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The failure to solve the problems of Wales' poorest communities is laid bare in a damning report that projects they are set to fall further behind in the next two decades.

The Cardiff University and Nottingham Business School study also raises worrying questions about Wales' city regions which are shown to be significantly less competitive than their rivals in England and Scotland.

And it paints a picture of a state that is set to become increasingly polarised in the coming years with London and the south east growing rapidly while the areas that have struggled the most become even poorer.

The Bevan Foundation think tank said that the figures showed the failure of the city region model to help outlying areas in the Head of the Valleys - but said the projections were only based on past trends and that "big change" remained possible.

This map from the 2019 UK Competitiveness Index shows the areas with the fastest growth in red and those set to become poorer in blue:

(Image: Cardiff University / Nottingham Business School)

Merthyr Tydfil is named in the report as the area set to see the worst economic decline of the 377 council areas studied in the coming two decades.

While parts of London are expected to see their economies grow by more than 7% a year, measured by GDP, it projected that Merthyr Tydfil will become poorer at a rate of at -0.56% of GDP every year.

Gwynedd is also in the bottom 10 of the areas studied, with its economy forecast to decline at a rate of 0.26% of GDP every year.

The projection for Merthyr is a devastating finding for an area that has been hit hard for decades since the loss of its heavy industry but has been building a sense that the tide is turning. Unemployment has fallen and visitor numbers have risen.

The areas with the worst long-term predicted GDP growth per year 377. Merthyr Tydfil -0.56% 376. Mansfield, East Midlands -0.48% 375. Thanet, South East -0.34% 374. Hyndburn, North West -0.31% 373. Boston, East Midlands -0.30% 372. Waveney, East of England -0.30% 371. Gwynedd -0.28% 370. Burnley, North West - 0.26% The academics have this to say about how the figures are calculated: "The process used to generate the forecasts utilises previous competitiveness figures and examines the relationship between the input and outcome sub-indices (which capture the resources available and the ultimate ability to generate welfare benefits for the population) and growth in GDP per capita in the following years."

Helen Cunningham, projects officer at the Bevan Foundation, a think tank that looks to develop lasting solutions to poverty, inequality and injustice", said policy makers should stop seeing Cardiff as the solution for the Heads of the Valleys.

"One of the big ideas was to use the relentless expansion and growth of the Welsh capital as the engine for development up the Valley," she says.

“We need to change the view that just growing cities like Cardiff and Swansea is the answer,” she said.

“They are important but they are not going to meet the jobs gap that the Valleys face. Treating them as a commuter belt is not going to cut it.

“In Blaenau Gwent for instance about half of the working age population leave the borough for work .

“This has a huge impact on people’s lives. The trains cost £8 return a day now."

But she said there are reasons to believe the future is brighter than that painted in the report.

“The first thing to say is that the projections in Cardiff Universities report assume that it will be business as usual and do not factor in plans for the future," she said.

“The Valleys does have lots of successful businesses. There are people who are highly skilled but we need more.

“We have to go from the starting point that change is possible for the Valleys. Big change is possible, we have to be optimistic.”

Merthyr: A proud and storied town that feels it is changing course At the very top of the Taff Valley, Merthyr was not built - it was forged in the fire of the industrial revolution. In 1754 it was recorded that the occupation of the vast majority of people in the heavily wooded valley were “shepherds”. And yet iron production swelled its population to up to 80,000 towards the end of the 1800’s. At its peak, it boasted four of the greatest ironworks in the world at Dowlais, Plymouth, Cyfarthfa and Penydarren. The loss of heavy industry has provoked a challenge for policymakers and the town's proud population for decades. Many in the town will now tell you that the problems are being solved. Author and playwright Anthony Bunko, who is a co-founder of the immensely popular Merthyr Rising arts festival, believes that talking Merthyr down is part of the problem - not a path to solutions. “I really wonder if these people who wrote this report have actually come to the town or have they just sat in their posh offices in Cardiff, drinking non-fat, skinny lattes and telling each other how nice their trainers are, shameful.....but we will show them," he said. “To be honest, if this report was looking at Merthyr fifteen to twenty years ago I would probably agree, but over the last five years or so, the town has changed for the better. “I really believe we have improved more than any other town in Wales and maybe the UK. “Ok, we haven’t got a factory like Hoover which employed 6000 people in its heyday but the place is looking great, we have attracted lots of retail, lots of tourist using Bike Park Wales etc and coming to events like Merthyr Rising and Merthyr Comedy Festival to name a few of the great events that are taking place. “People in the town are now realising we have got to do things differently nowadays to survive. As far as the creative arts are concerned I really believe we are shooting ahead of other places, even places like Cardiff. "We have probably got the best music scene in Wales with bands like Pretty Vicious, Florence Black, The Moon Birds, Digg, Tracy Island taking the UK by storm. We now have four or five theatre companies promoting local talent from ages six to 66 - the scene is buzzing. “The belief and the confidence from the people of the town that we are as good as anyone else when it comes to the arts is great to see. We are used to this negative press. We get it all the time. It just helps us to grow stronger and more determined.”

The statistics in the report also raise questions for how well Cardiff and Swansea are faring in comparison to their rivals in England and Scotland.

Aberdeen is the only city region outside England in the top 10 urban regions. Cardiff comes 33rd and Swansea last in 44th place.

In the last nine years, however, Cardiff is one of the most improved regions having risen from being 85% as competitive as the average to 87.5%.

There is also grim reading for the Welsh local authorities of Blaenau Gwent and Anglesey who are named the among the "least competitive places in Britain”.

Wales' fastest growing area economically is forecast to be Monmouthshire with a 2% GDP growth rate - but even that is much lower than the fastest growing parts of Scotland, London, the North West and the South East.

The report says: "The further away a locality is from London the lower its future long-term growth rate"

The least competitive parts of the UK 379. Blaenau Gwent 378. Anglesey 377. Mansfield (East Midlands) 376. East Lindsey (East Midlands) 375. Merthyr Tydfil 374. Boston (East Midlands) 373. Blackpool 372. Weymouth (South West) 371. Ashfield (East Midlands) 370. Torridge (South West)

One of the reports authors, Professor Robert Huggins from Cardiff University’s School of Geography and Planning, says more entrepreneurial role models are needed.

He said: “One of the main issues that places like Blaenau Gwent and Merthyr is that they do not have the type of industries that are productive or create high levels of employment like technology.

“The businesses in the town tend to be ones you would find anywhere.

“They are known as non-tradable which means they are not as likely to be involved in exporting.

“It is a legacy of continual erosion and it becomes embedded. It is like the past imposing on the future.

“There is entrepreneurship but not to the level needed.”

Prof Huggins agrees that many areas like Merthyr are becoming "dormitory towns".

The most competitive parts of the UK 1. City of London 2. Westminster 3. Camden 4. Tower Hamlets 5. Islington 6. Hammersmith and Fulham 7. Kensington and Chelsea 8. Southwark 9. Wandsworth 10. Windsor and Maidenhead

Ian Staff Davies is one of Merthyr's entrepreneurs - a decision born out of necessity when he was made redundant.

He said: “I have been self employed now running my own business since being made redundant from the bank in 2013.

"It just seems logical to for me to work in the surrounding geographical area as there is plenty of business to be done locally.

"I’m a local mortgage and protection advisor in the town and I’m flat out and very busy all the time are as a few other local advisors.”

Rachel Thomas runs a business in the town. She said: "The biggest challenge for new business startups like myself is the unfair and extortionate business rates applied by the valuation office."

Prof Huggins says a "critical mass" is needed.

“There are a group of entrepreneurs who are committed to staying in Wales,” he said. “They say they want to stay in Wales but it needs to reach a critical mass.

“We are not going to be getting all of this external investment, we are going to have to build our own.

“There are not the role models in business. My own research shows that you only need 20-30 key actors to change the mentality.

“They are the catalysts.”

How regions compare in competitiveness London 119.8% (of average) South East 103.5% East of England 97.8% Scotland 94.2% South West 94.1% North West 92.4% West Midlands 90.5% East Midlands 89.8% Yorkshire and Humber 88% North East 84.8% Wales 84.4%