MAXIMISING THE WELSH POUND?

Last week, the public sector borrowing requirement for the UK was announced at a record £15 billion for September.

On the same day, and seemingly oblivious to this news, the Welsh Assembly Government (WAG) announced that £120 million of taxpayers’ money was being spent on a number of public sector projects across the nation.

Certainly, one cannot argue with funding of £8 million for a new children’s hospital for Wales, although why WAG has waited so long to support this critical project remains a mystery.

However, one has to question whether, at a time when we should be doing everything to bolster our economy, any of the other projects receiving public money will really help to deal with worst recession since the Second World War?

Is it really a priority for WAG to back projects such as £35 million for the Ebbw Vale Learning Works (which includes a sports, leisure and arts centre); £15 million on an arts and science centre at Bangor University; £3.5 million for the Glyn Vivian Art Gallery, Swansea; and nearly £1 million for eco-lighting at 17 monuments?

According to WAG, resources need to be used effectively and efficiently to ensure value for the Welsh pound.

Therefore, why has the Assembly not partnered with the private sector to deliver key projects that can make a difference to the economy? Surely that would have ensured that public money, matched with the private sector, would have gone a lot further.

As it stands, most of the additional funding for the projects approved will come either from other public sector pots or from European funds.

You also have to ask why not one single proposal to boost the business performance of the Welsh economy was funded by WAG?

For example, Wrexham Council submitted a bid for a Western Gateway "green" business park project and Flintshire for offices, warehouses and workshops in Sealand.

Neither were supported and yet a £15 million bid from Bangor University to build a replacement for Theatre Gwynedd and a new students’ union nightclub was approved?

Of course, WAG has argued that the projects funded "will create or support over 3,000 jobs during the construction process".

As this works out at roughly £40,000 per job, it is a very expensive way of getting people back to work, especially as it is nearly four times the cost of a job created by grants to business. There is also no guarantee that any of the capital projects funded will go to local Welsh companies, given the procurement rules operated by WAG.

With the current restrictions on public funding, one would wonder where WAG has managed to find an additional £120 million for these projects.

Well, it would seem that the answers lie in the details of next year’s WAG budget, which shows a reduction in capital expenditure for the economy and transport portfolio of £60 million and for education and learning of £82 million.

For the last couple of years, WAG has been advocating 'a bigger bang for the Welsh buck'. If that is the case, how can it approve a tranche of public sector projects that will do little to support Welsh industry and bring down the 130,000 currently unemployed in Wales? How can WAG support a £142 million cut in expenditure in the main areas that can help to build up Welsh business, namely economy, transport and skills?

That is hardly "maximising the benefit of every Welsh pound for the people of Wales". Worst still, with estimates of 160,000 people being unemployed in Wales by next year, it seems that the future of Welsh business is being mortgaged for the sake of a number of pet projects that could, and should, be delayed until the economy recovers.