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Development Bank plan 'kicked into long grass' Development Bank plan 'kicked into long grass'
(about 4 hours later)
Plans for a development bank for Wales look to have been kicked into the long grass by ministers, according to business figures and politicians.Plans for a development bank for Wales look to have been kicked into the long grass by ministers, according to business figures and politicians.
Economy Minister Edwina Hart has written to AMs about the bank and the future of Finance Wales, the Welsh government's arms-length business finance body. Economy Minister Edwina Hart has written to AMs about the bank and the future of the Welsh government's arms-length business finance body Finance Wales.
There has been criticism of its credit charges and jobs creation record. It comes after criticism of its credit charges and jobs creation record.
The Welsh government said work on creating a development bank is ongoing. But the Welsh government said work to create a development bank was ongoing.
It is estimated there is a gap of £500m a year between what Welsh businesses want to borrow and what high street banks are willing to lend to them. In March, a series of independent reports by academic Prof Dylan Jones-Evans, commissioned by Mrs Hart, recommended a development bank be created to make it easier for businesses to borrow money.
A series of independent reports by academic Prof Dylan Jones-Evans was commissioned by Mrs Hart. He said it could be a "catalyst and driving force" to support small businesses and also help growth in the Welsh economy.
It led to a recommendation five months ago that a development bank should be set up to make borrowing easier, especially for smaller businesses. It came after estimates showed there was a £500m-a-year gap between what Welsh businesses wanted to borrow and what high street banks were willing to lend them.
He set out a 12 month time period for the new organisation to be established. Prof Jones-Evans recommended the new organisation be set up within a year and said Finance Wales should be integrated into the new bank.
Finance Wales would have been submerged into the new bank. But in the letter to AMs, seen by BBC Wales, Mrs Hart said Finance Wales would now take on many of the roles intended for the development bank.
There has been an ongoing dispute within the business world about how best to progress. That includes working with high street banks to support companies that have been denied funding.
In the letter to AMs, seen by BBC Wales, Mrs Hart said Finance Wales would take on many of the roles intended for the development bank by Prof Jones-Evans. It also said Finance Wales would begin the process of employing a new chief executive.
This includes working with high street banks to support companies that have been denied funding. Mrs Hart told AMs the Welsh government and Finance Wales would then work together on a business plan for a development bank.
Finance Wales will also begin the process of employing a new chief executive. A spokesman for the Welsh Conservatives said the Welsh government should scrap Finance Wales and start again "instead of kicking the development bank into the long grass".
'Driving force'
Mrs Hart told AMs the Welsh government and Finance Wales would jointly work on a business plan for a development bank.
A Welsh government spokesman said: "Work on the creation of a development bank for Wales is ongoing.
"[AMs] recognise the importance of building on the skills and experience of Finance Wales in determining the final development bank model."
Prof Jones-Evans's expert group in March recommended a development bank as a "catalyst and driving force" to support small businesses and also help growth in the Welsh economy.
A spokesman for the Welsh Conservatives said: "Instead of kicking the development bank into to the long grass, the Welsh government should take the opportunity to start with a clean slate - scrap Finance Wales and start again."
The spokesman said the bank needed to be stand-alone but Labour's plans "muddied the waters".The spokesman said the bank needed to be stand-alone but Labour's plans "muddied the waters".
A Welsh government spokesman insisted work to create a development bank was ongoing, adding: "[AMs] recognise the importance of building on the skills and experience of Finance Wales in determining the final development bank model."