WAG'S SCORCHED EARTH POLICY

The more I write about the ERP, the more I seem to get confirmation from various commentators of the mess that Ieuan Wyn Jones' Department of Economy and Transport (DET) is creating.

The latest comments seem to suggest that not only are staff within DET uninformed about what is going on, but so are most of the businesses in Wales that have previously worked in partnership with WAG to deliver jobs and prosperity to local economies.

"I can confirm that local authorities have been told not to offer grants above £5k with immediate effect (no such thing as phasing in or out in the WAG vocabulary) - it had been possible to offer grants up to £35k in some areas and to certain projects, although this was not common. There was an opportunity to use the Local Investment Fund to lessen the impact of the ludicrous and disastous overnight closure of SIF, but WAG says No. So £5k is the maximum grant now available to business - important help for many at a time when cash and credit is still scarce but inadequate for many others.

This is despite the fact that none of the funding for LIF comes from WAG but is entirely funded by the EU via the Wales European Funding Office (WEFO). It is clear that WAG's intention is to end ALL grant support to business, whatever their size and to re-direct EU funding away from LIF (and other EU funded initiatives) into its new (fleeting?) priorities such as Broadband. Local authorities and other organisations are being squeezed out of access to these funds, which are to become WAG's own piggy bank. WEFO is no more than a department of WAG with no independence and no apparent ability to stand up for Welsh business.


It is definitely the case that almost all SMEs and larger companies are totally unaware of the end of SIF and the scrapping of FS4B after just 18 months and at God knows what cost (not that FS4B was ever more than a massively over complicated and bureaucratic mess). Their reaction is almost universally shock and a real fear of what this means for themselves and the Welsh economy. Where is the Welsh media in all of this? Hardly a peep from any of them.


IWJ could well be out of office next year and will leave behind a legacy that will be catastrophic - what is he thinking of?"

If the commentator is right, there are serious questions to be asked on:

(a) how WAG can influence expenditure by democratically elected local authorities and
(b) why the European funding body WEFO is allowing them to do so?

Does Ieuan Wyn Jones truly understand what his senior civil servants have done to the small business community that have always been supported by his party, Plaid Cymru?

More importantly, is the type of democracy we want in Wales where the parties in power can just do want they to do with little opposition?

Once the ERP had been published, there has been no detailed discussion with the stakeholders being affected (in this case, the businesses of Wales), tight control of the press and other influencers in the business community and a cack-handed attempt to take full advantage of the summer apathy to bulldoze through their economic strategy.

Such actions are what you expect from a banana republic, not the Welsh democracy that was voted for back in 1997.

QUOTE OF THE WEEK - UPDATED

“As the world emerges from recession, successful exporting companies will be even more important for economic prosperity. Globalisation means our competitors are just as likely to be across the ocean as down the road, so international focus is vital.”

Ieuan Wyn Jones, Daily Post, July 28th

So that is why you have abolished International Business Wales which, at a cost of £10.5 million in 2009-2010, has created or safeguarded around 7,500 jobs this year.

Let us also not forget IBW has helped hundreds of Welsh companies with their exporting activities during the last twelve months - a business support activity which will now be abolished for companies across Wales.

International focus is important to WAG - what do you think?

Update: read the following extract from a comment that has just been posted:


Thanks for setting up this blog, I’ve been reading it every day for the last week and been passing on the link to officers in WAG, clients of mine and other business professionals. 
It should be noted that the success of IBW had been largely helped by the grant scheme that was on offer to clients; consequently, the Invest Wales Team (WAGs grant dept) should also get a lot of the credit for the job creation. 
Let’s face it; a substantial grant to help with set up costs; job creation is a considerable inducement to potential inward investors. 
This week an associate of mine went up to an FS4B (I thought it had been scrapped) event, and apparently the presenters had asked for some briefing from WAG on the proposed changes, but no-one was able to supply anything. It would be a safe bet to suggest that they (whoever they are) are still trying to make it up! 
Repayable grants were introduced in 2006 on a selective basis, and were usually targeted at companies that forecasted high profits and cash flow. I understand, to date, none of these repayable grants have been collected, therefore, the success or failure of repayable grants can’t be measured, so what basis can it now form as policy for all offers of grant.
It seems shameful that WAG officials fought tooth and nail for Assisted Area Status (and Wales still has another 2 years to benefit from it) for IWJ to flush it down the toilet.
And which companies said businesses don’t need grants!! Doh!!  Do you want a grant? No, I’d rather have a loan, please ! It’s intellectually incoherent!!!!
My understanding is that the local authorities have been asking to up the level of grant assistance (currently £5k) for the Local Enterprise Fund (grant for small businesses) to help fill the void, but WAG said ‘No!’…. another own goal.
I’m told Scotland is keeping its grant scheme for the time being, but don’t panic we can offer broadband, so if you want set up your business in Newcastle Emlyn you can yippeee ………well ok not now but at some point, booo!.

The sentiment is well made - I had a telephone conversation this morning with someone who was hugely instrumental in bringing in Admiral to Cardiff. He believes, like many others, that to abolish support to business in Wales at a time when we are trying to emerge out of recession is utter madness.

Keep the comments coming in. In particular, I would be grateful for ideas on how we get WAG to reconsider this madness before it starts to really affect the Welsh economy.