Social Enterprise Australia operate a sector-led national infrastructure that coordinates impact across jurisdictions.

None of these models is perfect. All of them share a starting assumption that the Welsh policy frame does not yet share: that the social-purpose sector is a critical national asset, and that it warrants the same seriousness of architecture as any other strategic sector.

The political moment

The Plaid Cymru-led government that took office on 13 May 2026 inherits a third sector under unusual pressure and a Welsh policy frame that is more advanced than it is delivered. The Plaid manifesto includes commitments on child poverty, on social care, on a National Commission for Wales and on rebalancing the relationship between Welsh and UK Governments. Each of these intersects directly with the sector's work. Whether the new administration treats the sector as a delivery partner, a stakeholder or core national infrastructure is a question worth watching, and worth raising in good faith.

The minority arithmetic in the 96-seat Senedd makes cross-bench engagement essential. The Greens, the Liberal Democrats and the Labour group all have positions on the third sector that overlap with Plaid's. There is, in principle, a working majority for a stronger settlement if anyone chooses to assemble it.

What infrastructure for the sector looks like

The Cardiff Business School research that informs DC's wider work identifies five concrete pieces of national infrastructure that Wales lacks. Each of them, mapped onto the third sector, addresses a specific failure of the current settlement.

Verification. A consistent, credible way of identifying which Welsh organisations are genuinely delivering social value, in a form that procurement officers and capital allocators can act on. Without this, "socially responsible" risks becoming a tick-box exercise. With it, the £8 billion of annual Welsh public procurement can be directed with confidence.

Propositioning. A function that turns sector-side ambition into investable propositions. Most third sector organisations have neither the resource nor the disposition to package their work in the language of institutional capital. A propositioning function does that work for them.

Capital matching. Instruments that fit the cash flow profile of social organisations rather than asking those organisations to fit the instrument. Patient capital, outcomes-linked finance, blended structures that combine grant and investment.

Measurement. A shared framework, anchored in the seven goals of the Well-being of Future Generations Act, that lets the sector report once and lets the system aggregate consistently. The current proliferation of frameworks is itself a tax on capacity.

Sustained convening. A standing platform that brings the sector, the public sector, business and capital into the same room on a regular cycle. Not another consultation. A working architecture.

None of this is a substitute for what the sector already does. All of it is the connective infrastructure that lets what the sector does meet what the country needs.

The case for treating Wales's third sector as national infrastructure is not sentimental. It is empirical, economic and operational. The evidence is in the figures. The cost of the current settlement is in the burnout, the closures, the missed opportunities and the work that slips, unrecorded, through the cracks of a system that has not yet caught up with what the sector is.

A small country has fewer levers than a large one. Wales would be unwise to leave any of them under-used. The sector is one of the most powerful we have.

Sources

1. Wales Audit Office and Welsh Government third sector funding reporting (2017 synthesis); WCVA Data Hub; Welsh Government third sector scheme annual reports.
2. Bevan Foundation, on WCVA figures, sector economic value (£3.7 billion) and employment (79,000).
3. WCVA, voluntary sector in Wales statistics and volunteer time valuation.
4. Bevan Commission, The values and value of the third sector: Collaboration with the statutory sector to deliver health and social care in Wales (2024).
5. Senedd Research, Welsh third sector income source analysis.
6. Pobal (Ireland); Scottish Government social enterprise strategy; Social Enterprise NL; Social Traders and Social Enterprise Australia.
7. Plaid Cymru, For Wales: New Leadership for Wales manifesto, 2026.
8. Cardiff Business School, Mobilising Capital, Talent and Ambition: Social Impact Coalition Cymru (April 2026).

"Wellbeing economy" is one of those phrases that has been used so often, so loosely, that it now risks meaning everything in general and nothing in particular. That is a problem, because the underlying idea is not loose, and Wales is one of the few places in the world where the idea has any statutory force. If the next decade of Welsh policy is going to deliver on what the 2015 Act actually requires, the country needs a clearer working definition of what a wellbeing economy is, and a sharper view of what it would take to make Wales one in practice.

What a wellbeing economy actually is

Stripped of its consultancy varnish, a wellbeing economy is an economy whose institutions optimise for human and environmental flourishing alongside financial return, and which measures itself accordingly. It is not anti-growth. It is not anti-market. It is the rebalancing of an objective function and the building of the institutional capacity to act on it. The Wellbeing Economy Governments partnership, of which Wales is a founding member alongside New Zealand, Iceland, Finland, Scotland and Canada, has been working on the shared definition for the better part of a decade.

The architecture matters. A wellbeing economy is not a single policy. It is a set of arrangements: a measurement framework that the system actually uses, a planning regime that operationalises the framework, a procurement system that directs spend against it, capital instruments that pay out against it, and a workforce trained to plan against it. Each is a piece of plumbing. Each requires sustained institutional design.

What the Act actually does

The Well-being of Future Generations (Wales) Act 2015 creates seven national wellbeing goals: a prosperous Wales, a resilient Wales, a healthier Wales, a more equal Wales, a Wales of cohesive communities, a Wales of vibrant culture and thriving Welsh language, and a globally responsible Wales. It places a statutory duty on 44 listed public bodies to set wellbeing objectives and demonstrate progress. It establishes the Future Generations Commissioner. It sets out the Five Ways of Working: long-term thinking, prevention, integration, collaboration and involvement. It is, at the level of statute, transformational.

The 50 national indicators that sit beneath the goals are reported through the annual Wellbeing of Wales report, the latest of which was published in 2025. The 2024 regulations extended the list of bodies subject to the Act. The 2025 Future Generations Report, the Commissioner's seven-yearly statutory output, called for a post-legislative review of the Act to enhance its impact, prepare for the United Nations' updated Sustainable Development Goals in 2030, and open up a public dialogue on the Wales we want for future generations.

Ten years on: what has worked

The Wellbeing of Wales 2025 report, published to mark the Act's tenth anniversary, is the most honest single source on this. Some things have shifted in the right direction. Income poverty has declined over the long term, though children remain disproportionately affected. Qualification levels are rising and more young people are engaged in education, employment or training. Wales has reduced its direct carbon emissions by 27% since 2015 and is the second-best country in the world for recycling. Air and water quality have improved on several indicators. Free school meals for primary pupils, a progressive school curriculum, and the gradual reorientation of public-body planning around the seven goals are all real changes.

The Act has also done something less easy to measure but arguably more important. It has changed how senior public-sector decisions are framed. Long-term thinking, prevention and integration are now standing reference points in Welsh policy debate in a way they were not before 2015. That cultural shift is a precondition for the structural change that has not yet happened.

Where the plumbing is missing

Five operational gaps, in plain terms.

Measurement consistency. The 50 national indicators exist. The 44 public bodies are not yet applying them consistently. Some report against the seven goals in detail. Others provide summary statements that meet the statutory minimum without operationalising the framework. There is no shared analytical infrastructure that lets the system aggregate honestly. Until there is, the annual report is a description rather than a management tool.

Capital instruments. A wellbeing economy needs capital that pays out against wellbeing outcomes. Outcomes-linked finance, social investment bonds, blended capital that combines grant and investment. These exist at small scale in the UK. They do not yet exist in Wales at the scale the Act implies. The £100 billion of pension capital coming into private markets under the Mansion House reforms is, in principle, exactly the kind of capital that could be structured this way. The receiving architecture is not yet built.

Procurement operationalisation. The Social Partnership and Public Procurement (Wales) Act 2023 was designed to do this work. Its remaining provisions come into force from 25 March 2026, moving from framework duties to operational requirements. The £8 billion of annual Welsh public procurement is the most powerful directional lever the Welsh state holds. Using it well requires verification, measurement and capability that are not yet at scale.

Workforce capability. Planning against the seven goals is a different skill set from planning against budget lines. The civil service, local government and the public bodies subject to the Act have made meaningful progress, but unevenly. A National School of Government, as proposed in the new administration's manifesto, would be one route. Sustained investment in the existing workforce is another. Both will be required.

The Commissioner's powers. The Future Generations Commissioner has a statutory remit and a public voice. The Act does not give the office binding enforcement powers. Whether the post-legislative review opens this question is one of the most consequential design choices on the table.

The international peer set

Wales is not designing this in isolation. The Wellbeing Economy Governments partnership exists precisely to share what is working between countries that have set themselves up to attempt this. New Zealand has developed the Living Standards Framework and the wellbeing budget. Finland has built sustained capacity in its Prime Minister's Office to operationalise SDG-aligned planning. Iceland has its own wellbeing indicators. Scotland's National Performance Framework predates the Welsh Act and has informed its operation.

None of these countries has fully solved the architecture problem. All of them are further along on specific pieces of it than Wales is. The case for sustained learning across the WEGo network is, if anything, stronger now than at the point Wales joined it.

The political moment

The new Plaid Cymru-led government, sworn in on 13 May 2026, has explicitly committed in its manifesto to reviewing the Well-being of Future Generations Act to ensure it is working. The Future Generations Commissioner's 2025 report called for a post-legislative review. These two positions align. A formal review is the most likely starting point for the next phase of the Act's life.

The minority arithmetic in the 96-seat Senedd shapes what is deliverable. The Greens, who voted for First Minister Rhun ap Iorwerth and who have a stronger wellbeing-economy disposition than any other party in the new Senedd, are likely to push for an ambitious review. The Welsh Labour group, reduced to nine seats but with deep institutional memory of the Act's drafting and implementation, has a position. The Conservatives and Reform UK both have views on the Act that range from sceptical to actively hostile, though Reform's larger group size now matters for any legislative work that requires cross-bench support.

None of these positions is a substitute for the underlying architecture question, which is technical and operational as much as it is political.

What realising it looks like

A wellbeing economy is not built in a single Programme for Government. It is built over a generation, with sustained design across multiple administrations. The pieces of that work that are within reach in the next five years are concrete.

A shared measurement framework that all 44 public bodies use consistently, anchored in the seven goals and the 50 indicators, designed in dialogue with the sector rather than imposed on it. Outcomes-linked capital instruments structured to pay against wellbeing outcomes the bodies already report. The full operationalisation of the SPPP Act's £8 billion lever against the goals. Sustained workforce capability programmes across the civil service and local government. The post-legislative review of the Act itself, asking what works, what does not, and what statutory change would strengthen the framework.

None of this is glamorous. All of it is the architecture that makes the 2015 ambition real.

The Well-being of Future Generations Act gave Wales a head start. Ten years on, the country has done some of the work of making it real and not yet enough. The next decade is the test. The institutional architecture is the question. The Coalition, the next Welsh Government, the public bodies, the third sector and the capital that has to flow through all of them are the actors. The goals are already in statute. Using them well is the work.

Sources

1. Well-being of Future Generations (Wales) Act 2015 and the Welsh Government statutory guidance.
2. Welsh Government, Wellbeing of Wales 2025 annual report.
3. Future Generations Commissioner for Wales, Future Generations Report 2025.
4. Wellbeing Economy Governments (WEGo) partnership, member-country reporting.
5. Welsh Government, response to the Future Generations Commissioner's Future Generations Report 2025 (July 2025).
6. HM Treasury, Mansion House reforms documentation; KPMG and Macfarlanes analysis of the Pensions Investment Review (2025).
7. Social Partnership and Public Procurement (Wales) Act 2023; SPPP Regulations 2026 (SI 2026/75).
8. Plaid Cymru, For Wales: New Leadership for Wales manifesto, 2026.

Talk to most people in Wales about circularity and they will, reasonably enough, think of kerbside recycling. That conversation needs to broaden. The bigger opportunity is the redesign of industrial production, repair and material flows so that materials stay in the economy longer and at higher value. It is industrial strategy, not waste policy. And Wales has structural advantages here that the country has barely started talking about.

Where Wales actually sits

Wales has the highest household recycling rate in the United Kingdom and the second-highest in the world, with a national rate above 65%. The Beyond Recycling strategy, published in March 2021, set the ambition of becoming the world's number one and a zero-waste nation by 2050. The strategy is due for a strategic review in 2026. That review is the moment at which a serious shift, from waste policy to industrial strategy, can be made.

The recycling story is genuinely world-class. It is also, increasingly, a story about marginal gains. Moving from 65% to 70% to 75% delivers diminishing returns. The remaining mass of materials in the Welsh economy, the materials that are produced, used and disposed of by businesses rather than households, is a much larger prize, and one that recycling alone cannot capture.

The shift from recycling to circularity

A circular economy is not a recycling economy. The standard hierarchy (refuse, reduce, reuse, repair, refurbish, remanufacture, recycle) is well established, and recycling sits near the bottom of it. The materials, the energy and the value preserved at each step of that hierarchy is greater than the step below. A serious circular economy is one in which industrial production, public procurement, business models and consumer behaviour are all oriented towards keeping materials in use at the highest possible value.

The reuse-ready Deposit Return Scheme, secured for Wales in February 2026 after years of intergovernmental negotiation, is the clearest single example of the shift in operation. It moves Wales beyond glass and plastic recycling and towards reusable packaging infrastructure, the kind that has been operating in countries like Germany and Denmark for decades. The DRS has been written about elsewhere on this site. The point for this brief is that DRS is one example of a much wider pattern, and the next decade depends on Wales recognising it.

What Wales already has

The country starts from an unusually strong position. The household recycling infrastructure is in place. The Beyond Recycling strategy gives the policy frame statutory and political weight. The Well-being of Future Generations Act makes "a resilient Wales" a statutory goal, and resilience is the natural civic language of circularity. The Welsh manufacturing base is concentrated in sectors well-suited to circular redesign: steel, automotive components, food and drink, construction materials. The universities have active research programmes in industrial sustainability, materials science, and bio-composites. WRAP Cymru, with twenty years of operational experience in Wales, is one of the most capable circular economy implementation bodies anywhere in the UK.

Internally, DC Ventures has built Arcus, an intelligence platform that currently monitors 81 live circular-economy regulations across UK and Welsh policy and generates compliance briefings on demand. The point is not promotional. The point is that this kind of real-time visibility into the regulatory environment is itself a piece of the architecture a circular Welsh economy requires. Organisations cannot adapt to rules they cannot see.

Where the gaps are

The gaps are predictable. Capital instruments designed for the longer payback profile of circular business models barely exist at scale. Most institutional capital is calibrated to faster cycles than circular industrial assets can return. Welsh circular ventures, when they look for finance, have to translate themselves into instruments built for different purposes.

A propositioning function connecting Welsh circular ventures to institutional investors does not yet exist. Welsh organisations doing genuinely valuable circular work do not have a standing platform that packages their ambition into terms institutional capital can act on.

Procurement, by far the most powerful single lever, has not yet been calibrated to reward circularity. Under the Social Partnership and Public Procurement Act, the £8 billion of annual Welsh public procurement spend is moving from framework duty to operational requirement from March 2026. The wellbeing-economy alignment of that spend will only be as good as the verification, measurement and skills infrastructure that sits behind it.

Skills pipelines for repair, remanufacturing, and material recovery at industrial scale need work. The further education and apprenticeship system has begun, but the volume of trained people relative to the size of the opportunity is still small.

What the international peer set has done

The Netherlands' national Circular Economy Programme commits to a fully circular economy by 2050 and provides the institutional architecture, including the Versnellingshuis (the "acceleration house"), that helps businesses navigate the transition. Finland's national roadmap, launched in 2016 and updated through Sitra, was the first national circular economy road map in the world. Scotland's Circular Economy (Scotland) Act 2024 places statutory duties on Scottish Ministers and public bodies and follows directly the Welsh model in form. The countries leading on circularity, in other words, are doing what Wales already has the legal and policy foundations to do, and going further on the institutional architecture.

The political moment

The 2026 Senedd election delivered a Plaid Cymru-led government with a 74-page manifesto. The manifesto includes a new national energy company, community energy ownership measures and a renewables wealth fund. It is less explicit on circular economy than environmental observers had hoped. Friends of the Earth Cymru noted that climate and nature emergencies do not appear in the Plaid foreword or its "Our priorities" section. That is an editorial note worth carrying.

But the underlying institutional architecture, the WBFGA frame, the SPPP procurement lever, the Beyond Recycling strategy due for review, and the existence of strong sector bodies like WRAP Cymru and Cwmpas, is bipartisan in origin and durable across administrations. The Beyond Recycling review in 2026 is a strategic opportunity for whichever ministers hold the brief.

What the architecture would look like

Five things, in roughly this order, would move Wales from a recycling leader to a circular economy leader.

First, a strategic review of Beyond Recycling in 2026 that explicitly broadens its remit to the industrial circular economy. Not a refresh of recycling targets. A re-anchoring of the strategy in industrial transformation.

Second, capital instruments matched to circular business models. Patient capital, outcomes-linked finance, blended structures. The Mansion House pension reforms are about to release the largest pool of long-term productive capital into the UK economy in a generation. Welsh circular ventures are exactly the kind of propositions that capital is looking for, if they can be packaged correctly.

Third, a Welsh procurement framework that rewards circularity. The infrastructure for this is being built under the SPPP Act. The next step is making circularity a first-class outcome inside that infrastructure, not an afterthought.

Fourth, skills pipelines aligned to industrial circularity. Repair, remanufacture, material recovery, design for circularity. Further education, apprenticeship and university capacity calibrated to the scale of the opportunity.

Fifth, sustained convening. A standing platform where Welsh circular businesses, public procurers, capital allocators and policy-makers engage on a regular cycle. Not another consultation. A working architecture.

The bottom line

Wales is the best in the UK and second in the world at household recycling. That is real. It is also no longer the live policy question. The live question is whether Wales can move from being a recycling leader to being a circular economy leader, and whether the next decade of industrial strategy is calibrated to that prize. The foundations are in place. The Beyond Recycling review in 2026 is the moment. The architecture, if it gets built, would be a serious piece of national infrastructure.

The UK Internal Market Act 2020 is not the kind of legislation that lends itself to headlines. It does not feature in many manifestos. It operates more by foreclosing options than by being invoked. But its practical effect on Welsh ambition, on procurement, product standards, environmental regulation and the public-purpose use of public money, is real and worth being honest about.

The argument has been made

The constitutional argument against UKIMA is on the record. The Welsh Government has pursued judicial review through the High Court, the Court of Appeal and the UK Supreme Court, all of which refused permission on the grounds that ruling on the substance would be premature absent specific Senedd legislation. The Welsh Government's published position is that the Act, "imposed on Wales by the UK Parliament, purports to restrict the Senedd's ability to legislate in devolved matters". That is a position the Welsh Government has held under successive First Ministers.

Owen Derbyshire, the founder of DC, has set out the constitutional case at length elsewhere, in a recent piece for the Institute of Welsh Affairs on the Deposit Return Scheme. Readers interested in that argument should go to the IWA piece directly. The summary version: the UK Internal Market Act now routinely requires a devolved government to seek Westminster's permission to exercise its own statutory competence. That is, on any reasonable reading, not the devolution settlement Wales voted for.

This piece picks up the operational follow-on question. If the constitutional argument is right, and if the Act forces every distinctive Welsh policy through a years-long negotiation, what does that actually cost Wales? And what should the next Senedd, regardless of its political composition, do about it?

What the DRS story actually cost

The Deposit Return Scheme is the clearest case study in operation. All four UK governments committed in 2018 to comprehensive deposit return schemes. By 2023, England, Scotland and Northern Ireland had each scaled back, dropping glass. Wales held the line.

Holding that line meant Wales had to negotiate a formal exclusion from the UK Internal Market Act before it could legislate a glass-inclusive DRS. That negotiation took years. It involved multiple Secretaries of State, sustained intergovernmental engagement, third sector advocacy and detailed cross-party work inside the Senedd. The exclusion was finally granted in February 2026, with a four-year transition before deposits apply to glass, and the regulations were laid for an October 2027 launch.

Five years. That is the operational cost of one distinctive Welsh policy, in one sector, that the underlying evidence supported almost unanimously. The political capacity, the legal capacity and the bandwidth of senior officials directed to securing that exclusion was capacity not directed elsewhere. The cross-party consensus that had originally supported the policy began to erode under sustained lobbying during the intervening years. Wales won the constitutional argument and partly lost the political one.

That cost is the friction tax of UKIMA in operation. It is the price Wales now pays, in time and political capital, for every act of distinctive devolved policy that touches the movement of goods across the internal market.

The cost extrapolated

The DRS case did not happen in isolation. The same machinery applies, in principle, to any future Welsh policy that imposes distinctive standards on goods sold in Wales. Reuse targets for producers. Distinctive product standards on environmental performance. Single-use plastic bans broader than the current scope. Food labelling. Welsh-specific procurement rules that test the edges of the Act. Each one is a years-long negotiation in waiting.

Wales does not have the political capacity to fight all of those negotiations, all of the time. The DRS exclusion was secured, in part, because the sector was unusually well-organised, the evidence was unusually clear, and the will at ministerial level was sustained across multiple Secretaries of State. Most policy ambition does not benefit from all three of those conditions at once. The friction tax, in practice, deters distinctive policy that is harder to fight for, including a great deal of policy where the underlying case is no less strong than DRS but the political coalition for it is more diffuse.

The asymmetry that matters

The structural feature of UKIMA that does the real damage is asymmetry. A devolved administration that wants to converge with England pays no cost. A devolved administration that wants to lead, on circularity, on environmental standards, on social value in procurement, on any of the territory where Welsh ambition has historically sat ahead of the UK curve, pays a heavy one. The Act is therefore not policy-neutral. It is a structural drag on devolved ambition specifically.

This is what makes the operational case different from the constitutional one. Constitutionally, the question is whether the Act is compatible with the devolution settlement. Operationally, the question is whether a small administration can keep absorbing a friction tax of this size for every act of distinctive policy, indefinitely. The honest answer is that it cannot. Wales will adapt, as small administrations do, by being more selective about which battles to fight. The cost of UKIMA is not, mostly, the battles Wales loses. It is the battles Wales never starts.

The Common Frameworks alternative

The architecture for a different settlement already exists. The Common Frameworks mechanism, which predates UKIMA, was established with the consent of the devolved administrations and provides a consent-based route for managing divergence on devolved matters. UKIMA was layered on top of the Common Frameworks without that consent, and that layering is the root of the constitutional dispute.

The point worth making clearly is that reforming UKIMA does not mean abolishing the principle of a UK internal market. A workable internal market matters for Welsh businesses too. The reform that would change the operational picture is the restoration of a consent-based, transparent, time-limited process for devolved divergence on social, environmental and public-purpose policy. That is what the Common Frameworks were designed to do.

The political moment

The 2026 Senedd election delivered a Plaid Cymru-led government with a manifesto that commits to working "closely with partners in the Scottish Government and the Northern Ireland Executive to defend devolution". UKIMA reform is not named in the manifesto's headline priorities, but the underlying commitment to constitutional rebalancing, including the proposed devolution of the Crown Estate, welfare administration, criminal justice and broadcasting, is consistent with putting UKIMA reform back on the standing intergovernmental agenda.

Other parties' positions vary. Welsh Labour has pursued UKIMA reform through the courts and intergovernmental channels rather than constitutional confrontation. The Conservatives have broadly defended UKIMA as a settled feature of the post-Brexit constitutional landscape. Reform UK has been less specific. The point is not to score these positions. The point is that UKIMA reform is one of the few constitutional questions where there is plausibly a working cross-bench majority for action in the next Senedd, if any administration chooses to assemble one.

What good would look like

Three things. First, putting UKIMA reform onto the standing agenda of intergovernmental relations rather than handling it case by case. Second, building the working coalition with Scotland and Northern Ireland, where interests on this question genuinely align. Third, making the constitutional argument publicly, repeatedly and in good faith, in the kind of language that recognises both the legitimate intent of an internal market and the operational damage of how the current Act is structured.

None of this is a Welsh problem alone. It is a question about how the UK manages devolution after EU exit. The honest framing of that question, and the building of the cross-administration working majority to answer it, is work the next Senedd is well placed to begin.

What DC does in the meantime

Every piece of work DC and its partners are building, the Coalition, the ventures, the research base, sits inside the operating environment UKIMA creates. We work around the friction tax. We design the architecture so that what Wales can do under the Act gets done well. We also acknowledge, in public, that the country would be better served by reforming the Act than by routing around it forever. Both things are true. Both deserve to be said.

A serious capital event is happening to the UK economy, and Wales is not yet ready for it. Over the next five years, structural reform to the way British pension funds invest will release the largest pool of long-term productive capital the country has seen since the introduction of auto-enrolment. The numbers are well-published. What is less well-discussed in Wales is what receiving that capital well would actually require.

The reform, in plain numbers

The Mansion House Accord, signed in May 2025, commits 17 major UK pension providers to invest at least 10% of their main default funds in private markets by 2030, with half of that committed to UK investment. The 17 signatories manage about 90% of active savers' defined contribution pensions. The Accord is reported to mobilise up to £50 billion of UK pension capital into a wider pool of private assets, including property, infrastructure, private credit, private equity and venture capital, over the next five years. The Mansion House Compact, the broader policy framework alongside the Accord, could drive up to £100 billion into private markets, with £50 billion specifically targeting UK growth companies.

The Pension Schemes Bill 2025 sits behind these voluntary commitments. The Bill will legislate for minimum scale: pension schemes will be required to manage at least £25 billion in assets by 2030, with consolidation across the existing fragmented landscape of 60-plus defined contribution schemes and 86 local government pension administering authorities. The Bill also includes reserve powers that would enable the government to set quantitative baseline targets for UK and private market investment if the voluntary commitments are not met.

The Local Government Pension Scheme, currently the largest funded pension scheme in the country with assets of more than £425 billion, is being pooled into larger investment vehicles. The published figure for what consolidation could free up for investment in local communities is over £20 billion.

Why this is the most consequential capital event in a decade

The UK pensions market manages around £2.5 trillion. Each one percentage point shift in allocation toward private markets represents roughly £25 billion in capital flow. Mansion House is a ten-percentage-point shift, with reserve powers behind it. The structural intent is unambiguous: HM Treasury wants pension capital working harder for the UK economy.

For productive long-term capital, this is the closest thing to a generational reset that has happened in living memory. Pension funds are, by their nature, patient capital. The instruments they will deploy through the Accord, infrastructure, private credit, growth equity and venture, are precisely the instruments the impact economy has needed and lacked at scale. The flow has begun. It will continue through 2030.

What this could mean for Wales

Even a proportionate Welsh share of the £100 billion mobilisation is materially larger than the combined capital programmes of the current Welsh public sector. Wales has roughly a twentieth of the UK population. A twentieth of £100 billion is £5 billion. The Welsh share of LGPS consolidation flows alone, if proportionate, would dwarf most current Welsh public investment vehicles.

Those numbers are not destined. They are conditional. They depend on Wales having the receiving infrastructure to capture pension flow when it deploys. Capital does not flow toward geography. It flows toward investable propositions. The geography that has prepared its proposition base captures the capital. The geography that has not, watches it deploy elsewhere.

Why Wales is not yet ready

Five gaps, drawn from the Cardiff Business School research that underpins DC's wider work, sit between Welsh ambition and Welsh capital absorption.

Verification. No standing scheme certifies which Welsh organisations are credibly delivering social or environmental impact in a form institutional capital can act on. Without verification, the diligence cost of every Welsh investment is paid bottom-up by each allocator. The market does not scale.

Propositioning. Welsh organisations doing valuable work do not have a function that translates that work into the language of institutional capital. Pension fund analysts cannot evaluate what is not packaged for them.

Capital matching. The right instruments for the right needs do not exist at scale. Outcomes-linked finance, social investment bonds, blended capital structures: these instruments exist somewhere, but Wales does not have the standing infrastructure to issue them at the volume the next five years will require.

Measurement. Every Welsh public body uses a different reporting framework. Pension allocators looking for consistent impact reporting across a regional portfolio cannot easily aggregate Welsh evidence.

Sustained convening. There is no standing platform that brings Welsh proposition holders, public sector counterparts and institutional capital allocators into the same room on a regular cycle.

The closing window

The capital is moving now. The 2030 horizon for Mansion House compliance is four and a half years away. The funds that will be deployed are being structured this year and next. The geographies that will capture them are being chosen by allocators inside that window. Wales does not have an indefinite period of preparation. The decisions that determine where pension capital flows in the late 2020s are being made today.

The Coalition is being built around exactly these five functions, and the Cardiff Business School research published in April sets out the architecture. The work is underway. Whether it moves at the pace the capital window requires is the operational question for the next two years.

What needs to happen

Three things, in roughly this order. A verification function operating on a defined cohort of Welsh organisations by the end of 2026. A first capital matching pilot, with a named pension allocator and a defined Welsh deal flow, in 2027. And a measurement framework, anchored in the seven goals of the Well-being of Future Generations Act, that lets allocators aggregate Welsh impact reporting consistently.

Whichever administration holds the Welsh economic brief through to 2030, the underlying capital window is the same. The infrastructure DC and its partners are building is designed to serve whoever forms the government, not to advocate for any of them. The case for getting it done is structural, not political.

The largest single pool of productive long-term capital this country has seen in a generation is forming. Wales has the policy framework, the legislative foundations and the delivery partners to receive it. The connective infrastructure is what is missing. The next two years decide whether it gets built in time.

Public procurement is the least glamorous lever in any state's toolkit, and one of the most powerful. In Wales, public bodies spend around £8 billion a year buying goods, services and works. That number is bigger than any single grant programme the Welsh Government runs, more flexible than legislative reform, and more immediate than economic strategy. If even a fraction of it is directed against the country's stated wellbeing goals, the effect on the Welsh economy and on Welsh social outcomes is substantial. If it is directed indifferently, that fraction goes elsewhere.

What the 2023 Act actually does

The Social Partnership and Public Procurement (Wales) Act 2023 places a statutory duty on Welsh contracting authorities to deliver socially responsible procurement. The Act is the first piece of primary legislation on procurement to be made in Wales. It explicitly links the £8 billion of annual spend to the seven goals of the Well-being of Future Generations Act, and it amends the "prosperous Wales" goal so that fair work becomes one of its stated outcomes.

In plain language: every Welsh public body, by law, must now make procurement decisions that contribute to environmental, social, economic and cultural wellbeing. That is not aspirational language. It is statutory.

What changes in 2026

The Act has been commenced in stages since 2023. The remaining provisions come into force on 25 March 2026, moving the legislation from framework duty to operational requirement. From 1 April 2026, contracting authorities must publish annual socially responsible procurement reports for prescribed contracts, and Welsh Ministers must publish an annual report on public procurement across Wales.

The Social Partnership and Public Procurement (Wales) Regulations 2026 set out the information those reports must contain, including the estimated value of contracts awarded to suppliers offering opportunities to use, learn or improve Welsh language skills, and to suppliers that recognise a trade union. The reporting regime is not a tick-box exercise. It is a public statement of where socially responsible Welsh procurement is, and is not, happening.

From March 2026, in other words, Welsh procurement officers have a statutory obligation, a measurement requirement and a public reporting duty all converging on the same point.

Why it is the lever that operationalises the wellbeing economy

The Well-being of Future Generations Act sets the strategy. The Social Partnership and Public Procurement Act is, in practice, the principal lever that operationalises it. £8 billion a year, directed against the seven wellbeing goals, is what making the strategy real looks like. Without the procurement work, the WBFGA stays an aspirational document. With it, the WBFGA becomes the country's working operating system.

That is why the Act matters beyond the procurement profession. It is the bridge between the world-leading statutory framework Wales already has, and the everyday transactional reality of how the Welsh state spends money. The bridge has been built. Whether traffic flows across it well is the question now.

The three things that have to be solved

The Act gives Welsh procurement officers a legal duty. It does not, in itself, give them the infrastructure to discharge that duty well. Three gaps stand between the statute and the outcome.

Verification. When a council buys school meals, builds housing or commissions adult social care, the contracting authority has no consistent, credible way to tell which providers genuinely deliver social value and which claim to without doing so. Without verification, "socially responsible" risks becoming a paperwork exercise. With it, the £8 billion can be directed with confidence.

Measurement. Every Welsh contracting authority will need a measurement framework consistent enough that the Welsh Ministers' annual report means something at a national level. The current proliferation of frameworks is itself a tax on capacity. A shared measurement architecture, anchored in the seven wellbeing goals, would allow the system to aggregate evidence and learn at pace.

Capability. Procurement officers across 44 listed public bodies need to know how to specify, score and award contracts for social value at scale. That capability exists in pockets across the system. It is not yet evenly distributed, and the volume of contracts that will fall under the new reporting regime from April 2026 is significant. Without a capability programme, the Act risks being delivered unevenly, with the strongest authorities setting the pace and the rest catching up over years.

What the Coalition does about it

The Cardiff Business School research that informs DC's Coalition design maps directly onto these three gaps. A verification function (function one of the five). A measurement framework anchored in the WBFGA seven goals (function four). A propositioning function that helps Welsh social organisations compete inside the new reporting regime (function two). The infrastructure exists in design; the work of the next two years is to bring it operational.

DC Ventures contributes through the Social Value Planner, the prototype tool that helps Welsh organisations plan, deliver and report on social value under the SPPP regime. The tool sits inside the broader architecture. It is one piece, not the whole.

The political context

The Plaid Cymru-led government that took office in May 2026 inherits the SPPP Act in mid-implementation. The party's manifesto proposes an Economic Fairness Bill and a resurrected WDA-style economic development agency, both of which would intersect directly with how the £8 billion lever gets pulled. Welsh Labour's record on procurement is the foundation on which the new administration will build. The Conservatives have expressed concern about administrative burden on smaller suppliers. The shape of how the Act is operationalised in 2026 and 2027 is the responsibility of the new Cabinet Secretary holding the brief, whichever party they come from.

One thing the SPPP Act has that few pieces of Welsh legislation share is broad cross-party agreement on its underlying intent. Operationalising it well is a question of capability and architecture, not of constitutional principle. That is a useful starting point.

The bottom line

£8 billion a year is the lever. The Act made the lever stronger. From March 2026 the lever has an operational mandate behind it. Pulling it well, across 44 public bodies, against seven wellbeing goals, is the work of the next five years. Verification, measurement and capability are the things that have to be solved. The infrastructure to solve them is in design. The next two years decide whether it gets built.

The wellbeing economy is not a policy. It is what happens when Wales spends £8 billion of public money in line with the seven goals it has placed on the statute book. That is the work. It is unglamorous, technical and consequential, all at once.

There is a structural feature of the Welsh labour market that is no longer in serious dispute. Wales has more working-age people outside the workforce than the UK as a whole, and the gap has been widening. This is not a measurement artefact, and it is not a story about laziness, and it is not a recent phenomenon. It is the long shadow of de-industrialisation, public sector retrenchment and an underlying health profile that the rest of the country, mostly, does not share. The drivers are well documented. The policy response, less so.

The headline numbers

In the year ending December 2025, the economic inactivity rate for working-age people in Wales (excluding students) was 20.5%. The equivalent UK rate was 17.6%. The gap is just under three percentage points. The Welsh unemployment rate over the same period was 4.5%, up 1.2 percentage points on the previous year. The Welsh employment rate is gradually moving in the opposite direction from the UK average; the employment gap between Wales and the UK widened from 2.5 percentage points in late 2024 to 3.0 percentage points in late 2025.

What that means in practice: of every 100 working-age people in Wales, roughly 20 are economically inactive and approximately 4-5 are unemployed. The remainder are in work, though not all of them in good work. Wales's underlying productivity, measured in GVA per head, sits at around 72% of the UK average. The country produces less per person, employs fewer of its working-age people, and pays them less for the work they do.

The driver is health

Long-term sickness is the single largest reason for economic inactivity in Wales, and it has been getting worse. In the year ending December 2025, long-term sickness accounted for 38.9% of all economically inactive Welsh males, a 2.3 percentage point increase on the previous year. For Welsh women, long-term sickness accounted for 32.0% of economic inactivity, recently overtaking "looking after family" as the leading driver.

The Bevan Foundation's State of Wales work tracked the trajectory. Between September 2020 and September 2024, the number of Welsh people reporting they were economically inactive because of long-term illness rose by more than 37,000, an increase of 6.4 percentage points in proportional terms. Some of this is pandemic-related. Some of it is the long tail of cuts to community health, mental health and rehabilitation services. Some of it is a Welsh population that is older, more rurally dispersed and with a higher prevalence of chronic conditions than the UK average. None of it is going to resolve without sustained, integrated action across health and economic policy.

The operational implication is unavoidable. The Welsh workforce strategy is, in significant part, a Welsh health strategy. Decoupling the two is not possible.

The geography matters

The challenge is concentrated, not uniform. In the year ending September 2025, the economic inactivity rate in Mid and South West Wales was 25.2%. In South East Wales it was 24.3%. In North Wales, 22.3%. Inside these regional aggregates, the variation between local authorities is wider still. In some Valleys local authorities, economic inactivity because of long-term illness alone exceeds 30%.

A national workforce strategy that treats Wales as homogeneous will misfire. The work has to be place-specific, calibrated to local labour market conditions, employer mix and health profile.

What we do not yet see well

The Welsh labour market is reasonably well-measured at the aggregate level, through ONS labour force statistics, the Annual Population Survey and HMRC real-time information. What is harder to see, in published data, is the granular employer base: which Welsh organisations are growing, which are contracting, which sectors are hiring, where wage growth is happening and where it is not.

This is the gap DC Ventures' Cambria is being built to address. Cambria currently indexes more than 2.4 million Welsh data points and turns them into structured intelligence that public bodies, investors and partners can use. The point is not promotional. The point is that better visibility into the actual Welsh employer base is itself part of the workforce response, because policy can only be as well-calibrated as the data infrastructure it operates on. The country needs to see itself before it can act on what it sees.

What is and is not working

The existing Welsh Government employment programmes (Communities for Work, Working Wales, ReAct+, the Young Person's Guarantee, the Employability Skills Plan) have produced genuine outcomes in places. Welsh Government's own evaluations show real success in getting people into employment, in young person engagement, and in particular geographies. The pattern is also clear: useful programmes, fragmented delivery, no shared measurement framework that lets the system as a whole learn at pace.

Staff retention and workforce planning matter as much as employment programmes. The Welsh Government's 2024 economic and fiscal report flagged retention as a priority for public sector productivity. The same logic applies across the wider economy. A workforce strategy that focuses only on getting people into jobs, and not on whether those jobs are good and people stay in them, leaves a great deal of value on the table.

The political moment

The Plaid Cymru-led government that took office in May 2026 inherits the workforce challenge. The Plaid manifesto proposes a resurrected WDA-style economic development agency and an Economic Fairness Bill, both of which would change the institutional architecture inside which workforce policy is delivered. The party's "five priorities", health and care, childcare, the Welsh economy, schools and child poverty, intersect directly with the conditions that produce economic inactivity in the first place.

Welsh Labour's record over the previous administration includes the SPPP Act 2023, the foundational economy programme and the existing employability portfolio. The Conservatives have emphasised closer alignment with UK Government welfare reform. Reform UK has positioned around in-work taxation and reducing the welfare bill. Each of these positions has implications for the Welsh labour market that go beyond party slogans, and each will play out in the operational decisions of the next two years.

What needs to be true regardless

Three things hold regardless of which administration is doing the work.

Health-led labour market policy. Because long-term sickness is the dominant driver of economic inactivity, no workforce strategy will succeed without integrated action on the underlying health conditions. That means primary care, mental health services, occupational health and rehabilitation, working alongside the employment programmes rather than parallel to them.

Shared measurement. A common framework for "what good looks like" in workforce outcomes, anchored in the Wellbeing of Future Generations Act seven goals and the SPPP Act 2023 reporting requirements. Without it, the system cannot tell what is working at pace.

Verification and matching. Knowing which Welsh employers are credibly creating quality jobs, and routing public investment and procurement towards them. Both Cambria's data infrastructure and the verification function inside the Coalition design are oriented to this work.

The bottom line

Wales has the analytical tools, the legislative framework and the institutional architecture to do this work better than the country currently does. The infrastructure DC and its partners are building exists to support whichever administration takes office, and to be used by the public sector, the third sector and employers regardless of political weather. The workforce challenge is the country's most consequential structural problem. Solving it properly is generational work.

The Welsh workforce is not failing. It is being asked to operate inside a system whose pieces have not yet been put together properly. Better data, integrated policy, place-specific delivery and a sustained focus on the health drivers behind economic inactivity are the components. Building the connective infrastructure between them is the work.

There are not many policy frames Wales can claim to have introduced before anywhere else. The foundational economy is one of them. The idea, that the everyday goods and services people rely on (food, care, housing, energy, retail, transport) constitute a distinct part of the economy worth treating strategically, has its intellectual roots in the work of the CRESC research centre at Manchester and the Foundational Economy Collective. It became Welsh Government policy in 2019. Seven years on, the question worth asking is not whether the idea was right. It is whether the implementation has matched the ambition.

What the foundational economy actually is

The Welsh Government's working definition is broad: "the foundational economy is made up of those goods and services in our communities that we use every day. Care and health services, food, housing, energy, construction, tourism and retailers on the high street are all examples". The published estimate is that these sectors account for around four in every ten Welsh jobs and around one pound in every three of household spending. In some Welsh communities, particularly outside the south-east, the foundational economy is, simply, the economy. The strategic question is how it is governed.

The Welsh policy frame and its history

The original Foundational Economy Challenge Fund opened in 2019 with around £4.5 million of funding distributed across 52 projects. The intent was clear: experimental pilots to test new ways of strengthening foundational sectors, with a particular focus on supply chain localisation, community wealth retention and improving employment conditions.

The successor programme, the Foundational Economy Projects funded between 2023 and 2025, focused on two sectors: food, and housing and construction. The total funding envelope was just over £2 million. The Welsh Government's December 2025 evaluation report on these projects reported "the success of the Foundational Economy projects". It set the work against the underlying scale of the relevant sectors: 18,190 businesses in the Welsh food sector, generating £21.7 billion of turnover; 31,160 businesses in housing and construction combined, generating turnover of nearly £24 billion.

Those numbers are the source of the central question of this brief. A programme of £2 million is, on any reading, a vanishingly small intervention against a combined sectoral turnover of around £45 billion. The policy ambition described in the foundational economy literature, the relocalisation of supply chains, the structural improvement of employment conditions in foundational sectors, the building of new community-owned and worker-owned business models at scale, is not deliverable at that funding ratio. It is barely demonstrable.

What has worked

The pilots have produced genuine demonstration value. Cynnal Cymru, as the community of practice provider, has built and held a network of practitioners that did not previously exist in Wales. The Centre for Local Economic Strategies (CLES), engaged to support a Welsh Government blended approach with public service board members, has applied a body of community-wealth-building methodology that is unusually well-developed in the UK context. The "can do" principles embedded in the pilots have shifted, in places, how Welsh public bodies think about local supply chains and procurement.

Wood Knowledge Wales, Cyfle Building Solutions, Menter Mon's Tech Tyfu project, Cardiff Council's Food Hour: each of these initiatives has produced specific, evaluable outcomes. The 2023-25 evaluation reports 120 additional jobs created through PAS2030 contractor support, 80% of Cyfle apprentices progressing into employment or apprenticeships, and the establishment of standing communities of practice that have continued past the project funding window.

These are real outcomes. They are also, in scale terms, demonstration outcomes, not transformational ones.

What has not

The most useful critique of the Welsh approach to date comes from inside the sector. The Foundational Alliance Wales, a coalition of practitioners and policy thinkers, has argued that "there are too few outcomes that are positive and policy driven" from explicitly-labelled foundational economy initiatives. It contends that, while there have been "accidental successes" through the Challenge Fund, the way the fund was developed diluted "the impact and learning opportunities". The Senedd's Economy, Trade and Rural Affairs Committee broadly concurred, concluding that, while there are examples of excellent foundational economy initiatives, the Welsh Government "needs to work with partners to learn from these and spread best practice more widely".

The structural pattern is clear: useful pilots, weak scaling, no consistent measurement of systemic effect, a funding envelope that is incompatible with the strategic claims being made on the policy's behalf. Cyfle Building Solutions, one of the better-known successful pilots, captured the wider sectoral view in its own contribution to the recent committee evidence: "without that pump-prime, we wouldn't have piloted something. But any mainstreaming requires longer-term investment rather than short-term grant".

The strategic question for the next Senedd

The next administration inherits a foundational economy policy that has produced real learning, accumulated a working coalition of practitioners, and is fundamentally under-resourced relative to its own stated ambition. Becoming a serious industrial strategy would require three changes.

Scale of funding. A foundational economy programme that takes itself seriously needs a budget proportionate to the sectors it is trying to influence. £2 million against £45 billion of sectoral turnover is not that.

Statutory weight. The most effective lever available to the foundational economy frame is the SPPP Act 2023, which puts socially responsible procurement on a statutory footing across £8 billion of annual Welsh public spend. Integrating the foundational economy explicitly into the operational architecture of the SPPP Act, rather than running it alongside, would change the scale of what is possible without requiring new statute.

Systemic measurement. A measurement framework that tracks what the policy is supposed to achieve at the system level (local pound retention, employment conditions in foundational sectors, ownership structures, community wealth) rather than at the project level. Pilot reporting is necessary; it is not sufficient.

Where the new administration sits

The Plaid Cymru manifesto proposes the resurrection of a WDA-style economic development agency and an Economic Fairness Bill, both of which would change the institutional architecture inside which the foundational economy is delivered. The party's emphasis on community wealth, on Welsh ownership and on the "£1 in £3" economic argument is consistent with the foundational frame in principle. The 100-day commitment to realign Welsh Government spending with manifesto priorities provides a window for the funding question to be revisited.

Welsh Labour has signalled continued commitment to the existing frame. The Conservatives are sceptical of state intervention at scale in commercial supply chains. The other parties have been less specific. The genuine cross-party point is that there is a foundational economy in Wales whether the policy frame names it or not; the strategic question is whether the country governs it deliberately or by default.

The bottom line

The foundational economy frame is right. The institutional and financial commitment behind it, to date, has not been. Whichever administration takes office in the next Senedd will need to choose: either treat the foundational economy as the industrial strategy it claims to be, with the scale of funding, statutory weight and measurement architecture that implies, or accept that it is, at present, a useful piloting culture and a national learning network. Both are valuable. They are not the same thing. The country deserves an honest distinction between them.

If you read enough business literature on productivity, on regional inequality, on the long-run consequences of ownership form, you start to notice a pattern. The countries that have done best at keeping wealth in their communities, at sustaining productivity growth across regions, and at retaining good employers through generational transition are the ones that took the cooperative form seriously. Not as ideology, not as nostalgia, but as a workable model of how a modern business is owned. Wales has more of this form than most of the UK, and it has been growing rapidly. The strategic question is whether we treat that growth as a sectoral curiosity or as core industrial strategy.

The numbers

The number of employee-owned businesses in Wales has grown from 37 in May 2021 to 63 by June 2023, hitting the Welsh Government's target of doubling the sector by May 2026 ahead of schedule, in June 2024. The sector is approaching 100 employee-owned businesses across Wales. Cwmpas, the Welsh Co-operative Centre established in 1982 by the Wales TUC, has supported transitions across every Welsh local authority over the period. Gwynedd is the first county in Wales to be formally designated as an Employee Ownership County, supported by the council itself.

These are not just symbolic conversions. They include businesses across professional services, retail, construction, food production and manufacturing. Dafydd Hardy, the first employee-owned estate agency in Wales, transitioned in late 2024, safeguarding 44 jobs in north Wales. BIC Innovation, a business consultancy in Gwynedd, has more than tripled its employee numbers since employee ownership transition. The Timber Cooperative in Caernarfon is producing high-quality, locally sourced timber for community building projects, in a worker-owned model. The diversity of the conversions matters. Cooperative ownership is no longer a niche form for one or two sectors.

Why the cooperative form matters now

Three structural Welsh problems have, until now, resisted decades of policy intervention. The cooperative form addresses all three in ways the conventional firm does not.

Productivity. The international research literature on employee ownership and worker engagement is now reasonably settled. Employee-owned businesses tend to be more productive than comparable conventionally-owned firms, particularly in service sectors. The mechanism is engagement: people who own the place they work in tend to work in it differently. For an economy whose GVA per head sits at 72% of the UK average, that productivity premium is not a marginal benefit.

Ownership flight. A long-running Welsh problem, particularly acute in SMEs at the point of generational transition. Many Welsh businesses, in family ownership, sell to private equity or trade buyers from outside Wales when the founder retires. The capital leaves, the supplier relationships reorient, the local civic anchor weakens. Employee ownership is a credible alternative for that transition moment, and Cwmpas has been the principal vehicle for delivering it.

Local wealth retention. Businesses rooted in their local communities, owned by people who live in them, hire locally, source locally and reinvest locally tend to keep more wealth circulating in the local economy than businesses owned at distance. This is, again, well-evidenced. It is also the explicit policy intent of the foundational economy frame, the SPPP Act and the Wellbeing of Future Generations Act in combination.

The institutional architecture Wales already has

Wales has, in Cwmpas, one of the longest-established cooperative development bodies in the United Kingdom. It is over 40 years old, has support agreements with local authorities, has been a recipient of UK Shared Prosperity Fund delivery, and has the operational know-how to transition businesses across sectors. Tower Colliery, which became the largest employee-owned company in Wales in January 1995, is one of the defining Welsh business stories of the late twentieth century. The institutional memory and capacity exist.

What Wales does not yet have, at scale, is a capital architecture matched to the cooperative form. Most existing UK capital instruments are calibrated for conventional ownership structures, conventional exit timelines and conventional governance. Cooperatives do not exit to private equity. They do not optimise for a five-year horizon. The cooperative sector has been growing in Wales largely on the strength of debt finance, founder transition arrangements and limited public sector support. The structural capital problem is real.

What the sector itself is calling for

Cwmpas published a 2026 manifesto setting out ten cooperative actions for the next Welsh Government to take. The headline proposals: invest in specialist support and create a cooperative development hub to identify, support and scale new cooperative, employee-owned and social businesses; double the size of the employee-owned business sector again; promote community ownership of assets as part of a national strategy with new laws and funding; and empower social enterprises to deliver community-led health services through simpler contracting and stronger weight on social impact.

The cooperative ask is not exotic. It is broadly the same set of actions one would expect of any country taking the form seriously: institutional support, capital matching, statutory recognition and a procurement regime that rewards the form rather than penalising it.

The capital piece, and the Mansion House moment

The largest single opportunity for the Welsh cooperative sector over the next five years is the same opportunity sitting in front of the rest of the Welsh impact economy: the £100 billion of UK pension capital being mobilised through the Mansion House Accord and Compact. Pension capital is patient, long-horizon, mission-flexible capital. It is precisely the kind of capital that maps well to cooperative business models, with their longer payback profiles and structural unwillingness to exit.

The challenge is that there is currently no standing mechanism in Wales that turns Welsh cooperative propositions into instruments pension capital can deploy into. The Coalition's capital matching and propositioning functions are being designed to address that gap. The cooperative sector is, on most reasonable readings, one of the principal beneficiaries of getting that architecture built well.

The political moment

The 2026 Plaid Cymru manifesto includes a new national energy company, community energy ownership measures and a renewables wealth fund. The wider economic frame proposes the Economic Fairness Bill and the resurrected WDA-style agency. Each of these intersects with the cooperative economy frame in identifiable ways. Welsh Labour's record on cooperative growth, including the underlying Welsh Government support for the EO target, has been broadly positive. The Conservatives have been more sceptical of state support for any particular ownership form. Reform UK has been less specific. The cross-party point worth landing is that cooperative growth in Wales has happened under successive administrations and is broadly supported by the practitioner community.

The systemic case

Cooperative ownership is not nostalgia and it is not ideology. It is a serious institutional answer to a structural problem: how to keep wealth circulating locally in a small open economy, how to retain good employers through generational transition, and how to lift productivity in places conventional ownership models have struggled to serve.

The evidence supports the form. The institutional capacity exists. The political moment is, on balance, open. What is missing is scale, capital structure and the policy commitment to treat cooperative growth as core industrial strategy rather than as a peripheral interest. The Cwmpas manifesto is a credible starting point. The next two years will tell whether the next administration takes it seriously enough to build the architecture out.

A country that wanted to be serious about productivity, about regional inequality and about keeping wealth in its communities would treat cooperative ownership as core infrastructure. The country in question, in this case, is Wales. The work to make it so has begun. Whether it scales depends on the choices made in the next two years.

The Senedd voted in 2024 to grow from 60 members to 96 from the May 2026 election. The case for it was straightforward and accepted across most of the parties: a parliament too small to scrutinise its own government, with members sitting on multiple committees while several hundred pages of evidence sat unread on the desk. The Cardiff University view, made well by Daran Hill among others, was that Wales had spent two decades trying to scrutinise a national government with a backbench too thin to do it properly.

The expansion is the right answer to that question. It is not the whole answer. A larger Senedd helps internal scrutiny: more members, fewer briefs each, more time on the legislation in front of them. It does very little for the external scrutiny ecosystem, the journalism, the think tanks, the policy researchers, the civic-technology infrastructure, that any modern democracy depends on to translate parliamentary work into something voters can engage with. That ecosystem has been shrinking for the entire life of devolution.

What scrutiny actually consists of

Parliamentary scrutiny is not a single thing. It is a system. Committees take evidence. Members ask questions. Journalists translate that work for a wider readership. Think tanks and academic centres run alternative analyses. Civic technologists make the underlying data legible. Citizens use that information to form judgements. Each layer depends on the layer below it being functional.

In Wales, the parliamentary layer is about to be substantially strengthened. The Welsh Government's own framing of the Senedd Cymru (Members and Elections) Act 2024 was that the expansion would give the institution "increased capacity to scrutinise, make laws, and hold the government to account". That is reasonable, and most independent commentary has agreed.

The layers around the parliamentary one are a different story. They have been thinning for a long time.

The journalism layer

The Senedd's own research service has been blunt about it. The Culture, Welsh Language and Communications Committee, reporting at the end of the Fifth Senedd, concluded that the "supply of media content for Wales is inadequate" and that the biggest shortfall was in news and current affairs. The committee called the retreat of news journalism from Wales "a profound public policy issue, which policy makers at all levels, not least the Welsh Government, need to address as a priority issue".

The numbers behind that conclusion are stark. The Western Mail, the only daily newspaper distributed across Wales, had a circulation of 37,576 in 2008. By 2020, that figure had fallen to 8,419, a fall of more than three-quarters in twelve years. Media Wales, the company behind the Western Mail and South Wales Echo, employed close to 700 editorial and production staff in 1999. By the time Cardiff University's Andy Williams was tracking the figures, that number was 136.

Welsh broadcasting has held up better, particularly BBC Cymru Wales and S4C, but the dedicated political journalism budget is a fraction of what it was. The Wales Report, BBC Wales's flagship political programme, was scrapped in 2017. ITV Wales's Sharp End has survived but in a late-night slot. The result is that a country which now legislates in twenty distinct policy areas has fewer specialist Welsh political journalists than it did twenty years ago, when it had legislative competence in almost none of them.

The point is not nostalgia for old institutional forms. It is that the work those institutions did, asking ministers difficult questions, reading committee transcripts, holding civil servants to account, translating policy documents into something an ordinary citizen could understand, is not being done in equivalent volume by anything that has replaced them. Nation.Cymru, founded in 2017 by Ifan Morgan Jones precisely to address that gap, has done remarkable work on a fraction of the budget of any national title. The Bureau of Investigative Journalism's Local Reporting Service has helped, as have BBC-funded Local Democracy Reporters. None of these initiatives, individually or together, replace what a healthy Welsh press once did.

The policy layer

The think tank picture is similar. Wales has, by international standards, very few of them. The Bevan Foundation, the Institute of Welsh Affairs, the Wales Centre for Public Policy, the Welsh Centre for International Affairs, Gorwel, the Bevan Commission. That is essentially the list. Of those, only two operate as fully independent generalist think tanks producing regular policy output: Bevan and the IWA. The Bevan Foundation's most recently filed accounts gave assets of around £180,000 and the IWA's around £200,000. Those are the budgets supporting the country's two main independent voices on Welsh public policy.

For comparison: the Resolution Foundation, IPPR, Nuffield Trust and Institute for Fiscal Studies all operate at budgets several multiples larger and several of them have larger London staffs than Wales has independent think-tank staff in total. The Scottish independent policy ecosystem, while not enormous, is meaningfully bigger than the Welsh one, partly because of an older tradition of Scottish-specific philanthropy and partly because devolved competence in Scotland has attracted a research community to match.

The Wales Centre for Public Policy, founded in 2017 as a successor to the Public Policy Institute for Wales, provides high-quality evidence reviews on behalf of Welsh Ministers. It is doing essential work. It is not a substitute for independent scrutiny: it is co-funded by Welsh Government and works largely to the Welsh Government's commissioning brief. That is a useful function. It is a different function.

Senedd Research, the in-house service for the Senedd itself, is similarly essential and similarly distinct from independent scrutiny. The two together, plus a handful of academic specialists at Cardiff, Swansea, Aberystwyth and Bangor, plus the half-dozen think tanks listed above, are the policy layer. It is too thin for a country with 96 elected representatives now legislating across a wide and growing range of devolved competencies.

The civic-tech layer

Then there is the layer most countries now take for granted: civic technology. The infrastructure that turns parliamentary activity into something a citizen, a journalist or a researcher can actually search, read and use. TheyWorkForYou for Westminster. OpenAustralia. They Vote For You. The OpenCorporates database for company structures. A range of structured-data platforms that make democratic activity legible at scale.

Wales has not historically had the equivalent. OpenSenedd, which DC Ventures has been running since 2024, is part of an attempt to start closing that gap, with structured tracking of every vote, debate, statement and sentiment shift across the Senedd. It is one tool. Other tools are needed, including for procurement, for grants, for local government decisions, for committee evidence, for the relationship between policy commitments and outcomes. Each one of those, in a country well served by civic technology, would be a separate operating product or platform, used daily by people whose job it is to understand what government is doing. In Wales most of them do not yet exist.

What closing the gap requires

This is not, mainly, a public-policy problem in the Senedd's gift. It is a civic and philanthropic infrastructure problem, and it will be solved at the scale of independent organisations, philanthropic capital, journalism funding and civic technology partnerships, or it will not be solved at all.

Three things are worth saying clearly.

One. The Senedd expansion is necessary but not sufficient. A larger parliament with better committee capacity is, on net, a major improvement. It does not make up for the contraction in the external scrutiny ecosystem. Anybody pointing at the expansion as a complete answer to Welsh accountability is making an incomplete argument.

Two. Welsh civic infrastructure needs sustained, patient capital. The Bevan Foundation and the IWA have done extraordinary work on tight budgets for decades, and so has every smaller research outfit and journalist trying to cover Welsh politics seriously. They have done it without the philanthropic base or the UK-wide trust funding that comparable English-language organisations elsewhere benefit from. That is a fixable problem, and one of the things the Social Impact Coalition is designed to help address.

Three. Civic technology is part of the answer, not an alternative to it. A well-funded press, a well-resourced policy ecosystem and a well-built civic tech layer all do different jobs. OpenSenedd does not replace investigative journalism. Better procurement data does not replace the IWA's policy work. The point is that all three are weaker in Wales than in comparable democracies, and the answer is to strengthen each of them rather than choose between them.

The Senedd expansion is, in this light, a beginning. The institution being scrutinised is larger and better-resourced for the first time in its history. The institutions doing the scrutinising are, with some exceptions, not. That asymmetry is the architecture problem Wales has to solve next.

Audit Wales, the trading name of the Auditor General for Wales and the Wales Audit Office, audits more than 800 public bodies and around £28 billion of income and expenditure a year. That is the scale of the Welsh public sector accounted for through the Auditor General's office: NHS Wales, the 22 unitary authorities, the four police and crime commissioners, three fire and rescue authorities, three national park authorities, the Senedd Commission, Welsh Government itself and the sponsored bodies sitting under it. It is, by any reasonable definition, a significant share of Welsh economic life.

What a Welsh citizen, journalist or researcher can find out about that spending, in practice, without making a formal request, depends very heavily on which body holds the money and which contracting authority is doing the spending. The picture is improving. It is not yet good.

What good would look like

It is worth being clear about the target. The international standard for procurement transparency is the Open Contracting Data Standard, a free, non-proprietary open data standard implemented by governments around the world. The OCDS describes how to publish data and documents for the procurement of goods, works and services in machine-readable form, structured so that any researcher, journalist or supplier can analyse them at scale rather than reading one PDF at a time.

Wales has signed up to the standard. Sell2Wales, the Welsh Government's procurement portal, publishes contract data in OCDS-compliant formats from November 2016 onwards, including bulk downloads in XML, JSON, Excel and CSV. That puts Wales meaningfully ahead of where it was a decade ago, and ahead of some comparator nations on this specific question. The framework exists. The standard is adopted. The publication mechanism is in place.

The harder question is whether what runs through that pipe actually delivers transparency in the sense the public would recognise.

Procurement: the framework, the gap

Welsh procurement is governed, from 25 March 2026 onwards, by the Social Partnership and Public Procurement (Wales) Act 2023 together with the UK Procurement Act 2023. Both Acts substantially strengthen the legal requirements around transparency. The Procurement Act 2023 introduces a requirement to publish details of all payments over £30,000 made under public contracts, with the explicit purpose of increasing transparency of public spending. The SPPP Act 2023, fully commenced in stages through 2026, requires Welsh contracting authorities to publish annual reports describing how their procurement activity has contributed to the seven well-being goals, and to maintain a public contracts register of "registrable contracts" above defined thresholds.

These are real improvements. The annual reporting duty, which came into force on 1 April 2026, is a genuinely new accountability mechanism. Welsh public bodies will now have to evidence, every year, how their procurement decisions contributed to economic, social, environmental and cultural well-being. That is a more demanding standard than English-language equivalents and a tougher reporting requirement than most comparator jurisdictions impose.

The gap is not in the framework. It is in the practical visibility. Sell2Wales captures notices above defined thresholds (over £25,000 for goods and services, over £2 million for works), but does not currently capture below-threshold spend in the same structured form, and the data quality is, by Sell2Wales's own published guidance, the responsibility of the contracting authority entering the data. The result is a system where the formal record exists but is not, in practice, the kind of thing a citizen can use to ask a specific question of a specific council.

None of this is a failure of Welsh Government or of Audit Wales. It is a structural feature of how 22 local authorities, seven local health boards, multiple non-departmental public bodies and Welsh Government itself all contract independently of one another. Each has its own commissioning function, its own systems, its own categorisation. No single platform aggregates them into a defensible national view.

The grants question

Procurement is half the picture. Grants are the other half. The Welsh Government's own 2019-21 UK Open Government Partnership commitments noted that "there is no routine/regular publication of grant scheme or grant offer data", and that "by making grants data openly available, it is anticipated that the public will gain a better understanding about how Welsh Government spends money in Wales". That commitment was made six years ago. Grant data publication remains, in 2026, less developed than procurement data publication, despite grants being a comparable lever in budget terms.

This matters because grant funding is how a very large share of the Welsh third sector is supported, how regional economic development is delivered, and how a great deal of Welsh policy intention is converted into activity on the ground. Without structured, machine-readable grant data, it is hard for any researcher to answer basic questions: which organisations received Welsh Government funding last year, in which categories, for which outcomes, at what scale, in which constituencies, and to what effect. The information exists, in fragments, across the systems of dozens of different funding bodies. It is not aggregated, and it is not searchable as a single dataset.

Local government, twenty-two ways

Wales's 22 unitary authorities make local government in Wales an interesting case in its own right. The Senedd Petitions Committee considered a petition in the previous Senedd asking that all Welsh local authorities be required, by statute, to publish details of spending over £500, on the model adopted by many English councils. The petition noted that "the information is already available on various internal council databases, so would merely need to be collated centrally and in a form suitable for access".

Some Welsh councils already publish at this level. Others do not. There is no statutory requirement to do so. There is no shared format, no shared categorisation and no single comparison view. A resident in Cardiff who wants to know how Cardiff Council spends compares to Swansea, Wrexham or Carmarthenshire has to download twenty-two different PDF reports and reconcile them by hand. In practice, very few do.

The Welsh Local Government Association represents the 22 authorities collectively and has done useful work on collaborative procurement, shared services and benchmarking. The Independent Commission on Local Government Finance Wales, in its final report, observed that the existing finance system "has not failed" but identified a series of changes that would strengthen local accountability. None of those changes are about transparency in the sense this brief is interested in, the sense of giving citizens the information they need to compare and judge.

The audit layer is doing its job

None of this is to suggest that nobody is looking at the £28 billion. Audit Wales does, every year, and to a high professional standard. The Auditor General is a statutory office with real powers, real independence and a track record of producing useful public-interest work, on financial audit, on value for money, and on local performance themes covering inequality, the climate emergency, service resilience and well-managed public services.

The audit function is not the same as public transparency. Audit Wales produces detailed accounts for each public body, but those accounts are published for accountability to the Senedd, not to the public, and they are not designed to be aggregated or compared at scale. They are the institutional answer to the question "is public money being properly accounted for". They are not the answer to the question "where, exactly, is it going, and what is it producing on the ground".

What closing the gap requires

The framework is in place. The standard exists. The legal duties have been strengthened materially through 2026. The political appetite for transparency, across parties in Wales, has been broadly consistent for at least a decade. What is missing is the connective infrastructure: the platform layer that turns several hundred separate publication streams into a single, usable, queryable view of Welsh public spending.

This is solvable. Some of the components already exist. Sell2Wales already exports OCDS data. Audit Wales already audits all the bodies. StatsWales already publishes local authority expenditure outturn data. Welsh Government's open data publication guide already sets the default expectation that public data should be published unless there is a specific reason not to. The pieces are real. They have not yet been joined up.

Joining them up is the project. Three things would close most of the gap.

First, a shared standard, applied consistently. The Open Contracting Data Standard is the obvious answer for procurement. An equivalent grants data standard, building on the work of the 360Giving initiative used widely across UK philanthropy, would be the obvious answer for grant funding. Both standards exist. Both have international adoption. Neither is universally applied in Wales.

Second, a national aggregation layer. Sell2Wales aggregates procurement. StatsWales aggregates expenditure outturn. Neither aggregates grants, payments, contract awards and outcomes into one structured queryable view. Building that view, at the level of an independent civic infrastructure organisation rather than inside Welsh Government, is the obvious next step.

Third, a statutory floor. The Senedd has the competence to require all 22 local authorities, all health boards, all sponsored bodies and Welsh Government itself to publish defined categories of spending data in defined formats on a defined timetable. Not every detail needs primary legislation, but a baseline statutory transparency requirement for the devolved Welsh public sector, comparable to what already operates for parts of the UK central government, would close most of the remaining inconsistencies.

None of these are radical proposals. None require political consensus that does not already exist. They require sustained delivery, on a multi-year timeframe, by a small number of organisations working together. That is the kind of work DC and the Coalition exist to make easier. It is one of the most useful things Welsh civic infrastructure could do in the next four years.

There is a question Welsh public life does not ask itself often enough, and is poorly equipped to answer when it does. The question is: what is the £28 billion of Welsh public money actually for? Not in the language of the Well-being of Future Generations Act, which gives the right values at the right level of abstraction. In the operational sense. What measurable change are we trying to produce in Welsh society over the next ten, twenty, thirty years, and how would we know if we were getting there.

This is a piece about that gap. About why Wales is not particularly clever, at the moment, on understanding the long-term financial, economic and societal impact of the investments it makes with public money. About what would be needed to be cleverer. And about why, if Wales does not become cleverer on this question, every other Welsh policy ambition gets harder to deliver.

Three layers, not one

The problem is not a single problem. It is three nested problems, and they have to be addressed in order.

The first layer is definition. Wales has not, in any operationally rigorous form, defined what success looks like for the bulk of its public investment. The Well-being of Future Generations Act 2015 establishes seven well-being goals: a prosperous Wales, a resilient Wales, a healthier Wales, a more equal Wales, a Wales of cohesive communities, a Wales of vibrant culture and thriving Welsh language, and a globally responsible Wales. These are real and important. They are also, by design, expressed at a level that almost any specific policy can claim to advance, and that almost no specific policy can be rigorously held to account against. That is not a criticism of the Act, which has done what it was designed to do. It is a description of what the Act, on its own, cannot do.

The second layer is measurement. Wales does collect data on well-being. The annual Wellbeing of Wales report tracks 50 national indicators, the National Survey for Wales gathers the underlying responses, and Welsh Ministers must publish progress against them annually. The Future Generations Commissioner reviews public bodies' performance and publishes a Future Generations Report ahead of each Senedd election. The Auditor General has a statutory power, under section 15 of the Act, to examine the extent to which public bodies are acting in accordance with the sustainable development principle. The architecture for measurement exists. What it does not currently do, in any joined-up form, is connect specific Welsh public spend to specific long-term outcomes at the granularity needed for serious investment decisions.

The third layer is infrastructure. The data, the supply chain visibility, the analytic capacity and the cross-institutional collaboration needed to do that work at scale either does not exist or sits in silos that cannot easily be joined up. Wales has good people doing good work, in Audit Wales, in the Wales Centre for Public Policy, in Senedd Research, in the Bevan Foundation and the IWA, in Cardiff Business School and the Wales Institute of Social and Economic Research, and across the wider academic community. None of those organisations, individually, has either the remit or the resource to build the integrated outcomes-evidence infrastructure that a country serious about evidence-based economic development would build.

The drop in ambition

The clearest sign that this matters is what Welsh economic strategy itself has done over the last decade. Professor Andrew Henley of Cardiff Business School, writing for the Productivity Insights Network in 2021, made the observation directly. Welsh economic activity, he noted, "has proved amenable both to the passage of time, as the long-term impacts of industrial restructuring have worked through population cohorts, and to tractable policy instruments". Productivity, on the other hand, "has proved to be a much more complex issue, linked far less directly to precise policy instruments". The consequence: "a series of subsequent Welsh economic strategy statements have dropped any explicit reference to GVA or productivity targets".

That is a striking sentence. Wales had measurable economic targets. The targets proved hard to move. The response over a series of strategy statements was to drop the targets, not to redesign the instruments. The 2017 Economic Action Plan substituted four "foundation sectors" (tourism, food, retail, care) for sector-based ambition. The 2021 Welsh Economic Recovery Plan substituted "wellbeing economy" framing for measurable economic outcome commitments. The Welsh Government's own current Economic Resilience and Reconstruction Mission states the position with refreshing directness: "What we measure is an indication of what we value. The need for measuring output, outcomes, and evaluating impact remains necessary as part of the desire to improve performance, and is of interest to the media and the public in terms of holding government and organisations to account."

That statement is true. The follow-on action, the integrated outcomes measurement infrastructure that would let that intention be acted on, has not been built.

Five years to evaluation

The Social Partnership and Public Procurement (Wales) Act 2023 is the most significant change to Welsh procurement in a generation. It applies to over 800 public bodies. It governs the directional use of around £8 billion of public spend a year. It came fully into force, in stages, through 2026, with the headline annual reporting duty live from 1 April 2026.

Welsh Government published its own evaluability assessment of the Act in March 2026. The recommendation, in the assessment's own words: "For procurement, long-term outcomes (5 years plus) would be anticipated in 2031 based on a 2026 implementation date. Therefore, it is recommended that the procurement element of the impact evaluation could commence in early to mid 2031."

This is not a criticism of the assessment, which is methodologically careful and probably right about timing. It is a description of the architecture problem. Wales is bringing in a major reform that affects how £8 billion of public spend gets directed each year, and the framework that will tell us whether the reform actually moves the long-term outcomes it is intended to move will not begin its work for five years. In the intervening period, the evidence base for refining, reweighting or reorienting the policy will be thin to non-existent.

That is what "we are not particularly clever on understanding the long-term impact" looks like in practice. It is not negligence. It is a structural feature of how Welsh public investment is currently designed: ambitious in principle, undermeasured in operation, and dependent on evaluations that arrive years after the decisions they were meant to inform.

What we do not see

The second part of the problem is that even where data is being collected, much of what would matter for serious investment decisions is not visible in any usable form.

Supply chain data is the clearest example. The Procurement Act 2023, applicable to Welsh contracting authorities from February 2025, includes provisions for prompt payment of SMEs through the supply chain, and the SPPP Act 2023 Regulation 6, in force from 25 March 2026, requires contracting authorities to have visibility of certain contractor practices: whether contractors use zero-hours contracts, have equality and diversity policies, and are signatories to the Welsh Government's Code of Practice on Ethical Employment in Supply Chains. These are real improvements. They are also focused on the immediate contractor, not on what happens further down the chain.

Compare this with how UK central government already operates for contracts over £5 million in value. The Cabinet Office's Procurement Policy Note on supply chain visibility requires in-scope organisations to compel successful suppliers to advertise sub-contract opportunities above £25,000, and to report subcontracting spend including separately the spend going to SMEs and to voluntary, community and social enterprise organisations. That is a structured, machine-readable view of where a public-money supply chain actually goes, several layers deep. Welsh contracting authorities are not currently required to publish at that depth.

That gap matters because it is precisely the layer where the answer to a serious question lives: when Welsh public money is spent on a major construction project, infrastructure programme, IT contract or care commissioning round, how much of the spend stays in Wales, how much reaches Welsh SMEs, how much reaches Welsh social enterprises and how much leaks out to suppliers outside Wales at the second and third tier of the supply chain. That is the data that would let Welsh Government, local authorities and health boards make genuinely informed decisions about how to direct future spend. Wales does not currently collect it at scale.

Supply chain data is one example. Grant data is another, as covered in our brief on public spending transparency. Cross-organisational outcomes data, of the kind that would let a researcher trace whether a particular £10m intervention in care, skills, infrastructure or business support actually shifted the well-being indicators it was meant to shift, is a third. In each case, the data either does not exist, exists only in fragments, or exists in formats that prevent aggregation.

The comparator nations have moved further

Wales is not the only small nation working on this. The comparators are useful.

Scotland adopted the National Performance Framework as the central architecture of public policy outcomes. The Framework, statutorily underpinned by the Community Empowerment (Scotland) Act 2015 and substantially revised in June 2018, sets out eleven National Outcomes mapped to the 17 UN Sustainable Development Goals. Every Scottish public body is expected to align its activity to those outcomes, and progress is published annually on a public dashboard. Scotland did not solve the underlying difficulty of measuring long-term societal change. It did build the architecture for trying.

The Office for National Statistics maintains the UK National Wellbeing Programme, which publishes a dashboard of 59 headline national well-being indicators organised across 10 domains of life, going back to 2010. Northern Ireland's wellbeing framework operates on 12 outcomes adopted under the Programme for Government structure. The OECD has its own Better Life Index. The Future Generations Commissioner for Wales has herself contributed the Maturity Matrix as a tool for tracking outcomes and measuring impact, and Wales is recognised internationally as a leader in well-being legislation.

The point is not that Wales should copy any of these. The point is that other comparable nations have made more progress on connecting public investment to long-term outcomes through a shared architecture, and Wales has the legislative foundation to do so but has not yet built the architecture.

What Wales already wants

What is striking is that Welsh Government itself has been clear about the gap. The Welsh Government's Statement of Areas of Research Interest for economic and fiscal issues, published in November 2025, explicitly identifies as priority areas: "Fiscal sustainability analysis, including the long-term impact of demographic change, climate-related fiscal pressures, and public investment strategies" and "Determinants of productivity at both firm and regional level, including the role of digital adoption, skills utilisation, innovation, infrastructure investment, and business scale-up support."

That is the right set of questions. Welsh Government, in setting out where it most needs evidence, has put its finger on the gap. The gap is the infrastructure to answer those questions at the scale and granularity that Welsh decisions require.

What "evidence-based economic development" would actually take

Five components, in our view.

One, a shared outcomes framework with measurable milestones. Not a replacement for the well-being goals, but a layer below them, built jointly by Welsh Government, Audit Wales, the Future Generations Commissioner, the WCPP and the broader policy community. A framework that says: across the seven goals, here are the twenty or thirty intermediate outcomes Welsh public investment is collectively trying to move over the next decade, and here are the milestones that would tell us whether we are moving them.

Two, supply chain visibility at scale. A Welsh equivalent of the UK central government PPN on supply chain visibility, requiring publication of sub-contract opportunities and structured reporting on the destination of supply chain spend at the second and third tier. This would tell us, for the first time, where Welsh public money actually ends up. It would let local procurement, foundational economy strategy and SME support decisions be made on real data rather than aspiration.

Three, joined-up cross-institutional analytic capacity. Wales has the institutions. Audit Wales, the WCPP, Senedd Research, Cardiff Business School, the Bevan Foundation, the Institute of Welsh Affairs, the Wales Institute of Social and Economic Research, the Future Generations Commissioner's office. What it does not have is a standing collaboration among them on the long-term outcomes question, with shared data, shared standards and shared analytic infrastructure. That collaboration is buildable. It needs sustained capital and a convening organisation that is not Welsh Government itself.

Four, a long-term evaluation function that operates in real time. Welsh Government's own evaluability assessment of the SPPP Act is the right approach. But evaluability assessments that recommend impact evaluations five years out are not enough. Wales needs a continuous, real-time evaluation function for its largest investment programmes, one that publishes its working assumptions, its indicators and its preliminary findings as it goes, rather than waiting until the policy has been in place for a decade.

Five, and most fundamentally, public agreement on what we are aiming for. Not in the values sense. In the operational sense. The seven well-being goals describe the kind of Wales we want. They do not, on their own, tell us what we are trying to move first, by how much, by when. That second conversation, the conversation about operational priorities and measurable interim ambition, has been deferred for the entire life of the Act. It cannot be deferred indefinitely.

The honest answer

Wales is not unusually bad on this. The UK as a whole is not exemplary on the long-term outcomes question. Most national governments struggle with the connection between annual budgets and intergenerational outcomes. The point of this brief is not that Wales has a uniquely Welsh problem. It is that Wales has uniquely Welsh tools, the Well-being of Future Generations Act, the SPPP Act, the Future Generations Commissioner, the Auditor General's section 15 powers, a national procurement portal already running OCDS, an academic community of real depth, that could, with the right cross-institutional architecture, make Wales unusually good at this.

The most useful thing the next decade of Welsh public investment could do is build that architecture. Not as a substitute for the policy work. As the foundation of it.

Fundamentally, we need to know what we are aiming for. The rest of the work, the data, the supply chain visibility, the analytic capacity, the evaluation function, is the work of getting there. None of it can be done well without the first conversation happening first. That conversation, in any operationally serious form, has not yet started.

Starting it is the work.