Wales

Welsh Government grants to companies face investigation

Alcoa plant
Image caption The former Alcoa plant was sub-leased to Kancoat by Welsh ministers and it went bust

Wales' public spending watchdog has said he "is minded" to launch a formal investigation into the way the Welsh Government gives grants to companies.

It comes after it emerged £3.4m was given steel-coating firm Kancoat which went bust. Questions were also raised about £1m paid to Kukd in Cwmbran.

Auditor General Huw Vaughan Thomas said he will speak to officials over the coming weeks.

The Welsh Government said it would welcome the study.

Mr Thomas said he had asked Wales Audit Office staff to explore bringing other examples he has been told about within the scope of a wider review.

He said he had already raised the prospect of such a review with the Public Accounts Committee.

Mr Thomas wrote to Plaid Cymru AM Adam Price outlining his plans.

'Systemic failure'

Mr Price said: "I remain firmly of the view that the Welsh Government's system and strategy in allocating financial support to businesses needs a forensic and wholly-objective analysis that only the Wales Audit Office can provide.

"Recent events suggest we are witnessing a systemic failure of the system rather than a series of coincidental mistakes."

On Thursday, Pembrokeshire firm Main Port Engineering went into administration.

It received a £650,000 Welsh Government grant to open a new £1.8m manufacturing site in June 2015 with the aim of creating 30 jobs and safeguarding the then workforce of 155.

A government spokeswoman said: "Value for money studies on areas of Welsh Government activity is one of the duties of the Auditor General for Wales, so it is no surprise that he is considering looking at this important area."

She said the government supported more than 100,000 jobs in the Welsh economy from 2011 to 2015 and latest figures show the survival rates of the companies were above the UK average.

More on this story