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A GRANT TOO FAR?

Many will have read about the announcement yesterday that Corus/Tata will be receiving over a million pounds from the Welsh Assembly Government under the ProAct scheme.

What on earth is going on?

Both WAG and Corus have essentially admitted that they are stretching the criteria by which the company qualifies for the funding, especially as the money will pay for training for workers in jobs that are not under threat.

As a limited fund, every pound that is given to a large firm under Pro-Act means one pound less to a small firm. Therefore why give the money to a large multinational company that doesn’t qualify for the scheme and, more importantly, has recently received a £500 million loan from various banks?

So far, ProAct has spent £17.3 million on helping 129 companies in Wales. How many of those supported were large firms who just took the money because it was available and how many were small firms in serious financial difficulties?

How many more large firms have been treated ‘flexibly’ by civil servants to get the money out to companies? Certainly, given that this is a European scheme, there are normally limits on the amount of funding that goes to support large firms.

Given the impression that Corus actually didn’t need the money in the first place, the question is whether this is a grant too far and brings the whole process of supporting businesses into disrepute?

Certainly, one prominent satirical website seem to think so.

Comments

John the Baptist said…
The coverage of the BBC over this issue has been nothing short of scandalous. The usual march of pliant academic commentators who won't say anything against WAG just in case they lose out on grants or their Vice Chancellors get upset.

The Head of Economics at Swansea even said that he supported such a move - hasn't he heard of the simple tenet that government only steps in when there is market failure. There is no market failure when Corus is given a million pounds for supporting jobs that weren't under threat. It is a bung, simple as that.

Keep sticking your head above the parapet as the rest of the academic community in Wales has lost its balls.
October 09, 2009 7:40 am
Alwyn ap Huw said…
As Tata has an annual turnover that is greater than the Assembly's annual budget it would have made more sense fot Tata to give a grant to the Assembly!
October 09, 2009 2:28 pm
Professor Dylan Jones-Evans said…
Alwyn - great comment!

It will be mentioned in dispatches in the DP column on Monday
October 09, 2009 4:57 pm
Dave said…
Last week, Ieuan Wyn Jones said that

""Some of the practices of old have had their day – where businesses were offered large pots of grants in order to invest in Wales. This is now simply not enough to hook companies and to entice them to create sustainable investment".

Begs the question why Corus were given a million pound bung then.
October 09, 2009 6:03 pm
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