Wales agency acts on critical report

THE WELSH Development Agency yesterday moved to prevent a recurrence of irregularities highlighted in a Commons report into the agency three months ago.

Three executives at the WDA have been disciplined and Philip Head, the chief executive, has resigned. David Rowe-Beddoe, the WDA's chairman, said he accepted all 43 recommendations of an internal inquiry into the findings of the Commons Public Accounts Committee report published in July. He was now overseeing a reorganisation of the agency and tightening procedures.

Among the irregularities exposed by the committee were unauthorised redundancy payments, free petrol for private trips by senior directors, the appointment of a convicted fraudster as marketing director and 'Operation Wizard', the use of more than pounds 800,000 of public money to fund an investigation into the agency's possible privatisation.

'The agency's failure to uphold the necessary standards of probity and accountability is greatly regretted,' Mr Rowe-Beddoe said.

Michael Henry, the WDA's executive director, corporate services, was leaving immediately; a second director, Ian Rooks, was moving job and a third, Alun Daniel, was officially reprimanded.

In a Commons statement, John Redwood, Secretary of State for Wales, welcomed the move. He assured MPs he would not be restricting the WDA budget and its work in attracting investment for Wales would continue. But he refused to concede to Opposition demands that Gwyn Jones, the former WDA chairman who left the agency just before the PAC presented its report, should also stand down as the BBC's national governor for Wales.

Standards at the WDA, he said, had fallen 'well below' those MPs had the right to expect. The blame, he said, lay with the WDA, not his predecessors at the Welsh Office.

But Mr Redwood and the Treasury, which also released its own response to the PAC yesterday, angered MPs by stopping short of attacking Operation Wizard. The Treasury said no accounting rules had been breached.

Rhodri Morgan, MP for Cardiff West, said he did not see why the taxpayer should pay for 'a punt on the benefits of privatisation' by WDA staff for which there was no parliamentary authorisation.

The WDA was one of several recent PAC reports dealt with by a Treasury minute yesterday. These included the competition for the provision of Ministry of Defence support services, where the Government accepted there had been deficiencies in record keeping. Another was malpractice at the Forward Civil Service catering division which the Treasury said had cost pounds 900,000, where disciplinary action is still proceeding.