The First Minister today rebuffed calls for an apology after a Public Accounts Committee revealed “significant failings” in the Welsh Government’s £3.4m investment in a Swansea firm.
The committee’s report found that the Welsh Government ignored its own due diligence in pouring more than £3m of public money into Kancoat, a Swansea firm which ultimately failed.
Kancoat operated an aluminium-coil-coating production line in Swansea from 2012, which is used in the manufacture of tin cans, drinks cans, and aerosol canisters.
The company received significant financial support from the Welsh Government worth £3.4m in total, including loans and grants.
Among the most significant of the revelations contained in the PAC report was the failure of the Welsh Government to heed warnings that the firm had a weak business plan, and that investment represented an unacceptably high risk for Finance Wales – which is effectively a lender of last resort.
Speaking after First Minister’s Questions today, Mr Davies said:
“This affair is reflective of Welsh Labour’s laissez-faire attitude to taxpayers’ money, and it is an absolute scandal that the former Economy Minister ignored repeated warnings not to support this investment.
“No government can ever guarantee a successful outcome, but the Welsh Government’s due diligence process is designed to ensure best possible protection for public money in such circumstances.
“In this case that process was ignored and £3.4 million was given to a firm that lacked a coherent business plan, and which represented an unacceptable level of risk, even to Finance Wales – a lender of last resort.
“The First Minister’s apathetic response to this matter is deeply regrettable, as is his unwillingness to apologise for the latest in a long line of catastrophic financial errors by ministers under his government.”
During plenary this afternoon an Urgent Assembly Question by Russell George AM was also taken.
Mr George, the Shadow Economy Secretary, pressed the Welsh Government on steps being taken to ensure such failings are not repeated in future.
Speaking after plenary, he said:
“Not for the first time the Welsh Labour Government has taken decisions which have led directly to a massive loss for the Welsh taxpayer.
“In this instance substantial investments were made in the face of sound advice and despite numerous red flags.
“Yet, disturbingly, no one seems willing to take responsibility for the failure and there is little evidence to suggest that lessons have been learnt.
“The Public Accounts Committee has made a series of recommendations and it is vital that these are studied carefully and acted upon so that similar mistakes are not made in future.”