MSs holds Welsh Government to account over £27.1 million life sciences write off

 

North Wales MS Mark Isherwood and other MSs have challenged the Welsh Government over the £27.1 million in its 2022-23 accounts that it has written off following the closure of the Welsh Life Sciences Investment Fund. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

The Welsh Government invested £50m in the Wales Life Sciences Investment Fund. The current value of the transferred assets, according to their Statement, is in the region of £2.5m. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

The Board of the Development Bank of Wales realised previous accounting impairments to write-off £27.1m in its 2022-23 accounts. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

Challenging the Minister for Economy on the topic, Mr Isherwood said in the Senedd, “In 2016, the Audit Wales report on the Wales Life Sciences Investment Fund found that, although innovative and having many merits, ‘Aspects of its establishment, governance, oversight and early operation were flawed and poorly documented.’ ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

“As Chair of the Public Accounts and Public Administration Committee, you’ll not be surprised to hear that I’ve referred this to the Clerks for advice, and they’re further seeking advice on this from Audit Wales. But what engagement over this have you had with Audit Wales, given that this involves the efficient and effective use and administration of public funds, and given their previous interest in this matter?” ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

The matter was raised during Topical Questions by Mr Isherwood’s colleague, Natasha Asghar MS, who highlighted that “when the fund was originally backed by £50 million of taxpayers’ money over 10 years ago, it was chaired by the multimillionaire life sciences entrepreneur Sir Chris Evans, who is actually a prominent supporter of and donor to – surprise, surprise – the Labour Party. Concerns have been raised in the past about the fact that, under his Chairmanship, the Life Sciences Fund made a number of investments in businesses linked directly to Sir Chris.” ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

She also called for assurances that there will be “a full investigation into the negligent and financial irresponsibility that has evidently taken place”. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

Minister Vaughan Gething said “in 2016, I was busy with other matters as the health Minister”, and added “In 2016, when that report was provided, it was dealt with by the ministerial team at the time. I’ve now been dealing with the end of the fund, the closing of it, and the arrangements we have in place and the learning to take on what we might do to better support the economy in this area in the future. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

“And as I said, this is an area that has grown significantly since 2012, when the fund was introduced: 12,000 good jobs, over 360 companies, and an era when I think we’ll see more growth. And I think the suggestion from Luke Fletcher that the life sciences fund will be the place to manage this—actually, that’s not their role. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

“They do have a role in promoting the sector, in looking at what innovation takes place, but they’re not the sort of area where you’d expect them to manage funds. So, there has been learning that’s been taken on board, there’s definite learning about the fund closing, and as I say, the fact that DBW are now running the remaining investments that are in place I think highlights the reality of not just the learning that’s taken place, but the reality of the expertise that is now in place, to help run future investments. DBW have a very good track record, and one that is envied by organisations in England, in doing just that for Wales.” ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

Darren Millar MS then challenged, “I still haven’t heard an explanation from your lips, Minister, as to why this hasn’t been disclosed sooner. You had this information in February, you say that you want to be transparent about the losses that have been made—tens of millions of pounds, which you seem, frankly, very casual about, and this is taxpayers’ money, of course, so perhaps that’s why you’re very casual about it. You haven’t answered the question about the links to the chairman of the fund and the Labour Party. People want to know, in a transparent way, why there was a delay in disclosing it, what the links are between Sir Chris Evans and the Labour Party, why you allowed that fund to invest in businesses with a close association with Sir Chris Evans, and why you’ve got such a casual attitude to the loss of tens of millions of pounds of taxpayers’ money in Wales, which could’ve been better spent on many other things.” ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

Minister Vaughan Gething replied, “Well, it’s simply not true to say that I have a casual attitude to public money. The Member knows that isn’t true, but yet again, not for the first time, he is prepared to say things that he knows not to be factual. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

“When it comes to links to political parties and donors, he should look in a mirror—himself and his party. When it comes to what’s happened within this fund, we have indicated what has happened, we’ve been clear about that in the written statement, about the money has been spent, about the losses that have been accrued and about the fact that this was a higher risk investment fund. We’ve been entirely upfront about what has happened. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

“And following the fund’s closure, I then had to receive reports about the nature of the ongoing investments that are still being managed by DBW, and we’ve reported, again, in term time. We haven’t waited another week to avoid scrutiny in the Chamber, and we’ve set this out—[Interruption.]—we’ve set this out in detail for Members to see, and it will be disclosed in the DBW accounts. And I fully expect that there’ll be further scrutiny, both from DBW and, indeed, from this institution, about the mechanics of the fund, and I am entirely positive about that. As I say, the strength of this sector—12,000 jobs in a sector that we expect to grow—and we will carry on proudly supporting the growth of life sciences here in Wales.” ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​