Wales politics

Incompetence does not explain timber sales scandal say AMs

forestry in Wales Image copyright Thinkstock
Image caption The timber sales scandal at Natural Resources Wales is 'inexplicable', AMs say

Incompetence alone does not explain why Natural Resources Wales repeatedly sold publicly-owned timber without going to the open market, AMs have said.

Auditors revealed in the summer that the quango sold wood without tendering it, repeating behaviour it was criticised for only months before.

In a new report, the assembly's Public Accounts Committee said decisions made by staff were "inexplicable".

NRW said it will get to the "root cause" of what took place.

The organisation, which is funded by the Welsh Government, has had its accounts criticised by the Wales Audit Office three years in a row over the timber contracts.

It is the second time the committee has criticised NRW over timber sales.

What went wrong?

The saga began in 2014 when NRW gave a single company, BSW Timber, a 10-year-deal worth £39m set up to help deal with diseased wood.

NRW did not ask any other company, and was subject to a damning report in March 2017 by the Wales Audit Office.

It warned the deals may not have complied with EU law on state aid..

Despite the report, months later the quango established 59 new contracts without a tender to three firms, including BSW Timber.

Image caption Natural Resources Wales manages Wales' public woodlands

The newer deals were struck to cope with the fallout of the end of the original 2014 agreement, which was scrapped after the firm failed to build a new saw line that had been contractually promised.

In both cases the auditor general was unable to say whether the deals were lawful.

All the deals were sold at below the market rate - and the failed 10-year agreement lost taxpayers £1m.

What does the committee say?

"The decisions made by experienced staff at NRW are inexplicable and it is difficult to view these actions a result of incompetence," said committee chairman and Tory AM Nick Ramsay.

He said earlier concerns were disregarded and the subsequent actions of NRW "appear to defy logic".

"We can only conclude that we will never fully understand or have an explanation for what happened," he said.

NRW's own policies state that the sale of timber should be done on the open market, except in exceptional circumstances.

Image caption AMs said the collapse of the original deal was "eminently forseeable"

But the report argues that the collapse of the deal was "eminently forseeable", and it is likely that NRW knew the saw line was not being constructed but took no action.

AMs found it "difficult to comprehend why NRW would reward" BSW Timber, and found decisions to award the deals were not reported to the organisation's board.

Signed contracts could not be supplied for all deals, while some were authorised by staff that were not authorised to do so.

The report said: "The structure in place appears to have enable executives to take the law into their own hands against no oversight from the board, no formal intervention from the chief executive and the Welsh Government unaware."

What happens now?

NRW has promised "a full and independent review" by auditors Grant Thornton, and said it fully accepts the committee's recommendations.

Image caption Clare Pillman said she is determined to get to the root cause of what happened

AMs called for the review to be made public and for the Welsh Government to commission its own investigation if the review is insufficient.

Chief Executive Clare Pillman, who was not in the job at the time of the sales, said: "These are serious findings and I am absolutely determined to get to the root cause, address the issues and see an improvement in next year's audit."

Conservative environment and rural affairs spokesman Andrew RT Davies said: "When a public body like NRW so flagrantly breaks the rules there must be consequences.

"As the Welsh Labour Government created this quango it must now take responsibility.

"Regrettably, Natural Resources Wales has been mired in scandal and today's alarming report reinforces the view that the organisation has spiralled out of control."

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