Wales land deal leaves taxpayers £15m short

A Welsh government spokesperson said there were conflicting valuations

A report into the largest sale of publicly-owned land in Wales in recent years found it should have generated at least £15m more for the taxpayer.

Sites were sold as one portfolio by the Regeneration Investment Fund for Wales (RIFW) for £21m three years ago.

But the District Valuer, in a report by the Wales Audit Office, valued them at £36m if they had been sold separately.

Natural Resources Minister Carl Sargeant defended it as a "brave" move taken at a time of financial crisis.

Auditors also said there were flaws in the sale process and weaknesses in the advice to the RIFW board, in particular from the property consultants Lambert Smith Hampton.

Land sites in the spotlight

• Imperial Park, Newport

• Lisvane, Cardiff

• Llantrisant Business Park

• Upper House farm, Rhoose

• Goetre Uchaf farm, Bangor

• Llanfairpwll, Anglesey

• Wrexham Industrial Estate

• Ty Draw Farm, Pyle

• Mayhew foods site, Aberdare

• Wonastow Road, Monmouth

• Towyn Way East, Towyn

• Pen y Bryn, St Asaph

• St Georges Road, Abergele

• Llandudno Junction

• Brackla Industrial Estate, Bridgend

Six of Wales' biggest public money blunders

It also said some parties involved in the deal had relationships with the buyer and seller that could have given rise to potential conflicts of interest.

RIFW, which is a wholly-owned subsidiary of the Welsh government, sold the land to a company based in Guernsey called South Wales Land Developments. The proceeds were designed to be used to invest in regeneration schemes.

The report said: "Due to flaws in the way RIFW was established, in the selection of assets and also in the sale process itself, neither RIFW nor the Welsh government are able to demonstrate that value for money was achieved from the portfolio sale transaction."

The sites varied from former industrial land to more than 100 acres (40 hectares) of valuable farmland earmarked for housing on the edge of Cardiff.

'Best interests'

They were sold at a time when the potential value of many of the sites was increasing as local authority planning blueprints were being changed to allow more housing.

Conservative AM Darren Millar, chairman of the assembly's public accounts committee, said: "This is certainly the biggest potential loss to the taxpayer that I've seen in my time as chair of the public accounts committee and I've been chairing it for a good number of years."

Responding to an urgent question in the Senedd on Wednesday, Mr Sargeant told AMs: "At a time when the UK was in financial crisis we were very brave to bring forward a programme collectively to look at major investments for the people of Wales. Building the economy was something we were keen to pursue."

He said there were "some issues that we need to respond to" in the Wales Audit Office report, but said the alternative valuation of the land was "an assumption".

Earlier, a Welsh government spokesperson said: "The valuation evidence from the District Valuer also needs to be considered alongside conflicting valuations in their report and the circumstances facing the fund in early 2012, when economic prospects were very uncertain.

"While the Wales Audit Office finds that the RIFW board acted reasonably in the circumstances and given the advice they received, we would consider taking legal action to recover any loss should there be clear evidence of RIFW's land assets having been sold at undervalue."

A spokesperson for Lambert Smith Hampton said: "We acted in good faith and in RIFW's best interests at all times.

"We secured a good price for the sale of the assets, in accordance with the brief we were set."

Week in Week Out, The Big Welsh Land Scandal? BBC One Wales, Wednesday 15 July at 22:35 BST