THE WELSH GOVERNMENT has been accused of misleading the public, ambushing investors, and using the Circuit of Wales project as a political football intended to shore up its vote in the South Wales Valleys after refusing to back the project last week.
NO TO GUARANTEE
The Welsh Government had been asked to provide a loan guarantee of £210m to private investor, the insurance giant Aviva. Had the Circuit gone bust, the Welsh Government would have been left liable for the loan balance but Aviva would have retained ownership of the Circuit.
Last week, Economy Secretary Ken Skates announced that the Welsh Government had decided against backing the project by providing a guarantee to key investor Aviva, claiming that late in the day the Welsh Government had received advice from HM Revenue and the Office of National Statistics that financing the deal would amount to state aid and affect Wales’ capital grant from the Westminster Government.
Mr Skates claimed that the presence of the Circuit of Wales on the books would have meant education and health services would have had their budgets squeezed.
However, Mr Skates’ version of events has been met with withering scorn from opposition parties who say that the Welsh Government’s version of events is disingenuous nonsense and that the Welsh Government has twice delayed pulling the plug on the project for Labour’s own electoral benefit .
INDEPENDENT INQUIRY CALL
Both the Conservative Party and Plaid Cymru have called for an independent inquiry into the Welsh Government’s conduct of the Circuit of Wales deal.
Andrew RT Davies, the Conservative leader in the Assembly said: “The Circuit of Wales has been a Welsh Labour car crash of epic proportions.
“After so many years of uncertainty and false hope, it’s clear that Welsh Government have plenty of questions to answer.
“Whilst I have had longstanding concerns that the Heads of the Valleys Development Company may not be right vehicle for this project, it is hugely disappointing to see it crumbling away in such dramatic and overnight fashion.”
Plaid Cymru Shadow Cabinet Secretary Adam Price claimed that evidence has come to light that the First Minister may have misled the public.
Adam Price said there was ‘compelling evidence the Welsh Government has been guilty of serial mendacity ‘.
“Sadly this project has been characterised by a series of inaccurate and misleading statements made by the Government, ostensibly to justify its own position in the face of potential criticism ,” he added.
“An email written by an Aviva senior director – dated 14th July last year – pointed to the false assertion by the Welsh Government ‘that we requested a 100% underwrite a few days before the rejection (of the first proposal in April 2016), when in fact this deal had been worked up with the Welsh Government (through civil servants) for many months and nothing in our funding structure changed in the run up to the announcement’.”
Mr Price continued: “I have an email from Welsh Government presenting a proposal based on a Welsh public sector guarantee of the debt dated January 26th 2016, confirming Aviva’s assertion. And yet speaking in Ebbw Vale on April 11th last year, as reported by the Western Mail, Carwyn Jones repeated the falsehood when speaking about the rejection of the proposal: ‘It was in the last few days beforehand. We weren’t to know the guarantee would be inflated’.
“These are not isolated instances. They are part of a pattern of duplicity that have characterised the Welsh Government’s approach to this project throughout, constantly shifting goalposts and covering their tracks.”
Mr Price called for an independent inquiry to investigate the matter: “Since the First Minister himself can now be shown also to have misled the public on the Circuit of Wales – all the more pointedly as it was in Blaenau Gwent and in the middle of a keenly fought election campaign – it’s no longer appropriate that he makes this decision as he will now need to be a subject of that investigation, not its judge and jury.
“As things currently stand no-one – business, media, Parliament or public – can be confident our Government is being straight with us. Only a full independent inquiry can begin to rebuild public trust. “
HAMILTON SLAMS GOVERNMENT INSULT
Neil Hamilton AM, UKIP Group Leader in the National Assembly for Wales stated in the Senedd chamber: “Are we really expected to believe, that the government accounting conventions about whether something should be classified as public expenditure or private by the ONS and the Treasury have come as a blinding revelation yesterday, and the cabinet was totally unaware of these conventions hitherto?
“It is an insult to the people of Blaenau Gwent that such a shoddy excuse has been used and a disgrace that so much public money and time was wasted on this decision.
“The Welsh Government now plans to build a £100m automotive business park in Ebbw Vale. What we have now is a proposal from the government to spend £100 m over ten years. Shedloads of money to build a series of empty sheds,” continued Mr Hamilton
“Interestingly the Welsh Government announced this decision after the election; a decision beforehand would clearly have damaged Labour in the polls. What a cynical political decision, a terrible betrayal of the people of Blaenau Gwent and a shoddy excuse for what amounts to the replacement of the Circuit of Wales with a Scalextric set.”
Appearing before the Public Accounts Committee the day before the Welsh Government pulled the plug, a senior Welsh Government civil servant, James Price, told Committee members that he regarded the £9.3m as a fair price to pay for the due diligence that it had enabled the Welsh Government to undertake and suggested that the Auditor was wrong to decide that business risk assessments carried out before providing the money were deficient.
One thing that emerged from that Committee meeting was the broad agreement that due diligence had to take place before the Welsh Government exposed itself to further risk. It was surprising, therefore, that the following day in the Assembly one of those members who had been singing the praises of due diligence taking place committed a complete about face.
Deriding the Welsh Government’s involvement as being an exemplar of ‘the dead hand of government’, UKIP’s leader in the Assembly Neil Hamilton appeared to have forgotten his words of little over twenty four hours earlier: ‘Personally, I think it was a very reasonable punt you took (with the grant and loan). Now we’re talking about much, much larger sums of money, it’s right that a considerably greater degree of examination be undertaken’.
COMPANY DENIES GOVERNMENT CLAIMS
A spokesperson for the Heads of the Valleys Development Corporation (HVDC), the company behind the Circuit of Wales, said: “Along with my team and commercial partners, I am hugely disappointed and saddened that the Welsh Government has failed to support The Circuit of Wales, what would be a game changing development for Wales and in particular the people of Blaenau Gwent.
“We strongly disagree with the decision and the rationale behind it.
“We have always believed passionately, and continue to do so, in this project’s ability to transform and provide opportunities and hope to one of the poorest parts of the UK, not just Wales. The project is totally defined, finance is in place, and construction and hiring could start immediately.
“My team and I will now analyse the Welsh Government’s reasons not to support the development and are actively seeking additional clarification from them. We will then very shortly issue a detailed response before deciding on our next course of action.”
That detailed response, when it arrived, savaged the Welsh Government’s reasoning and claimed that the reasons given to the Senedd for refusing to back the deal were either wrong, specious, or had not been raised with the developer or its investors. In addition, the statement revealed that the Economy Secretary had not met with representatives of the company for over twelve months before making his decision.
A spokesperson for HVDC said: “ This is a real loss for the people of Ebbw Vale, the immediate community and a missed opportunity for Wales as a whole. This is a project that has been totally defined; it is fully financed (with finance in place) with construction and hiring ready to start immediately.
“At a time when the Welsh Government is trying to demonstrate that Wales is ‘ppen for business’, the rejection of this significant infrastructure project will do little to breed confidence within the private sector for future investment in the country.”
Most tellingly, perhaps, HVDC made a concerted attack on the Cabinet Secretary’s assertion there was a very significant risk that the full £373million debt of the entire Circuit of Wales project would be classified against Welsh Government capital spending.
The statement from the Company expressed amazement at the lack of notice given to it that any problem had arisen: ‘The company was never informed or made aware of this ONS and HM Treasury advice during the due diligence process. We were promised by Welsh Government officials that we would be consulted if any significant issues arose during due diligence and given an opportunity to respond.
‘We were not notified that this was a serious roadblock prior to Tuesday’s meeting and never given a chance to respond.
‘The Welsh Government has known about the latest structure of this project since well before February 2017 and could easily have obtained clearer guidance from Treasury and ONS prior to Tuesday’s meeting and informed us’.
The spokesperson continued: “We believe it is important for the people of Blaenau Gwent to have the details of these discussions with ONS and HM Treasury disclosed to the public. What were these discussions, who were they with and when were they undertaken?
“ We wholeheartedly disagree that the support for The Circuit of Wales would be on balance sheet and would require the Welsh government to limit its budget and compromise the building of schools and hospitals .”
The company also claimed that the £100m technology park – funded by public money – announced by Ken Skates as a sop to Blaenau Gwent was scheduled to cost £150m of wholly private money and be delivered in two years: not the ten announced by the Cabinet Secretary in the Senedd.
SCHEME UNDER SCRUTINY
However, the scheme has been the subject of scepticism for some time.
A BBC investigation for soon to be scrapped current affairs programme Week In Week Out, cast doubts on whether or not the company could achieve anything like the promises it had made either in terms of regeneration of Blaenau Gwent or in relation to delivering on its promises regarding the proposed facilities within the time and budget specified. Moreover, the same documentary revealed that £35,000 from HVDC – a company partly funded by the Welsh Government – had been used on landscape gardening on the home of the person fronting the scheme, Michael Carrick.
An investigation by the Auditor-General for Wales criticised the Welsh Government both for a loan guarantee a £7.3m provided to HVDC and a £2m grant provided as seed money. The Auditor discovered that part of the money had been used to acquire a small motorcycle manufacturing business in England and ruled that there had been insufficient regard as to whether the uses to which public money were being put were delivering value for money for the public.
Initial claims that 6,000 jobs would be created and claims of businesses flocking to set up working partnerships on the Circuit of Wales site had also come under scrutiny.
A reassessment of the project carried out by the University of South Wales as part of the due diligence process suggested that 2,000 jobs fewer than claimed would be created. In addition, jobs during the construction phase of the project would be temporary, with the Circuit ultimately employing around 150 full time staff, while the remainder of jobs would be created in spin-off enterprises over a longer period of time.
As this article was being prepared for publication, Michael Carrick, told BBC News: “We haven’t given up on it and I’m hoping government hasn’t.
“The project is too important to walk away. We’ve got the support of our investors, we’ve got the support of our development partners and we want to make it work for government and for the valleys.”
Whether Mr Carrick will be able to overcome the deep reservations of the Welsh Government and proceed with the scheme with their backing is open to question.
Whether the HVDC will be able to develop the Circuit of Wales on the scale planned – or at all – without that backing, is highly unlikely.
North Wales Commissioner to stand down
PLAID CYMRU Leader Adam Price has paid tribute to North Wales Police and Crime Commissioner Arfon Jones who has announced he is standing down at the next election.Mr Jones of Plaid Cymru is the region’s second-ever police and crime commissioner and has been PCC since 2016, and the next election had originally been due to take place last May but the vote was put back a year because of the Covid-19 pandemic.
Arfon Jones said: “The main reason I have decided not to seek re-election is that I will have been working for more than 46 years by the time of the next election.“As a result of the pandemic, the term of office was extended for a year. I started thinking about this last May but I didn’t talk to anybody else about it until three months ago.
“I have achieved a lot in the past five years and it is going to be more difficult to make a difference next time because of the pandemic, Brexit and the fact that the term of office has been curtailed to three years.”
Plaid Cymru Leader Adam Price MS said: “We are indebted to Arfon Jones for his tremendous contribution as the Police and Crime Commissioner for north Wales.“From launching Checkpoint Cymru – a project to address the underlying causes of offending; commissioning over £2 million worth of services to support victims of crime; leading the charge in tackling domestic violence and to more recently keeping our communities safe during the Coronavirus pandemic, Arfon’s considerable achievements in office are a testament to his commitment to the constituents he serves.
“On behalf of Plaid Cymru, I would like to thank Arfon Jones for his contribution to Welsh public life and send him our warmest wishes for the future.Plaid Cymru Chair Alun Ffred Jones added: “From safeguarding the most vulnerable in our society, protecting our communities and preventing offending and reoffending, Arfon Jones’s tireless work has helped make North Wales a safer place.
“A true public servant, he will be remembered for representing the people of north Wales with determination and for fighting to ensure that the voices of victims of crime are heard within the justice system.
“On behalf of Plaid Cymru, I wish him all the best for the future.”Mr Jones succeeded Winston Roddick in the Police and Crime Commissioner role and had a 12,000 majority over Labour’s David Taylor in the last Police and Crime Commissioner elections in 2016.The elections for the role of Police and Crime Commissioners in England and Wales are scheduled for Thursday, May 6, the same day as voters head to the polls in elections to the Welsh Parliament.
Taskforce returns empty homes to use
MORE than 500 applications have been received to bring empty homes back in to use through Welsh Government’s £10 million Valleys Taskforce Empty Homes Grant Scheme, Deputy Minister for Economy and Transport Lee Waters has announced.
Phase One of the initiative was launched a year ago by the Deputy Minister, and Chair of the Valleys Taskforce, after a successful roll-out across Rhondda Cynon Taf.The scheme is open to homeowners across the extended Valleys Taskforce, which runs from Carmarthenshire in West Wales to Torfaen in East Wales. Its boundaries were also extended last year to include the Gwendraeth and Amman Valleys.
Phase Two of the scheme, launched in July 2020, will ensure even greater numbers of local businesses are used to bring empty homes back to life and incentivise applicants to use more energy-efficient measures within their renovations. Not only will this help to reduce carbon emissions it will also result in lower energy bills for future residents.
While the scheme will see some applicants going on to live in their refurbished properties, other properties will be brought in to use for social housing by Registered Social Landlords, helping to increase the supply of affordable housing.Deputy Minister for Economy and Transport Lee Waters said: “A year ago, I announced that following the success of a Rhondda Cynon Taf scheme, we were opening a £10 million Welsh Government Empty Homes Grant scheme across the whole of the Valleys Taskforce areas.“It is heartening to see that scheme progressing well, with over 500 applications already received and I hope many more to come.
Of course, this year has been challenging for everyone but despite the pandemic causing a delay on the scheme for many months, and the floods that impacted many Valleys areas, we have seen great progress.
Local authorities have worked hard to roll out this scheme in their areas and provide the necessary match funding to make this success and I would like to put on record my thanks for their hard work.“With strengthened criteria, which we developed collaboratively with local authorities and other stakeholders, this scheme has not only brought empty properties back in to use but has also supported the foundations of our local economies by providing work for small local businesses in the construction sector.
The retrofitting element also means it is supporting our decarbonisation agenda while also reducing energy bills for the future.“I look forward to seeing the full results of this Valleys Taskforce scheme and will work closely with the Minister for Housing and Local Government to use our learning to influence and develop a future empty homes schemes for the whole of Wales.”Mike Roberts, from Carmarthenshire, applied to Phase One of the scheme. He said: “My house had been empty for more than two years and desperately needed to be restored to a decent standard.“The Empty Homes Grant Scheme was a great help and allowed me to carry out essential works all at once.
“There was a formal process and a range of forms to complete but my grant was approved and the work has been done. I am delighted.”To be eligible for the Valleys Taskforce Empty Homes Scheme, homes need to have been empty for at least 6 months. Applicants to the scheme are also restricted to one grant per person and in cases where repair work exceeds £20,000, will have the option to apply for the Welsh Government’s Houses into Homes scheme.
Call to replace the Lords
OVERHAULING Parliament’s London-dominated second chamber would help empower the UK’s nations and regions, writes Willie Sullivan a senior director at the Electoral Reform Society.
It’s been a year since Boris Johnson’s victory in the 2019 general election, an election won with a commitment to ‘level up’ those communities left behind.
Since then, our politics has been shaken by a pandemic that has put pressure on the already strained constitutional settlement that holds the nations and regions of the UK together.
We’ve seen attention turned to local and regional government as well as the devolved administrations. We’ve seen clearly how the over-centralising nature of Westminster can hamper and undermine public trust. The video of Andy Burnham first hearing news of Greater Manchester’s Covid funding settlement at a live press conference will go down as a low point in Britain’s patchwork devolution framework.
This is all set to the backdrop of declining faith in our politics. At the same time as the PM was returning to Number 10 last winter, polling for the Electoral Reform Society showed that just 16% of the public believe politics is working well in the UK – and only 2% feel they have a significant influence over decision-making.
For a government publicly committed to a levelling up agenda, this democratic malaise must serve as a warning: it will take more than economic investment or shiny new infrastructure to remedy the feeling of powerlessness that many feel outside of Westminster.
Tackling that will require some long-overdue reform. The calls for a clear framework for devolution in the UK have become impossible to ignore in recent months. Even areas of England with mayors felt sidelined this year, but the picture was even worse elsewhere – with zero guarantees that local people would be consulted on changes that would affect their lives immeasurably.
There’s a good way to start empowering the UK’s nations and regions: overhauling Parliament’s unelected second chamber.
Abolishing the outdated and unaccountable House of Lords offers a chance to rebalance politics away from Westminster – and create a representative Senate of the Nations and Regions.
Recent Electoral Reform Society analysis found that nearly a quarter of peers are based in London, compared to just 13% of the UK public. Over half – 56% of peers – live in the capital, or the east and south-east of England, while peers in the east and west Midlands make up just 6% between them – leaving many areas in which the Conservatives won seats in the so-called ‘red wall’ woefully underrepresented.
It should be said, this is only peers we know about: more than 300 refuse to state even the country they live in (some live overseas), and hundreds more do not even provide a direct email address for people to get in touch and stand up for their areas.
All this undermines the government’s stated intention to ‘level up’ the regions, when we have a chamber that is skewed towards one patch of England.
Reforming this London-dominated second chamber is a rare issue that is highly popular across all parties. 71% of the UK public back an overhaul of the House of Lords, research showed this year. The issue cuts across Britain’s divides, with an overhaul backed by a majority of those who voted Conservative or Labour in the 2019 general election, and those who voted Leave or Remain in the EU referendum.
As well as levelling up representation – with peers elected using a fair, proportional voting system – a genuinely accountable second chamber could establish a guaranteed voice for the regions of the UK, to speak as one, to scrutinise legislation and our constitutional settlement with clear communities in mind. The UK remains one of the most centralised countries in Europe – and the archaic, power-hoarding set-up in Westminster has a big role to play in why this is.
The pandemic has shown just how important it is for those outside the capital to be truly heard. There are many reasons why voters had more confidence in their governments’ Covid responses more in Wales and Scotland, but having a stake – being genuinely ‘in it together’ makes a big difference.
This is a challenge to all parties, from Boris Johnson as he tries to plot a path for recovery for the UK, to Keir Starmer as he begins to outline his own view of devolution.
One thing’s clear: the London-dominated House of Lords is undermining the voice of local communities. A Senate of the Nations and Regions could be the gamechanger we need.
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