The West Midlands Growth Company (WMGC) is set to undergo significant reforms over the next year, with stakeholders admitting the region is “not getting the necessary economic impact from the investment it is getting”.

It will undergo a transition costing £7.25 million to become a smaller economic development vehicle by 2026/27, with reduced management and back office capacity.

The new approach was recommended in documents ahead of the West Midlands Combined Authority (WMCA) board meeting on November 15.

The board meeting agenda states that the region’s “economic performance has declined since 2020” and faces “serious long-term structural challenges”, including “youth unemployment, low wages, fuel poverty and low skills levels.

The challenges have pushed WMCA leaders, local officials and WMGC representatives to opt for transformation rather than a complete shutdown of the current model. The new vehicle will strive to “avoid duplication, overlap and fragmentation”.

There will be greater visibility for the Mayor and leaders to minimize funding needs for the transition year. The governance of the Transitional Growth Corporation will also be reformed and will be directly accountable to the WMCA Board of Directors with a more streamlined private sector board responsible for the operation of the WMGC.

During this transition, WMGC will continue its foreign investment activities and support of the tourism economy, which is expected to secure between 1,500 and 2,400 jobs in the region.

Richard Parker, the Mayor of the West Midlands said in a statement to TheBusinessDesk.com: “Our businesses, universities, colleges, chambers and trade bodies that we have in the West Midlands are ones that we can be really proud of, and the structures and the support around them should make it as easy as possible for them to invest, grow and expand.

“We are therefore taking a new approach to business growth and delivery, which will include a clearer definition of purpose and objectives in areas such as inward investment, business support, research, marketing and tourism. .

“The aim is to provide a clearer and more comprehensive offering to our business community while positioning the West Midlands as one of the most attractive places in the world to do business.”

According to WMCA documents, this phased approach is seen as the “most sustainable way” to “enable vital services to continue in parallel to avoid losing momentum and skills, thereby enabling talent, knowledge and relationships essential around core inward investment, capital attraction and tourism to grow. be preserved for the future.

2025/26 will be a year of transition, with the existing WMGC refocused and restructured with a new board of directors.

Alternative options were considered, including a complete shutdown of the WMGC, which would have cost £3.5 million and would likely have resulted in the loss of 25 to 35 major investment opportunities. Another option involved continuing the global growth agenda alongside the inward investment strategy, which could have secured an additional 1,900-2,800 jobs, plus 500 more in 2026/27 – but this option would have required a cost of transition higher by £8.2 million.