Skip to main content

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

Anonymous 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
Post a Comment

Popular posts from this blog

THE CRACHACH

Unlike me, do you consider yourself part of 'the establishment' here in Wales?  As thousands gather for the Eisteddfod in Mold this morning, they will, according to some social commentators, not be participating in the greatest cultural festivals of Europe. Instead, they will merely be bit-part players in one of the annual gatherings of the great and good of Wales.  Unkindly, this set of the movers and shakers in Welsh society is known as 'the crachach' , and constitute a social class all of their own, dominating the educational, cultural and media sectors of Wales and allegedly looking down upon any outsider with new ideas, reinforcing mediocrity and failing to see beyond the limits of their own narrow experience.  They are said to live in a comfort zone that awaits the expected invitation to the next glass of chilled chardonnay and canapés, forgetting that due to their lack of leadership and drive, Wales remains firmly rooted to the bottom of the UK prosperity league ...
30 comments
Read more

THE FUTURE FOR SILICON VALLEY

During the last twenty years, there have been many academics, politicians and policymakers (including yours truly) who have looked over to the innovation developed in Silicon Valley, California and wondered if we could ever emulate that success here in Wales. Whilst the former First Minister Rhodri Morgan proposed only last week that South Wales could become the “UK’s answer to Silicon Valley”, he is not alone in the world with such a suggestion for his local area. With imitation often being the sincerest form of flattery, many others regions across the globe have tried to emulate the ‘secret sauce’ that has led to this small valley to the South East of San Francisco becoming the seedbed for world-leading companies such as Hewlett-Packard, Apple and Google. But after fifty years of success, can it maintain its position as the premier location for innovation in the World? This is a question that its own business community has recently been asking itself. This has culminated in a...
Read more

MYOPIA AND ENTROPY

Over the next month, this blog will look very carefully at some of the new policies developed as part of the Economic Renewal Programme (ERP) launched by the Welsh Assembly Government (WAG) last week. Hopefully, it will help to start a debate on whether this is the right approach to turn around the Welsh economy and to drag us from the bottom of the UK’s prosperity league table. I will start by examining the decision to abolish International Business Wales (IBW), the Assembly’s overseas investment arm that was responsible for attracting business into Wales as well as promoting Welsh business abroad. Some will say that this decision to close down the last remnant of the old Welsh Development Agency was justified by the outcomes of last October’s review of IBW by Glenn Massey, the former inward investment specialist. However, if you bother reading the Massey report in detail, it actually has little evidence to suggest that the division was doing badly. If we examine IBW’s record on new j...
27 comments
Read more