Enterprise Agencies

Oral Answers to Questions — Wales – in the House of Commons at 12:00 am on 16th November 1987.

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Photo of Alun Michael Alun Michael , Cardiff South and Penarth 12:00 am, 16th November 1987

To ask the Secretary of State for Wales what steps he is taking to ensure the future security and success of enterprise agencies in Wales, particularly the Cardiff and Vale enterprise.

Photo of Mr Ian Grist Mr Ian Grist , Cardiff Central

The success of enterprise agencies in Wales is demonstrated by the 16,000 jobs in small businesses that they have helped to create. The agencies, including Cardiff and Vale enterprise, have benefited from substantial central funding, which continues to be available under the new arrangements introduced last year.

Photo of Alun Michael Alun Michael , Cardiff South and Penarth

I am sure that the Minister is aware of reports that the Government intend to put a substantial amount of money into such agencies and that it will be matched by a similar amount from the large banks. Presumably the banks will do that with the intention of obtaining a write-off facility on their contributions. Can the Minister tell us what he knows about that? Is he aware of the report that none of this money will go to Wales? If that is the case, what will the Minister and his colleagues do about that? Does he share the fears of some of us that it might lead to a diminution of the existing secondments by banks, which have made a tremendous contribution to enterprise agencies? In view of the Minister's statement that these agencies are very cost effective in the creation of jobs, does he agree that they provide an ideal model for partnership between local government and private enterprise in our areas?

Photo of Mr Ian Grist Mr Ian Grist , Cardiff Central

I do, indeed, agree that they are models, not just for local government, but for private industry. Under the new system, local enterprise agencies can receive a grant for five years up to a maximum of £25,000 per annum in the first two years, declining to £10,000 in the fifth year. The grants are conditional on the local enterprise agency producing a satisfactory three-year business plan, a five-year financial strategy aimed at self-sufficiency by year six, and matching £1 for £1 private sector contributions—and of course that is not only banks. Similar but less generous arrangements apply to English local enterprise agencies. In addition to core funding, the Welsh Development Agency will grant up to £17,500 per annum per agency for special projects.

Photo of Mr Keith Raffan Mr Keith Raffan , Delyn

Does my hon. Friend agree that as the 15 local enterprise agencies in Wales have assisted in the creation of 16,000 jobs at a very good cost-per-job ratio, it is important that, as his officials have advised, the private sector should become far more substantially involved than hitherto in the local enterprise agencies? Can he tell us what progress has been made in achieving that aim, in more closely monitoring the successes and failures of the local enterprise agencies, and in organising an annual conference in Wales at which the agencies can meet and exchange information and experiences?

Photo of Mr Ian Grist Mr Ian Grist , Cardiff Central

I am sure that the local enterprise agencies will have heard my hon. Friend's suggestion. It sounds to me an excellent one. We want to see more private sector involvement in financing and the secondment of more staff—a point that my hon. Friend made some time ago. The private sector connection varies markedly among the different agencies throughout Wales.