§ Mr. SweeneyTo ask the Secretary of State for Wales whether he has received the report on the Welsh Development Agency's action in relation to the development of certain sites in the Cynon valley.
§ Mr. RedwoodThe Welsh Development Agency commissioned an inquiry, undertaken by Grant Thornton, into the actions of the agency in connection with the 515W development of sites in the Cynon valley, Mid Glamorgan. These arose from the establishment of a joint venture board in 1991 comprising the WDA, Cynon Valley borough council and Mid Glamorgan county council. I have received a copy of the report from the chairman of the agency.
The report notes that the inquiry team was granted full access to the agency and Welsh Office papers and also to those of a number of other organisations. It concludes that there is no evidence of improper pecuniary gain or collusion by any of the parties. It concludes, too, that conflicts of interest which arose were properly declared and dealt with by agency board members. But the report identifies weaknesses in the agency's procedures and serious lapses in management control over its joint venture activities. It also questions whether value for money was secured.
The agency chief executive has informed me that he is sending a copy of the Grant Thornton report and the agency's response to the recommendations to the Chairman of the Committee of Public Accounts. I note the comprehensive remedial action contained in the response of the new management and I will be discussing the report's findings and the proposed measures with the chairman. The chairman of the agency agrees with me that the former management's conduct fell short of the standards we expect.
The report examines a number of transactions which also involve Cynon Valley borough council. The council did not allow Grant Thornton access to certain papers, but I hope that those concerned will study the report carefully and, where appropriate, carry out their own investigation of these matters. It would, of course, be for the district auditor to respond to any requests for an inquiry into the council's activities.
The chief executive as accounting officer has also informed the Chairman of the Committee of Public Accounts about other matters which the new management of the agency has been investigating which go back many years. These concern redundancy and pension payments, the underwriting of share issues, the engagement of consultants, procurement issues and breaches of delegated authority. Some of these instances of non-compliance continued until earlier this year.
I have considered the agency's past underwriting activities. The agency has not engaged in underwriting or sub-underwriting since 1991 and has no plans to do so. In my view, however, this is no longer an appropriate role for the WDA, even in relation to Welsh-based companies, and I have so informed the board.
The chairman has assured me that he will continue to investigate and expose all instances of non-compliance which the agency can identify, however long ago they might have occurred, and to continue to act swiftly wherever necessary to bring agency practice and procedures in line with the proper stewardship of public funds. The new management of the agency understands the standards which I and this House expect of it. The chairman has also assured me that he and his senior management team attach the highest importance to open communication between the agency and my Department.
A copy of the Grant Thornton report and the agency's response to the recommendations have been placed in the Library of the House.