Politics

Short Circuit for Wales

Published

8 years ago

July 7, 2017

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.

News

UK government boosts Port Talbot transition fund with extra £22m support

Published

7 hours ago

December 17, 2025

Tom Sinclair

AN EXTRA £22 million in UK Government funding has been announced to support workers and businesses affected by Tata Steel’s transition at Port Talbot, taking the total community support package to £122 million.

The funding uplift means the Tata Steel / Port Talbot Transition Board fund now stands at £102 million from the UK Government, alongside a further £20 million contributed by Tata Steel. Ministers say the additional money could help support up to 1,000 more jobs across the local economy.

Since July 2024, the Transition Board has already allocated £80 million to the Port Talbot area, funding thousands of training courses for individuals and helping nearly 200 businesses to start, expand, invest in new equipment and move into new markets.

The UK Government said the rapid deployment of the funding has helped prevent an increase in unemployment benefit claims during Tata Steel’s shift towards greener steelmaking.

Following strong demand for support, a further £22 million has now been allocated, extending the availability of Supply Chain, Business Start-Up, Resilience and Growth funding into 2026. The announcement was made on Thursday (Dec 18).

Secretary of State for Wales Jo Stevens said the government was determined to continue backing the community through the transition.

She said: “This government has acted decisively to support workers and businesses in Port Talbot, allocating the entire £80 million in initial funding quickly into the community to ensure that whoever needed support could access it.

“Grants have been delivered swiftly to meet the needs of local people, businesses and communities, and there is evidence that our approach is working. But we want to make sure that as many people as possible have continued access to support with the extra £22 million for local businesses into the new year.

“We said we would back workers and businesses affected by the transition at Port Talbot and are delivering on that promise.

“It remains a difficult time for Tata Steel workers, their families and the community, but we will continue to support them.”

Ms Stevens announced the funding increase during a visit to Port Talbot-based engineering firm JES Group, which has received Transition Board support. She also toured the JES Academy, which is providing training for dozens of former and current steelworkers.

Justin Johnson, Director of JES Group and The Skills Academy, welcomed the announcement.

He said: “I want to express our gratitude to the UK Government for establishing the original Transition Fund and for now having the foresight to increase the level of support at such a critical moment.

“This uplift will make a significant difference to supply-chain companies like ours. As Tata Steel transitions to electric arc furnace steelmaking, businesses like JES must transition alongside it, while also diversifying into new sectors to reduce reliance on what was once our core work.

“We believe the history of steelmaking in Port Talbot is far from over and that a brighter, greener future lies ahead, but while that future takes shape, diversification is essential.

“The journey has not been easy, and it is far from over, but this additional support creates real opportunities for stability and growth. I also want to recognise Business Wales and Neath Port Talbot Council’s economic development team for their guidance and practical assistance.”

The Transition Board was established to protect jobs and the local economy during Tata Steel’s move to greener steel production. Information on applying for support is available via the Tata Steel Transition Information Hub.

The UK Government has also committed £2.5 billion to rebuild and decarbonise the UK steel industry, with a national Steel Strategy due to be published in early 2026. This includes £500 million already allocated to Tata Steel for the electric arc furnace now under construction at Port Talbot.

Politics

Debate over single Welsh police force reignited amid merger reports

Published

8 hours ago

December 17, 2025

Chris Haines, ICNN Senedd reporter

THE PROSPECT of merging Wales’ four police forces into a single mega-force has resurfaced, as politicians scrambled to respond to reports of an overhaul of policing in the new year.

Adam Price raised reports that Home Secretary Shabana Mahmood is considering cutting the number of police forces in Wales and England from 43 to 12 through mergers.

The former Plaid Cymru leader told Senedd members the reforms would represent the “biggest upheaval” of police forces since the 1960s.

Warning the Welsh Government was not consulted on plans to scrap police and crime commissioners, he said: “No change should happen – a merger for example – without full Senedd scrutiny and a Welsh democratic mandate.”

Mr Price suggested an all-Wales model – merging the four police forces, similar to what happened in Scotland in 2013 – could have benefits but said governance would be critical.

During topical questions on Wednesday December 17, he argued a single police force would need to be accountable to the Senedd, with powers over policing devolved to Wales.

The MP-turned-Senedd member urged the UK Government to rule out any cross-border mergers involving a Welsh force being absorbed into an English one.

Responding for the Welsh Government, Jane Hutt described the widespread media reports as “unhelpful, unconfirmed speculation”. But she confirmed the UK Government is expected to publish a white paper in the new year.

Jane Hutt, secretary for social justice, trefnydd and chief whip

She committed to engaging with Sarah Jones, the UK policing minister, who was attending a meeting of the Welsh policing partnership board the next day (December 18).

Ms Hutt told the Senedd she has been assured the UK Government recognises the differing governance arrangements between Wales and England.

Conservative Altaf Hussain urged the Welsh Government to take the opportunity to abandon calls for devolving powers over policing and justice to Wales.

Dr Hussain said: “There is merit in having a single unified police force for England and Wales – if only to tackle dysfunctional forces like Gwent Police, who have allowed a culture of misogyny to persist amongst their officers and leaders.”

Ms Hutt suggested reforms would present a natural opportunity to consider the role of the Welsh Government and Senedd in terms of accountability for policing in Wales. She said the focus is on a phased approach, beginning with powers over youth justice and probation.

Jane Dodds, the Liberal Democrats’ leader in Wales, called for a clear timetable for the devolution of youth justice and probation. “We need more devolved powers,” she said.

Labour’s Alun Davies agreed, accusing UK ministers of putting Ms Hutt in an “invidious position” of responding to hearsay about a fundamental public service. He said: “This is the second time in two months… this simply isn’t good enough.”

Mr Davies criticised Labour colleagues in the UK Government for “clearly” not recognising calls for policing to be devolved and biting the bullet. “That needs to happen,” he said, adding: “It needs to happen as soon as possible.”

The former minister told the Senedd: “We certainly don’t want to see the nationalisation of policing that’s just been proposed by the Conservatives. We’ve never had a national police force in the UK – we don’t want one today.”

It was “groundhog day” for the Conservatives’ Mark Isherwood who reminded the chamber of the then-Assembly’s review of policing in 2005 when mergers were floated previously.

He said: “To recognise the regional cultural and geographical differences that exist within Wales, all agreed that Wales must be policed in regions.”

But Rhys ab Owen, who sits as an independent, argued Wales’ four police forces “make no sense at all” with Police Scotland showing a unified force can “flourish”.

Politics

Support for £27bn spending plans amid uneasy compromise

Published

9 hours ago

December 17, 2025

Chris Haines, ICNN Senedd reporter

THE SENEDD has backed the Welsh Government’s “imperfect” £27bn draft budget following a late deal to prevent a “catastrophe” for public finances.

The 2026/27 spending plans passed with 24 in favour, 13 against and Plaid Cymru’s 13 members abstaining as part of a near-£300m deal with the Welsh Government. Ministers will unveil the final budget in the new year before a further crunch vote on January 27.

But scrutiny committees warned inflation based on “outdated” forecasts could see real-terms cuts, criticising a lack of preventative spending and “business as usual” funding for culture.

Leading scrutiny on December 16, Peredur Owen Griffiths, who chairs the Senedd’s finance committee, sounded the alarm about inflation figures underpinning the draft budget.

He warned that while health and councils would receive uplifts, these were based on forecasts from March that are already outdated.

Calling on ministers to publish an assessment of inflationary pressures alongside the final budget, he said: “Some areas face real-terms cuts unless funding increases.”

The Plaid Cymru politician also urged the Welsh Government to develop a plan to close a “persistent productivity gap” compared with the UK average.

Peter Fox, the Conservative chair of the health committee, said the NHS initially faced a “historically low” uplift of only 0.5% in real terms before the deal was struck.

Mr Fox made a compelling case for extra funding for “vital” palliative and end-of-life care services as well as more money for respite care for unpaid carers.

While welcoming an extra £180m for health and social care, he warned of a system buckling under pressures in relation to waiting times, staffing and an ageing estate.

“It’s essential to balance these short-term demands with longer-term transformation,” he said, calling for assurances funding for prevention is not lost to immediate firefighting.

This sentiment was echoed by Delyth Jewell, the Plaid Cymru chair of the culture committee, who lamented that the arts sector faces another year of “more of the same” real-terms cuts.

She pointed out that spending on culture in Wales ranks among the lowest in Europe.

Llŷr Gruffydd, chair of the climate change committee, raised concerns about infrastructure, pointing to the transport secretary’s admission that Wales has the UK’s oldest bus fleet.

Mr Gruffydd also criticised cuts to biodiversity, noting a 3.9% fall in day-to-day resource spending and an 8% reduction in longer-term capital funding amid a “nature emergency”.

Meanwhile, John Griffiths, who chairs the local government committee, welcomed a minimum 4% increase for councils but warned “frustrations continue” over the funding formula, which relies on data from the 1991 census.

He said: “We remain concerned that local authorities are still in a vulnerable position and continue to face the prospect of council tax rises, service cuts and job losses.”

His Labour colleague Buffy Williams, chair of the education committee, warned ministers failed to publish a specific children’s rights impact assessment for the 12th year in a row.

Heledd Fychan, Plaid Cymru’s shadow finance secretary, defended her party’s decision to abstain, arguing rejecting the budget could have led to thousands of job losses, council tax rises of 22% and the “very real prospect of bankruptcy for some of our councils”.

“This was a budget that, if it was left unamended, would have proved catastrophic for Wales,” she said, dismissing suggestions Plaid Cymru was “propping up” Labour.

But her Conservative counterpart Sam Rowlands criticised the budget as a failure that “does nothing” to get Wales’ economy moving nor get to grips with long NHS waiting lists.

Reform UK’s Laura Anne Jones added that the “cosy arrangement” between Labour and “their little helpers” Plaid Cymru “smacks of a government that has run out of ideas.”

Reform UK's South Wales East MS Laura Anne Jones — Reform UK’s South Wales East MS Laura Anne Jones

Closing the debate, finance secretary Mark Drakeford insisted the budget deal was “good news for Welsh citizens” because the “catastrophe” of a failed budget has been avoided.

“We have secured that more ambitious set of outcomes,” he said, pointing to the £180m extra for health and social care as well as a £112m for councils as part of the deal.