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Ministers’ botched £50m life sciences fund ‘achieved all its aims’

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A “FAILED EXPERIMENT” of investing public money in risky biotech-style businesses cost Welsh taxpayers at least £28m but achieved all of its original objectives, a committee heard.

Giles Thorley, who heads the Development Bank of Wales, largely blamed external factors for the poor performance of the now-closed Wales Life Sciences Investment Fund.

And the chief executive told the Senedd’s public accounts committee the venture could be repeated in future provided the lessons are learned.

His report detailed how the Welsh Government-owned development bank lost £28.2m investing into “very high risk”, unprofitable life sciences businesses.

According to the paper published this week, the fund, which was managed by Arix Bioscience plc, paid £7.7m in fees or 15% of the initial £50m invested.

Mr Thorley revealed the fund contract set no limits on the fees charged by the manager.

He claimed the fund, which ran for the decade to 2023, met all of its initial four aims: to increase access to finance, attract businesses, grow the sector and boost research.

The fund also had an ambition to raise another £50m, bringing the total to £100m, but Arix invested £5m in 2016 – with only £21.8m returned to the public purse to date.

Managers ordinarily limit the investment into any one business to 10% but 40% of the fund was invested in only two businesses: Rutherford Health and ReNeuron.

Each received £10m from the fund and both later went under, returning nothing and raising concerns that the portfolio was “overly concentrated” in a handful of businesses.

Mr Thorley wrote: “Normally the maximum investment from a fund into a single business is limited to 10%. This mitigates the impact to the fund should some of the investments fail.”

The fund held investments in only nine companies, with three exceeding 10% each and totalling nearly 60% of all investments held.

By comparison, International Biotechnology Trust – a listed life sciences fund – holds dozens of investments to reduce risk, with none making up more than 5% according to its accounts.

That fund has returned roughly 60% to investors over the past decade compared with a -56% return for taxpayers from the Wales Life Sciences Investment Fund (WLSIF).

Mr Thorley said the failed investment strategy assumed the further £50m would be raised, which resulted in less diversification, increased risk and limited follow-on funding.

He also pointed to the pandemic, a big factor in Rutherford’s failure, and the high-profile collapse of the Woodford Equity Income Fund – a co-investor in some WLSIF businesses.

Mr Thorley said disappointing clinical trial results were the main factor for businesses like ReNeuron, which relaunched as a private company in March after a year in administration.

He said: “The nine investee businesses represented a broad portfolio, … from lower risk established businesses with revenue streams to very high risk (potentially very high return) pre-revenue businesses where future returns were wholly dependent on successful trials.

“To that extent, the portfolio was considered balanced.”

Mr Thorley pointed to Simbec-Orion, the fund’s only success story, which provided a £19.7m (2.24x) return on an £8.75m investment.

He wrote: “The fund did achieve all four of its objectives and it may have taken just one more portfolio company to succeed for the fund to have returned the full investment or profit.

“For that reason, provided all the lessons learnt from this fund are considered, the final lesson learnt is not to write off any future considerations for using a specialist fund manager with a dedicated fund as part of a wider approach to supporting growth in a business sector.”

But Senedd Members seemed less keen as they briefly discussed the paper on May 3.

Arix Bioscience blamed a two-year Wales Audit Office review of the fund as a major reason the extra £50m could not be raised.

Adrian Crompton, the auditor general for Wales who sits on the public accounts committee, said: “At a high level, the lessons learned report indicates that, the assessment is that all of the objectives of the fund were met and you, I’m sure, will have some observations on that.”

Auditor General Adrian Crompton
Auditor General Adrian Crompton

Describing the fund as a failure, Plaid Cymru’s Adam Price said: “I would suggest on the basis of this that we shouldn’t replicate this experiment.

“It’s fine to experiment but if an experiment fails and you say ‘oh well, it’s OK for us to try again’, I think there are some more basic questions.”

The public accounts committee, chaired by the Conservatives’ Mark Isherwood, decided to discuss the matter in more detail behind closed doors, excluding the public and press.

 

Business

Wolfscastle spa earns prestigious AA recognition

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WOLFSCASTLE COUNTRY HOTEL and Spa in Pembrokeshire is celebrating national recognition after its luxury spa was included in the prestigious AA Recommended Spa Awards.

The accolade highlights the hotel’s commitment to delivering high-quality wellbeing experiences, exceptional service, and first-class facilities.

The AA Recommended Spa status is awarded to venues that provide an outstanding guest experience, combining professional expertise, premium treatments, and a relaxing environment. The recognition places Wolfscastle among a select group of leading spa destinations across the UK.

Grace, Levi and Bethan, full-time spa therapists at the award-winning Wolfscastle Spa.
Hot stone massage in the Wolfscastle Country Hotel & Spa treatment room.

The spa, which has been open for nine years, has established itself as one of Pembrokeshire’s top wellness destinations, welcoming both hotel guests and day visitors seeking relaxation in a tranquil countryside setting.

Facilities include hydrotherapy experiences, thermal suites, and dedicated relaxation areas, alongside a wide range of luxury treatments designed to help guests unwind and recharge.

Bethan, Spa Manager at Wolfscastle Country Hotel & Spa, said: “We’re absolutely delighted to be recognised by the AA as a Recommended Spa. The team here work really hard to make sure every guest feels relaxed, welcomed and properly looked after from the moment they arrive.

“To receive this recognition is very special for us and reflects the care and effort our therapists put into every treatment.”

The award further strengthens the hotel’s reputation as one of West Wales’ leading hospitality destinations, offering award-winning dining, boutique accommodation, and premium wellness experiences.

Guests can enjoy spa days, overnight breaks, and tailored treatments throughout the year.

For more information or to book, visit www.wolfscastle.com.

The hotel is also marking a significant milestone this year, with owner Andrew Stirling celebrating 50 years at the helm.

 

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Business

Pembroke South Quay boat shed expansion plans submitted

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A PADDLEBOARDING and canoeing company’s call for an extension to a boat shed at Pembroke’s South Quay, below its historic castle, has been submitted to county planners.

In an application to Pembrokeshire County Council, G Booth of Paddle West CIC, through agent James Dwyer Associates, seeks permission for an extension to the stone-built boathouse, adjacent to the cliff on South Quay fronting the Mill Pond, Pembroke.

A supporting statement says: “It is intended to erect a single storey ‘lean-to’ building, or ‘shed’ for the storage of boats, such as canoes and kayaks, and related equipment, on a vacant space adjacent to the existing stone-built boathouse.”

It adds: “The boathouse and the intended adjacent boat storage shed is located, as is to be expected, in close proximity to water, the Mill Pond. The Mill Pond is the main area of activity for Paddle West, a Community Interest Company, providing boating activities, kayaking, canoeing and paddle boarding, frequently for young people and families.”

It goes on to say: “It is intended that the structure would be lightweight, erected on the exiting hard standing. The ‘shed’ would be used for the storage of boats and related equipment.”

With regard to the historic setting, it adds: “Although the stone-built boathouse appears not to be listed, it is recognised that the walls above are listed and together they are a piece.

“Accordingly, through form and external materials proposed, timber cladding and profile sheet roofing, the aim is to ensure that the structure would be subservient and muted and not detract or compete with the visual aesthetic of the boathouse or historic walls. In effect the addition would blend into the background.”

The application will be considered by county planners at a later date.

The boathouse is sited near to the new Henry Tudor Centre in South Quay, which is due to open in Spring 2027.

The centre, expected to receive around 30,000 visitors a year, will tell the story of Henry Tudor, son of Pembroke, his Welsh ancestry and his impact on our national story, Welsh culture and our wider British heritage.

The restored derelict South Quay buildings will also house a new library and community café, and a healthcare, social services and supported employment facility in the adjoining premises.

 

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Business

Pembrokeshire hospitality rates relief scheme backed

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A WELSH Government-funded scheme to provide rates relief for hospitality businesses has been backed by senior Pembrokeshire councillors.

A report for members of Pembrokeshire County Council’s Cabinet at their March meeting said: “Welsh Government has introduced the Food and Drink Hospitality Rates Relief, this relief is aimed at eligible businesses in Wales in the food and drink hospitality sector for example, pubs, restaurants, cafes, bars and live music venues.

“The aim of the relief is to support eligible businesses to manage continued cost pressures. The relief will apply to all eligible occupied properties by offering a discount of 15 per cent on non-domestic rate bills for the period April 1 to March 31, 2027. The relief is capped at £110,000 per business across Wales.

“As this is a temporary measure, Welsh Government is providing the relief by reimbursing local authorities that use their discretionary relief powers under Section 47 of the Local Government Finance Act 1988.”

It concluded: “The food and drink hospitality rates relief 2026-27 requires the local authority to adopt a discretionary scheme [as outlined] and in accordance with the criteria and conditions specified in the guidance issued by Welsh Government.

“It is proposed that Cabinet resolve to adopt [the scheme] which can be applied to administer the relief. Welsh Government will reimburse local authorities for the relief provided in line with their guidance via a grant under section 31 of the Local Government Act 2003.”

Members backed the recommendation.

All eligible businesses must apply for this relief by the March 31, 2027, and an application form will be available on the council’s website from the April 1.

The maximum cash value of the rates relief allowed, across all properties in Wales occupied by the same business should not exceed £110,000. Businesses claiming the relief must declare that the amount being claimed does not exceed those limits.

 

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