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Welsh Government’s decision to purchase property for £1.6 million ‘flawed’

June 14, 2012 12:25 PM

Aled Roberts AM has responded to the Wales Audit Office's report that has called the Welsh Government's decision to buy a property for £1.6 million 'flawed'.

The report has stated that the Welsh Government's decision to buy the former River Lodge Hotel in Llangollen in 2007, for £1.6 million, and subsequently to enter into a lease agreement with an organisation known as Powys Fadog, was "flawed and did not represent good value for money."

The report makes clear that:

  • Since purchasing the property for £1.6 million, the property has cost a further £200,000 on maintenance, security and business and water rates
  • Evidence suggests that the Welsh Government paid more for the property than it was worth
  • The purchase price of £1.6 million was not supported by a full valuation
  • At the time of purchase, the Welsh Government had not undertaken a robust assessment of risk.
  • The Welsh Government did not put in place effective measures to mitigate a conflict of interest - despite the fact that a Welsh Government official who was handling the project had a significant personal interest in the Powys Fadog project
  • Five years on from its acquisition, the property is still vacant and has become derelict.

Aled Roberts, Welsh Liberal Democrat member of the Assembly's Public Accounts Committee, commented:

"This is a shocking report that includes a damning conclusion regarding the Welsh Government's dealings with this particular property.

"Following this report, there is evidently a need for the Public Accounts Committee to look at why the governance arrangements with the Welsh Government were so clearly defective.

"As the report states, there was clear legal advice given to the then Labour-Plaid Welsh Government that raised significant concerns regarding the purchase of this property, yet former Government Minister's allowed delegated decisions to be taken which has ultimately cost the taxpayer a whopping £1.6 million. It is astonishing that these decisions were allowed to be made at such arms length when over a million pounds of public money was on the line.

"I welcome the Wales Audit Office's report and would hope that all of those individuals involved in this case would take the opportunity to give evidence in front of the Public Accounts Committee to ensure that this costly mistake can not be allowed to happen again."