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What do all of these companies have in common: Quinn Radiators, construction giant Dawnus, Tidal Energy Ltd, and Bodnant Welsh Food Centre?

Answer: They have all received thousands, hundreds of thousands and in some cases millions of pounds of Welsh taxpayers money at some point.

They have also all, either in full or in part, ended up entering administration or liquidation.

The list above is not exhaustive. There are also building firms like GM Jones, the Cuddy group and Jistcourt or firms like GRH Food Company and Dragon Feeds. The list goes on.

With the transience of the the benefits achieved by helping these businesses, there are serious questions to be answered about whether the millions of pounds of Welsh public money given to them in public support was well spent.

The list of such businesses that have received public support and then hit difficulties is "vast, ugly and very worrying", said one AM.

Even the auditor general for Wales has concerns, saying the Welsh Government had "not yet implemented an approach to balancing potential risks and benefits".

Should this money have been spent on schools or hospitals, both of which badly need it, instead? Or is the Welsh Government's effort to boost the economy the right way to tackle the huge challenges the nation's economy faces - and are a few failures a necessary price to pay for finding the far smaller number of winners like Admiral that show the benefits subsidising inward investment can bring.

Or is the answer somewhere in the middle? Is it not the ambition that's at fault but the decisions and judgement shown in trying to achieve it?

Big promises

Whenever businesses are given money by the Welsh Government, whether as a grant or a non-repayable loan, it is usually on the basis that they will either create new jobs or sustain existing ones. But if these jobs disappear soon after, or even before, they are even created, is the Welsh taxpayer getting value for money?

(Image: www.adrianwhitephotography.co.uk)

So far in 2019, we have seen some big names in Wales go into liquidation. In March Welsh construction giant Dawnus blamed "Brexit uncertainty" after going into administration.

It had received £3.5m loan from the Welsh Government to "help the business and its employees… during a very difficult period concerning their cash flow", according to Ken Skates, Wales' economy minister.

Whilst most of this had been repaid before the company folded, the government is just one of many creditors seeking to recover the rest of its investment. Most of the firm's equipment has now been sold to the highest bidder.

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In June, hundreds of staff at Newport factory Quinn Radiators have been laid off after the business went into administration.

The company received a £3m loan from the Welsh Government in 2018 with the aim of creating 120 jobs and safeguarding a further 290.

A spokesman for the Welsh Government confirmed a portion of that had been repaid and civil servants were seeking to recover the rest.

In the same month, construction firm Jistcourt went into administration after the firm's chairman said it was "unable to continue trading".

Jistcourt received a £1.1m loan from Finance Wales in 2016 to help its management team buy into the business.

In 2018, the leading and well-known Welsh demolition contractor Cuddy Group folded. In 2014, Cuddy Recycling, based in Llandarcy, received an injection of £228,000 cash from the Welsh Government's Welsh Economic Growth Fund.

If all of this generosity had seen Wales shooting up the economic league tables, there would perhaps be fewer questions.

Yet when you measure our economic performance in terms of Gross Value Added (GVA), that is far from the case.

How GVA in Wales has fallen as a percentage of UK average StatsWales

Wales' GVA per head is around 73% of the UK average - the lowest of any UK nation or region. And in comparison to London, GVA per head in Wales was just 40% of the average in the UK capital.

Speaking in May 2018, leading economist, Gerry Holtham, said that apart from a small window in the early 19th century, fuelled by industrialisation and intensive steel and coal production in particular, Wales has always been relatively poor in economic terms.

Mr Holtham called for a new way to finance firms looking to scale up through the provision of patient capital. In terms of Wales’ population of more than 250,000 companies, there was a lack of so-called middle-market firms, he said.

Mr Holtham said: "If I was in the pay of the Welsh Government I would say look we have stopped the rot. The UK economy has grown by a 32% since 2000 and the Welsh economy about the same... so no relative lost in position, but no gain certainly.

"And that is faster than half of the regions of England. But Scotland had a clear devolution dividend... Wales has not."

"But if [I was not in the pay of] the Welsh Government I might say I don’t know if we have stopped the rot, but we haven’t made any relative progress."

£12.4m written off

In November 2018, the auditor general for Wales published a report on Welsh Government financial support for businesses.

Between April 2014 and March 2017, the Welsh Government agreed nearly £219m of new support to businesses for jobs, split between 443 projects and just over 400 businesses. It also spent just over £167m to 530 unique businesses, with the aim of creating or safeguarding jobs.

Most of this money was pumped into the advanced materials and manufacturing sector.

Between 2014 and 2017, £15.3m was handed to energy and environmental projects. Tidal Energy Ltd, which went into administration in October 2016, received £8m in EU structural funds as well as £49,000 investment from the Welsh Government.

Hailed as a "landmark project" for Wales by the then first minister Carwyn Jones, the 400KW, 39ft high turbine being developed by Tidal Energy Ltd ended up broken on the ocean bed after just three months.

Failed project: Kancoat Ltd Kancoat Ltd was a limited company set up in early 2012 to take over the operation of a metal-coil-coating production line at the Alcoa site on the Waunarlwydd estate in Swansea. Funding The Welsh Government provided a funding package of £3.4 million to Kancoat Ltd in order to purchase and operate a metal-coil-coating production line, with a view to creating growth and sustainable jobs. Kancoat Ltd asserted that the Welsh Government’s assistance would help it create 32 jobs over three years and safeguard one further job in an economically important area. The funding package was provided through a combination of grant, loans and property support. What happened? The venture failed and the company went into administration in September 2014, owing the Welsh Government £2.6 million, with only 12 jobs having been created. Kancoat Ltd was dissolved on 11 March 2018, and the Welsh Government has actioned a write-off for the money it is owed.

The auditor general report said: "The number of projects that received financial support from the Welsh Government (530 of them) and were successful is far greater than the number of projects or businesses that failed."

Even so, the government recovered less than half of the money it had paid to projects in 2014-2017 that subsequently failed. In those three years, it was unable to recover £4.6m in project failures and £7.7m in business failures.

That's a whopping £12.4m in total.

What due diligence is being done?

In May 2019, opposition leader Paul Davies AM asked First Minister Mark Drakeford how the Welsh Government was keeping taxpayers' money safe.

Specifically, Mr Davies asked what due diligence was being done to end the waste of Welsh money.

Mr Drakeford didn't answer to the record of bad loans and poor business decisions that were put to him, which included £3.4m lost on a closed Canolfan Cywain, and £650,000 on Main Port Engineering which went into administration in 2016.

Failed project: Mainport Engineering (1990) Ltd Mainport Engineering (1990) Ltd was a fabrication and engineering company based in Pembroke Dock. Funding The company was awarded £650,000 from the Wales Economic Growth Fund (WEGF) to expand its operation by building a new facility, creating 30 new jobs and safeguarding 140 existing jobs. What happened? The jobs target was narrowly missed with 27 new jobs created and 140 safeguarded. The company’s revenue was negatively affected following the closure of a major client. Replacement contracts to mitigate the shortfall in revenue did not materialise and the company’s base costs could not be covered. Combined with an ongoing dispute with HMRC, this led to the company entering into administration in October 2016. As at November 2018, the Welsh Government was awaiting the final liquidator's report, but is not expecting to recover any money.

Mr Davies also highlighted the case of one company, Kukd.com. The online food ordering site received a £1million grant from the Welsh Government to expand the business and create 100 jobs, but after promised jobs failed to materialise, a Welsh Government investigation into how the money was spent was announced in September 2016.

(Image: PA)

Despite the passing of almost three years, the resulting report is yet to be published. Mr Davies said at the time: "This isn’t the first time we’ve questioned your government’s accountability, and for being less than transparent with us, First Minister. A long line of poorly managed projects have fallen far short of expectations and have dented the confidence of taxpayers."

A spokesperson for the Welsh Government told WalesOnline: "The Welsh Government undertakes appropriate due diligence whenever it provides funding."

Some risks are worth taking

The auditor general's 2018 report stated: "Risks must be balanced by opportunities and benefits; some risks may be worth taking."

Losses could be outweighed by the positive economic impacts achieved by other successful projects across the programme as a whole, it said.

Dr Kevin Evans, a senior lecturer in finance at Cardiff University's Business School, said the Welsh Government served a useful function in providing money to firms which may not otherwise be able to access it.

However, providing capital is inherently risky, Dr Evans added.

Key to allocating financial support are the selection of the recipient firms and the subsequent monitoring of them, he said.

Dr Evans said there were general questions that should be asked. He said: "What are the processes adopted to select those firms deserving of financial support? If the objective is to earn a return and preserve public funds, then this is important. The Welsh Government objectives may lie elsewhere.

"Having made the decision to allocate capital, it is then imperative that the recipients are monitored. The Welsh Government should then intervene to mitigate any risks they observe."

Failed project: Griffin Place Communications Ltd Griffin Place Communications Ltd was a contact centre established in 2014 in Cwmbran. The company provided out-sourced customer services, utilising sophisticated cloud software to maximize data security. Funding The company was awarded £600,000 business finance (£100,000 of this was repayable) to create 121 jobs in Cwmbran in 2014. What happened? The company was paid just under £589,000 and created 127 jobs. However, reports were received that staff were not being paid. Attempts to contact the company were unsuccessful, and the company eventually ceased trading and entered liquidation in 2015. There is no independent information to verify the reason for this business failure. As of November 2018, the Welsh Government was awaiting the final liquidator report, but is not expecting any recovery.

Questions on the perception of risk and financial support given to businesses in Wales are still being asked.

On July 8, 2019, Nick Ramsay, chair of the Assembly Public Accounts Committee, wrote to Andrew Slade, director general for the economy, skills and natural resources group.

In his letter, Mr Ramsay queried the amount, type and purpose of Welsh Government financial support that companies had received before they went into administration.

He also asked for confirmation of any outstanding debts from those companies flagged in a PAC meeting on June 24, which included GM Jones, Cuddy group, Jistcourt and GRH Food Company.

The PAC meeting heard how there was some uncertainty on the Welsh Government’s understanding on the structural arrangements for the Dawnus Group including whether the company in its entirety had gone into administration or whether it continued to operate its international companies and other Dawnus-related companies or companies that had re- emerged.

Mr Ramsay wanted to know why the Welsh Government considered it appropriate to offer advance loan funding to a company with overseas operations, which is within a large group of companies, if not all parts of that operation had been affected by the financial difficulties.

Answers to these questions are due to be discussed at the end of September 2019.

Time for change?

Whereas in the past the Welsh Government has focused on creating and safeguarding jobs when it came to dishing out financial support, this approach is changing.

The auditor general for Wales was critical of the government's approach to date and the 2018 report made several recommendations. The report stated: "The Welsh Government focused on creating and safeguarding jobs but did not monitor wider economic outcomes against the broad framework of indicators it undertook to report against."

Up until 2017, the majority of financial support was offered as non-repayable grants. In fact, between 2010 and 2017, of the almost £320m spent on business support, only £76m (24%) was classed as repayable grants or commercial loans. Less than £7m (2%) had actually been repaid.

In 2017, economy secretary Ken Skates defended the government's record, saying: "We make no apology whatsoever for getting 185,000 people either into work or saving their jobs in work since 2011.

"It's absolutely vital that Welsh Government serves the interests of working people and that's precisely what we've done."

But speaking in August, 2019, Russell George AM, the shadow economy minister, said: "The list of poor Welsh Government financial decisions in recent history is vast, it’s ugly, and it’s very worrying.

"This Welsh government’s willingness to throw taxpayers’ money away without the proper follow-up strategy shows no sign of slowing down, as we see cases as recent as Jistcourt and Quinn Radiators, which went into administration as recently as June.

"There needs to be a radical overhaul of governmental attitude towards business funding in Wales; we need to see more effective and transparent support and follow-up procedures put into place to see Welsh businesses thrive and end this wastage of public money."

Here is a list of some of those businesses that hit financial difficulties after receiving public money:

