British Formula 1 Grand Prix hosts Silverstone have asked Prime Minister David Cameron to confirm that a proposed new circuit in South Wales will not receive government financial support.
Silverstone Circuits Limited, whose own track risks losing the British MotoGP round to the Welsh newcomer, said in a statement on Monday that they had sought clarification over how the Circuit of Wales in Ebbw Vale would be funded.
The BBC reported last week that developers behind the proposed £ 280 million ($ 461.85 million) venture wanted government in Wales and Britain to commit up to £ 50 million towards it.
The Heads of the Valleys Development Company has said it hopes to create 6,000 jobs. Others have criticised the scheme as a ‘white elephant’ that would not live up to its ambitious plans to regenerate a deprived region.
Silverstone said their own application for help, when they had sought support to secure the future of the British F1 race, was denied “on the basis that this would be classed as illegal state aid”.
“In the absence of such aid, Silverstone had to sell off assets to ensure that the…British Grand Prix was retained in the UK,” it said.
The statement said it had no objection to competition but the addition of a government-funded circuit would threaten the British motorsport industry.
“It is Silverstone’s view that the Circuit of Wales project is unviable,” it added.
“Motor sport at circuit level is not particularly profitable and is often loss-making. Many UK circuits are under-utilised and struggle for revenue. It is unrealistic to suggest that Circuit of Wales will be the exception.”
Statement from Heads of the Valleys Development Company
The Circuit of Wales has been made aware that an employee of Silverstone Circuits Ltd. has written to the Prime Minister to question the legality of public investment in the development.
It is important to note that the Circuit of Wales is located in one of the poorest areas of the country and as such it qualifies for support in encouraging economic activity. Any application for support, once made, will be fully appraised in line with existing policy and procedure.
Michael Carrick CEO of the Heads of the Valleys Development Company, commented: “We are disappointed to have heard of the content of this letter, it sounds like Silverstone is resistant to investment within the automotive sector which is vital to its continued growth and development in the UK. The suggestion of ‘ illegal state aid’ made by Silverstone also highlights that they do not understand the basic process of applying for state funding of this nature.”
The government is keenly aware of the value that British technical leadership in motorsport brings to this country – not only in terms of its £ 9 bn annual turnover but also the fact that almost 80% of global automotive research and development is carried out in the UK. At present, however, the sustainability of that industry is being called into question, with migration of key businesses in the sector being linked to an ageing and inefficient infrastructure.
Wales has shown its value as a hub for engineering excellence in relevant sectors such as the global aviation industry, where 160 companies employ 23,000 people and generate an annual turnover of around £5 billion. A significant number of ‘Tier 1′ automotive manufacturers, including Ford and Toyota, and serviced by an established, diverse supply chain – are also based in Wales.
The Welsh government and the local community in Blaenau Gwent understands and supports the Circuit of Wales both as a catalyst for economic growth and as a venue for world-class sporting entertainment.
For the first time since Britain built the world’s first permanent racetrack at Brooklands in 1907, we have the opportunity to create a bespoke venue from the ground up. The Circuit of Wales is a unique investment opportunity: a development designed to meet the public’s expectations of a modern sporting venue and the commercial imperative to deliver a business hub that will sustain and support the British motorsport industry. (Reuters / Press Release)
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