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Cairns: Labour is failing businesses in Wales

Speech to the National Assembly for Wales.

"One Member remarked to me earlier how snappy the motion is, but it has been written and presented in this way for very specific reasons. The first is to highlight the Government's failure to achieve its economic targets. For the First Minister's information, that is yet another broken promise.

The second reason is to expose how the structural funds and Objective 1, in particular, have been mismanaged, and the third relates to the debate over match funding, particularly how the budgets have been managed, the allocation of Pathway to Prosperity funding, and the lessons that we need to learn from this.

The fact that Wales is the poorest part of the UK is a hallmark of the legacy of the First Minister and the Minister for Economic Development and Transport.

The First Minister, in particular, must accept responsibility for the fact that, despite increased resources from the Treasury, and the cash injection of European funds, the poor in Wales are poorer and the most deprived are even more deprived.

Recognition of that fact in the first instance would go a long way, because, without that, how can we believe that there is any hope that the Government's second economic strategy is based on reality and the facts?

Much of the debates in the first Assembly focused on Objective 1, and I believe that all parties recognised at that time how important it was to Wales. It was regularly referred to as a 'once-in-a-lifetime opportunity', but the bungling way in which the First Minister set up the structures when he was the Secretary for Economic Development, and the obvious failure of the scheme to achieve the set goals, means that we must learn the lessons from this experience. The Government's own mid-term evaluation report supports these facts.

I am grateful for the opportunity to repeat exactly what the mid-term evaluation report states.

That body was set up by the Government to evaluate its performance, and I think that it was even written by a Labour Party member. It states that:

'The high level of targets will not be achieved'.

It goes on to state that those targets were merely 'aspirational'. That is what is in the report: you can read those exact words on the Welsh European Funding Office's website.

Those are just two quotations from many that I could have picked out of that paper. I am grateful for the opportunity to emphasise and labour the point.

Two of the key bodies charged with implementing the Government's economic and structural policies were the Wales Tourist Board and the Welsh Development Agency.

It is important to recognise that money is not everything when it comes to achieving goals, but it is clearly significant. Throughout the debate on structural funds, from day one, there has been the question of match funding.

Opposition parties expressed concern that core budgets would have to be raided if there was not match funding over and above the Barnett allocation. We were assured that no project would fail for a lack of match funding.

That was the message from Alun Michael as First Secretary, from Rhodri Morgan as First Minister, and that is now the message from the Minister for Economic Development and Transport.

In an effort to demonstrate that core budgets were not to be raided, the Pathway to Prosperity budget line was used to 'preserve' the principle of additionality in becoming one of the sources of match funding to which the quangos and other organisations could bid. I suspect that the Minister and I will differ more than usual over this.

The purpose of this committee is to investigate the financing of the WDA and the WTB and the committee will be the body that will enable us to clear our differences. I have come out with strong statements, and I will be the first to apologise if the committee shows that the Minister was accurate in his reports.

Although the quangos are to be wound up, integrity over how they did or did not receive Pathway to Prosperity funding is critical. The purpose of the committee is to look into this. The Minister is on record as having told the Assembly and the Economic Development and Transport Committee that he did not cut the Pathway to Prosperity budget for either body. To give you the background, the operational plan published by the WDA reported a call on Pathway to Prosperity funding of almost £27 million.

The Minister agreed the plan, and the Economic Development and Transport Committee noted the plan. It is a fair assumption with regard to the budgeting process of the WDA that if the Minister had approved the operational plan, the WDA would be entitled to that funding. It is quite explicit within the report.

The budget was later revised from £27 million to £21 million, and down to £10 million for the following year. That is a 22 per cent swing in the funding allocation to the WDA.

When I questioned the Minister, he said that he had not cut the WDA's budget. I gave him several opportunities to clarify his position, but he persisted in that view. I gave him an opportunity to clear up whether he had cut the budget or not and, again, he said that he had not cut the budget.

The response to questions made under the Freedom of Information Act 2000, however, suggests a different story. I suspected that something was afoot when I experienced so many delays in the answering of my questions to the Minister and to the new chief executive of the WDA.

In the first letter from the chief executive of the WDA we were told that reviewing the budget is a normal part of the process, and is done year in, year out. Therefore, we can expect a 22 per cent swing in budget allocation—it is normal.

That is clearly the suggestion in the letter from the chief executive. However, when the papers were eventually published, they contained some worrying quotations. The head of the WDA business unit said:

'Much as I understand the problems that the WDA will face next year, we have a problem across the MEG that will require all budget holders to plan on something approaching 11 per cent reductions. For the WDA, this equates to roughly a £20 million cut—substituted for Pathway to Prosperity so that allocations stay the same.'

Again, the head of the WDA sponsorship branch within the civil service said:

'I do not think that the WDA's proposed approach could ever be extended to projects where third parties are integral to delivery because it would quickly leave the Minister vulnerable to the charge that they were abandoning the commitment that no good project would fail through the lack of match-funding. In other words, it needs to be kept in the family.'

I could go on to give you various other such quotations. They clearly demonstrate the panic in the WDA and the civil service about how it would manage its budget process as a result of this cut.

The response in the letter from the chief executive of the WDA was that this was normal. However, clearly, the responses to the questions asked under the Freedom of Information Act 2000 show that it was not.

There seems to be an inconsistency between what the Minister told the Assembly and the committee, and what happened in reality. There might be a simple explanation for that, or it may result in a serious allegation being made against the Minister.

The only way to clear this up once and for all is to gain a complete understanding of all the facts. On the face of it, the information could have grave consequences. The establishment of this proposed committee and its report to the Assembly are extremely important. I commend the motion to Members."

Dywedodd un Aelod wrthyf yn gynharach fod y cynnig yn un pigog iawn, ond mae wedi ei ysgrifennu a'i gyflwyno fel hyn am resymau penodol iawn. Y rheswm cyntaf yw er mwyn tynnu sylw at fethiant y Llywodraeth i gyrraedd ei thargedau economaidd.

Er gwybodaeth i'r Prif Weinidog, dyma addewid arall na lwyddwyd i'w gadw. Yr ail reswm yw er mwyn dangos sut y mae'r cronfeydd strwythurol ac Amcan 1, yn fwyaf arbennig, wedi cael eu camreoli, ac mae'r trydydd yn ymwneud â'r ddadl ynglyn ag arian cyfatebol, yn enwedig sut y rheolwyd cyllidebau, dyrannu cronfeydd Ffordd i Ffyniant, a'r gwersi y mae angen inni eu dysgu o hyn.

Mae'r ffaith mai Cymru yw rhan dlotaf y DU yn dangos yn glir beth y mae'r Prif Weinidog a'r Gweinidog dros Ddatblygu Economaidd a Thrafnidiaeth yn ei adael ar eu holau. Er bod y Trysorlys wedi rhoi mwy o adnoddau, ac er gwaetha'r arian Ewropeaidd, rhaid i'r Prif Weinidog, yn fwyaf arbennig, dderbyn cyfrifoldeb am y ffaith bod pobl dlawd Cymru'n dlotach a bod y bobl fwyaf difreintiedig hyd yn oed yn fwy difreintiedig.

Byddai cydnabod y ffaith yn y lle cyntaf yn cyfrif cryn dipyn, oherwydd, heb hynny, sut y gallwn gredu bod unrhyw obaith bod ail strategaeth economaidd y Llywodraeth yn seiliedig ar realiti a ffeithiau? Yr oedd llawer o'r dadleuon yn y Cynulliad cyntaf yn ymwneud ag Amcan 1, a chredaf fod pob plaid yn cydnabod ar y pryd pa mor bwysig ydoedd i Gymru.

Cyfeiriwyd ato'n rheolaidd fel 'cyfle unwaith mewn oes', ond y mae'r ffordd drwsgl y sefydlwyd y strwythurau gan y Prif Weinidog pan oedd ef yn Ysgrifennydd Datblygu Economaidd, a methiant amlwg y cynllun i gyflawni'r amcanion a bennwyd, yn golygu bod rhaid inni ddysgu'r gwersi o'r profiad hwn. Mae adroddiad gwerthusiad canol tymor y Llywodraeth ei hun yn ategu'r ffeithiau hyn.

Yr wyf yn falch o'r cyfle i ailadrodd yr hyn sy'n cael ei ddweud yn yr adroddiad gwerthusiad canol tymor. Sefydlwyd y corff hwn gan y Llywodraeth er mwyn gwerthuso ei pherfformiad, a chredaf fod yr adroddiad hyd yn oed wedi cael ei ysgrifennu gan aelod o'r Blaid Lafur. Mae'n dweud

na chyrhaeddir y targedau lefel uchel.

Mae'n mynd ymlaen i ddweud mai dyheadau yn unig oedd y targedau hyn. Dyna beth sydd yn yr adroddiad: gallwch ddarllen yr union eiriau hyn ar wefan Swyddfa Cyllid Ewropeaidd Cymru. Dim ond dau ddyfyniad yw'r rhain o lawer y gallwn fod wedi eu codi o'r papur hwn. Yr wyf yn falch o'r cyfle i bwysleisio hyn a manylu ar y pwynt.

Dau o'r prif gyrff y rhoddwyd iddynt y cyfrifoldeb am weithredu polisïau economaidd a strwythurol y Llywodraeth oedd Bwrdd Croeso Cymru a'r Awdurdod Datblygu. Mae'n bwysig sylweddoli nad arian yw popeth pan fo'n fater o gyflawni amcanion, ond mae'n amlwg yn bwysig iawn.

Drwy gydol y ddadl ar gronfeydd strwythurol, o'r diwrnod cyntaf, yr ydym wedi clywed am arian cyfatebol. Mynegodd y gwrthbleidiau bryder y byddai'n rhaid mynd i gyllidebau craidd pe na bai arian cyfatebol ar ben dyraniad Barnett. Cawsom ein sicrhau na fyddai unrhyw brosiect yn methu oherwydd diffyg arian cyfatebol. Dyna'r neges gan Alun Michael fel y Prif Ysgrifennydd, gan Rhodri Morgan fel y Prif Weinidog, a dyna'r neges yn awr gan y Gweinidog dros Ddatblygu Economaidd a Thrafnidiaeth.

Mewn ymdrech i ddangos na fyddai rhaid mynd i gyllidebau craidd, defnyddiwyd llinell wariant y Ffordd i Ffyniant er mwyn 'cadw' yr egwyddor ychwaneged a dod yn un o'r ffynonellau arian cyfatebol y gallai'r cwangos a sefydliadau eraill wneud cais iddi.

Tybiaf y bydd y Gweinidog a minnau'n anghytuno mwy nag arfer ynglyn â hyn. Pwrpas y pwyllgor hwn yw archwilio sut y cafodd yr awdurdod datblygu a'r bwrdd croeso eu hariannu a'r pwyllgor fydd y corff a fydd yn ein galluogi i ddatrys unrhyw anghytundeb. Yr wyf wedi gwneud datganiadau cryf, a fi fydd y cyntaf i ymddiheuro os bydd y pwyllgor yn dangos bod adroddiadau'r Gweinidog yn gywir.

Er bod y cwangos yn mynd i gael eu diddymu, mae cywirdeb y ffordd y derbyniasant, neu na dderbyniasant arian Ffordd i Ffyniant yn bwysig iawn. Pwrpas y pwyllgor yw ymchwilio i hyn. Mae cofnod bod y Gweinidog wedi dweud wrth y Cynulliad a'r Pwyllgor Datblygu Economaidd a Thrafnidiaeth na chwtogodd y gyllideb Ffordd i Ffyniant i'r naill gorff na'r llall.

I roi'r cefndir ichi, yr oedd y cynllun gweithredol a gyhoeddwyd gan yr awdurdod datblygu yn cofnodi galw o bron i £27 miliwn am arian Ffordd i Ffyniant. Nododd y Gweinidog ei fod yn cytuno â'r cynllun, a chafodd y cynllun ei nodi gan y Pwyllgor Datblygu Economaidd a Thrafnidiaeth. Mae'n deg tybio, o ran proses gyllidebu'r awdurdod datblygu, os oedd y Gweinidog wedi cymeradwyo'r cynllun gweithredol, y byddai gan yr awdurdod datblygu hawl i'r arian hwnnw. Mae'n eglur iawn yn yr adroddiad.

Diwygiwyd y gyllideb yn ddiweddarach o £27 miliwn i £21 miliwn, ac i lawr i £10 miliwn ar gyfer y flwyddyn ganlynol. Mae hyn yn ogwydd o 22 y cant yn yr arian a ddyrannwyd i'r awdurdod datblygu.

Pan holais y Gweinidog, dywedodd nad oedd wedi cwtogi cyllideb yr awdurdod datblygu. Rhoddais sawl cyfle iddo egluro ei sefyllfa, ond yr oedd yn dal i ddweud hyn. Rhoddais gyfle iddo egluro a oedd wedi cwtogi'r gyllideb ai peidio ac, unwaith eto, dywedodd nad oedd wedi cwtogi'r gyllideb.

Mae'r ymateb i gwestiynau a ofynnwyd dan Ddeddf Rhyddid Gwybodaeth 2000, fodd bynnag, yn awgrymu stori wahanol. Yr oeddwn yn amau bod rhywbeth ar y gweill pan welais gymaint o oedi cyn cael ateb i'm cwestiynau i'r Gweinidog ac i brif weithredwr newydd yr awdurdod datblygu.

Yn y llythyr cyntaf gan brif weithredwr yr awdurdod datblygu dywedwyd wrthym fod adolygu'r gyllideb yn rhan arferol o'r broses, a bod hyn yn cael ei wneud y naill flwyddyn ar ôl y llall. Felly, gallwn ddisgwyl gogwydd o 22 y cant yn y dyraniad i'r gyllideb—mae'n arferol.

Dyna'n sicr yr awgrym yn y llythyr gan y prif weithredwr. Fodd bynnag, pan gyhoeddwyd y papurau yn y diwedd, yr oeddent yn cynnwys rhai dyfyniadau a oedd yn peri pryder. Dywedodd pennaeth uned busnes yr awdurdod datblygu:

Er fy mod yn deall y problemau y bydd yr awdurdod datblygu'n eu hwynebu y flwyddyn nesaf, mae gennym broblem ar draws y Prif Grwp Gwariant a fydd yn ei gwneud yn ofynnol i bob deiliad cyllideb gynllunio ar sail cwtogiadau o tua 11 y cant. I'r awdurdod datblygu, mae hyn yn cyfateb i doriad o tua £20 miliwn—yn cymryd lle Ffordd i Ffyniant fel bod y dyraniadau yn aros yr un fath.

Unwaith eto, dywedodd pennaeth cangen nawdd yr awdurdod datblygu yn y gwasanaeth sifil:

Nid wyf yn meddwl y gellid fyth ymestyn dull gweithredu arfaethedig yr awdurdod datblygu i brosiectau lle mae trydydd partïon yn rhan annatod o'r cyflwyno oherwydd byddai'n fuan yn gadael y Gweinidog yn agored i'r cyhuddiad eu bod yn anghofio'r addewid na fyddai unrhyw brosiect da yn methu oherwydd diffyg arian cyfatebol. Mewn geiriau eraill, mae angen ei gadw yn y teulu.

Gallwn fynd ymlaen i roi dyfyniadau amrywiol eraill o'r fath. Maent yn amlwg yn dangos y panig yn yr awdurdod datblygu a'r gwasanaeth sifil ynglyn â sut y byddai'n rheoli ei broses gyllidebau o ganlyniad i'r toriad hwn. Yr ymateb yn y llythyr gan brif weithredwr yr awdurdod datblygu oedd bod hyn yn arferol. Fodd bynnag, mae'r ymatebion i'r cwestiynau a ofynnwyd dan Ddeddf Rhyddid Gwybodaeth 2000 yn dangos, yn amlwg, nad oedd yn arferol.

Ymddengys bod anghysondeb rhwng yr hyn a ddywedodd y Gweinidog wrth y Cynulliad a'r pwyllgor, a'r hyn a ddigwyddodd mewn gwirionedd. Mae'n bosibl bod eglurhad syml dros hyn, neu gallai arwain at ddwyn cyhuddiad difrifol yn erbyn y Gweinidog.

Yr unig ffordd o glirio hyn unwaith ac am byth yw drwy ddod i ddeall y ffeithiau i gyd. Mae'n amlwg y gallai'r wybodaeth fod â chanlyniadau difrifol iawn. Mae sefydlu'r pwyllgor arfaethedig hwn a'i adroddiad i'r Cynulliad yn bwysig dros ben. Yr wyf yn cymeradwyo'r cynnig i'r Aelodau."

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