South Wales Land Developments deal: Auditor general steps up probe

The spending watchdog the Wales Audit Office has stepped up its investigation into the sale of publicly-owned land worth more than £20m to a company in Guernsey.

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The public spending watchdog has stepped up an investigation into the sale of publicly-owned land worth more than £20m.

Sixteen parcels of land dotted around Wales were bought by a company based in Guernsey.

The auditor general for Wales, Huw Vaughan Thomas, said an initial probe raised a number of questions that warrant further in-depth investigation.

The Welsh government declined to comment.

The land was bought for about £21m by South Wales Land Developments Ltd in March.

It was bought from a public organisation which operates at arms length from the Welsh government called the Regeneration Investment Fund for Wales (RIFW).

'Claw back'

Land near Cardiff was sold weeks before a council report on potential housing sites which could boost its value.

Start Quote

This study will be seeking to answer the question 'was the disposal handled in a way that ensured good value for money?'”

End Quote Huw Vaughan Thomas Auditor general

The Welsh government says the sale included "claw back" arrangements in case the land rose in value.

The claw back contracts mean the taxpayer will share in any large increase in the price of the land due to planning decisions.

The Welsh government has refused to say what those claw backs are, but industry sources say it is not normally higher than 50% in deals of this type.

Initially, the auditor general began an investigation and included it in his ongoing audit of the Welsh government.

But Mr Thomas said the initial investigation had "identified a number of questions and concerns which I now consider warrant further in-depth audit investigation".

"I have therefore determined to undertake a value for money study into all aspects of the sale of these assets by RIFW.

"In broad terms, this study will be seeking to answer the question 'was the disposal handled in a way that ensured good value for money?'"

He added: "As is usual with my value for money studies, I intend to present my findings to the Public Accounts Committee in the form of a published report."

Property portfolio

A spokesman for the Welsh government said: "As a Wales Audit Office review is under way it would be inappropriate to comment at this stage."

When BBC Wales originally reported on the Wales Audit Office investigation earlier this month, Langley Davies, who is managing the property portfolio on behalf of South Wales Land Developments Ltd, said there was significant claw back, but would not say how much, or at which sites.

Mr Davies said at the time with reference to the timing of the sale of the Lisvane land that talks had begun about a year before the sale was completed.

At that stage, he said, the intentions of the council about future building projects were unclear.

Mr Davies has called it a long term project which should "bring much needed commercial activity within the property sector in Wales".

He also said earlier this month that there had been little activity at the sites to create jobs or business, and he felt their purchase was "a positive for business".

He said the company "appears committed to the regeneration of some of the assets within the portfolio and bringing other currently redundant assets into the development process" with spending of more than £1.5m for the Welsh economy.

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