Wales politics

Firms had £244m despite no-grants pledge by ministers

Economic strategy document Image copyright Welsh Government
Image caption The document published in 2010 stressed an end to the culture of grants

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% actually had been.

Economy Secretary Ken Skates said ministers made "no apology" for creating or saving jobs in a recession.

He 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, the document 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.

Image caption Russell George says ministers chose the wrong policy and were unclear about it

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.

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Media captionEconomy Secretary Ken Skates there would be no apology for serving the interests of working people

The Welsh Government said in a statement: "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."

Mr Skates added: "We make no apology whatsoever for getting 185,000 people either into work or saving their jobs in work since 2011.

"It's absolutely vital that Welsh Government serves the interests of working people and that's precisely what we've done."

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