A company which was approved a grant of almost £600,000 to set up a base in Caerphilly has been renting an empty office, Caerphilly Observer can reveal.
The Welsh Government, after being contacted by this newspaper, is considering whether Canadian web and technology business Appnovation has breached the terms of its grant.
Appnovation was granted £584,311 to create a total of 30 jobs – nine of which had to be in a Tier 1 economic area, such as Caerphilly, with 21 in a Tier 2 area such as Cardiff.
In the summer of 2014 it opened a research and development base at the Welsh Innovation Centre for Enterprise (ICE) on Caerphilly Business Park.
Caerphilly Observer, which is also based at ICE, has discovered the office has been mostly empty for the best part of a year, with its nine staff working remotely from their homes in Pontypool, Monmouthshire, Aberdare and Newport.
Just one staff member is from Caerphilly and it is understood they visit the office around once a fortnight.
The grant money of £584,311 for the nine jobs in Caerphilly and the 21 in Cardiff, is a revised offer on what was originally agreed.
In July 2014, the Welsh Government announced a support package worth £690,000 for Appnovation to create 25 jobs in Caerphilly with the potential to create a further 100. The grant was part of a £2.6 million investment by the tech firm, which had ambitions of turning its Caerphilly base into a European headquarters.
Arnold Leung, Appnovation’s Chief Executive Officer, told Caerphilly Observer the company was still committed to Wales, but that it had found it difficult to recruit in Caerphilly.
He said: “Attracting and retaining talent was becoming challenging so we talked to Welsh Government and said we really want to expand the R&D office in Wales, but we can’t hire more people, what should we do? They said why don’t you open up a new office in Cardiff on top of keeping the nine people there.”
Asked why the office had been empty for the best part of 12 months, Mr Leung replied that the company operated a work from home policy to “keep talent happy”.
He said: “A lot of folk don’t come to the office day-to-day any more and part of that was because we had to retain our talent, after operating in the office for two years, and stop them from complaining.
“The coffee wasn’t great, the food wasn’t great and they weren’t too happy about being in the office every day. So we were unfortunately forced to expand our work from home policy and to be really flexible with our staff members to be able to keep them.”
Mr Leung admitted the firm had an office near Queen Street station in Cardiff, and pressed on why the company maintained an office in Caerphilly, he replied it was for the benefit of its sole employee who lives in the town.
In a further emailed statement, Mr Leung said: “Appnovation, since 2014, has received £252,511 from the Welsh Government as we have not completed all milestones yet for job creation.
“During that time, Appnovation has created nine jobs [in Caerphilly] and six [in Cardiff], excluding three more team members expected to start in the coming months, in Wales and incurring £1,394,979 in salary expenses for these employees since 2014.”
He added: “These are jobs that could have been created in North America or Asia and funds that can be invested elsewhere.”
A Welsh Government spokesperson said: “We have been made aware of these allegations. We are now discussing them with Appnovation and considering whether the company has breached the terms of its grant.”
Responding to the claims that Mr Leung found it difficult to recruit in Caerphilly, Gareth Jones, CEO of Welsh ICE said: “Attracting skilled people to the area is rarely a complaint, and larger international companies like Ensono, who we also share Britannia House with, have created and filled a significant number of technical jobs for Caerphilly over the last few years.
“Companies that invest in Caerphilly reap the benefits. Last year an independent report found that since our inception in 2012, the Caerphilly campus has generated a £13m net benefit to the Welsh economy. This is a direct result of the efforts of the expanding Caerphilly business community.”