New £136m fund launched to help small firms grow

Ken Skates says the development bank would aim to increase investment and allow the Welsh economy to thrive

A £136m fund to help firms speed up investment and growth will be launched by Economy Secretary Ken Skates.

He said the money, available over the next seven years, would complement the planned new development bank for Wales.

But Plaid Cymru said the cash replaced an existing fund and would offer much less support than businesses required.

The new state-owned development bank will have a wider remit than the Welsh Government's investment bank, Finance Wales, does currently.

Before launching the fund on Wednesday, Mr Skates said: "The Wales Business Fund will mean Welsh SMEs [Small and medium-sized enterprises] can collectively access up to £136m of financial support over the next seven years, ensuring they are well-placed not only to develop their home markets but also to compete internationally."

The fund is backed by the Welsh Government and European Regional Development Fund.

Mr Skates said: "This support will be complemented by the establishment of the Development Bank for Wales which will further support Welsh businesses to access finance and ultimately help us to safeguard and create jobs right across Wales.

"Our work to establish the Development Bank is progressing well and we have now received a fully costed business plan from Finance Wales which would see them evolve into the Development Bank for Wales."

'Silver bullet'

Mr Skates said the business plan was being evaluated "with a view to the bank being up and running in the second half of next year".

He said driving up investment levels was "more important than ever as we seek to increase business confidence in the wake of the EU referendum".

"I will be looking to the development bank to drive up investment levels to £80m per annum within five years," he added.

Establishing a development bank was recommended as a "catalyst and driving force" to help the Welsh economy grow in a report for the previous Welsh Government in 2015.

Plaid Cymru Finance and Economy spokesman Adam Price said Welsh ministers had announced the creation of a new £136m business fund in January 2016 that "replaces the existing 'Jeremie' fund".

"Indeed it was originally expected to go live at the end of June, so its launch is in fact three months late," he said.

"Whilst any funding to support small businesses is to be welcomed, the £136m announced by the Welsh Government today is considerably less than the £500m funding gap identified by its own report, so this is far from being a silver bullet to solve the problem that Welsh businesses face."

The Welsh Conservatives said the announcement was a "cosmetic re-hash" of a previous policy.

Economy spokesman Russell George said: "If the Welsh Labour Government really wants to help small firms then they should have made good on their promises to cut business rates, and they should get cracking with the vital work of upgrading Wales' creaking transport infrastructure."