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Foundational Economy

The services and products within the foundational economy provide those basic goods and services on which every citizen relies and which keep us safe, sound and civilized. Care and health services, food, housing, energy, construction, tourism and retailers on the high street are all examples of the foundational economy. The industries and firms that are there because people are there. Estimates suggest they account for four in ten jobs and £1 in every three that we spend. In some parts of Wales this basic ‘foundational economy’ is the economy.

The Economic Action Plan (EAP) has set the direction for a broader and more balanced approach to economic development with a shift towards a focus on place and making communities stronger and more resilient. The EAP places a greater emphasis on tackling inequality and signals a shift to a ‘something for something’ relationship with business. Promoting inclusive growth through a new focus on the foundational economy sits alongside the other three pillars of our Economic Contract; supporting business investment that future-proofs the economy through Calls to Action; a regional approach to investing in the skills people need to enter, remain and progress in work; and the infrastructure communities need to be connected and vibrant.

The foundational economy approach offers the chance to reverse the deterioration of employment conditions, reduce the leakage of money from communities and address the environmental cost of extended supply chains.With join-up across portfolio responsibilities we are driving a greater synergy between the Valleys Taskforce, Better Jobs Closer to Home programmes and maximising the social value of procurement with what may be described as mainstream Government economic interventions.

A Ministerial Advisory Board Task and Finish Group on the Foundational Economy has been established to provide advice to Welsh Ministers on current and future interventions and best practice; support wider engagement with stakeholders in the foundational economy; and promote join-up of relevant government and non-governmental initiatives. The group is comprised of individuals with considerable knowledge, expertise and experience in this area.

We are working across government to develop an integrated enabling plan for the foundational economy sectors identified in the EAP - coalescing government action around common opportunities and challenges. We want to re-establish Wales at the forefront of realising social value in procurement by nurturing strong local supply chains through the work of the Public Service Boards. The structures created through the Wellbeing of Future Generations Act, provide an unparalleled opportunity to make rapid and significant progress.

The Welsh Government’s approach to supporting and developing the foundational economy will focus on three areas:

Our £4.5m Foundational Economy Challenge Fund: This will support a series of experimental projects that will enable us, with the help our partners, to test how we can best support the foundational economy and which Government interventions work best.

A renewed focus on growing the ‘missing middle’: We want to increase the number of grounded firms in Wales and establish a firm base of medium sized Welsh firms which are capable of selling outside Wales but have decision making rooted firmly in our communities.

Spreading and scaling best practice: We will start looking at social value within procurement. We will support Public Service Boards to use and strengthen local supply chains. The Wellbeing of Future Generations Act methods will help us make quick progress.

More information about the Foundational Economy and the Welsh Government’s approach can be found on the Welsh Government website.

Foundational Economy Challenge Fund

The shift to a foundational approach will be experimental and will require a profound shift in our thinking and doing. There is no exact template we can lift and shift to Welsh communities, though undoubtedly there are lessons we can learn from others. Our Foundational Economy Challenge Fund is supporting a series of experimental projects that will enable us, with the help our partners, to test how we can best support the foundational economy and which Government interventions work best. The fund’s budget is now over £4.5m. This includes £2.4m from the Valleys Taskforce budget, specifically ring-fenced for projects in the Valleys Taskforce area. We have pulled together a group of experts from a range of sectors to drive the agenda forward, and we are marshalling capacity within the Welsh Government by aligning the different programmes already carrying out work in this area, albeit not self-consciously branded as foundational economy activity.

North Wales Projects awarded funding:

North Wales Collaboration led by Denbighshire County Council - £70,000

To supply the private sector, local authority and health board employers with health and care workers.

Community Care Collaborative CIC - £97,065

To provide an in-house dedicated Mental Health & Wellbeing team and a Care Coordination team that will work with patients who are particularly vulnerable.

Denbighshire Voluntary Services Council (DVSC) - £100,000

To utilise Ruthin Town Hall as a community and business hub.

Cartrefi Cymunedol Gwynedd Cyf - £80,000

To introduce smart home technologies to explore if data can be utilised to improve effectiveness and efficiency of domiciliary care.

Wrexham County Council - £65,000

For a project aimed at ensuring local businesses and the local economy benefit directly from local authority housebuilding.

Denbighshire County Council - £66,779

To create a bespoke recruitment and development framework for carers.

Denbighshire County Council - £90,334

For a pilot project to identify and tackle loneliness using artificial intelligence in the form of a humanoid collaborative robot.

HF Trust - £52,014

For the provision of a friendship and dating agency for people with learning difficulties and autism. The project aims to improve social interaction to address loneliness and improve wellbeing.

Flintshire County Council - £100,000

For a project to provide micro-care enterprises to deliver direct care services.

Cwmni Cymunedol Bro Ffestiniog - £100,000

To support community businesses to work with three social enterprises to develop plans in community tourism, renewable energy and digital media content. A new consultancy service for the foundational economy will also be established.

Môn Shellfish Ltd - £100,000

For a partnership project with Coleg Llandrillo Menai and Partneriaeth Ogwen to look at increasing local markets for shellfish by developing local seafood products with a long shelf life. This will be linked to an education programme to teach the local community how to prepare and cook local seafood.


The successful projects for Mid and South West Wales:

Swansea Council - £100,000

To support the creation of social/micro enterprises which connect residents with local care organisations who can provide a flexible and responsive service.

Cyfle Building Skills Ltd - £86,625

A project which will see apprentices receive valuable work experience placements across the construction industry.

Pobl Group - £55,000

To build an online system for social housing residents to report faults and find local tradesmen to fix them.

Carmarthenshire County Council - £100,000

To increase the number of local or regional food businesses supplying the public sector in the area.

Pembrokeshire County Council - £100,000

To establish a not for profit agency supplying relief care workers for both the local authority and independent care organisations to address recruitment difficulties in the region’s social care workforce.

Swansea Council - £26,852

To test a pilot project aimed at maximising opportunities for small businesses to bid for contracted work.

Gower Gas and Oil - £81,478

To work with colleges and community partners to offer placement opportunities for learners, targeting those who fall between gaps in education and employment.

Severn Wye Energy Agency - £100,000

The charity will test Community Wealth Building by opening access to public sector contracts to small local businesses in Llandovery.

The Welsh Government have announced 12 projects which are being supported through the Foundational Economy Challenge Fund in the Social Care sector, these are:

Denbighshire County Council - £90,334

To pilot the potential of identifying and tackling loneliness using artificial intelligence in the form of humanoid collaborative robot which can be programmed to perceive emotions and adapt its behaviour to the mood of the humans around it. A local authority in partnership with a local technical college will undertake trials resulting in a full evaluation with a view to wider implementation.

People Plus Cymru - £100,000

Training and up-skilling for social care employers across Wales.

Neath Port Talbot CVS Ltd (NPTCVS) – £100,000

To introduce a social enterprise model for domiciliary care and low level home services support as an alternative to the way such support is currently commissioned and delivered.

The Cadenza partnership - £65,000

To adapt an established volunteer record and management tool to deliver an online approach of providing consistent, easy to use social prescribing records and opportunities.

Practice Solutions Ltd - £99,000

To develop a cooperative model to the provision of administrative services for social care providers.

Drive - £75,000

To make use of a community garden by supporting people with autism and specialised training for Learning Disability Nurses.

North Wales Collaboration (Denbighshire County Council) - £70,000

To develop a business case for creating a co-operative staffing agency for health and social care workers.

Denbighshire County Council £80,000

Develop recruitment and development framework for carers.

Pembrokeshire County Council - £100,000

To establish a not for profit agency supplying relief care workers.

Swansea Council - £100,000

To support the creation of co-operatives or social/micro enterprises to purchase and provide care and support in the Gower and other rural areas of Swansea.

Flintshire County Council - £100,000

To set up a pilot programme which will put in place support and structures to safely and legally commission micro-care enterprises to deliver direct care services.

Monmouthshire County Council - £200,000

To develop an apprenticeship scheme in the social care sector.


The successful projects in the Valleys are:

People Plus Cymru - £100,000

To develop up-skilling projects with social care employers to deliver quality training for staff.        

Caerphilly Council - £100,000

To carry out a research project into creating an employment and training support programme focussed on the emerging needs of social housing providers.

Citizens Advice Rhondda Cynon Taff - £47,676

To introduce a Skills for Life Project informing young people in schools, colleges and the local university about employment rights and responsibilities.

United Welsh - £100,000

To maximise the potential for four housing associations to help nurture existing and new SMEs in the local supply chain. 

Merthyr Tydfil CBC - £98,500

To use vacant commercial premises for use by start-up businesses helping to tackle the blight of empty high street premises.

Bevan Foundation - £99,920

For a community regeneration think tank, in partnership with the Wales TUC, to help increase fair work in foundational sector businesses.  

Caerphilly County Council - £100,000

To connect opportunities for developing construction, restoration and conservation skills with safeguarding “at risk” cultural, tourism and heritage community assets.

Neath Port Talbot CVS Ltd (NPTCVS) - £100,000

To introduce a social enterprise model for domiciliary care and low level home services support.

Prince's Trust Cymru - £44,246

To increase local employment opportunities for young people through major infrastructure investments. 

Impact Innovation and Growth Services Ltd - £95,000      

To build a network of innovative pilots to support Foundational Economy businesses that can be replicated, create value for money solutions, become sustainable and contribute to wider learning.

Age Concern Morgannwg - £80,000

To address the missing link for older people who access GP services due to loneliness, isolation, bereavement, and to help engage them in their community. 

The Cadenza partnership - £65,000

To adapt an online approach for providing consistent, easy to use social prescribing records and opportunities.

Torfaen Voluntary Alliance - £95,000

To create an apprenticeship ecosystem among small businesses within a Valleys community.

Green Valleys (CIC) WTOW Ltd - £95,000

To explore the impact of large scale community transfer of land, specifically for forestry and food production, where the profits are re-invested into the community.    

Elite Paper Solutions - £85,190

To work with public sector stakeholders to change procurement practices and place more contracts with social enterprises that support those furthest from the labour market.

Archer and Brooks Ltd - £100,000

To test creating a circular economy for bone waste in the meat processing industry in Wales, by opening a pilot plant close to a Welsh abattoir.

Simply do ideas - £23,509

To use a cloud based platform to connect social and economic challenges in the South Wales Valleys with entrepreneurial solutions from local colleges and universities.

Neath Port Talbot Council - £100,000

To create a shared tenancy facility and wraparound support for construction businesses in Neath Port Talbot.

Neath Port Talbot Council - £100,000

To identify local construction suppliers in Neath Port Talbot that could deliver packages of work under £25,000.

Ramblers Cymru - £71,200

To identify and develop local walking routes which would adopt the Visit Wales branding and attract greater visitor numbers to the area, increasing visitor spend.

Practice Solutions Ltd - £99,000

To explore applying a co-operative model to social care recruitment, training, tendering, and marketing.

Blaenau Gwent CBC - £54,327

To review its procurement policy and develop citizen-focused delivery.

Bevan Foundation - £73,690

To identify how the foundational economy can flourish in specific locations.

Torfaen County Borough Council - £75,106

To supply business support and mentoring to small business start-ups.

Drive - £75,000

To use a community horticultural asset to support people with autism and deliver training for Learning Disability Nurses.

Rhondda Housing Association - £100,000

To regenerate Tonypandy town centre with creative new approaches and using local skills to make it a reality.

Lunax Digital - £100,000

To create an App for local companies to trade skills and time through a time banking system.

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