Welsh government: Expert questions grants thinking

An expert has raised questions about the coherence of the Welsh government's economic strategy, based on its expenditure in the first five months of this financial year.

An analysis by BBC Wales has shown that some companies in Wales are still receiving non-repayable grants several months after a new economic strategy proposed to scrap them.

These include a grant of nearly £200,000 towards opening a boutique hotel in the centre of Cardiff.

Other companies receiving grants include The Authentic Curry Company, the Rhymney Brewery as well as larger employers such as Toyota and Corus.

Dr Martin Rhisiart, director of the Centre for Research in Futures and Innovation at the University of Glamorgan, said it was hard to work out what the government's current thinking was, based on this year's expenditure.

He said: "I think it begs this question - is this coherent enough - and what message does it give to the vast majority of businesses in Wales?

"It's that type of clarity we need, and I think all companies would appreciate it in terms of what the playing field is, and whether the rules of the game are the same for everyone."

He added that at the moment there was still a lack of understanding from business about the government's strategy of supporting certain sectors of the Welsh economy.

Dr Rhisiart said: "Communication is critical. There is still, I think, some confusion within the business community about how strict these sectors are and what's going to happen to them over the next few years."

However, the spending breakdown published by the government shows the majority of expenditure defined as "current grants to the private sector" recorded since April has gone to councils, universities and housing associations, rather than to businesses.

BBC Wales has been examining the breakdown of all spending published by the Welsh government over £25,000 during this financial year.

The Cardiff hotelier Jolyon Joseph received a grant of £189,000 from the government towards the cost of opening a new refurbished hotel on Cathedral Road, transforming a derelict building into a new boutique venue.

He said it had made a huge difference to the experience he was able to offer visitors to Wales.

"It's effectively changed a basic building and hotel into an opulent, sexy, individual Welsh place. It's a lovely, beautiful building, with a lot of care and heart gone into it."

Another project to get grants from the government is Furnace Farm in the Conwy Valley. The collection of 18th Century farm buildings on the Bodnant estate is expected to open next spring as a new centre for Welsh food, and owner Michael McLaren said government support has been vital to the project.

'Expanded'

He said: "The overall project is going to cost somewhere between six and seven million pounds but we are fantastically lucky to have had very substantial grant funding from Europe and the Welsh government, of the order of a little over three million pounds, for which we are enormously grateful.

"Quite simply, without it, this project could not have happened and if the project hadn't happened, we wouldn't be creating the forty full-time equivalent jobs, and we wouldn't be doing all the things we are trying to do for Welsh food and for the profile of Welsh food in this region."

Responding to Dr Rhisiart's comments, a Welsh government spokesperson said: "Our economic strategy is clear and focused on key sectors that have the potential to grow and prosper in Wales.

"The sector approach is allowing us to target our funding at key industries, which is vital during a time when public spending is being cut from Whitehall.

"We recently expanded the number of priority sectors to nine to include tourism, construction and food and farming, in recognition of the major contributions they also provide to the Welsh economy."