6. Debate on the Public Accounts Committee report on The Welsh Government's initial funding of the Circuit of Wales project

Part of the debate – in the Senedd at 4:10 pm on 11 July 2018.

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Photo of Ken Skates Ken Skates Labour 4:10, 11 July 2018

Now, we have accepted all of the committee's recommendations on the initial funding of the Circuit of Wales, and hopefully I can demonstrate to the Chair today that I take those recommendations very seriously indeed. I'll identify a number of the recommendations that the Members have already touched on, and hopefully I can offer some further assurance.

First of all, the Chair pointed to recommendation 6. I would happily provide figures from within Government that were requested by the Chair of the committee. In terms of recommendation 13, let me put on record that we are not open whatsoever to the presence of a casino in one of the most deprived parts of the United Kingdom. There are a number of project promoters, as I think the Member is aware, many discussions have taken place—they are commercial in confidence—and the Rocksteady proposal is not the only proposal that is being considered.

Recommendation 3: now, the provision of the contract accords with common commercial practice, though officials will report back to the Public Accounts Committee once legal advice has been provided and we are able to ascertain the position of the escrow account. We have already recognised that there are lessons to be learnt from elements of the Welsh Government's handling of the project, that is for sure, and we have put in place new processes to address those issues.

We accept the need to strengthen our controls to ensure value for public money. Actions must be proportionate to the risk involved, as well as be clearly documented. For example, we have already implemented changes to the business finance grant application process. Applicants must— must—now clarify whether Welsh Government funds are to be paid to related companies for goods or services. An exercise is also being undertaken to consider our controls to ensure value for money in more detail, and consideration will be made of the processes that can be put in place to ensure that complex projects demonstrate value for money where activities are procured. It must be noted that appropriate proportionate due diligence will be undertaken on any related companies identified at the application stage. And, with the launch of the new economy futures fund, all guidelines for officials have been refreshed, and the risk guidelines have been updated. We've also updated our internal guidance to ensure that all relevant information that might be considered novel, contentious or repercussive is included in ministerial advice provided as part of the approval process. We also accept that more work could have been undertaken at the appraisal stage of the project before including the purchase of FTR within the property development grant's eligible costs. In order that lessons are learned, the purchase of FTR will be developed into a case study for use at internal training sessions.

Now, guidance on risk weighting of projects of this nature is set out in Eurostat's manual on government deficit and debt, produced by Her Majesty's Treasury and the Office for National Statistics. Now, I recognise that there is merit in this guidance being made clearer. So, to that end, we will engage with others in the UK and with the statisticians to urge them to continue the process of clarifying and simplifying the classification rules. Formal decision making on classification clearly rests with the statisticians at the ONS and Eurostat. The ONS process is a process we have used successfully on a number of occasions, when Ministers have been minded to proceed with a particular course of action. While I believe that our internal processes are robust, I recognise that these processes could be improved. I also recognise that relationships between officials in Wales and their devolved and UK Government counterparts could potentially be better leveraged. I'm happy to commit to actions that will clarify those working relationships and processes.

Dirprwy Lywydd, Nick Ramsay warned during his contribution that corners risk being cut when the enthusiasm of politicians for certain projects becomes too intense. Some politicians remain strangely wedded to the proposal that was sadly rejected. But I would just have one final thing to say about major projects delivered in Wales: saving Cardiff Airport; the arrival of CAF; Aston Martin Lagonda; the Advanced Manufacturing Research Institute, with a contribution of £4 billion to the local economy; the £5 billion new rail franchise, which has been lauded across the UK; the compound semiconductor cluster; the International Convention Centre Wales—all of these are huge projects being delivered by this Welsh Government.