Councillors ‘blindsided’ by £5.25m settlement for power station contract

Councillors charged with overseeing a regional super council say they were “blindsided” at a revelation it paid more than £5 million to settle a legal dispute. 

The £5.25m sum was paid to a company that brought a legal challenge to how the Cardiff Capital Region, which is made up of ten councils from across south east Wales, awarded a contract for the demolition of a former power station. 

Earlier this year a High Court judge declared the contract to demolish Aberthaw Power Station for the Cardiff Capital Region was awarded unlawfully, but the size of the settlement was only revealed in June – and a councillor said he only learnt about it from news reports. 

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Councillors who sit on the region’s overview and scrutiny committee, who met this week, complained they hadn’t been fully informed of the proceedings, and accepted they had failed to properly scrutinise the region’s leadership and its executive. 

Armand Watts, a Labour councillor from Monmouthshire Council, told the meeting: “There’s nothing worse as councillors than the feeling of being blindsided. That is how we felt. The first I properly understood this was reading about it in the newspapers.” 

Cllr Watts said it was “embarrassing” for himself and Monmouthshire’s Conservative representative on the committee, Cllr Jan Butler. He said: “People were saying what’s going on? And we didn’t know as we hadn’t discussed it.” 

He added: “We should fear our electorate, they are reading headlines in newspapers and asking how did it ever get to this point?” 

Susan Lloyd-Selby, a Labour councillor for the Vale of Glamorgan which includes Aberthaw, said she wanted to know more about the independent review the region has commissioned and said there are also local concerns around the ongoing demolition work – which she said were causing “reputational issues” for the body. 

Cardiff Labour councillor Peter Wong said he’d been unhappy from the start with how the region had handled the £38m purchase of the former coal fired power station, in 2022.

The Aberthaw plans, to develop the site as a renewable energy park, are being done through Cardiff Capital Region Energy – a limited company in which the Cardiff Capital Region is the only shareholder. 

Cllr Wong said: “At the very first meeting at Aberthaw I asked can we see the business case and was told no, not even in confidence. That didn’t help the level of transparency. 

“I’m not saying that wouldn’t have led to the issues at Aberthaw but that lack of transparency doesn’t help. I genuinely think there needs to be more transparency and more effective scrutiny than we’ve currently been doing.” 

Later in the meeting Cllr Wong criticised the draft annual report of the South East Wales Corporate Joint Committee, which is the formal name for the capital region as one of four joint committees established across Wales. 

He compared it to the highly controlled decision making of the former Soviet Union and said: “I don’t think the report in front of us reflects what happened. It feels very much politburo stuff.” 

During the meeting Monmouthshire Council’s Labour leader, Mary Ann Brocklesby, who is the chair of the capital region, said the “procurement issue around Aberthaw” was “without question” the body’s “low point” of the year. 

Capital Region chief executive Kellie Beirne said the independent review is being conducted by accountancy firm Deloitte and is about “half way through” – and is expected to be delivered in the early autumn.

Ms Beirne also stated she isn’t a board member of Cardiff Capital Region Energy and also reminded members the legal proceedings were against Cardiff Council – and said the region is bound by a confidentiality agreement. 

It has previously said the £5.25m settlement has been funded from commercial returns on interest generated on balances it holds, and there was no requirement for further public funding.