Long Term Trends

Welsh Government guidance for setting well-being objectives states the Corporate Strategy should make reference to the most recent version of its Future Trends Report (opens in a new tab) and its Evidence Pack (opens in a new tab). This report is based around four mega trends (people and population, planetary health and limits, inequalities, and technology) that can impact both positively and negatively on the well-being of future generations. The report also has insight on the trends covering public finances and public sector demand and digital. Also of interest is The State of Natural Resources Report (opens in a new tab) (produced by Natural Resources Wales) which contains the assessment of Wales’ sustainable management of natural resources, including Wales’ global impact.

Key documents have not been updated since last Corporate Strategy. We have looked to other good quality peer reviewed sources such as the MoD’s Global Strategic Trends (opens in new tab) to update this section. This source emphasises the potential for global competition and conflict, combined with growing inequality to de-stabilise societies.

Any projection or forecast always comes with a ‘health warning’ – and can only represent best estimates at the point of writing. Some of the information in the Future Trends report is available for Counties though there is much greater uncertainty for these figures.

Population

Whilst the global population is still projected to grow by 1.5 billion to 9.6 billion by 2050, Wales’ population, in common with much of Western Europe is predicted to grow comparatively slowly, with growth concentrated in south Wales. Migration remains one of the most difficult factors to predict and without migration, Wales’ population is likely to fall.
Wales’ population is projected to increase by 5.8% from 3.11 million to 3.29 million, a 5.8% increase compared to 7.9% for England over the same period.
Despite low population growth, the number of households, particularly single households is projected to grow across Wales (in the case of single households from 440,000 in 2020 to around 525,000 by 2043). This will fuel growth for new housing, though there is a lot of uncertainty around numbers.
While estimates vary due to the impact of the COVID-19 pandemic, life expectancy increases in Wales looked set to continue, although the rate of increase has slowed over the past decade. The most recent data for healthy life expectancy and disability-free life expectancy show that both have dropped in Wales following the COVID pandemic, particularly for women. The combination of these two factors has the potential to drive continued demand for social care.
The prevalence of chronic disease is projected to increase. Dementia prevalence is expected to increase from 7% in 2019 to 9% in 2040, fuelling growth for complex social care.
In 2019, the number of Welsh speakers was expected to increase, with projections of the number of Welsh speakers by 2050 varying considerably. Data from the 2021 Census suggest that the number of Welsh speakers is lower than previously projected.
The most recent population projections for Pembrokeshire are based on 2018 estimates. It is clear that these over-estimated Pembrokeshire’s usual resident population. Updated projections (opens in a new tab) will be published on 28 January 2025.

Inequalities and equality of opportunity

Globally, up until the COVID pandemic extreme poverty (people living on less than $1.90 a day in 2011 prices) declined compared to the previous three decades. However, since 2020 extreme poverty has increased. As poorer countries become richer, inequality at the global scale is also decreasing.
Skills levels, as measured by the Annual Population Survey do not allow long term comparisons. The most recent figures show that skills levels in Wales are increasing; sample error means that the trend in Pembrokeshire is not certain.
Whilst rates of unemployment (up until the pandemic) were tending to fall across Wales, the rate of poverty in households where all adults are in work has continued to increase, indicating that being in employment alone is not enough to take someone out of poverty in Wales. In relative terms, rates of child poverty in Pembrokeshire have increased and are now amongst the highest or the highest in Wales. This is also in the context of an increasing rate of relative income poverty for children living in homes where all adults are in work over recent years.
Median gross weekly earnings for full-time adults working in Wales were £674.5 in April 2024. This was 92.6% of the average for the UK (£728.3). Median gross weekly earnings in Wales were the eighth highest amongst the 12 "regions" of the UK (i.e. the three countries: Wales, Scotland and Northern Ireland, and the nine regions of England).

Planetary health and limits

By 2050 in Wales it is predicted that the summer average temperatures will increase by 1.34 ⁰C. Winter precipitation is expected to rise by 5 per cent in the same period while summer precipitation will decrease by 16 per cent and rises in sea levels are expected across the country.
Climate change and extreme weather can exacerbate health and wellbeing inequalities. There is also a risk that responses to climate change can place disproportionate burdens on people and communities who are already vulnerable. For instance, the risks of heat-related deaths are projected to triple by the 2050s in the absence of additional adaptation, and disadvantaged groups are currently more likely to live in buildings that are poorly adapted to high temperature conditions.
Estimates show that from 2020 emissions need to decline by 7.6 per cent every year from 2020 to 2030 or the opportunity to limit warming to 1.5⁰C will be lost. However, global greenhouse gas emissions have grown every year since the financial crisis in 2009, at a rate of 1.5 per cent annually. Against this global backdrop, Wales has decarbonised a little more slowly than the UK, but has still seen a reduction of around 40% since 2008. The single largest contribution to this drop is carbon reduction in the energy supply sector.
There is a great deal of evidence pointing to a decline in species across groups in all parts of the world and this trend is happening across Wales. The UN predicts that one in eight species on the planet will be extinct within 20 years. The 2023 State of Nature (Wales) report (opens in a new tab) states that 18% of Welsh species are at risk of extinction.
There is evidence that emissions from global food production systems are driving biodiversity loss and reducing ecosystem resilience. For instance, nitrogen pollution is leading to the loss of sensitive species. One source of this pollution is ammonia which originates mainly from agricultural sources.
Climate change is likely to negatively impact on global food production with nearly half of projections indicating yield decreases greater than 10 per cent beyond 2050. In Wales, as with the rest of the UK, we are reliant on food imports from other countries, and often these are from countries vulnerable to the impacts of climate change on food production.
The World Economic Forum (opens in a new tab) now predict that five of the top 10 risks to the global economy over the next 10 years are related to climate change, biodiversity loss and damage to natural systems.

Technological evolution

Just as it did so in the past, technological evolution is expected to continue to pave the way in defining how modern societies and economies will interact and develop into the future.
The percentage of internet non-users has declined over time in Wales and the rest of the UK. However, there is evidence that a digital divide remains between those who have access to information and communications technology and those who do not. For instance, there is evidence that the proportion of people aged over 75 are still less likely to use the internet than younger age groups.
Following the pandemic, there was a trend towards more flexible and home working though the most recent data suggests this trend has peaked with very little growth in the number of flexible job opportunities advertised. The ability to work from home – or closer to home – is heavily dependent on industry and occupation, with those is low-paid work often severely limited in their options for working flexibly.

Public finances

The Future Trends report was written during the pandemic, and of the report’s six dimensions, public finances is the one where the timing of the work had the most impact on accuracy. The Evidence Pack references the Chief Economist's Economic and Fiscal Report (opens in a new tab) as a source of information for future reference and some key headlines from the 2024 edition are referenced below.

Wales’ economy is deeply embedded within the wider UK economy. Many of the general trends which affect the UK are likely to be reflected or heavily influence Welsh economic conditions.
Wales’ economic growth per person up to 2022 has been similar to other UK countries and English regions but remains lower than the UK average, comparable to the North East of England.
The UK’s relatively low economic growth in recent years is partly due to slower productivity growth compared to the pre-global financial crisis period. Wales has been similarly affected, with lower productivity levels contributing to its lower economic output per head. Evidence suggests enhancing agglomerations, improving workforce skills, and increasing investment are likely to improve productivity in Wales and the UK.
Interpreting labour market sources is challenging as data is based on small sample sizes. Although economic inactivity rates in Wales declined up until 2020, since then this decline has is likely to have stopped and it is likely there have been rising rates of long-term sickness-related economic inactivity.
The UK Government’s Autumn 2024 Budget increased taxes and borrowing to enable increases in spending on resource (‘day-to-day’) and capital budgets compared to what was expected earlier in the year. As a result, this has led to an increase to the Welsh Government’s financial settlement for next year from the UK Government, both compared to this year and what was expected earlier this year.
Despite the increases in government spending on public services this year and next, the outlook for public finances beyond looks challenging. On current UK Government spending plans, increases to public service spending over the medium term are expected to be much lower.

Wales Fiscal Analysis, a research body within Cardiff University’s Wales Governance Centre has also looked at the implications for Wales from the UK Government’s 2024 Autumn Budget. It noted that the £1.7 billion settlement for the Welsh Government was far better than anticipated and included:

£744 million additional funding for day-to-day spending which restores the value of the Welsh Government budget in 2024-25 to what would have been expected at the time of the 2021 Spending Review.
A further £695 million for day-to-day spending in 2025-26, as well as £235 million for capital spending.

Despite this, challenges and some uncertainty remain, particularly in terms of the impact on the public sector from the increase in National Insurance tax rates for employers, and anticipated increased costs of meeting public sector pay deals. Further, the current expectation is that future rounds of UK funding settlements are likely to be less generous, as the UK Government’s 2024 Autumn Budget is viewed in the context of a “downpayment” to restore public services.

Public sector demand and digital

The key driving force creating increased demand is population change; the number of people above pensionable age is growing faster than the number of working age people. Across the UK it is predicted that expenditure on health will grow from 7.3% to 8.3% of GDP by 2064/65.
There is likely to be a growth in artificial intelligence across a wide range of applications. Low skilled jobs are at much greater risk of being substituted by AI technologies or greater automation as well as the risk of potential bias creeping into the application of machine based learning, therefore raising ethical issues.
In future it is likely that there will be a significant growth in the amount of data generated alongside the economic value of data. Technical advances in computing are also possible, creating much more powerful computers and allowing faster and more complex calculations.
Equality of access to IT and to the internet will become ever more important, and those who do have access being placed at an increasing disadvantage.
The number of people who use the telephone to contact the council has declined a little in the past two years. Alongside this, there has been a substantial reduction in the number of customers contacting the council face-to-face as well as the use of notes and coins to pay for services.

Corporate Strategy 2025-30