Monday, August 1, 2011
ARE WE FALLING BEHIND IN MAXIMISING EUROPEAN FUNDS FOR IMPROVING ECONOMIC PERFORMANCE?
Last week, the Welsh Government, through European Structural funding, provided a grant to help develop tidal power in West Wales.
The provision of direct funding to the private company Tidal Energy will enable the new £11 million “DeltaStream” device to be manufactured, a development that will generate clean tidal power in West Wales by 2012.
There have been various commitments, over the years, by the Welsh Government to develop this vital part of the clean energy industry, yet despite the rhetoric, there has been little real action.
Therefore, the funding for this vital innovation should be broadly welcomed, although it should be of some concern that it has taken the Welsh European Funding Office (WEFO), which manages the European Structural programmes in Wales, over eighteen months to finally approve the project since the company first submitted an application back in December 2009.
Despite this, the fact that a private sector organisation is being directly supported is a step in the right direction, especially as around a billion pounds has previously been awarded to projects sponsored either by the Welsh Government or local authorities. In contrast, private sector sponsors had received only £7 million of grants for six projects prior to this announcement.
Ministers are to be congratulated on ensuring that businesses are finally being allowed into this vital funding stream, especially as there have been indications that some within the Welsh Government have been reluctant to fund projects where those involved actually gain directly from the projects they successfully develop.
Frankly, such an approach is nonsensical, as it would be fantastic if Tidal Energy became exceptionally profitable on the back of this grant and ensured that the technology created prosperity and employment in West Wales.
There now needs to be greater private sector involvement in the allocation of what is left of European funding over the next couple of years, especially given that recent evidence provided by the Welsh Conservatives has shown that the main Convergence Fund is considerably behind its targets for developing the poorest parts of Wales.
According to WEFO’s own data, there have been only 4,849 jobs created against a target for May 2011 of 7,348 jobs, 4,195 enterprises assisted against a target of 6,317 and, worst of all for efforts to develop an entrepreneurial economy, only 1,105 new enterprises created against a target of 3,019.
In training and education programmes, 154,138 individuals have participated in training programmes against a target of 197,837 and, out of this, only 25,282 young people assisted against a target of 37,782.
Clearly, there should be real worries over this poor performance and whilst I am sure that a number of projects will finally catch up with their individual targets, the fact that the main European convergence programmes are behind in terms of jobs created, new enterprises started and businesses assisted is something that should be an issue for those responsible for economic policy in Wales.
In particular, the shocking statistic that 12,500 fewer young people than expected are being trained through the European Social Fund programme should ring alarm bells in the corridors of power, especially as this is something that has been highlighted by various Ministers as being a key policy priority for Wales as the economy tries to emerge out of recession.
The individual who actually highlighted these facts as Shadow Business Minister has now become the leader of the opposition within the National Assembly and it will be interesting to note how Andrew RT Davies will take these concerns directly to the Welsh Government.
Certainly, his recent press release, which was ignored by the mainstream media in Wales, made the point that there has been too much “bureaucracy when it comes to managing European funding, with an obsession with process rather than outcomes”.
More relevantly, he suggested that, at a time when there is a need to ensure that every penny from Europe is supporting the Welsh economy, there should be an independent review of WEFO’s activities by the Welsh Audit Office.
Whether the new Conservative Party leader in Wales prioritises this issue will, no doubt, be something that he and his advisers will consider carefully over the next couple of months. But whether or not a formal investigation takes place, it is still critical that the Ministers responsible for the business and education portfolios review whether the projects sponsored by their individual departments are hitting the targets they have been set by WEFO.
In fact, those projects that are successfully achieving their objectives should be highlighted as best practice for others to follow their lead, especially as creating jobs, developing new businesses and upskilling the workforce is the most important aspect of any programme to support the Welsh economy.
Certainly, if the Welsh economy is to catch up with the rest of the UK, especially at a time when every job is critical, then full advantage must be taken of the billions of pounds of European funding available to Wales to ensure that the projects funded make the maximum contribution they can to create wealth and prosperity within the poorest communities.