3 days ago
- Business
- Business News Wales
‘Basic Failings' Led to Welsh Government £1.6m Loss in Maritime Centre Funding
Audit Wales has highlighted 'basic failings' in the way financial support was managed for the Porthcawl Maritime Centre Project and says there are 'clear lessons to learn'.
In March 2016 and January 2017, the Welsh Government approved a total of £2.7 million of potential funding towards a new Maritime Centre on the Porthcawl harbourside. The £2.7 million was a mix of domestic Welsh Government match funding and European Regional Development Fund (ERDF) grant.
Credu Charity Ltd led the Maritime Centre project, although it had worked closely with Bridgend County Borough Council in its development.
Between May 2016 and March 2020, the Welsh Government paid out £1.6 million to Credu for the Maritime Centre project.
In August 2020 the Welsh Government withdrew ERDF grant funding from Credu and intended to recover all related grant payments. It did so amid concerns about rising project costs and progress with the project and its wider financing.
In November 2020 Credu went into voluntary liquidation and the Maritime Centre was not constructed.
Based on initial audit findings, matters relating to the Maritime Centre project and Credu's involvement in it were referred to South Wales Police. The police investigation concluded at the end of 2024, with no charges being brought.
With the police investigation complete, Audit Wales has been able to conclude its work and has now published a report.
It says that in its view the Welsh Government did not put proper arrangements in place to manage the risks associated with the Maritime Centre. If it had, it might have decided not to fund the project or, once funded, it would have identified that the project was failing far sooner.
The liquidation of Credu is ongoing, but it looks unlikely that the Welsh Government will recover any of its claim, says Audit Wales.
It said:
'Even when grant funders have robust arrangements to manage risks, it is likely some projects will fail. But clear warning signs and opportunities to prevent or reduce the likely loss to the public purse were missed.'
It adds that it found that a lack of clarity over roles and responsibilities between different parts of the Welsh Government – the Welsh European Funding Office (WEFO) and Visit Wales – contributed to ineffective monitoring and oversight.
Due diligence for the Maritime Centre project was not rigorous enough and was too late, with public money committed to a project that did not have full match funding in place and was high risk. There were also weak controls around the processing of expenditure claims, says Audit Wales.
Audit Wales is not making specific recommendations in this report. In part, it says, this reflects the time that has passed since the events described, while the grant funding landscape has changed following the UK's departure from the EU. However, there are clear lessons to learn from this case, it says.
The Welsh Government has taken action to address matters arising from Audit Wales' work since it shared emerging findings. This has included an internal audit review of other grant funded projects being overseen by Visit Wales at the same time as the Maritime Centre project. It has also included some further development of grants management guidance and processes for the whole of the organisation.
Auditor General, Adrian Crompton said:
'All grant funded projects involve an element of risk. But this is not the first time I, or my predecessors, have reported on weaknesses in the Welsh Government's management of its support to charities or private companies. While time has passed since the events described in this report, there were basic failings in this case and the lessons from it remain relevant today.'
