Written Statement - Regeneration Investment Fund for Wales

The purpose of this Statement is to make an important announcement about the Regeneration Investment Fund for Wales (RIFW).  The Statement reflects work undertaken by my department working closely with the Wales Audit Office since Huw Lewis’ Statement to Members on 7 February 2013.  In that announcement Huw Lewis confirmed that the temporary pause that had been placed on the Fund’s investment activities in October 2012, following the announcement by the Wales Audit Office (WAO) that it was widening its value for money investigation into certain aspects of the Fund’s business, would continue.  The Statement in February also referred to two reviews to be commissioned by the Welsh Government and intended to complement the Wales Audit Office study.  One review looked at the Fund’s governance arrangements and the other was to examine the professional advice received by the Fund during the process by which the land assets originally vested in the Fund had been sold.  Both reviews were intended to generate evidence as to whether it would be appropriate for the pause on the Fund’s activities to be lifted.  

The work undertaken to date has not removed the concerns about the manner in which RIFW’s land assets were sold.  Because they were not sold on the open market there are complex questions about whether the sale of those assets achieved best value in the context of the business plan within which the Fund was operating at that time.  There are other aspects of the Fund’s early operations about which I have serious concerns which need to be addressed as part of the continuing work.  I will make a more detailed Statement on these once we have fully consulted the RIFW Board and the Fund’s manager, Amber.  The outcomes of our reviews will be made available to the WAO and the Auditor General will report in due course on his findings.  

My responsibility now is to determine immediate next steps.  Based on the advice I have received I have concluded that the current moratorium on the operations of the Fund must remain in place.  The continuing uncertainty this generates, together with the concerns raised by the emerging results of the various investigations, has damaged my confidence in RIFW as an effective conduit for regeneration finance and raises serious questions as to its future viability.  I have therefore instructed my officials to enter into urgent discussions with Amber to identify what options may exist to ensure that public regeneration funds can be channelled to viable projects in the RIFW pipeline in a timely manner, notwithstanding the moratorium that must remain in place on the Fund as it is currently constituted.

I have asked for this work to be completed by the end of August.  I will make a further Statement on the outcome when the Assembly returns after the recess.