



(Title Image: South Wales Argus)

The Issue

A few weeks ago, the Public Accounts Committee reported back on their inquiry into the proposed Circuit of Wales development in Blaenau Gwent following a critical Wales Audit Office (WAO) report.

They found that, amongst other things, the £9.3million of taxpayers funds committed to the project wasn’t value for money, a motorcycle company had been bought for £300,000 from a Welsh Government development grant and there were concerns over how the Welsh Government reacted to the WAO report and how they came to the decision to pull the plug.

Yesterday, AMs had the chance to debate the report’s findings and the Welsh Government response, but there were a few new revelations made.

Key Points

Chair of the Public Accounts Committee, Nick Ramsay AM (Con, Monmouth)

“We have serious concerns that the Welsh Government was not as transparent and comprehensive as they could have been in explaining their decision to perform what appeared to be a U-turn on the Circuit of Wales project.”

The Welsh Government’s acceptance of the Committee’s findings is welcomed, but there’ve been numerous promises from the Welsh Government down the years that lessons are learned yet the Committee are unconvinced.

The Welsh Government needs to be smarter, quicker and agiler when making decisions on major investment projects.

The Committee wants to see an end to the government’s “repeated commercial naivety” and were concerned that it seems the Welsh Government only sought to recover £100,000 from an escrow account when they were prompted to do so by the Committee.

Adam Price AM (Plaid, Carms. E & Dinefwr)

The report laid bare fundamental failings in how the Welsh Government makes decisions and its “reckless disregard for the truth” at times.

The Welsh Government is aware there are still plans to resurrect a project at the site.

One of the promoters has asked to be released from £7.3million of liabilities connected to a loan – that promotor is US-based Rocksteady Partners, who want to combine a race track with a casino and leisure resort.

If agreed, the Welsh Government would effectively take an equity stake in a casino project in one of the poorest parts of Wales.

Wales is appallingly bad at dealing with major investments projects and “the map of Wales is becoming l ittered by a junkyard of broken dreams “; we need to become less reliant on external actors and build up our own ability to deliver major projects.

Neil Hamilton AM (UKIP, Mid & West Wales)

“It’s a shocking catalogue of political myopia, administrative incompetence, evasiveness and even duplicity.”

The Circuit of Wales had the potential to be a “game changer” in the Heads of the Valleys, bringing in £410million of private investment – yet the Welsh Government found £100million of public money to “build a series empty sheds for which there are no known customers” (automotive park).

The Treasury government debt rules the Welsh Government cited as a reason to pull the plug were there from the start and the decision still hasn’t been properly explained.

Mohammad Asghar AM (Con, South Wales East)

When the issue of buying the motorcycle company was raised by an MP, the Welsh Government issued an “an incorrect and misleading press statement” saying no public funds were used, yet it came from the same officials who would’ve signed off the money in the first place.

Welsh Government Response

Economy & Infrastructure Secretary, Ken Skates (Lab, Clwyd South)

Support provided by taxpayers to the project had to be “proportionate and fair”; the final proposal was judged to be a “very high risk” and there was a lot of uncertainty over the numbers of jobs that would’ve been created.

The Welsh Government “are not open whatsoever” to the possibility of a casino development at the site – the Rocksteady proposal isn’t the only one being considered.

Various internal review and due diligence procedures have been updated; the purchase of the motorcycle company will be used for civil service training (as an example of what not to do).