HANDLING OF CIRCUIT BID UNDER FIRE
“INEXPLICABLE” decisions were made by Welsh Government officials over the Circuit of Wales project, it has been claimed.
More than £9m of public money was spent on the proposed racetrack by the Welsh Government before it ended its involvement, after refusing to act as guarantor for £210m in loans – almost half the total cost of the project.
Now an Assembly committee has raised “deep concerns” about how it was handled.
The Public Accounts Committee accepted government ministers were right to consider supporting the building of the new racetrack near Ebbw Vale, but that officials made “inexplicable decisions” in providing funding for the project, and failed to keep the then Minister for Business, Enterprise, Technology and Science up to date with latest developments.
The committee found that “highly unorthodox decisions” were made by officials and there was an accompanying lack of documentation and an “apparent failure of officials to seek and obtain the requisite approvals from their respective minister”.
They said there were a number of errors in the communication from Welsh Government officials to the public over the purchase of a motorcycle company in Buckinghamshire by the Heads of the Valleys Develop- ment Company (HoVDC), the company responsible for delivering the project.
A press release issued by a government department denied £300,000 used to buy the firm FTR Moto came from a £2m property development grant (PDG) given to HoVDC by the Welsh Government.
But paperwork seen by the committee showed not only did officials know about the purchase but agreed it.
PDGs are specifically for supporting private sector organisations in the purchase of property. FTR subsequently folded having never relocated to Wales.
It later transpired there was no evidence of the Minister for Business, Enterprise, Technology and Science being informed of the agreement.
The committee could also find little evidence the Welsh Government thoroughly scrutinised an agreement signed between HoVDC and Aventa Capital Partners, a company brought in to provide specialist services.
Both companies were headed by the same man, Michael Carrick, but officials did not check to see if the arrangement had undergone a satisfactory competitive tendering process, or what specialist services Aventa would provide.
A list of services submitted to the committee differed from the list provided to the Welsh Government, strongly suggesting the information provided to the committee was prepared retrospectively.
The committee said that while the Welsh Government cited an obscure technical accounting matter as a reason for pulling out, the government had commissioned its own comprehensive due diligence which provided ample reasoning why it should not support the project.
This led to public confusion and did little to promote confidence in the Government’s ability to handle public money wisely and well.
Chair of the committee Nick Ramsay AM said: “The proposed Circuit of Wales was a unique and significant project, which appeared to offer the possibility of regenerating an economically deprived area.
“The Welsh Government was right to explore possibilities of making this project work and, quite properly, it is not this committee’s function to comment on the merits of the Cabinet’s eventual decision not to provide the requested public finance support.
“We are deeply concerned, however, at how this project was approached by the Welsh Government.
“We want Wales to be a first choice for investment and to achieve this, the decision-making processes followed by those charged with the expenditure of taxpayers’ money, need to be both coherent and properly documented.
“The Welsh Government made some inexplicable decisions during its initial funding of this project, such as authorising payment for the purchase of a motorcycle company in Buckinghamshire as part of the property development grant intended to buy land in Ebbw Vale.
“It is essential that the Welsh Government demonstrates effective management of Welsh public money and maximises the opportunities for investment in Wales.”
The committee makes 13 recommendations in its report.
They include that the Welsh Government strengthen their controls to ensure value for public money; and that all Cabinet secretaries, ministers and all Welsh Government senior civil servants are reminded of the requirements within the Ministerial and Civil Service Codes to ensure the accuracy of all information released.
A Welsh Government spokesperson said: “We welcome this Public Accounts Committee report on the Circuit of Wales and will now fully consider the detail before formally responding. We have already recognised that there are lessons to be learned from elements of the Welsh Government’s handling of this project and have put in place new processes to address some of those issues.”