The Welsh Government didn’t fully translate its vision for economic renewal into a coordinated programme of financial support to businesses, instead focusing on managing individual projects. It also needs to demonstrate more clearly what this support achieves.

That’s the conclusion of a report by the Auditor General for Wales. The Welsh Government is beginning to overhaul its approach to providing financial support to business, through a new strategic vision. 

The Welsh Government’s Sectors and Business team committed around £219 million between April 2014 and March 2017 to help businesses create or safeguard jobs and spent just over £167 million during that same period. This funding has supported a range of industries - including manufacturing, construction, the creative industries and life sciences. Awards to large businesses tend to attract publicity but half of the new finance awarded was to support jobs in small and medium-sized enterprises. Although there have been some high-profile business failures, most of the other projects supported met their objectives and, where they did not, the Welsh Government recovered around half of the funds provided.

But the report found that there has been a lack of clarity for some businesses about what Welsh Government financial support is available and how to access it. It also concludes that the Welsh Government has monitored individual projects separately but has not managed financial support to businesses as a programme or reported routinely on what its support achieves overall.

The report found that current information systems do not make it easy for the Welsh Government to give a full picture of the financial support that is given and its impact. The Welsh Government is now starting to overhaul its approach to providing financial support to business through a new strategic approach and operating model.

The report calls on the Welsh Government to develop a more coordinated programme, supported by comprehensive and timely management information, and a clearer approach to define and manage acceptable levels of risk at a programme level.

Auditor General, Adrian Crompton said: “The Welsh Government must be able to demonstrate clearly and transparently how its financial support to businesses provides value for money, both by improving the economy and contributing to wider well-being objectives. The current approach is too piecemeal. However, if the Welsh Government implements my recommendations, it can improve this position as it develops arrangements to support its new Economic Action Plan.”