Failed Coleg Harlech planning bill hit £450,000
A north Wales adult education college paid out £450,000 in planning consultancy costs for a project that may never be built.
BBC Wales has learned that Coleg Harlech in Gwynedd spent the cash on planning a new centre in 2008-09.
But capital funding for the Canolfan Cambria centre was never secured.
The college recently announced it has a funding shortfall of £900,000 - though it is stressed it is not linked to the historic consultancy costs.
Coleg Harlech said that the funds for the consultation costs for the Cambria Centre project came from private funds at the time.
End Quote Welsh government review of the Canolfan Cambria project
We were unable to form an opinion about the efficacy of the scheme from a financial or value-for-money perspective”
The college authorities also said they are working on a recovery plan to tackle its current debt shortfall.
Under consideration are staff reductions, selling land and art assets, and asking the Welsh government for a short term loan of £500,000, in an attempt to deal with the financial situation.
The details of the planning consultancy bill came after the college submitted a planning application in 2008 for the new centre on its Harlech campus.
It would have included the redevelopment of the Theatr Harlech, the development of an exhibition and conference centre, along with business units and student accommodation.
The following year, Snowdonia Park National Authority's planning department gave permission for the centre to be built.
However, the college authorities failed to secure Welsh government and European funding for the project - even though they had already invested heavily in the preparation of the planning application for the centre.'No business plan'
Accounts from the college filed with the Charity Commission in 2010 gave the frank details.
"The deficit in 2008/9 includes significant estate-related transactions carried out in pursuance of the Estates Masterplan for the Canolfan Cambria Centre: ongoing investment in Consultant Cost to progress the planning application (£450,000)," states the entry on the papers lodged with the commission.
But the future of the project received what appears to be a fatal blow when the Welsh government published a review in 2010 on the feasibility of the new centre, and funding arrangements for residential provision on the Harlech campus.
The report, published as the Hancock Report, concluded that there was no compelling case to make for providing capital funding for the centre.
According to the report: "We were advised that although the architect's plans were substantial, and the scheme would comply with all regulatory requirements, including the Disability Discrimination Act and planning permission, there was no business plan for this project.
"Consequently, we were unable to form an opinion about the efficacy of the scheme from a financial or value for money perspective."Funding threat
One Coleg Harlech lecturer who spoke to BBC Wales anonymously said he felt that questions need to be answered by the college as to why so much money was spent on a single planning application, and for a project which had not secured financial backing.
"I think everybody will be shocked - because it's such a massive figure," said the lecturer.
"Why are we spending this kind of money on external consultants? You wonder, don't you, how that contract could have been drawn up? Who drew the contract up? Who signed it off?
"I can't see how we can survive unless somebody takes on the debt - and that would mean merging with another college who is willing to take on the £900,000 debt - and I can't see that happening.
"It's just inexcusable isn't it? And inexplicable. Somebody should have had an oversight - they did not and those people need to be brought to account."
A spokesperson for Coleg Harlech told BBC Wales that the current financial situation was being investigated and that the college could not comment until those investigations had been concluded.
Following Coleg Harlech's recent announcement about its financial problems, Education Minister Leighton Andrews warned the college that he would consider suspending all further Welsh government funding for the institution from 1 April 2013.
This step would be taken, according Mr Andrews, if he remained dissatisfied with the action taken to address the financial issues at the institution or the financial and governance arrangements in place to safeguard public funding.