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Aid grants 'fail to deliver jobs' Aid grants 'fail to deliver jobs'
(about 7 hours later)
The drive to bring in investment from overseas has created a third fewer jobs in Wales than initially forecast, according to a BBC investigation. The drive to bring in investment from overseas firms has failed to deliver jobs and value for money in Wales, according to a leading academic.
Over £500m has been spent since 1986 on grants to attract foreign firms to Wales, due to support 160,000 jobs.Over £500m has been spent since 1986 on grants to attract foreign firms to Wales, due to support 160,000 jobs.
But only two-thirds of these were created and possibly even fewer still exist, BBC Wales found. But Professor John Lovering says in the past 10 years there has been no real increase in the number of people employed by foreign-owned firms.
The assembly government disputed the conclusions and said the grants had brought £7.7bn to the Welsh economy. The assembly government has defended its grants policy.
A spokesman added the grants had brought £7.7bn to the Welsh economy.
Since 1986, 584 projects in Wales have received £524m in Regional Selective Assistance (RSA) grants.Since 1986, 584 projects in Wales have received £524m in Regional Selective Assistance (RSA) grants.
That investment has created 64,914 jobs and safeguarded a further 38,241, according to assembly government figures.That investment has created 64,914 jobs and safeguarded a further 38,241, according to assembly government figures.
But John Lovering, professor of urban development and governance at Cardiff University, said it was a mistake to invest the money in foreign companies.But John Lovering, professor of urban development and governance at Cardiff University, said it was a mistake to invest the money in foreign companies.
Is it a very sensible use of very large amounts of public money to be chasing this kind of investment? Prof John LoveringIs it a very sensible use of very large amounts of public money to be chasing this kind of investment? Prof John Lovering
He said: "We've got the same amount number of jobs in foreign companies now roughly than we had about 10 years ago.He said: "We've got the same amount number of jobs in foreign companies now roughly than we had about 10 years ago.
"A lot of money has gone into something that was to transform the Welsh economy and create a whole new dynamic, buzzy industry and it hasn't really happened.""A lot of money has gone into something that was to transform the Welsh economy and create a whole new dynamic, buzzy industry and it hasn't really happened."
Prof Lovering said it was very difficult to retain foreign companies in Wales as they moved around the world "at a great rate".Prof Lovering said it was very difficult to retain foreign companies in Wales as they moved around the world "at a great rate".
He highlighted the case of LG Electronics in Newport which opened a plant in the city in 1996 and is due to close this year with the loss of 315 jobs.He highlighted the case of LG Electronics in Newport which opened a plant in the city in 1996 and is due to close this year with the loss of 315 jobs.
"[Former Welsh Secretary] William Hague and the chairman for the WDA [Welsh Development Agency] were dancing round the fields of Newport promising 6,000 jobs and a total of 26,000 jobs to be generated out of that."[Former Welsh Secretary] William Hague and the chairman for the WDA [Welsh Development Agency] were dancing round the fields of Newport promising 6,000 jobs and a total of 26,000 jobs to be generated out of that.
'Claw back' grants'Claw back' grants
"We didn't see a tiny fraction of that - and that's only the most prominent example," he said."We didn't see a tiny fraction of that - and that's only the most prominent example," he said.
"The question is - is it a very sensible use of very large amounts of public money to be chasing this kind of investment?""The question is - is it a very sensible use of very large amounts of public money to be chasing this kind of investment?"
A spokesman for the assembly government said the BBC's conclusions did "not accurately reflect the situation" and did not take into account non-manufacturing jobs, including recent investment by ING Direct, which created 300 jobs in Cardiff. A spokesman for the assembly government said the conclusions did "not accurately reflect the situation" and did not take into account non-manufacturing jobs, including recent investment by ING Direct, which created 300 jobs in Cardiff.
He said: "RSA is results driven. If forecasts are not met, then the assembly is not obliged to pay.He said: "RSA is results driven. If forecasts are not met, then the assembly is not obliged to pay.
"Further, if the grant is paid and there is a subsequent fall in employment or investment, grant can be clawed back - as was the case with LG."Further, if the grant is paid and there is a subsequent fall in employment or investment, grant can be clawed back - as was the case with LG.
"Since 1986, 584 projects have received £524m of RSA. This investment has created 64,914 new jobs and safeguarded 38,241 - a total of 103,155."Since 1986, 584 projects have received £524m of RSA. This investment has created 64,914 new jobs and safeguarded 38,241 - a total of 103,155.
"At 6.8% of total investment, RSA has leveraged in a total of £7.7bn in the Welsh economy.""At 6.8% of total investment, RSA has leveraged in a total of £7.7bn in the Welsh economy."
Wales@work is on BBC Radio Wales on Tuesday, just after 1800 BST.Wales@work is on BBC Radio Wales on Tuesday, just after 1800 BST.