Circuit of Lies

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 14^th 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 26^th 2016, confirming Aviva’s assertion. And yet speaking in Ebbw Vale on April 11^th 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 15^th 2016.  Unhelpfully for the Government I was able to point to an email from a senior Welsh Government civil service dated April 7^th 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 26^th 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.