Politics

‘Fundamental flaws’ cost Welsh taxpayers

Published

7 years ago

February 11, 2016

FUNDAMENTAL flaws in the way the Regeneration Investment Fund for Wales (RIFW) was managed, overseen, and advised, cost Welsh taxpayers tens of millions of pounds, according to a National Assembly for Wales committee.

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 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 fulfill 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.

Members also agreed that, in light of South Wales Land Developments Ltd onward sales, the Welsh Government’s contention that it is not possible to demonstrate that the sale was under value, is unconvincing, pointing to the following as evidence (overage is an agreed sum of money to claw-back in addition to the sale price if the buyer meets certain conditions):

The Rhoose site was purchased from RIFW for less than £3 m, without overage, and sold on by SWLD for nearly £10.5 m;
The Abergele site was purchased from RIFW for £0.1 m, without overage, and sold for £1.9m.
Lisvane, near Cardiff, was / is the ‘jewel in the crown’ and should have been disposed of via a properly marketed open and competitive sale process. The Committee believed it incomprehensible that this was sold to SWLD at an agricultural land value of £1.835 million (even with overage) when its potential open market value for residential housing is at least £39 million.

“The Public Accounts Committee’s inquiry into the Regeneration Investment Fund for Wales (RIFW) has been one of the most significant and deeply troubling inquiries undertaken by the Committee,” said Darren Millar AM, Chair of the Public Accounts Committee.

“The fact that one of the largest sales of publicly owned land in Wales should have generated tens of millions of pounds more for the taxpayer than it did, is inexcusable.

“While the Committee found the concept of RIFW to be innovative, we concluded that it was poorly executed due to fundamental flaws in Welsh Government oversight and governance arrangements, and that the Fund was poorly served from those appointed and trusted to provide the Board with professional advice and expertise.

“It is regrettable that many of the flaws we identified are consistent with issues this Committee has considered during previous inquiries.”

The Committee makes 18 recommendations in its report including:

The Welsh Government must strengthen monitoring and oversight arrangements of its arms-length bodies and, in particular, ensure that any concerns are swiftly identified and escalated internally;
That measures are put in place to ensure that Board Members have the appropriate expertise and capacity to fulfil their duties and receive adequate and appropriate induction training, and;
The Welsh Government should ensure that robust overage arrangements are considered whenever it disposes of public assets that possess future development potential.

The Regeneration Investment Fund for Wales (RIFW) was established in December 2009 in response to the constrained financial climate which restricted access to capital for investment in regeneration in Wales. RIFW was created as a Limited Liability Partnership (LLP) wholly-owned by the Welsh Government. RIFW’s purpose was to invest £55 m initially in urban regeneration schemes across Wales, comprising £25 million of European Regional Development Fund (ERDF) and £30 m of Welsh Government funding. The Welsh Government provided RIFW with £9.4 m cash, and a portfolio of 18 land and property assets valued in existing use at £20.5 m , based on a valuation commissioned by the Welsh Government.

News

Hundleton: Less houses means £9k community payment reduction

Published

3 days ago

March 20, 2023

Bruce Sinclair Local Democracy Reporter

A CALL to reduce the amount of community payments connected to the development of a Pembrokeshire housing estate by more than £9,000 was given the thumbs-up by county planners.

The request to reduce payments made in connection with a Section 106 community payments agreement was made after the developer built less homes than previously planned.

The Section 106 agreement required financial contributions to secondary education provision, public open space, transportation and affordable housing, in relation to the building of 32 dwellings at the Bowett Close site in Hundleton.

Members of the March meeting of the county council’s planning committee heard 29 homes had been built by applicants WH & NL Developments, with a recommendation the commuted sum – relating to an initial 2014 planning application and a later 2021 application for a lower number of homes – be reduced to reflect the lower number.

The 2021 application had sought to regularise changes to the earlier scheme, reducing the number of properties on-site.

A report for planners said the applicant sought to reduce financial contributions proportionately, seeking an affordable housing contribution drop of £7,631.25 to £73,768.75, a drop in the highways contribution of £562.50 to £5,437.50; a secondary education contribution reduction of £1,054.17 to £10,190.31 and a public open space contribution reduction of £685.68 to £6,628.24, which would lead to a total reduction of £9,933.60.

The report said the reductions in all but the highways aspect could be supported.

“With regard to the highways contribution of £6,000, this figure was required in connection with the impact the housing development would have on local highways infrastructure.

“A reduction in the number of dwellings would not significantly reduce the impact of the development on local highways infrastructure as a development of 29 dwellings still requires a basic level of infrastructure such as footway links.”

Members of the committee supported the recommendation to lower the contribution, with the total reduction amounting to £9,371.10.

News

No affordable housing contribution for holiday lets at Fishguard restaurant

Published

3 days ago

March 19, 2023

Bruce Sinclair Local Democracy Reporter

A NEW restaurant on the site of a disused former garage site in Fishguard’s Lower Town will avoid paying a £15,000 affordable housing contribution if its three associated apartments stay as holiday lets.

The application in the town’s conservation area, submitted by Orwell Pine Co Ltd, for the restaurant/café and three apartments was recommended for conditional approval, subject to the completion of a Section 106 legal agreement, and conditions including the implementation of flood mitigation measures.

A report for members of Pembrokeshire County Council’s March 14 planning committee said: “The application submission proposes residential apartments for the open market.

“The applicant has advised that this is in order to obtain development funding on the wider lending market. However, the intention is for the three apartments to be used as holiday let accommodation.

“Accordingly, the applicant is of the view that a financial contribution towards affordable housing should not be required of the development and requests that it be recognised that the proposal, inclusive of the [business] use, represents a large investment to support local employment, bringing a continued inward investment to the visitor economy, whilst enhancing the conservation area.”

In the absence of an assessment providing evidence that it would be unviable for the development to proceed, policy normally requires a 10 per cent contribution to affordable housing.

This would amount to £15,262.50 for the three properties.

Fishguard & Goodwick Town Council support the application, subject to the prevention of new developments being used at any time as holiday lets.

The report for planners states: “Given the intention is for the units to be occupied as holiday lets it is considered reasonable that a recommendation of approval be subject to a Section 106 agreement, only triggering the required affordable housing contribution should the units be occupied as residential (Use Class C3), there being a permitted development right for properties to move between the C3, C5 and C6 use classes.”

At the March planning meeting, agent Rob Howell said the application offered “an exciting opportunity to bring more to Fishguard and Lower Town,” adding it would bring “year-round employment for local people as well as additional seasonal employment.”

Committee Vice-Chair Cllr Jordan Ryan, who moved the recommendation, said it was a “currently unused site that doesn’t look very nice”.

The application was supported by committee members.

Speaking after the meeting, a spokesman for Pembrokeshire County Council said: “A contribution towards local needs affordable housing will only be required of the development if it is occupied as a sole or main residence.

“If once constructed the apartments are occupied as holiday lets then a contribution is not required.”

“It is permitted to change the use of a residential unit between a sole or main residence (Use Class C3) and a holiday let (Use Class C6) without the need to submit a planning application.

“Following construction of the development, should the apartments first be occupied as holiday lets and then later be used as a sole or main residence this change in use would trigger the requirement to contribute towards affordable housing.”

News

Chancellor delivered a ‘less than bare minimum Budget’ – Welsh Government

Published

1 week ago

March 15, 2023

Tom Sinclair

THE CHANCELLOR’S Spring Budget has fallen well short of providing the support people need during the cost-of-living crisis, Finance Minister Rebecca Evans said today (Mar 15).

She said the Chancellor made a series of deliberate choices to prioritise “petrol and potholes” over investment in public services, pay and economic growth.

And although the Office for Budget Responsibility today set out a positive forecast for inflation to fall back from its record high levels by the end of this year, its analysis shows that living standards are expected to fall by 6% between 2021-22 and 2023-24 – the largest decrease since records began.

Responding to the Budget, which will provide Wales with an additional £178m of funding over two years, Finance Minister Rebecca Evans said:

“Today we saw a less than bare minimum Budget, which misses the big picture, at a time when people’s financial situations are worsening.

“It fell short of providing meaningful support – there were sticking plasters when we needed significant action. Potholes and petrol took precedence over pay rises for teachers and NHS staff.

“Critical public services which we all rely on continue to face devastating cuts – there was no extra funding for health, social services or local government.

“The decision to maintain the energy price guarantee for a further three months will provide some comfort for people in this ongoing cost-of-living crisis and is something we have been consistently calling for.

“We have also been calling on the UK Government to make Universal Credit fairer and for energy companies to stop penalising people on prepayment meters. We have seen small steps in the right direction in these areas.”

She added:

“The Chancellor today made some big and long-term commitments on childcare in England. We are already rolling-out a phased expansion of our childcare offer to two-year-olds as part of our Co-operation Agreement with Plaid Cymru.

“We will consider how best to use the consequentials from this announcement as a Cabinet, to best meet the needs of people in Wales.

“But we need to be really clear: this Budget does not go far enough in addressing the very real challenges people are facing.

“The Chancellor had the financial levers and capacity to provide comprehensive and meaningful support, as well as to invest in public services, public sector pay and economic growth. What we have seen today has unfortunately fallen short.

“It was also disappointing to see the lack of specific investment in Wales. The Chancellor did not take advantage of the investment opportunities in rail, research and renewable energy.

“We will be carefully analysing the detail of the announcements made today and will be providing more information about what they mean for Wales in the coming days and weeks.”