USE IT OR LOSE IT - WAG FAILS TO SPEND BUSINESS SUPPORT BUDGET

Having spoken to many companies about the level of business support that they are receiving from WAG, the biggest complaint is the amount of bureaucracy that seems to be stifling the entire system.

Simply put, if WAG is putting in resources to support Welsh businesses, then surely those resources should get out to those businesses as quickly as possible?

Unfortunately, that doesn't seem to be the case.

When the Minister for Economy and Transport was asked what proportion of WAG's Business Support Programme had been expended by 31st October 2009, the answer came back as:

"At the 31 October 2009, the expenditure on the Flexible Support for Business Programmes represented 22% of the overall annual budget for 2009-2010."

Yes, that's right - after six months of the financial year, less than a quarter of the business support budget had been spent and this during the worst recession since the 1920s.

You would have thought spending would be AHEAD of target given that WAG and the Minister have both emphasised the lack of funding available to small firms as the key problem in the economy.

And its gets worse as there is allegedly tens of millions of pounds that remains underspent within the economic development budget with two months to go of the current financial year, and this at a time when businesses are crying out for support.

If that is the case, then it is clear that something is seriously wrong with the entire business support structure within Wales. Given this underspend, there is a strong argument for the Audit Office to examine why there is so much inefficiency within DET when it comes to ensuring that government support reaches our business community quickly.

Otherwise, as this blog and others have argued, WAG should get rid of the majority of business support, focus on those areas of market failure only(start-ups, innovation) and use the rest of the money saved to reduce business rates for the small firm sector.

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