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Report into binned Populous racetrack blasts ‘inexplicable’ funding decisions

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Welsh assembly members have slammed ‘inexplicable decisions’ by the Welsh Government over the ill-fated £430 million Circuit of Wales racetrack designed by Populous

A report by the Welsh public accounts committee into the funding of the now-collapsed project said it was ‘deeply concerned’ about the government’s approach, claiming it had made ‘misleading statements’ about the funding given to the scheme.

The Circuit of Wales was granted planning permission back in 2013 to build a racetrack in Blaenau Gwent, south Wales, which would be used to hold the British Moto GP.

But last July the scheme was effectively ended after the government rejected a plea for £210 million in public funding by the project’s developer, the Heads of the Valleys Development Company (HoVDC).

The Welsh Government had provided more than £9.3 million to support the track’s development up until that point.

The committee’s report raised several concerns about the robustness of the government’s decision-making process and its record-keeping around the scheme.

One concern related to HoVDC’s use of taxpayer money to fund the acquisition of a Buckingham-based motorcycle company.

In 2012 the government provided HoVDC with a £2 million property development grant. The developer used £300,000 of this to acquire motorcycle firm FTR, which has since gone into administration.

The report said there was weak justification for including the FTR acquisition within the property development grant, and that spending £300,000 of public money on the purchase proved ‘no value for money whatsoever’. 

It also claimed the Welsh Government issued ‘incorrect and misleading press statements’ on the support given to the acquisition.

According to the report, there was a lack of evidence that key decisions such as the purchase of FTR had received ministerial approval. 

The report found that officials had failed to inform the economy secretary of key information surrounding the scheme, and questioned how the government communicated its reasons for rejecting HoVDC’s funding plea.

It said: ‘The suggestion that the cabinet decision was based primarily on a technical accounting matter does not reflect what the committee understands was a comprehensive due-diligence appraisal of the Circuit of Wales project’s merits, and may itself have needlessly undermined public confidence in the Welsh Government’s decision-making process.’

Public accounts committee chair Nick Ramsay said the government ‘was right to explore’ the possibility of supporting the Circuit of Wales, but said there were significant shortcomings in its handling of the scheme.

He added: ‘The Welsh Government made some inexplicable decisions during its initial funding of this project, such as authorising payment for the purchase of FTR as part of the property development grant intended to buy land in Ebbw Vale.

‘We certainly do not expect to see any recurrence of the basic errors, omissions and poor judgements on the part of officials that have come to light as a result of our work.’

A Welsh Government spokesman said: ‘We welcome this public accounts committee report on the Circuit of Wales and will now fully consider the detail before formally responding.

‘We have already recognised that there are lessons to be learnt from elements of the Welsh Government’s handling of this project and have put in place new processes to address some of those issues.’

It had been hoped the project would have been finished in time for the UK’s Moto GP race in 2018, with the venue set to host the event until at least 2024.

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