Clear vision needed for post-Brexit regional funds

(Pic : Getty images)

The Senedd's External Affairs Committee have called for the Welsh Government to start planning for a post-Brexit, post-EU funding Wales in a new inquiry report published last week (pdf).

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Welsh Budget 2017-18

(Pic : BBC Wales)

The Welsh Government's spending plans for the next financial year were tabled in the Senedd on Tuesday by Local Government & Finance Secretary, Mark Drakeford (Lab, Cardiff West).

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Plaid's Infrastructure Commission

(Pic : Plaid Cymru)

(Owen : It's funny how things turn out. I'm sure that counts as three correct predictions in a row. As for the recent controversial episode of Question Time this sums up what happens in pretty much every episode and why I don't watch political programmes. "Don't feed the trolls.")

On Monday, the Shadow Ministers for the Economy & Infrastructure – Adam Price AM (Plaid, Carms. E & Dinefwr) and Dai Lloyd AM (Plaid, South Wales West) respectively – launched a policy paper outlining their proposal to create a National Infrastructure Commission (pdf).

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Senedd Debates Brexit

(Pic : Wales Online)

I won't be covering First Minister's Questions this week – even though the business of government and legislature goes on – instead choosing to cover the National Assembly's response to the EU referendum result.

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Fourth Assembly Review : Final Verdict

(Pic : The Guardian)

Here's a final round-up of how the Welsh Government and opposition party leaders have performed as the Fourth Assembly draws to a close.

• End of Year Report 2015
• End of Year Report 2014
• WAG End of Year Report Card 2013
• Welsh Government - End of year report (2012)

Office of First Minister; Constitutional & Legislative Affairs

• First Minister : Carwyn Jones (2011-2016)
• Counsel General : Theodore Huckle QC (2011-2016)

C+

Does Carwyn display leadership credentials? I say yes on the whole and it's hard to picture anyone else on the Labour front bench being able to replace him. Carwyn also thinks very carefully before acting – which should be considered a good trait in a political leader – but he seems to be a bit slow to move from talking about doing something to actually doing something.

I wouldn't say he's smug, but it's clear Carwyn thinks he's above the opposition leaders and finds FMQs a chore; in all honesty, you can't blame him. He finds it all too easy to bat off questions – presumably because of his background as a barrister – and he'll often find agreement with Plaid and Lib Dems on certain matters of policy. As a result he's rarely put under any pressure at all, but comes across as a bit too laid back.

The Counsel General had a more prominent role this term and racked up a 2-1 victory over the UK Attorney General after three Welsh laws were challenged in the Supreme Court. He did his job – nothing good or bad you can say about that. He could well play a key role in the argument for some sort of Welsh legal jurisdiction in the future, but AMs seem reluctant to ask him questions – Simon Thomas and Mick Antoniw aside.

Finance & Leader of the House

• Minister : Jane Hutt (2011-2016)

B-

Finance Minister is one of the duller postings in the Welsh Government, but it requires a strong hand and a cool head to deal with competing priorities. Jane might not have set the world alight in other roles down the years, but I'd say she's found her niche and that could stand her in good stead if she decides to make a leadership bid in the future. Maybe she's shown a bit too much favouritism to the NHS in her budgets, but I'd say her overall management of the nation's finances has been sound, with cautiously sensible proposals for the management of devolved taxes in the Fifth Assembly.

Considering the time and manpower constraints, the Assembly's calendar has been well-managed, with the introduction of topical individual members debates bringing more relevant discussions into the chamber. However, the weekly business statement announcements verged on pointless as Jane always has an excuse on hand not to hold a debate or support a ministerial statement - which clearly frustrated many AMs over the last five years.

Economy, Science & Transport

• Ministers : Edwina Hart (2011-2016),
• Deputy Ministers : Jeff Cuthbert (2011-2013), Ken Skates (2013-2014), Julie James (2014-2016)

B

It started very wobbly indeed, but in the end – and with evidence to back it up – it's hard to argue against Edwina Hart's stint here being anything other than a success and she's leaving the Assembly on a high.

Unemployment's down, there are some big schemes on the table on in the pipeline and the Welsh economy has been through a period of growth. The only real criticisms would be her department's failure to properly implement reforms to business rates while it's clear that some of Edwina's actions have been unnecessarily combative – the closure of Junction 41 in Port Talbot, for example.

Ken Skates' brief stint as Deputy Minister for Skills was a rare ministerial highlight as he oversaw the rapid expansion of Jobs Growth Wales, which made the decision to move him in 2014 all the stranger.

Health & Social Services

• Ministers : Lesley Griffiths (2011-2013), Mark Drakeford (2013-2016),
• Deputy Ministers : Gwenda Thomas (2011-2014), Vaughan Gething (2014-2016)

D

Health is the big area of policy failure for Labour, mainly due to service failures rather than their intent to make improvements. They've passed three significant laws on health and social services this term – Hygiene Ratings Act, Human Transplantation Act, Social Services & Wellbeing Act – but not without controversy or incident, such as the original proposals for vaping in the Public Health Bill (which ultimately failed) and the smacking ban.

I've said enough about their policy performance, so I'll focus on the ministers themselves. It was quite clear that Lesley Griffiths was out of her depth and lost control of matters at times. While Mark Drakeford brought a more considered intellectualism to the post he's hardly set the world alight either. There's a real danger that Health Minister is going to become the post nobody wants.

Although he was perhaps too slow to act on the McClelland review's recommendations on ambulance services, Vaughan Gething has, at times, shown why he's so highly thought of and it's a racing certainty he'll become a full minister in the Fifth Assembly.

Education & Skills

• Ministers : Leighton Andrews (2011-2013), Huw Lewis (2013-2016)
• Deputy Ministers : Jeff Cuthbert (2011-2013), Ken Skates (2013-2014), Julie James (2014-2016)

C+

A mixed bag though, broadly-speaking, Huw Lewis is leaving the Assembly on a political high. This area of policy hasn't perhaps got the critical attention it deserves in the Welsh media – aside from the PISA results and big changes like the Donaldson Review. It's fair to say there've been a number of big policy announcements through the Fourth Assembly, and exam results have gradually improved.

The Lib Dems can take some credit here for their Pupil Deprivation Grant – though it's probably going to be some time until the effectiveness of it is properly analysed. Money in education has been a major theme, with Labour committing to keeping schools budgets at 1% above any changes to the block grant (and it's believed they didn't keep that promise over the whole term). Meanwhile, the increasingly controversial tuition fee policy, while being well-meant, seems financially damaging in the medium to long term.

So although the raw numbers point towards improvement of sorts, there's been a bit too much knee-jerk tinkering – though the difference in attitudes between Leighton Andrews (more proactive and directly-influential) and Huw Lewis (more collaborative) was marked.

Environment, Natural Resources & Rural Affairs

• Ministers : John Griffiths (2011-2014), Alun Davies (2013-2014), Carl Sargeant (2014-2016)
• Deputy Ministers : Alun Davies (2011-2013), Rebecca Evans (2014-2016)

C+

The intentions are good but, as always with Welsh Labour, the actions weren't there in abundance. Wales' excellent record on recycling has held up, but there were a number of issues – particularly open-cast mining and fracking – where Carl Sargeant was very good at talking the talk but lacking any real bite.

The Welsh Government passed landmark legislation on planning and the environment – the latter committing Wales to meeting greenhouse gas reduction targets. Also, the intent of another "landmark" law on future generations/sustainable development was welcomed, but the implementation was a damp squib.

On rural affairs, there were several major developments with the first Deputy Minister, Alun Davies, picking a fight with the Supreme Court over agricultural wages, forcing a law through the Assembly using emergency legislation powers; a fight he ultimately won. Then he finally oversaw action on stray horses – which has been a particular problem in south west Wales – though again he used emergency powers to see the law though. His stint in the job – which polarised the farming community – came to a rather ignominious end.

His replacement, Rebecca Evans – one of the quietly impressive performers this term - faced with her own immediate problems, particularly a crisis in milk prices which prompted a very quick and efficient review of the dairy sector. It come up with a number of ideas such as a new leadership board and possible milk processing facility in south west Wales.

Local Government, Communities, Housing & Regeneration

• Ministers : Carl Sargeant (2011-2014), Huw Lewis (2013), Lesley Griffiths (2013-2016), Jeff Cuthbert (2013-2014), Leighton Andrews (2014-2016)
• Deputy Ministers : Vaughan Gething (2013-2014)

C+

The overarching issue here has been local government reorganisation as facilitated by the Williams Commission. As mentioned earlier this week, what the whole process has failed to do is properly determine what local government is and what is should be responsible for. The map should've been an after thought.

This group of ministers also oversaw one of the worst scandals of the term in the form of RIFW, though they made up for that somewhat with the less ambitious replacement scheme, Vibrant & Viable Places.

For the first time in post-devolution Wales a minister was given specific responsibility to address high levels of relative poverty, and to date – in the absence of any meaningful level to make an impact, like the benefits system – little progress has been made.

However, several major laws relating to housing have been passed, one of which makes major changes to homelessness provision, while the other outlines significant reforms to the private rental market. Whether there are enough houses being built in the first place is another matter. Also, Labour kept one of their key 2011 manifesto pledges by recruiting at least 500 extra PCSOs.

Culture, Heritage, Welsh Language & Sport

• Ministers & Deputy Ministers : Huw Lewis (2011-2013), John Griffiths (2013-2014), Carwyn Jones (2013-2016), Ken Skates (2014-2016)

C

Another area where, while not really doing anything wrong, the Welsh Government probably could've done more. There's provisional evidence that 2012 London Olympics have had a positive knock-on impact on sports participation, but whether that lasts without proper funding is up for debate. It's a similar situation with the arts in Wales; as it's seen as "low hanging fruit" by local authorities many arts schemes, particularly music, have been victims of cuts.

Elsewhere, concerns have been raised about Wales' place in the new BBC Charter and future of public service broadcasting – particularly the long-term future of S4C – as the decline in the Welsh print media continues. A lot's been said but, as it typical, very little has happened with the Welsh Government appearing toothless as broadcasting  powers are non-devolved.

One area where they've bared their teeth this term is heritage, with the passing of the Historic Environment Act being an attempt to afford more protection to monuments and historic buildings – though perhaps not going as far as it should've, with ministers wimping out of a merger between Cadw and the Royal Commission on Ancient Monuments.

The position of the Welsh language has been awkward – particularly since the 2011 census findings, as well as the decision by the First Minister to take direct responsibility for Welsh language policy in 2013. Nevertheless, Welsh was made an official language in the National Assembly (with equal status to English) for the first time, while a (large and perhaps pedantic) number of standards for Welsh in public services were introduced.

Opposition Leaders

Andrew Davies (Con, South Wales Central)

B- personally; B- party

It's been a clear period of personal and professional growth, and despite some suspect moments of his leadership, Andrew took to the role of Leader of the Opposition pretty well and can be relatively pleased with his performance this term. He isn't perfect, but he does occasionally rile the First Minister – though it's sometimes hard to tell whether he's a mouthpiece for the UK Government or not.

The Tories have gone big on health and have, in some parts of Wales, managed to sew some doubts in people's minds on certain aspects – though it all seems a little repetitive. Following the Wales Bill(s) and future devolution of income tax they can, to a certain degree, say they are a pro-devolution party, though the EU referendum perhaps threatens to cause divisions. After a good result at the 2015 Westminster election, both Andrew himself and his party have reason to be upbeat going into the Assembly election....that still doesn't mean Andrew's coming out of it as First Minister.

Leanne Wood (Plaid, South Wales Central)

B+ personally; C+ party

This term has seen Leanne Wood rise from being part of the fringe of Plaid's backbenches to one of the more well-known politicians in Wales. At a personal level that's an incredible achievement. Leanne has always come across as down to earth, if a little self-righteous, so I don't believe there's any overconfidence there and she has every reason to believe in herself considering her political journey. The real danger is if the rest of her party believe their own hype. That's only going to end in tears.

Plaid haven't set the world alight over the last five years. Despite worthy attempts to professionalise their front bench, the positive reforms have occurred behind the scenes with the development of a strong "Brand Plaid". I'll come back to this in more detail later on in the campaign, but the good news is that Plaid haven't gone backwards and have stopped the rot from 2011. Their problem is a lack of demonstrable forward momentum.

Kirsty Williams (Lib Dem, Brecon & Radnor)

A personally; B party

Kirsty Williams is, without doubt, an excellent AM and excellent party leader. She managed to draw some significant concessions from the Welsh Government and the Lib Dems have passed two laws, including the Nurse Staffing Levels Act. That should count as a real triumph considering Labour's reluctance to take on board any suggestion on health and it's something Lib Dem activists can take to voters.

The party do genuinely punch above their weight – I'm tired of saying that, but it's the truth – and they can be proud of their record in the Fourth Assembly. Hand on heart I say that none of the Lib Dems AMs deserve to be on the end of a kicking in a few weeks time, but it's coming and I doubt I'll be the only one wincing when steel-toe boot makes contact with Lib Dem backside.

Overall Verdict

If the big theme of next term will be the devolution of taxes, the big theme this term was the Assembly's new law-making powers following the 2011 referendum. By and large, AMs and Assembly staff have proven they're more than capable of handling those powers.

The laws themselves, however, have been a mixed bag, with some genuinely groundbreaking legislation introduced alongside some very vague or downright useless laws which will probably be repealed sooner rather than later – the Future Generations Act somes to mind. I would prefer a focus on quality over quantity of legislation next term; it's better to have 10-12 good laws than the 30 or so glib laws we've seen over the past five years.

Although the opposition have certainly caused problems for Labour this term, their fractured and disunited nature - mainly due to big ideological differences - has given Labour an easy ride. That looks set to continue in the Fifth Assembly. Until Labour's "right to rule" is properly challenged (as it was, but for the wrong reasons on Wednesday), the Assembly's stuck in a rut. Maybe, for the good of the country and the future of democracy in Wales, the main opposition parties will have to put some of their differences aside and work together on some aspects.

Lack of ambition, micromanagement, laziness, cronyism – Welsh Labour have them all in spades and displayed them all this term.

Their rule of Wales over the last five years - while not being a complete catastrophe, more a cosy marriage that neither partner has the guts to call off – can be summed up as, "not good enough". The problem for the rest of us - unless you actually support Labour - is that we seem depressingly comfortable with "not good enough."


Tomorrow, I'm going to "do something nice" (or perhaps not so nice) and conclude my look back at the Fourth Assembly by handing out my end of term "awards".

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Dirty Deeds Done Dirt Cheap VI : The Debate

Apart from recently announced legal action, the curtain comes down on
the RIFW scandal on the last day the Fourth Assembly met in plenary.
(Pic : BBC Wales)

Yesterday, I covered some of the failures over the course of the term, as well as a last-minute "special performance" by Cirque du Plaid. I couldn't let the Assembly go without revisiting one of the Welsh Government's biggest "whoopsies" - the RIFW scandal - one last time.

Most of the time AMs are capable of acting like grown-ups, and a debate was held on the findings of the Public Accounts Committee (PAC) report into the scandal (Part V). Some credit has to go to the Business Committee for squeezing in a debate before the election – they could've easily let it slide.

Jac o' the North wrote more on this a few days ago and it's well worth a read as always, while in the last few days the Welsh Government announced they'll start legal action against one of the key protagonists in the saga, Lambert Smith Hampton (which was actually one of the recommendations of the committee's report).

Starting off, the Chair of the Committee, Darren Millar AM (Con, Clwyd West) described it as one of the most significant and deeply concerning inquiries undertaken by his committee (clip). He said it was "inexcusable" and subsequently outlined the findings of the report (which I've already covered in detail).

Although the idea behind RIFW was innovative, it was poorly executed due to flaws in Welsh Government's oversight, as well as the fact RIFW was poorly-served by the professionals who were supposed to offer expertise. It exposed numerous flaws in government procedures, line accountability, record-keeping and data retention.

Darren welcomed the First Minister's apology and the Welsh Government's positive response to the report. It was vital that future Welsh governments recognise all of the recommendations to ensure necessary improvements are made to their handling of arms-length bodies, and to ensure such losses to the public purse are never repeated.

Nick Ramsay AM (Con, Monmouth) said the tragedy for him was the number of different parts of Wales affected by the scandal (clip). When it emerged land in Monmouth which was earmarked for a controversial housing development was sold for fraction of market value, the local reaction "bordered on disbelief". The legacy could undermine trust constituents have in government's ability to handle large financial issues – particularly in light of future tax devolution - as ownership and management of land is a key responsibility of government.

Alun Ffred Jones AM (Plaid, Arfon) said it was a damaging chapter for government and people's perceptions of the Assembly (clip), particularly the perception that government isn't careful with its own money and not worried about getting the best value. He found it difficult to believe that no minister was aware of what was happening and was disappointed that nobody's taken responsibility for the fiasco.

Alun said nothing summarised the scandal more succinctly than the 180 degree turn the board made – one moment they agreed to sell the land separately, the next they agreed to sell them in one package. Alun said if even a community council did this "it would raise chuckles" (Oh, the irony! Coincidentally, this appeared to take place at the same time as Plaid's emergency meeting on the Public Health Bill.). He believed it was a cock-up rather than a conspiracy, but it leaves a nasty taste in the mouth.

Jenny Rathbone AM (Lab, Cardiff Central) accepted it was a great idea to invest in urban regeneration during recession (clip). However, she felt sorry for the RIFW board members who were like "lambs to the slaughter" and knew nothing about how to handle land sales. Instead, the Welsh Government should've disposed of the own land then handed the proceeds to RIFW.

It was "unfortunate" that the Welsh Government wasn't tracking what was going on, which meant that the whole thing was out of sight and out of mind. The decision over the land parcel should've been made by ministers, particularly as the "jewel in the crown" Lisvane site would obviously be used for housing as Cardiff expands. In closing, Jenny believed the Welsh Government had learned their lesson.

Aled Roberts AM (Lib Dem, North Wales) was disappointed that the debate was scheduled for the last day, but it was an eye-opener regardless (clip); he doubted whether even a community council would've done some of the things outlined in the report. There was no criticism of the idea, but everything after that was poor, with Aled expressing surprise that the Welsh Government thought just four people meeting for four days a year could discuss these sorts of issues and make decisions – he could only come to the conclusion that board members had been let down.

However, he believed the main weakness was that a civil servant was put in as an observer when it wasn't clear what his role was, with no guidance issued by ministers. Also, the issue of poor record-keeping appears time and time again in these inquiries. This is unacceptable and he wasn't hopeful that the Welsh Government had learned any lessons.

Leader of the Opposition, Andrew Davies (Con, South Wales Central), said the whole situation unfolded from a genuinely sincere attempt to unlock assets (clip), but it was "incomprehensible" that nobody would've realised that some of the land would've increased in value, particularly in Lisvane – it's "not rocket science". Lack of communication appeared time and time again and board members had been cast adrift. The suggestion that the recession meant there needed to be a rush to raise funds for projects was a "red herring" as there was clear evidence that land was already being sold for more than the RIFW valuations at the time.

Responding for the Welsh Government, Communities & Tackling Poverty Minister, Lesley Griffiths (Lab, Wrexham) shared frustrations with AMs and the Committee (clip). RIFW was much needed in 2010, and funding regeneration through recyclable loans was worthwhile during a recession. She shared frustrations that projects weren't brought forward and apologised for that, reiterating the First Minister's apology too.

The delivery was flawed despite the good concept. The government outlined a range and measures to improve oversight of arms-length bodies, though the valuable work and contributions of independent experts on boards and working groups should be acknowledged. The fund was brought under direct ministerial control in 2013 and in January 2016 the Minister said the remaining funds from RIFW would be made available for regeneration projects.

Lesley confirmed that legal proceedings have started against Lambert Smith Hampton, and further legal steps are being kept under review. The Welsh Government accepted all the Committee's recommendations, and said the government will continue to learn lessons and improve policies.

Summing up, Darren Millar repeated that the scandal reflects on the Welsh Government and Assembly as a whole (clip). Due to the significant sums of money involved it was important to rebuild trust – though he appreciated the government's positive response to the recommendation and said their overall response was appropriate. Ministers should've been informed of significant decisions, particularly those involving public assets, and the fact there was no feedback on decisions being made on ministers behalf was "absolutely astonishing".

He shared the opinion that there should be sympathy with board members. He also said the overage clauses were inadequate. However, he spared his ire for the poor record keeping, saying that the fact diaries were deleted after 12 months, so nobody had any idea where key people where and at what meetings, was "appalling and disgusting".

The findings of this report had been echoed in many other PAC reports down the years - AWEMA, grants management and Betsi Cadwaladr board arrangements were mentioned. Something's wrong if lessons aren't learned and he hinted that some of these issues have appeared in their ongoing Life Science Fund inquiry.

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Live From Angel Street - January Communities Committee

The next webcast Bridgend Council (BCBC) meeting I'm going to focus on is the Community, Environment & Leisure Scrutiny Committee, held on Wednesday (27^th January) – you can watch it he....

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Dirty Deeds Done Dirt Cheap V : The Inquiry

(Pic : BBC Wales)

Yesterday, the Public Accounts Committee published their forensic report into the failed Regeneration Investment Fund for Wales (RIFW)....and it makes really, really grim reading for the Welsh Government (pdf).

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Dirty Deeds Done Dirt Cheap IV : Endgame?

After a wait of years, the Wales Audit Office has finally
delivered its verdict on the RIFW land sale scandal.
(Pic : BBC Wales)

It's been three years in the making, but at long last the Wales Audit Office have delivered their verdict on the Regeneration Investment Fund for Wales (RIFW) and the sale of land parcels to an offshore company, South Wales Land Developments (pdf).

It doesn't make good reading for the Welsh Government. At all.

It's so serious it warranted a special episode of Week In, Week Out : The Big Welsh Land Scandal? which will be broadcast tonight at 10:35 (iPlayer link).

A Brief Recap

The core issue is how or why RIFW sold widely-known lucrative development
land (like Lisvane, above) for significantly less than its proper value.
(Pic : Wales Online)

• Dirty deeds done dirt cheap (18.9.12)
• Digging deep into dirty deals done dirt cheap (11.2.13)
• Dirty deeds done dirt cheap – Round III (17.7.13)

RIFW was established as an arms-length public body by former Deputy First Minister, Ieuan Wyn Jones. Its primary goal was to sell Welsh Government-owned land to raise match funds for regeneration projects in the EU Objective One area (West Wales & The Valleys).

In 2012, RIFW sold a parcel of 15 pieces of land to South Wales Land Developments (SWLD), which was based in the tax haven of Guernsey. This includes land in Bridgend (Pyle and Brackla Industrial Estate), Lisvane in Cardiff (now being developed as Churchlands), Wrexham and Llandudno Junction.

Former police officer and Conservative AM for South Wales West - now MP for Gower - Byron Davies, referred the sale to the Wales Audit Office (WAO). It was understood the land was sold for a total of just £20.6million.

There's nothing controversial about that in itself; however, because the land was certain to be developed for housing – particularly the Cardiff plot – the actual value of the land would've risen considerably, meaning RIFW (effectively the Welsh Government) sold lucrative land for significantly less than it was worth. From the Cardiff land alone, at the time it was estimated the Welsh Government will have missed out on a potential ~£120million.

There were "claw back clauses" inserted into the deal to ensure that if the value of the land rose, the Welsh Government would get some extra money back, but the exact details were unclear. The implication was that the land was deliberately or accidentally undervalued, the sale was rushed unnecessarily or that someone passed insider information to SWLD.

The Welsh Government suspended RIFW projects in February 2013 (except one in Neath town centre) and ordered two internal investigations. The Wales Audit Office also referred the deal to the Serious Fraud Office (SFO).

The WAO Report Key Findings

1. The RIFW Concept

• The RIFW concept was "innovative", but the requirement to sell property distracted RIFW from its core purpose. There's no criticism of the concept, and WAO actually praise it – particularly providing regeneration funding in a period when accessing finance was difficult. Because there were (supposed) deadlines on the EU component of funding, the need to generate funding from land sales should've been acknowledged as a risk and perhaps distracted officials from the task of working on regeneration projects themselves.
• Progress was slower than expected. The Welsh Government underestimated how long it would take to establish the fund, many projects were not deemed "investment ready", and there were delays as officials worked with interested developers to develop more robust plans – compounded by the economic conditions at the time.

2. Welsh Government Oversight

• The Welsh Government failed to set out the oversight mechanisms for RIFW as an "arms-length body". RIFW was established as a limited liability partnership (LLP), wholly owned by the Welsh Government, with Welsh Ministers and officials as board members – having obtained legal advice to ensure it complied with EU law.
• Amber Infrastructure Limited and Lambert Smith Hampton acted as independent fund and investment managers respectively. But because RIFW didn't have a chief executive, it was unclear who was accountable as all executive functions were carried out by Amber. This is described as a "complicated contractual arrangement" which hampered oversight.
• RIFW would've appeared in the Welsh Government accounts and should've subsequently been subject to scrutiny from the Welsh Government's Corporate Governance Committees – but it never featured at committee meetings.
• It was unclear where legal responsibility stopped because RIFW crossed a boundary between the Welsh Government and an entirely private company – this should've been cleared up in unambiguous guidance which was never issued.
• The Welsh Government were represented at board meetings by an "observer", who expressed no concerns over the land sales. This involvement in itself would've compromised the "arms-length" nature of RIFW and could be interpreted as tacit Welsh Government approval of the sales.
• Further oversight was hindered by departmental reorganisations between 2011-2012 following the 2011 Assembly elections, where responsibility for regeneration shifted and officials who were familiar with RIFW's work were moved. Vital information wasn't transferred with them.
• RIFW's board was too small, meaning absences impacted performance and the large amount of work the board needed to get through placed burdens on all board members, many of whom were unpaid. An independent board member rarely participated due to a conflict of interest.
• These weaknesses aren't contained to RIFW, as the Welsh Government internal investigation findings (Lloyd report) are relevant to other "arms-length" bodies.
• Actions undertaken by the Welsh Government since the issue was raised (i.e. internal investigations and taking direct control of the fund) are described as "appropriate".

3. Value for Money

• 23 plots were drawn up to be transferred to RIFW in 2009, it was estimated their total value was between £29.8-£35.6million (the higher figure being optimistic/"hope value").
• The plots were transferred in 2010, however many of them were said to be unready for marketing and sale, plus information was inaccurate with "unresolved issues" at some sites.
• It's acknowledged that many of the sites had "long-term development potential" if included in Local Development Plans, so a quick sale would minimise returns. RIFW weren't advised to keep hold of high-value land (like Lisvane) and were pressured to sell quickly because of various deadlines (explained later).
• The Welsh Government published information that became known within the Welsh property industry (i.e. land values, cash requirements) and subsequently weakened their negotiating hand. This information was circulated to six unnamed property companies with interests in Wales, or clients with interests in Wales.
• There was no December 2015 deadline to sell the land to meet EU match-funding requirements. Some high-value assets could've been held back for the second phase of RIFW beyond 2015. RIFW only had to raise ~£6million to meet the requirement because it was established with £9.4million in cash and had to meet a match-funding target of £15.4million. They were also wrong to assume they needed to invest £55million in the first phase by 2015.
• The plan for a phased sales was abandoned when they received a written £23million offer from Guernsey-based GST Investments for all of the land. GST were operated by Barclays on behalf of Peter's Foods Sir Stanley Thomas, and were represented in negotiations by Langley Davies. Rightacres also submitted a bid of £17.7million.
• After torturous negotiations, the sale was agreed for £20.65million, which didn't reflect the market value. Only two voting board members were present at the meeting which accepted the deal. In 2012, the purchaser changed from GST Investments to newly-registered South Wales Land Developments, also in Guernsey - the sale value increasing to £21.75million. These changes weren't properly reported to the RIFW board.
• There was no independent valuation or open marketing as well as weak professional advice. Phased disposals (instead of selling the sites in one swoop) could've yielded at least an extra £9.2million (£30.9million in total based on District Valuer estimates).
• The sales agreement didn't allow RIFW to benefit from increases in value. Only sites in Lisvane and Monmouth had "claw back" clauses which entitled the Welsh Government to a share of future profits – potentially worth £20.7million at 2013 prices. It's unclear how much they could've clawed back from other sites which are now being developed, like Pyle and Brackla.
• The sale of public assets at significantly below market value could be interpreted as unlawful "state aid". The Welsh Government should discuss whether the EU Commission should be informed by the UK Government.

4. Conflicts of Interest

• Lambert Smith Hampton (Investment Manager) – After the sale in March 2012, LSH were appointed as managing agents for SWLD at some sites, including Brackla Industrial Estate (though that sale was conducted after they were appointed). There's no evidence of improper conduct, but there was a clear conflict of interest which breached their investment manager agreement.
• Jonathan Geen (Independent Board Member) – As a solicitor he had undertaken work for one of the potential purchasers. He immediately notified the board and left the meeting, though later got permission from the board to act for the purchaser. Again, there was no improper conduct and he took no part in any sales decisions. However, the WAO say it would've been more appropriate to turn down Mr Geen's request to act for a purchaser due to the board's small size.

What does this mean?

If any crime's been committed here it's criminal incompetence.
(Pic : Wales Online)

There were two main scenarios as to what this constitutes : fraud, or incompetence. According to the report, the SFO have decided it's not something which "falls within their remit for investigation" unless further information is brought to South Wales Police or the SFO themselves.

That leaves one other scenario, doesn't it?

I suspect it boils down to the misinterpretation of the December 2015 EU match-funding deadline – the deadline that never really existed in the WAO's verdict. That's presumably why quick sales were pushed so hard and why a sale of all of the sites in one package looked tempting.

RIFW was clearly a good idea which was rendered dysfunctional by its own governance arrangements. SWLD saw an open goal to make money and took it – you can't blame them either. From their end, apart from moral questions that surround being based in a tax haven, everything they've done sounds above board.

The WAO say the value of the Lisvane land, originally estimated by King Sturge, may not be as high as the often-quoted £120million figure because not all of the land can be developed – only about 58-63% can (a proportional £69.6-£75.6million).

The only hard figure of how much the Welsh Government "lost" is in the region of £9-15million (the difference between the sale price and the most optimistic actual values); but when you factor in all the parcels of land without "claw back" agreements, plus the potential value of the workable land in Lisvane alone, you're looking at something approaching £90-100million.

The National Assembly's Public Accounts Committee have also announced today they'll hold an inquiry into RIFW, so it's not quite over yet. The current Natural Resources Minister, Carl Sargeant (Lab, Alyn & Deeside), will be in the firing line as the last minister in charge of RIFW, but due to reshuffles he can argue this is something he inherited from others.

Politicians and civil servants are human and will err from time to time - sometimes at great cost. The price we pay for democracy is that the right person for the job won't necessarily be the one elected or appointed.

Is this the worst blunder involving public funds in the devolution era? It's got to be up there.

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Bridgend's Deprivation Mapped

The Caerau Park and Tudor estates are placed near the top of the most
relatively deprived areas in Wales. What about the rest of the county?
(Pic : zoopla.com)

Last week, the latest figures from the triennial Welsh Index of Multiple Deprivation (WIMD) were released by the Welsh Government and Office of National Statistics. Deprivation itself is defined, statistically, as a "lack of access to opportunities or resources".

The WIMD collects data from each of Wales' 1,909 Lower Super Output Areas (LSOAs) – there's roughly one for every 1,000-1,500 people – and compares them to each other, giving policy makers and the general public an idea how relatively deprived neighbourhoods are compared to the rest of Wales (not the rest of the local authority).

So it's important to point out from the start that ranking lowly doesn't mean a community is "affluent" and it doesn't measure precisely how deprived a community is – only how deprived a community is compared to every other community in Wales.

The WIMD has an overall ranking, but it also has 8 separate types of deprivation each LSOA is measured against, with some indicators weighing more heavily in the final ranking than others :

• Income – Proportions of people with an income below a certain level and claiming income-based benefits and tax credits.
• Employment – A general lack of employment, based on claims for out-of-work benefits.
• Health – Lack of good health, including : long-term disabilities, low birth weights, cancer incidences and death rates.
• Education – Numbers of people with no qualifications, truancy levels, university admissions and GCSE pass rates.
• Access to Services – The ability to access everyday services essential for day-to-day living (food, GP appointments, after school clubs), and the travel times to reach such services.
• Community Safety – Overall crime levels, based on police and fire service statistics.
• Physical Environment – Proximity to big polluters, flood risk and air quality.
• Housing – Lack of adequate housing, including overcrowding and no access to central heating.

In terms of the all-Wales figures, St James' in Caerphilly is now ranked as the most relatively deprived community in Wales, though many of the names towards the top are all too familiar – Rhyl West, Splott, Queensway 1 in Wrexham (Caia Park), Twyn Carno (Fochriw, I think), Penydarren 1 (Galon Uchaf area of Merthyr) and Caerau 1 in Bridgend (Caerau Park and Tudor Estates).

With the number crunching done, it's worth taking a look at the picture in Bridgend in some more detail.

Overall Ranking & Changes Compared to 2011

(Click to enlarge)

The 2014 listings aren't really all that different to those in 2011.

The areas you would expect to be more deprived were, including : Caerau, Morfa ward (which includes Wildmill), Bettws, and at a more local level the Brackla Meadows estate, Bryntirion (the area around the Labour club), the Marlas estate in North Cornelly and the Queens Avenue area of Sarn.

As you would also expect, the valleys are relatively more deprived than the coastal/Vale areas, and the suburbs of Bridgend (including Litchard, Broadlands and the Coity end of Brackla), as well as Porthcawl, come out of it rather well.

In terms of how the rankings have changed since 2011, very few areas have dramatically become relatively less deprived than they were, though Sarn 2 (the southern half of the village) fell the most places along with the Hendre area of Pencoed, Nottage in Porthcawl and Cornelly 2 (South Cornelly and Kenfig village). It looks like – despite their overall poor ranking – levels of deprivation in Caerau, Bettws and Morfa have stalled or have even improved slightly compared to the rest of Wales.

In terms of areas which have moved up the rankings, then Brackla comes off particularly badly, especially Brackla 1 (the area around Tremains Primary) and Brackla 4 (Priory Oak, Trem-y-Mor). All Garw Valley wards have slipped – and weren't in a great position in the first place – but it's Pyle 1 (a large chunk of Kenfig Hill) and Pendre – Carwyn Jones' old council ward – which have risen the sharpest in the rankings compared to 2011.

Income & Employment

(Click to enlarge)

These are perhaps two of the more important measures of deprivation as low incomes and lack of high quality employment will limit opportunities by themselves.

In terms of income, the picture perhaps isn't quite as bad as many would believe. Even in parts of the valleys – especially Pontycymer, Maesteg, Nantyfyllon (Caerau 5), Ynysawdre and Bryncethin – incomes are near enough in the middle compared to the rest of Wales, or even slightly exceeding this. These areas have lots of cheap housing and might be attractive for younger working families priced out of other areas, while Maesteg has always had a settled middle class.

Unsurprisingly, Porthcawl and the villages and suburbs of Bridgend and Pencoed do well. You need to remember though that Welsh income levels aren't great compared to the UK anyway.

With employment, however, the differences are more stark, with pronounced problems in the valleys and urban centres (Morfa, Pyle, Porthcawl East & West Central) as you might expect – Caerau 1 ranks as the 4^th most deprived area in terms of employment in the whole of Wales. Bridgend doesn't do too great overall, but clearly employment opportunities are much better south of the M4 and around Pencoed than elsewhere in the county.

Health & Education

(Click to enlarge)

There are five big pockets of areas where people are more deprived in terms of health compared to the rest of Wales – Caerau & Maesteg, Nantymoel, the central Garw Valley (Bettws, Llangeinor, Ynysawdre), North Cornelly & Pyle and the big estates in and around Bridgend town centre (Wildmill, Brackla Meadows, Ystrad Fawr). Again, this shouldn't be a surprise.

As you might expect the areas with good health are Broadlands, Laleston, Litchard and Brackla. These areas are not only generally wealthier than the average, but some areas - like Brackla - are generally younger than the rest of the county.

The north-south split is starker in education than any other measure. Pretty much all of the areas with low-ranking wards in terms of educational deprivation are located in and around Porthcawl, Pencoed and Bridgend, while the valleys have numerous areas that rank in the top 20% most deprived in Wales. The M4 almost matches the boundary perfectly as even Cornelly and Pyle fit in "the north".

That doesn't mean everywhere south of the M4 is doing well (Wildmill & Brackla Meadows) or that everywhere north of the M4 is doing badly (Llangynwyd & Aberkenfig).

Access to Services & Community Safety

(Click to enlarge)

Access to services is as much an infrastructure problem as one of the facilities being in close proximity. Blaengarw and Nantymoel have quite a few shops and services close at hand, ditto the upper Llynfi valley, so these areas do well. More rural areas like Cefn Cribwr and Coychurch, as well as "overheated" areas like Broadlands, will do badly. If you're close to a town centre you're going to rank well on this, so it doesn't really tell us much.

Community safety doesn't really tell us much either, as the closer you are to a town centre, the more crime will be committed. This means urban wards like Morfa and Porthcawl West & East Central will score worse than leafy suburbs like Broadlands, Litchard, Penyfai and Newton.

Caerau, Aberkenfig and Bettws don't really count as either so their poor scores on community safety probably indicate problems other than population density - presumably high levels of anti-social behavior.

Environment & Housing

(Click to enlarge)

You would expect areas close to Bridgend and Maesteg town centres to suffer from pollution problems, but there's a strip of particularly poor-scoring areas stretching from Aberkenfig to Pencoed. I think the culprits are the M4, traffic problems caused by the awkward road layout around Bryncethin, Tondu and Sarn, the Brynmenyn industrial estate and the fact the three main tributaries of the River Ogmore confluence in this area, which is prone to floods.

Ogmore Vale stands out and I have absolutely no idea why other than the polluting industries – like car scrappage and recycling firms - on the Penllwyngwent industrial estate.

On the flipside, you would expect rural wards and Porthcawl – with its seafront and access to the sand dunes - to score well, so no real surprise there.

Housing is the category where Bridgend county on a whole does very well compared to the rest of Wales, so this is clearly one of Bridgend's core strengths. It's probably because large amounts of housing have been built since the 1970s, like Brackla, or more recently, like Broadlands and Tondu, meaning they're often of a higher spec than the terraced houses of old. It's generally the areas where Edwardian and Victorian terraced houses are the only option – like the Garw Valley, Morfa 1 & 3 and Oldcastle 1 (the area around Nolton Street and Cowbridge Road) – which score poorly.

What can we learn from WIMD 2014?

Is enough being done in Bridgend's relatively deprived neighbourhoods?
(Pic : Wildmill Communities First)

Things haven't changed dramatically – As I've said, the areas of Bridgend you would've expected to rank towards the top and bottom have done so. Although these figures are relative, it's hard to tell if Welsh Government and local authority schemes like Communities First are really targeting the core issues that result in higher deprivation : unemployment, poor education and low incomes.

A better environment doesn't mean better life chances – The Bridgend valleys boast some of the finest scenery in south Wales, and since the end of mining, the environment of these areas has improved. The people there are still broadly worse off than those living in and around the M4 though. It makes you wonder if "sustainable development" is really going to improve people's well being or not, and whether local communities are being assisted to make the most of the natural environment.

Sarn and Pencoed are on the up; Brackla and Pendre are on the way down – Again, you have to remember that these figures are relative, but what's clear is that Sarn and Pencoed are becoming relatively less deprived compared to the surrounding areas, while Brackla and Pendre are starting to slip. Brackla is also, arguably, the most diverse council ward in Bridgend, as you can go from some of Wales' most grinding deprivation to some of its swankiest postcodes in a 20 minute walk.

Something needs to be done with "the usual suspects" – Marlas, Caerau, Bettws, Wildmill, Brackla Meadows - yet again they're mentioned for the wrong reasons. I could probably write fifty blogs on the state of Bridgend, but the question remains - what can be done to turn these areas around? With regard Caerau, in the last fortnight I mentioned there were plans for a holiday resort in the Afan Valley, which might generate much needed employment in the area and make use of Caerau's strengths – but those plans have stalled. Valleys 2 Coast had/have plans for housing renewal programmes in Wildmill (pdf) and Careau Park (pdf) too, but again presumably nothing will happen without the funding. New houses won't necessarily solve problems relating to crime, unemployment and low incomes either.

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Short Circuit

The goodwill shown towards the proposed Circuit of Wales
is quietly turning into suspicions and doubts.
(Pic : Click on Wales)

After numerous delays and bubbling controversies, it's worth returning to the Circuit of Wales saga.

I briefly outlined what the project involves in Formula One, Motorsports and Wales. Jac o' the North also covered it in Vroom, Vroom – The Next Gravy Train? In short, the project proposes a motor sports track, a karting track, various related facilities (hotels etc.) and an industrial park at Rassau to the north of Ebbw Vale in Blaenau Gwent.

The total cost of the project is currently estimated to be in the region of £280million, and is being led by Heads of the Valley Development Company (HVDC). Concerns about some claims made by the developers prompted a BBC Wales Week In, Week Out investigation last month (though it's no longer available on iPlayer), and also an angry response from established motor circuits like Silverstone, Brands Hatch and Donington Park, who fear the project could receive illegal state aid.

As I was preparing this post, news broke yesterday that the EnglandandWales Planning Inspectorate are going to hold a four-day public inquiry in June to determine whether the project will go ahead.

The Jobs Issue

Job creation figures have been criticised by industry experts as wide of the mark - although,
of course, any job creation is going to be welcomed in the Heads of the Valleys.
(Pic : frequency.com)

Last summer, estimates regarding the number of jobs created from the project's backers and developers were in the region os 4,000 construction jobs and 6,000 operational jobs - a total of around 12,000. Following Week In, Week Out, HVDC said the figures are 2,300 construction jobs and between 4,000-6,000 operational jobs.

Yeah, the figures are suspect. But the proposed business park could make an excellent base for the automotive industry (Ebbw Vale is an automotive enterprise zone). It's historically been one of Wales' economic and manufacturing sector success stories and would provide highly-skilled, relatively well-paid engineering jobs.

Prof. Garyl Rees of the Wales Automotive Forum, told Week In, Week Out estimates that the project would create 6,000 operations jobs requires "incredible multipliers" and "doesn't do any good to anybody". He hints the real figure is closer to 1,000 jobs – which is still significant in the Heads of the Valleys, don't get me wrong - meaning the original estimates are only 600% out.

If estimates on jobs are that far out, I doubt it's the only area where there are "issues".

Promising jobs in an economically depressed area is always going to win hearts and minds – rightly or wrongly. Just be sure the numbers add up, because I suspect Prof. Rees is right based on historical precedents.

The Money Issue

There's no deal in place to secure a major event (MotoGP), while the apparent
request for state assistance has been angrily criticised by established circuits.
(Pic : aqueduct.co.uk)

Last August, when discussing the project's finances, I said this :

"There's....the question of how events will be attracted to this new circuit in the face of competition from established circuits - and how much that might cost. It would almost certainly require some sort of capital funding from the Welsh Government at some point."

Although the developers claimed they had the money to build the track itself, the begging bowl has promptly come out, hinting towards a £30million investment from the Welsh Government and possibly up to £20million from the UK Government – a total of £50million in public funds (~18% of the total cost). I don't think it's beyond the realms of possibility that the next round of EU funding will be eyed up too.

The project has already been awarded a £2million loan from the Welsh Government, prompting Antoinette Sandbach AM (Con, North Wales) to call for a Wales Audit Office investigation before any more public funds are put into it.

All this is wasted money if we end up with a track with no events. As of yet, the developers have no deal in place to host the British leg of the MotoGP championship from 2015 – which would move from Silverstone. It's also unclear what other events the Circuit of Wales aims to attract.

It's claimed the Circuit of Wales could generate 750,000 visits a year. MotoGP would probably attract ~250,000 people over a three-day race weekend - a third of the visitor estimates in just three/four days. What about the rest of the year? The only other motorsport event that comes close to those figures is Formula One, and there's no chance of that moving to Wales. Are the visitor figures another very optimistic over-estimate?

You can argue the business park is more economically important than the race track, as at least it would be used all-year round and provide more than temporary hospitality and race-day jobs. So surely the business park should be the priority development, with the race track a nice add-on, not the other way around.

There's feudal remnant at play too. As the Western Mail and Daily Wales recently reported, the Duke of Beaufort (a distant cousin of Bet Windsor – net worth circa £135million) stands to make several million pounds out of this development, as he's the landowner via a claim to the title of Earl of Glamorgan dating back to Chuckles II. The Earldom of Glamorgan is a courtesy tital only used to address the direct relatives of a peer, so AFAIK shouldn't have any value in itself.

Also, as Jac o' the North said, only one person on the HVDC board of directors has any experience in motor sport – and that's as a motorcycle racing manager.

What started as slightly tangy whiffs in the air that make you check your shoes, is turning into a full-blown farmer's field pong.

Here comes the muck spreader....

The Environment & Planning Issue

A Natural Resources Wales u-turn on their objections to
the project has been called into question.
(Pic : Chris Hatch via Gwent Wildlife Trust)

The development is on common land, which means any land lost has to be replaced like-for-like on adjacent upland moors. It's a process the EnglandandWales Planning Inspectorate says could take up to a year, leading to significant delays in planning and – subsequently – construction.

When the plans were first submitted, Natural Resources Wales (the joint environment body established in April 2013) registered an objection, which should've/could've led to the scheme being "called-in" by the Welsh Government and possible further delays.

Correspondence between Welsh Government officials, agents working on behalf of HVDC, and Natural Resources Wales (NRW), were released via a Freedom of Information request last September. The important documents are Nos. 18-18c, which is NRW's response to a request for further advice.

NRW say in 18a (pdf) that, "....from the outset, we have had serious concerns over the scale, location and nature of the scheme as submitted and the likely resultant environmental impacts."

They go on to say that they wanted to work with the developers and Blaenau Gwent Council to ensure the environmental impacts would be mitigated, adding that a lot of work went towards that goal – though all the relevant information should've been provided from the start. They then conclude that the project no longer needed to be called-in by the Welsh Government. A near complete u-turn.

Since then, it's been revealed by BBC's The Wales Report that internal NRW e-mails suggest they've been put under pressure not to object to major developments. Morgan Parry – a well-respected NRW board member who died in January – is quoted as saying :

"I don't know who wrote our submission or how high up the hierarchy it was escalated, but I know that staff are finding it difficult to do anything other than give the same answer as we would have done before....

"The only way our advice on issues such as Circuit of Wales is going to change is if we are directed by (Welsh) government to have regard for other factors over and above the environmental ones. And that, I believe, would be a very sad day."

That day came.

Coincidentally, the minister in charge of the environment, Alun Davies (Lab, Blaenau Gwent), is also the local AM. Quasi-judicial decisions and all that. He is, however, quoted as dismissing criticism of the Circuit of Wales u-turn as possibly the work of "one disgruntled employee".

Big Projects, Big Problems

With all the talk of improved cross Irish Sea connections, has Wales
imported something rather unpleasant from the Irish.
(Pic : tee2i.org)

Personally-speaking, I have no objection to these flagship "big projects". They should be judged on their individual merits and strength of their business/economic case – weighed against the environmental impacts (which should be offset). I don't see the point of protecting every single scrap of  moorland, which is about as unnatural as it comes as it should, ideally, be covered in forest (sheep farming aside).

So in principle, I support the Circuit of Wales. It's just the execution of the project and sheer number of unanswered questions that risks bringing the whole thing down. That's not something limited to this project either, it's almost becoming standard practice in Wales.

For "big projects", the whole process – from planning to construction – has to be transparent.  Figures shouldn't be plucked out of the sky, and key decisions shouldn't be made behind closed doors in a manner that could compromise the independence of major public bodies. An example of good practice here would be the proposed tidal lagoon in Swansea Bay.

If developers think they'll need public money, they should be up-front about that from Day 1, not drop politicians in it just as the public momentum builds behind a project. It's an underhand tactic, and bounds politicians and other decision-makers to support them in order to avoid becoming public enemy number one. It puts them in a difficult position, so it's not fair on them or fair on us.

We've seen it with RIFW (which has yet to reach a conclusion). Lest we forget Valleywood? We've also seen it with some of the schemes proposed for restoration of open-cast mining sites (like the Teletubby Village at Margam), and Carmarthenshire's dealings with Llanelli Scarlets (also something related from Y Cneifiwr). On a smaller scale, we've seen it in the case of the suspected fraud in the Milford Haven regeneration scheme.

Wales can't afford to become a nation of - what the Irish would call – gombeens; which roughly translates as shady wheeler-dealers with political connections. Labour would be wise not to perpetuate their position as a gombeen-enabler, shoring up their strong claim to be a Welsh version of Fianna Fáil.

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