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Short Circuit for Wales

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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.

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Boris Johnson expected to resign as Prime Minister today

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THE PRIME MINISTER, Boris Johnson is expected to tender his resignation today, according to sources close to Number 10.

Less than a month on from surviving a leadership challenge, the PM’s premiership will come to an end after senior ministers were among those to quit the government in protest at Downing Street’s handling of a series of recent scandals.

The latest of these being Mr Johnson promoting Chris Pincher to the role of deputy chief whip in February despite being told of a sexual misconduct complaint against the Tamworth MP in 2019.

On Tuesday, the PM apologised for allowing this job move to take place – but this did not stop the resignations of both his health secretary Sajid Javid and chancellor Rishi Sunak minutes later.

By Thursday morning, more than 50 Conservative MPs had resigned from their government roles.

Commenting on the news that the Prime Minister will be resigning today as Conservative Party Leader, Andrew RT Davies MS, Leader of the Welsh Conservatives in the Senedd, said: “I’ve always said it was essential for the Prime Minister to hold the confidence of our country, party and parliament. Clearly, that is no longer the case.

“Boris Johnson’s legacy will always be that he ended the deadlock and got Brexit done, delivering on the will of the British people.

“As well as securing a historic victory in 2019, Boris ensured our return to freedom out of the Covid-19 pandemic. Regrettably, it has now become very difficult for him to deliver on the mandate he secured.

“As a friend and supporter of the Prime Minister, I recognise his achievements over the last three years. It now falls to the Conservative Party to select a new leader to deliver on our manifesto commitments for the remainder of this parliament.

“I wish him, Carrie and the rest of his family all the best for the future and thank him for his service to our country.”

Reacting to the resignation of the Prime Minister Welsh Liberal Democrat Leader Jane Dodds MS said:

“Finally this whole sorry and undignified saga has come to an end. It was always abundantly clear that Boris Johnson was unfit to be Prime Minister and those that backed him to the hilt have a responsibility for the mess and destruction he and his brand of populism has had on our country.

“The Welsh public won’t forgive so many Welsh Conservative MPs for propping up Boris Johnson for so long against various scandals while at the same time ordinary families were struggling to cope with the cost-of-living crisis.

“Johnson or no Johnson, for many former Conservative voters the party they once knew is beyond redemption and will not be coming back.”

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The Welsh Government launches Basic Income pilot scheme

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FROM 1 July 2022, more than 500 people leaving care in Wales will be offered £1600 each month (before tax) for two years to support them as they make the transition to adult life.

Launched by First Minister Mark Drakeford, it is hoped the pilot will set care leavers on a path to live healthy, happy and fulfilling lives.

The radical approach has trust, autonomy and respect at its centre. It will provide independence and security to people who have faced immense challenges during their childhood, giving them greater control and empowering them to make decisions about their future.

The £20 million pilot, which will run for three years, will be evaluated to carefully examine its effect on the lives of those involved

Social Justice Minister Jane Hutt said the scheme is a direct investment in the lives and futures of some of Wales’ most vulnerable young people.

Those taking part in the pilot will also receive individual advice and support to help them manage their finances and develop their financial and budgeting skills.

Local authorities will play a key role in supporting them throughout the pilot. Voices from Care Cymru will also work with the young people to give them advice on wellbeing, education, employment and help them plan their future after the pilot.

To launch the scheme, First Minister Mark Drakeford, Social Justice Minister Jane Hutt and Deputy Minister for Social Services Julie Morgan met with people taking part in the pilot, and young people who themselves have been in care, to talk about the impact this support will have on peoples’ lives.

They discussed how they hope the financial stability will give people the opportunity to make positive life choices as they leave care and provide a more solid foundation from which to build their adult lives.

First Minister Mark Drakeford said: “We want all our young people to have the best possible chance in life and fulfil their full potential. The state is the guardian of people leaving care and so has a real obligation to support them as they start their adult life.

“Our focus will be on opening up their world to all its possibilities and create an independence from services as their lives develop.

“Many of those involved in this pilot don’t have the support lots of people – myself included – have been lucky enough to enjoy as we started out on our path to adulthood.

“Our radical initiative will not only improve the lives of those taking part in the pilot, but will reap rewards for the rest of Welsh society. If we succeed in what we are attempting today this will be just the first step in what could be a journey that benefits generations to come.”

Minister for Social Justice Jane Hutt said: “We’re in the midst of a cost-of-living crisis like no other and we therefore need new ways of supporting people who are most in need.

“Our Basic Income pilot is an incredibly exciting project giving financial stability to a generation of young people. Too many people leaving care face huge barriers to achieving their hopes and ambitions; such as problems with getting a safe and stable home, to securing a job and building a fulfilling career. This scheme will help people live a life free of such barriers and limitations.

“We will carefully evaluate the lessons learnt from the pilot. Listening to everyone who takes part will be crucial in determining the success of this globally ambitious project. We will examine whether Basic Income is an efficient way to support society’s most vulnerable and not only benefit the individual, but wider society too.”

Tiff Evans of Voices from Care Cymru, speaking on behalf of young people who have experienced care, said: “This is a brilliant opportunity for care leavers in Wales. It is good to see that care leavers in Wales are being thought of and Welsh Government are providing this opportunity for them as young people to become responsible, control some parts of their lives and have a chance to thrive and be financially independent.

“We thank Welsh Government for investing in them and their future and we look forward to other changes and developments for care experienced young people in Wales in order for them to reach life aspirations.”

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Boris Johnson, his wife and chancellor Rishi Sunak to be fined for breaking lockdown rules

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THE PRIME MINISTER Boris Johnson and his wife Carrie, and chancellor Rishi Sunak, have been notified that they will be issued with fines for breaking lockdown rules.

The fixed penalty notices are the result of a Metropolitan Police investigation into parties in Downing Street and Whitehall in 2020 and 2021.

Mr Johnson will become the first sitting prime minister to receive a punishment for breaking the law.

Labour immediately called for both the PM and chancellor to resign while Liberal Democrat leader Sir Ed Davey called for parliament to be recalled for a vote of confidence in Mr Johnson.

Scotland’s first minister Nicola Sturgeon also demanded that they should quit.

Those calls have been echoed this week by Welsh Liberal Democrat Leader Jane Dodds has called on the Welsh Conservative Leader Andrew RT Davies and Welsh Secretary Simon Hart to “show a backbone” and call for Boris Johnson and Rishi Sunak to resign following the news that both men are to be fined over lockdown parties.

Commenting Jane Dodds MS told The Herald: “Boris Johnson & Rishi Sunak have broken the law & repeatedly lied, they must resign from their positions at once.

“While people in Wales were playing by the rules at great personal expense, those in charge thought they were above the law.

“This also will come as a painful blow to all those covid bereaved families in Wales.  The behavior of Johnson and Sunak

“The Welsh public deserves much better. For the sake of the country, both Boris Johnson and Rishi Sunak must resign immediately.

“If the Conservative Party is to have any legitimacy in Wales Andrew RT Davies and Simon Hart need to show some backbone and be calling for resignations immediately. No Welsh Conservative MP should be backing the Chancellor or Prime Minister staying in post.”

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