O NE of the Key [...]

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Byline: DYLAN JONES-EVANS

ONE of the key decisions of the Economic Renewal Programme (ERP) is the abolition of funding and support for the majority of small businesses in Wales.

Instead, the savings made will go towards the pounds 240 million required by the Welsh Assembly Government (WAG) to invest in a "next generation" broadband infrastructure for Wales by 2016.

Yet WAG has failed to make a coherent case as to why this is a better form of investment than supporting firms directly, and why government should fund this instead of the private sector.

Indeed, the new broadband programme will, according to estimates, only create or retain around 11,000 jobs in Wales for one year i.e. a cost of roughly pounds 22,000 per job.

No case is made at all as to whether spending on next generation broadband will provide a better return as compared to other types of support.

The second issue is why should government subsidise such services at a time when telecommunications companies are increasing their investment in new technologies and expanding their broadband infrastructure.

Whilst there may be a clear argument to support those areas that are deemed "uneconomical" for further investment by telecom companies, surely the whole point of investing in broadband to rural areas is to ensure that they do regenerate and create businesses that will utilise the technology in the future and pay companies such as BT for the privilege of doing so.

Given this, why on earth should government pay out what is essentially a grant to the broadband providers to enable them to gain business from those new customers that they will gain as a result of the infrastructure investment by the taxpayer? …