Importance of linking health spending to university research and business for developing the economy stressed at Academy Health Wales conference
Speaking at the Academy Health Wales’s Health Economy conference organised by the IWA in Cardiff yesterday, Deputy First Minster Ieuan Wyn Jones provided us with a glimpse of the Economic Renewal Strategy he will be unveiling next Monday. The Economic Development and Transport Minister hinted that he had been listening to representations from business organisations such as the Wales CBI, Federation of Small Businesses, and Chamber Wales. As a result he would be focusing his probably shrinking budget on trying to create a good business environment rather than programmes which attempt to help business directly.
Acknowledging that the Welsh Government had no influence over “major game changers” such as macro-economic policy and corporation tax Wyn Jones said, “What we have to do is use the levers at our disposal more cleverly. We need to strengthen the partnership approach between Higher Education, business and government”.
He said he wanted to see much more internal collaboration between his Economic Development and Transport Department and the Health and Education departments. This could impact on research and development and procurement policies. “It is in the Health department’s budget that the biggest research and development fund exists,” he said. And he noted that overall the Welsh public sector procurement budget was worth £5 billion, split three ways – 50 per cent within the purview of local government, 30 per cent within the NHS, and 20 per cent the Welsh Government directly. He said the proportion of contracts won by Welsh companies had increased from 35 per cent to 50 per cent in recent years, but that we could do better. “The contracts we issue should be framed and advertised in ways that allow Welsh companies to become more competitive,” he said.
Pointing out that the Welsh health service and employed 90,000 people and injected £1.3 billion into the Welsh economy he called for a renewed emphasis on health and life science industry clusters linked to our universities, especially Cardiff and Swansea. He said Wales only attracts 2 per cent of the UK’s research and development budget, when it should be at least 5 per cent based on our population, adding, “We need to find ways of making that crucial step from research and development to commercialisation.
“Our role as the government is to provide the right kind of support, especially financial support, at the right time. That does not necessarily have to be in the form of grants but in facilitating commercial finance”.
His approach chimed with the mood of the conference which surveyed the inter-relationship of health policies and economic development from the perspective of industry and the universities. Rod Palmer, of Performance Health Products, which designs and manufactures wheelchairs and other equipment for the disabled, described the grants system in Wales as a “shambles” which was in need of a complete overhaul. “It has the bulk of an elephant and the reaction time of a sloth,” he said. The availability of capital was another problem. “Wales was the first industrial nation, but we’ve failed to retain our capital. There’s been a capital flight – we’re desperately short of development capital.
Palmer was equally critical of NHS Wales’s approach to procurement. “The NHS is driven by an annual budget and as a result only takes the cost of purchase into account,” he said. “This fails to take into account the costs of ownership – how beneficial products are over time is excluded”.
Earlier the conference heard from Professor Sir Mansel Aylward, Chairman of Public Health Wales, that a major heath determinant was employment. He said that being unemployed for more than six months for a man was equivalent to smoking 200 cigarettes a day. There was no better route to health than getting people back to work. Employers with effective health and productivity programmes yielded 20 per cent more revenue per employee than those without.
Ceri Phillips, Professor of Health Economics at Swansea university, pointed out that the demand for the health service was increasing at an exponential rate and that we were just not equipped to cope with it. We needed to develop a research agenda that focused on maximising the impact of health spending.
Swansea’s Vice Chancellor Professor Richard Davies told the conference that the bio-sciences were one of the fastest growing economic sectors in the world and that they tended to grow in clusters around universities. In the 1990s and in the wake of the Olympic Games in the early 1990s Barcelona developed a cluster of 1,400 companies creating 42,000 jobs. Edinburgh was currently developing a 100-acre bio-medical research park bringing in £1.2 billion pubic and private sector investment. Scotland already has 20 per cent of the UK’s Life Science industries. Wales needed to follow suit and build on existing developments at Swansea, Cardiff and Bangor. “Universities have a fundamental role to pay in commercialising research,” he said.
Overall the conference demonstrated the importance for Wales of making the most of where most of our public spending goes, and that is on the health service. It is encouraging that the message was being delivered, and heard, loud and clear.
