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.
Local coronavirus restrictions imposed to control outbreaks in South Wales
Coronavirus laws are being tightened in four more Welsh authorities – Blaenau Gwent, Bridgend, Merthyr Tydfil and Newport – following a sharp rise in cases, Health Minister Vaughan Gething today announced.
The new measures will come into force at 6pm on Tuesday 22 September 2020, to protect people’s health and control the spread of the virus in the four local authority areas.
The new restrictions will apply to everyone living in Blaenau Gwent, Bridgend, Merthyr Tydfil and Newport:
People will not be allowed to enter or leave these areas without a reasonable excuse, such as travel for work or education;
People will only be able to meet people they don’t live with outdoors for the time being. They will not be able to form, or be in, extended households;
All licensed premises will have to close at 11pm;
Everyone over 11 will be required to wear face coverings in indoor public areas – as is the case across Wales.
From 6pm on Tuesday 22 September, the requirement for all licensed premises to close at 11pm will also be extended to Caerphilly borough.
Health Minister, Vaughan Gething, said:
“Following the decision to place additional coronavirus restrictions in place in Caerphilly and Rhondda Cynon Taf, we have seen a worrying and rapid rise in cases in four other south Wales council areas – Blaenau Gwent, Bridgend, Merthyr Tydfil and Newport.
“In many cases, this is linked to people socialising indoors without social distancing. We are seeing evidence of coronavirus spreading. We need to take action to control and, ultimately, reduce its spread and protect people’s health.
“It’s always a difficult decision to introduce restrictions but coronavirus has not gone away – it is still circulating in communities across Wales and, as we are seeing in parts of South Wales, small clusters can quickly cause real issues in local communities.
“We need everyone’s help to bring coronavirus under control. We need everyone to pull together and to follow the measures which are there to protect you and your loved ones.”
The restrictions are being introduced following a rapid increase in the number of confirmed cases in coronavirus, which have been linked to people meeting indoors, not following social distancing guidelines and returning from summer holidays overseas.
The Welsh Government will call an urgent meeting of all local authority, health board and police forces from Bridgend to the English border tomorrow to discuss the wider situation in South Wales and whether further measures are needed across the region to protect people’s health.
The new local restrictions measures will be kept under regular review. They will be enforced by local authorities and by the police.
Keep Wales safe by:
Always keeping your distance
Washing your hands regularly
Working from home wherever you can
Following any local restrictions
Following the rules about meeting people
Staying at home if you or anyone in your extended household has symptoms.
Julie James AM attends the launch in Swansea of new research on benefits of Community Led Housing
JULIE JAMES AM, Minister for Housing and Local Government, attended the launch at Down to Earth in Swansea of new research from the Wales Co-operative Centre, with support from the Nationwide Foundation, which found that residents who live in community led housing (CCLH) experience improved mental wellbeing and happiness, as well as improved skills development.
Over 50 residents from 22 community led housing schemes across Wales and England were interviewed. The top benefits that residents highlighted were:
Residents felt less isolated, being surrounded by a supportive network
• Improved mental wellbeing and happiness
• A better quality of life with the potential for skills development and increased levels of confidence, as well as a better financial situation
• Wider benefits to the community including a reduction in antisocial behaviour and greater community collaboration
• Derek Walker, Chief Executive of the Wales Co-operative Centre, said of the research: “We were really pleased with the research findings and the range of softer benefits that residents have seen. As well as the expected financial benefits, there is a much wider impact on mental wellbeing and skills development which is great to see.”
Minister for Housing and Local Government, Julie James AM, said: “I have been overwhelmed in hearing the benefits residents gain from living in community-led housing. The difference tenants feel in terms of improved skills, increased confidence and improved mental wellbeing to name but a few – demonstrates why community-led housing can, and should be part of the solution to the housing crisis we face here in Wales. Building more affordable housing and providing people with safe, warm and secure homes is a key priority for this Welsh Government. I’m looking forward to watching community-led housing grow and flourish – and contribute towards our commitment to building 20,000 affordable homes during this Assembly term.”
Lib Dems slam ‘botched’ scheme
THE WELSH Liberal Democrats have slammed the Conservative Government for their “hapless treatment” of EU citizens after the Home Office released guidance on the new EU Settlement Scheme.
The Home Office has confirmed that for the duration of the trial period, until 30 March, EU citizens applying to stay in the UK must either use an Android phone or travel to one of 13 ‘document scanning’ centres instead.
For Holyhead, the closest ‘document scanning’ centre is Trafford.
According to an analysis by the Welsh Liberal Democrats, EU citizens travelling from Holyhead would face costs of £55 on the train for at least a six and a half hour round trip. The drive would be a 224-mile round trip costing around £56 in fuel.
The only document scanning centre in Wales is in Caerphilly. Travelling from Pembroke to Caerphilly and returning the same day by rail would cost £32.10 (the cheapest available fare at the time of enquiry), the cheapest off-peak fare from Aberystwyth would be £77.10 return. By car at an average of 40mpg, the cost of travel would be at least £27 to and from Pembroke, while from Aberystwyth the cost would be at least £25. Both car journeys represent round trips of over 180 miles.
Welsh Liberal Democrat Leader Jane Dodds said: “Too many people in Wales are deeply anxious about their right to stay. Many of them fill vital roles in the health service, our schools and the tourism sector. They want to register as soon as possible, but Theresa May’s hapless treatment of EU citizens could result in a new Windrush scandal.
“For anyone who doesn’t have an android phone, this botched scheme means they will have to travel. For people in Holyhead, that means facing a 224-mile round trip and paying over £50 for the privilege. This postcode lottery is simply unacceptable.”
Liberal Democrat Home Affairs Spokesperson Ed Davey MP said: “Following significant pressure, the Prime Minister said there will be no financial barrier for any EU nationals who wish to stay. How long did that commitment last?
“It is Conservative Ministers who have made a mess of Brexit. They should either pay the cost for EU citizens or change the application system and ensure EU citizens are made to feel welcome in the UK.
“Ultimately, the best way to avoid all of this mess is by giving the people the option to remain in the EU with a final say on Brexit.”
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