Businesses have had grants worth a combined £244m from the Welsh Government since it promised to stop paying handouts in 2010.At that time, the private sector was told any more funding awarded by the government would have to be repaid.But it has emerged only about a quarter of the money was ever expected to be repaid and only 2% has actually been paid back.Opponents asked why ministers strayed so far from the policy.The Welsh Government said it carried on awarding grants because the recession knocked business confidence.
Economy Secretary Ken Skates is expected to produce an updated strategy for supporting businesses in the coming weeks.It will replace Wales’ last economic strategy, published under the Labour-Plaid Cymru coalition in 2010. Still available on the homepage of the government’s economy website, it says all funding for businesses will have to be repaid as part of an “investment culture”.In fact, of the almost £320m spent on business support in the six full financial years since then, only £76m (24%) was classed as repayable grants or commercial loans. Less than £7m (2%) has actually been repaid.
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Conservative economy spokesman Russell George, who chairs the assembly’s economy committee, accused the government of a lack of clarity and of embarking on the “wrong policy in the very first place”.”A business can go to the Welsh Government’s website, look at what its current policy position is and it says ‘we no longer provide grants, we expect all grants to be repayable,” he said.”But that’s not the case and it’s not been the case for six years.”The 2010 strategy – called Economic Renewal: A new direction – was drawn up by former Plaid Cymru leader Ieuan Wyn Jones as deputy first minister. The following year, just 1% of business support was repayable. That rose to a high of 44% under Mr Jones’ successor as economy minister, Edwina Hart, in 2015, but fell the following year.
The Welsh Government said: “During the last recession, business confidence was at close to an all-time low. “As a responsible government committed to economic growth we took the decision to take positive action to address business market failure. “When considering whether to support job creation projects, the Welsh Government considers both business need and the minimum necessary. “We take an evidence-based approach in deciding whether a grant or loan offers best value for money for the Welsh economy.”
Source: BBC News