“As the world emerges from recession, successful exporting companies will be even more important for economic prosperity. Globalisation means our competitors are just as likely to be across the ocean as down the road, so international focus is vital.”
So that is why you have abolished International Business Wales which, at a cost of £10.5 million in 2009-2010, has created or safeguarded around 7,500 jobs this year.
Let us also not forget IBW has helped hundreds of Welsh companies with their exporting activities during the last twelve months - a business support activity which will now be abolished for companies across Wales.
International focus is important to WAG - what do you think?
Update: read the following extract from a comment that has just been posted:
Thanks for setting up this blog, I’ve been reading it every day for the last week and been passing on the link to officers in WAG, clients of mine and other business professionals.
It should be noted that the success of IBW had been largely helped by the grant scheme that was on offer to clients; consequently, the Invest Wales Team (WAGs grant dept) should also get a lot of the credit for the job creation.
Let’s face it; a substantial grant to help with set up costs; job creation is a considerable inducement to potential inward investors.
This week an associate of mine went up to an FS4B (I thought it had been scrapped) event, and apparently the presenters had asked for some briefing from WAG on the proposed changes, but no-one was able to supply anything. It would be a safe bet to suggest that they (whoever they are) are still trying to make it up!
Repayable grants were introduced in 2006 on a selective basis, and were usually targeted at companies that forecasted high profits and cash flow. I understand, to date, none of these repayable grants have been collected, therefore, the success or failure of repayable grants can’t be measured, so what basis can it now form as policy for all offers of grant.
It seems shameful that WAG officials fought tooth and nail for Assisted Area Status (and Wales still has another 2 years to benefit from it) for IWJ to flush it down the toilet.
And which companies said businesses don’t need grants!! Doh!! Do you want a grant? No, I’d rather have a loan, please ! It’s intellectually incoherent!!!!
My understanding is that the local authorities have been asking to up the level of grant assistance (currently £5k) for the Local Enterprise Fund (grant for small businesses) to help fill the void, but WAG said ‘No!’…. another own goal.
I’m told Scotland is keeping its grant scheme for the time being, but don’t panic we can offer broadband, so if you want set up your business in Newcastle Emlyn you can yippeee ………well ok not now but at some point, booo!.
The sentiment is well made - I had a telephone conversation this morning with someone who was hugely instrumental in bringing in Admiral to Cardiff. He believes, like many others, that to abolish support to business in Wales at a time when we are trying to emerge out of recession is utter madness.
Keep the comments coming in. In particular, I would be grateful for ideas on how we get WAG to reconsider this madness before it starts to really affect the Welsh economy.
Update: read the following extract from a comment that has just been posted:
Thanks for setting up this blog, I’ve been reading it every day for the last week and been passing on the link to officers in WAG, clients of mine and other business professionals.
It should be noted that the success of IBW had been largely helped by the grant scheme that was on offer to clients; consequently, the Invest Wales Team (WAGs grant dept) should also get a lot of the credit for the job creation.
Let’s face it; a substantial grant to help with set up costs; job creation is a considerable inducement to potential inward investors.
This week an associate of mine went up to an FS4B (I thought it had been scrapped) event, and apparently the presenters had asked for some briefing from WAG on the proposed changes, but no-one was able to supply anything. It would be a safe bet to suggest that they (whoever they are) are still trying to make it up!
Repayable grants were introduced in 2006 on a selective basis, and were usually targeted at companies that forecasted high profits and cash flow. I understand, to date, none of these repayable grants have been collected, therefore, the success or failure of repayable grants can’t be measured, so what basis can it now form as policy for all offers of grant.
It seems shameful that WAG officials fought tooth and nail for Assisted Area Status (and Wales still has another 2 years to benefit from it) for IWJ to flush it down the toilet.
And which companies said businesses don’t need grants!! Doh!! Do you want a grant? No, I’d rather have a loan, please ! It’s intellectually incoherent!!!!
My understanding is that the local authorities have been asking to up the level of grant assistance (currently £5k) for the Local Enterprise Fund (grant for small businesses) to help fill the void, but WAG said ‘No!’…. another own goal.
I’m told Scotland is keeping its grant scheme for the time being, but don’t panic we can offer broadband, so if you want set up your business in Newcastle Emlyn you can yippeee ………well ok not now but at some point, booo!.
The sentiment is well made - I had a telephone conversation this morning with someone who was hugely instrumental in bringing in Admiral to Cardiff. He believes, like many others, that to abolish support to business in Wales at a time when we are trying to emerge out of recession is utter madness.
Keep the comments coming in. In particular, I would be grateful for ideas on how we get WAG to reconsider this madness before it starts to really affect the Welsh economy.
Comments
Anon 0935 - I would fully expect that any investment announced over the next few weeks will be getting their grant from WAG, including Sharp.
Notice how careful the press office has been not to mention grants at all either in this announcement or that concerning GE Healthcare.
Pond Life - you may say that....
Anon 10:58 and 12:26 - it would be worth comparing the cost/job in terms of IBW with other similar international operations within the RDAs and Scotland/Invest Northern Ireland.
This, of course, does not take into account any grant that the company would have received on top of the admin costs for IBW but it would be worth comparing the cost per job here with other parts of DET, such as Technium etc.
In fact, if we examine the fact that £240 million is going to be spent on broadband by WAG, a similar return per job (and assuming the £10,000-£12,000 grant that companies would normally get per job on top of the IBW), that would give us an expectation of around 20,000 jobs created directly by the broadband programme. More on this tomorrow.
Anon 1237 - agree, this is probably the major blind spot in the ERP? Who is now going to drive internationalisation of Welsh enterprise?
It should be noted that the success of IBW had been largely helped by the grant scheme that was on offer to clients; consequently, the Invest Wales Team (WAGs grant dept) should also get a lot of the credit for the job creation. Let’s face it; a substantial grant to help with set up costs & job creation is a considerable inducement to potential inward investors.
This week an associate of mine went up to an FS4B (I thought it had been scrapped) event, and apparently the presenters had asked for some briefing from WAG on the proposed changes, but no-one was able to supply anything. It would be a safe bet to suggest that they (whoever they are) are still trying to make it up!
Repayable grants were introduced in 2006 on a selective basis, and were usually targeted at companies that forecasted high profits and cash flow. I understand, to date, none of these repayable grants have been collected, therefore, the success or failure of repayable grants can’t be measured, so what basis can it now form as policy for all offers of grant.
It seems shameful that WAG officials fought tooth and nail for Assisted Area Status (and Wales still has another 2 years to benefit from it) for IWJ to flush it down the toilet.
I promise you‘ll find it hysterical, if you watch the interview IWJ had with Huw Edwards during the election campaign. The interviewer didn’t have to try too hard to make his guest look like the village idiot. I thought perhaps IWJ was having a bad day, but it appears to be more permanent by the look of this ERP policy.
And which companies said businesses don’t need grants!! Doh!!
Do you want a grant? No, I’d rather have a loan, please ! It’s intellectually incoherent!!!!
My understanding is that the local authorities have been asking to up the level of grant assistance (currently £5k) for the Local Enterprise Fund (grant for small businesses) to help fill the void, but WAG said ‘No!’…. another own goal.
I’m told Scotland is keeping its grant scheme for the time being, but don’t panic we can offer broadband, so if you want set up your business in Newcastle Emlyn you can yippeee ………well ok not now but at some point, booo!.
This is despite the fact that none of the funding for LIF comes from WAG but is entirely funded by the EU via the Wales European Funding Office (WEFO). It is clear that WAG's intention is to end ALL grant support to business, whatever their size and to re-direct EU funding away from LIF (and other EU funded initiatives) into its new (fleeting?) priorities such as Broadband.Local authorities and other organisations are being squeezed out of access to these funds, which are to become WAG's own piggy bank. WEFO is no more than a department of WAG with no independence and no apparent ability to stand up for Welsh business.
It is definitely the case that almost all SMEs and larger companies are totally unaware of the end of SIF and the scrapping of FS4B after just 18 months and at God knows what cost (not that FS4B was ever more than a massively over complicated and bureaucratic mess). Their reaction is almost universally shock and a real fear of what this means for themselves and the Welsh economy. Where is the Welsh media in all of this? Hardly a peep from any of them.
IWJ could well be out of office next year and will leave behind a legacy that will be catastrophic - what is he thinking of?
..... it does n't make good reading and something had to be done I feel . The mistake is that all too often WAG feels the need to be radical under citicism .
Some functions are indeed critical to the Welsh economy but failing depts may just need a tweak or at least good management rather than closure .In a similar fashion could n't FS4B have been made to work rather than immediate closure and immediate lack of support for business ? What private company stops production for a few months to change it's methodology ? Come on WAG ....change management!!
However, I agree with you that a few changes would have made the world of difference. For example, WAG had already moved two senior managers responsible for FS4B prior to the ERP being published. With the right management, it could have been made to work. Unfortunately, unless there is a major u-turn, we will never know.
The real question is what is Plaid Cymru thinking of? The party of Wales and the small businesses of Wales has been outmanouvered by a group of civil servants who owe their jobs to the patronage of Welsh Labour into focusing their efforts on supporting large firms, many of which are heavily unionised. They are being used by a Labour Party which has neutered them in the polls and which has now made the party a poodle for their policies. IWJ may think that his policy is radical but all it does is enable Labour to serve their friends in big business and I think the book has already been closed on which large telecommunications company will get the broadband contract.
Is there any way you can show a break down of the figures of new projects coming to Wales and from what IBW international office they originated. I am simply amazed that WAG has not published these job wins over the last 12 months. I have seen press release for 200 new jobs for Virgin in Swansea and now Sharp but no mention of job numbers
Unfortunately, the only data I have is directly from UKTI's press office and that only gives the most basic information although as the UK can be broken down by sectors and country of origin.
Presumably, if that is available for the UK, then it should be available for Wales, but you would have to ask WAG for that data as it currently isn't available in the public domain and I certainly haven't been given access to it.
Unfortunately, the only data I have is directly from UKTI's press office and that only gives the most basic information although as the UK can be broken down by sectors and country of origin.
Presumably, if that is available for the UK, then it should be available for Wales, but you would have to ask WAG for that data as it currently isn't available in the public domain and I certainly haven't been given access to it.
10 YEAR PAYBACK CALCULATION
£million
Grant (1.0)
VAT Income 20.0
PAYE & NI 6.0
Corporation Tax 2.5
Saved Benefits 5.0
Saved Health & Crime Costs 1.0
Net Benefit to the Exchequer 33.5
So it seems that IWJ wants to implement a policy that is socially divisive, adversely targeting the most disadvantage in Welsh society, in a bid to save £1 million that would perhaps have yielded a minimum of £33.5 million in benefit to the exchequer of a 10 year period. You see it doesn't matter that some nomadic companies only come for a limited period, attracted by grants. Because while they are here they create massive financial and social benefit in Welsh society. The table doesn't include for any Keynesian multiplier effects.