THE WELSH GOVERNMENT has settled a claim against its former advisors about land sales which took place under a purported regeneration scheme.
The Regeneration Investment Fund for Wales (RIFW) had issued proceedings against Amber Fund Management and Lambert Smith Hampton concerning the portfolio sale of 15 properties in 2012.
The settlement has been reached on a commercial basis and without any admission of liability by any party.
The detailed terms have been incorporated into a confidential settlement agreement between the parties.
The Welsh Government Minister for Local Government, Julie James, said the £40.7 million tied up in the Fund can now be made available to support future investments across Wales.
RIFW was set up as an arms-length body by the Welsh Government to allow the Welsh Government to raise money which could then be used to fund regeneration and investments in Welsh businesses.
It was a complete shambles.
One of the advisors appointed had previous connections with one of the parties which bought some of the land at an undervalue.
Vital information was not relayed to the RIFW’s board by the Welsh Government and Board members were kept in the dark about transactions carried out in their name.
Under the oversight of their appointed agents and Welsh Government civil servants, RIFW sold publicly owned assets by private treaty and without prior valuation at a price that reflected the assets’ existing use, under sale terms that provided only limited protection to the public interest in their significant future development values, and via a negotiation process that left RIFW lumbered with undesirable assets.
The Chair of the Senedd Public Accounts Committee, Nick Ramsay MS, said: “The out of court settlement between the Welsh Government and the former advisors of RIFW effectively brings a curtain down on a very sorry and lamentable episode.
“The hasty sell-off of publicly-owned land at bargain-basement prices effectively deprived Welsh taxpayers of tens of millions of pounds which could’ve been used for essential services.
“We look forward to examining matters further with the Permanent Secretary and Head of the Welsh Government Civil Service, Shan Morgan, at our next meeting on Monday, November 23.
“We will be asking what robust steps have been taken to avoid history repeating.”
RIFW was set up as an arms-length body by the Welsh Government to sell off land around Wales including in north Wales, Monmouthshire and Cardiff, and use the money, in conjunction with European funding, to reinvest in areas in need of regeneration.
But the Public Accounts Committee found that the body was poorly managed, poorly overseen by the government, and that, because of a change in the direction of RIFW, from one of regeneration to property asset disposals, some of the Board members felt they lacked the necessary knowledge and expertise to fulfil their roles.
It also learned that the Board was not presented with key information regarding the value of the land in its portfolio, or of expressions of interest from potential buyers.
Fifteen plots of land, originally supposed to be sold separately, were instead sold as a single portfolio at a price which did not take into account potential use of the land in the future. This decision resulted in Welsh taxpayers missing out on tens of millions of pounds of funding.
The Committee learned that one of the organisations charged with offering expert advice to the Board, Lambert Smith Hampton Ltd, had previously acted on behalf of a director of the buyer of the land, South Wales Land Developments Ltd (SWLD), and signed an agreement to do so again one day after the sales went through.
The Committee concluded that the RIFW Board had been poorly served by its own expert advisors.
Angela Burns MS – Shadow Minister for Government Resilience and Efficiency – said: “The Fund was established to sell valuable packages of Welsh Government land, with the money used to support regeneration schemes. However, evidence has since emerged that shows that the sale of RIFW’s assets was undertaken at a loss of tens of millions of pounds. A loss which was borne ultimately by the Welsh Taxpayer and yet another example of the complete inability of this Labour Government to be fiscally prudent.
“Millions of pounds have been squandered, millions that could have been invested in our education and health systems or spent building Wales’ economy or supporting some of our more vulnerable citizens. It’s an absolute scandal and the real scandal is the Welsh Government can slide out of their responsibility for this debacle”
Included in the scandal are:
- Fifteen sites sold for £21 million; with the taxpayer missing out on staggering sums of money
- A site in Rhoose purchased from RIFW for less than £3m – sold on for almost £10.5m South Wales Land Developments Ltd. Taxpayers losing out
- An Abergele site purchased from RIFW for £100,000, without overage, and sold for £1.9million. Taxpayers losing out
- Land in Lisvane sold for £1.8million – worth £39million.
Welsh Conservatives also claim the Welsh Government has squandered £1 billion on other projects, including:
- £221m on uncompetitive Enterprise Zones
- £9.3m on flawed initial funding of the Circuit of Wales
- £97.9m on delays and overspend on the A465 Heads of the Valleys Road
- £157m on the M4 relief road inquiry
- Over £100m propping up Cardiff Airport
