Adam Price AM calls for an independent inquiry into the Circuit of Wales decision by the Welsh Government
There is fairly compelling evidence the Welsh Government has been guilty of serial mendacity. That is a very serious charge to make of any Government. In this piece I’ll try and summarise the facts which have led me to this conclusion (which I can happily back up with documentary sources for anyone who would care to see them – please write to me at [email protected]).
The particular context I will be referring to is the Circuit of Wales, a six-year long saga that was unceremoniously brought to a shuddering halt earlier this week. I don’t plan here to replay the arguments over the merits or demerits of the proposal. That has been aired fairly widely, and divided opinion pretty evenly. This article is not about the decision itself but the mixture of dishonesty and dysfunction that characterise the way in which it was made. Even if you take the view that this was a bad project, all of us who care about good governance have reason to be very worried indeed about what I am about to reveal.
As we now know the Welsh Government finally rejected the deal on the 27th June largely because their advice said that the whole of the project’s debt could be classified as being on balance sheet. Yet less than two weeks earlier a senior Welsh Government official dealing with the project told Aviva, its principal funder, that “at the moment there does not appear to be any showstoppers”.
Now there are, of course, two possibilities here, the Government was incompetent or they were dishonest. The former suggests the Welsh Government had genuinely not thought about the major issue which eventually sunk the project until the last few days. Indeed the Welsh Government does seem to be suggesting that in some of its press statements. And yet a report by Ernst and Young dealing with this very issue, the relevant sections of which I have seen, was shared with Welsh Government, I’m told, as far back as October last year. Based on what is currently in the public domain there does not seem to have been any attempt to discuss or resolve this issue with the company or any of the funders at any point in the run-up to the rejection announcement.
The alternative explanation to incompetence is what politicians sometimes euphemistically call dissembling. If this were the only instance then I would be less confident in raising that as a possibility. But 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. Another email, this time 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”. 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. When I asked in a written question whose idea an 80% guarantee – the second proposal to be rejected in July last year –was, I was told by the Cabinet Secretary it was the Heads of the Valleys Development Company on April 15th 2016. Unhelpfully for the Government I was able to point to an email from a senior Welsh Government civil service dated April 7th proposing an 80% guarantee to the Circuit’s developers, after conferring with the First Minister’s Private Office. This misleading reply came after another set in which the Minister erroneously claimed the Government had only had two weeks advance warning of the date of publication of the recent and damning Wales Audit Office’s report – which itself accused the Government of making statements that were “both inaccurate and misleading” – when, as the Auditor General confirmed to me (and the Government have now admitted) they were actually told a full six weeks earlier.
When these discrepancies came to light I asked the First Minister to launch an immediate investigation under the provisions of the Ministerial Code regarding the need to avoid misleading Parliament and public, which was at the heart of the Nolan Principles of Public Life. He wrote back to me on the 26th June saying that he had asked “the responsible Deputy Permanent Secretary to initiate a review of all answers provided to Written Assembly Questions in relation to the Circuit of Wales since the beginning of this Assembly term. This work will report to me on the accuracy of the information provided in those responses..” Once this work is completed the First Minister will decide whether to trigger a full investigation under the Ministerial Code.
But 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.
All articles published on Click on Wales are subject to IWA’s disclaimer.
‘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.’
The Welsh government is not our government it is your government – I voted against it at every stage. Why single out this issue now? It is almost impossible to think of anything the WG has ever done which has made Wales in any way better than England. It has made things worse in so many ways I have lost count. It has screwed up so many times I have lost count. My trust in a senseless extra layer of legislative devolution which looked doomed to failure cannot be rebuilt because I never had any trust in it to be demolished.
So just scrap it before it does any more damage!
Yes thanks John.
Adam has raised a serious issue here that certainly warrants investigation and points to a deficiency in our political culture. Democracy is new to us in Wales as are the accompanying concepts of transparency and accountability that go with it. But it was not born in a vacuum. Prior to this, Wales was run and continues to be run in some parts on a keeping up appearances approach. Wrongdoing is not confronted but avoided and rationalised away so as to present a front of respectability. This needs to change and it is the Welsh Assembly that is best placed to do this.
There has been another incident this week where two civil servants refused to attend an Assembly Committee to give evidence because they were too busy. This is contempt of the Assembly and the First Minister, having trained and worked as a barrister would understand that only too well. Yet he allowed it to happen. The Chairman of the Committee stated that it was possible to summons witnesses but that he did not want to go down that path. The trouble is that the legislature’s authority is weakened by not challenging these acts of contempt and confirms the gentlemen’s club atmosphere of the Civil Service that sees the electorate and their representatives as somehow beneath them and not worthy of their time.
In future, the Assembly’s message to the Civil Service should be clear. If you are summoned to give evidence to the Assembly or any of its committees, you attend unless you are unwell or personal circumstances prevent you from doing so. If you do not, then contempt of Assembly proceedings should be initiated against the offending individual or individuals. It should be remembered that the electorate voted for their representatives to govern on their behalf; the Civil Service is there to serve. It would appear that some civil servants need to be reminded of that constitutional, legal and political fact.
Rhobat Bryn Jones I agree, the only answer to our problems is to give the Welsh Government more power.
The only thing wrong with that analysis Philip is that there is no proof that increasing the power available to a governing body actually improves the standard of its deliberations or actions. Indeed, both Scotland and Wales have increased powers compared to their original settlements. Can we point to a resulting improvement in the standard of government of those two Nations?
Dictators have absolute power but I rarely hear of populations clamouring for the high quality government that comes with such arrangements.
I believe RBJ is right. The fact is that there has been a change of responsible Minister and no doubt a change of mind about this project. The previous Minister was notorious for making decisions that ignored civil service input and advice. The current Minister inherited a decision and no doubt got cold feet when given advice. Unfortunately the government did not have the courage to say so in an election period given the desperation in Ebbw Vale for the project – any project – to go ahead. They prevaricated until elections were out of the way. They then came up with a reason that lacks conviction; it may be true that the loan guarantee is on balance sheet but that should have been known ages ago and would not come as a surprise. It is probably the case that they canned this project for good reasons but they have been maladroit and economical with the truth. They did not have the integrity and courage to say: one minister took a flier but on inspection that turned out to be a mistake so sorry no deal.
Where is our esteemed and respected FM in this matter. Can you imagine if this ‘project’ had been handled by a Conservative government in Westminster the nationalists and fellow travellers in media/Senydd would have been howling about our need for more powers etc etc. When the Aston Martin ‘project’ came to St. Athan the FM couldn’t wait to get a welsh flag draped over a car,even though the funding for the development came from English taxpayers. The people in Ebbw Vale and surrounding areas have been sold a pup,and BBC CYMRU/Wales will now to find another hopeless project to send camera crews/reporters,otherwise what will they spend their time on??
Adam raises a number of serious questions number over the way the Assembly Government has handled this project but he has conveniently forgotten his own role as an enthusiastic supporter. Politicians from various parties have been ardent cheer leaders for Circuit of Wales and yes it would be wonderful if it was built and was half as successful as it claimed. Last December the 28th Adam Price wrote on this site a peon of praise for the project. A well informed comment from Alexander Phillips queried its economic viability. No one attempted to answer Mr Phillip`s arguments after all that woudlnt be popular in a seat that was vigorously contested between Labour and Plaid.
Do I think the Assmbly Government has been guilty of playing politics with this project.?..Yes Is Adam Price best placed to make this criticism. Well people and glass houses and motes and planks.
@ Philip Hughes
The argument for stronger powers for the Welsh Government is one argument but not directly related to the issues above. The issue regarding the First Minister’s alleged misleading of the public is a question of scrutiny. The issue of the absent civil servants from an Assembly committee is both one of the powers of an Assembly committee to summon civil servants and the First Minister’s reluctance to ensure their presence. The central issue is therefore how powerful is the Assembly in carrying out its role of scrutiny with regard to the First Minister and the civil servants who serve his government. Clearly neither feel they have anything to fear from rendering themselves unaccountable on these issues.
It confuses me why Plaid Cymru consistently give blind support for suspect applications like the Circuit of Wales and the Swansea Bay Lagoon.
There are two items in Adam’s article that are relevant to the accusation that the First Minister made a misleading statement with regard to the rejection of the proposal in April 2016. The first is the comment by the First Minister on 11th April 2016.
“It was in the last few days beforehand. We weren’t to know the guarantee would be inflated.”
By this is meant that the guarantee that the Government would underwrite the project for a 100% of the costs. The article does not state what the increase was. In other words, what was the Government’s understanding of the underwrite they would be asked for that was less than 100%?
The other document referred to is the e-mail. To quote Adam,
” 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” (the assertion that Aviva presented the Government with an inflated underwrite request). It is not clear whether the e-mail is dated 26th January 2016 or the proposal for a public sector guarantee.
All of the other references cited by Adam occurred after 11th April and therefore can have no bearing on whether the First Minister misled the public.
I have asked Adam for a copy of the e-mail he refers to, as invited to do so in his article, but I have yet to receive a reply.
You will not be surprised to hear that Adam Price has not replied to my request; a politician making an empty promise in public, who would have thought? However the issue has moved on to the floor of the Senedd where the political aspect of this dispute will hold sway. I agree with Jon Owen Jones on this point which is that what is driving both Adam and Plaid on this is their view that Blaenau Gwent is a winnable seat at the next National Election in 2021. We should remember that Plaid came within 650 votes of taking the constituency from Alun Davies in 2016 when all the attention was focused on the Rhondda and Leanne Wood. It is therefore comparatively easy for an opposition party to be enthusiastic about a project which they will never have to make a decision about and portray themselves as the ones enthusiastic for a better future for the constituency compared to the naysayers in Government. It will be for the voters of Blaenau Gwent to decide who they believe in 4 years time.
For myself, I have never been totally convinced by the project since it always seemed too good to be true and yet required the support of considerable amounts of Government support. Ken Skates has succeeded in getting the project out of the public accounts which may have been his attention all along but I suspect his Government will be grateful that a potential albatross around the neck has now been removed with sighs of relief all round. However the way this matter has been handled does raise questions, in particular whether the interested parties were misled while the Government sought to manipulate the situation to their advantage.
It would be nice to think that an investigation would reveal the sequence of events and the areas of ambiguity highlighted, not forgetting the disgraceful behaviour of two civil servants refusing to attend an Assembly committee to answer questions from our elected representatives. I suspect however that such truths will be the first casualty in the battle for Blaenau Gwent.
“It confuses me why Plaid Cymru consistently give blind support for suspect applications like the Circuit of Wales and the Swansea Bay Lagoon.”
I’ve been confused by this as well. Both projects have behaved in very strange ways and appear not to like scrutiny. I wonder why?
The Circuit was always a crazy idea. It never added up from a purely Motorsports perspective, let alone a business one. The fact it got this far before the Government has the courage to call time on it speaks to the level of ineffective decision making therein.
P.S: I don’t buy the logic that the Welsh Government is rubbish, therefore the only solution is to give it more power.