Pop Factory funding is referred to Europe

Jan 28 2008 by David James, South Wales Echo

A SIX-YEAR-OLD controversy over £4m funding for a South Wales music project has been referred to the European Commission.

The Welsh Assembly Government has asked the commission to investigate how an expansion of Rhondda’s Pop Factory was funded.

The controversy centres around a decision by scrapped training quango Elwa to give Pop Factory owner Avanti Media Group £4m in 2002 to expand.

At the time the Auditor General for Wales slammed Elwa over the way it handed over so much money with no safeguards, accusing the post-16 training organisation of a “culture of malaise”.

Half of the cash was never spent and was later handed back to Elwa.

A spokesman for Avanti – which set up the Pop Factory in Porth in 1996 to bring the television and music industries to the South Wales Valleys – said it had only found out about the decision to bring in the European Commission last week.

The company said it had always been entirely open and was surprised there could be a further investigation.

Its statement said the company “hoped and remains hopeful that a resolution to the issues can be reached without the need of a referral to take place”.

Even though half of the money has been handed back, the European Commission could decide more of the cash should be returned if funding rules have been broken.