Welsh Government location strategy ‘delivered its objectives’

24 Mar 2014 - 5:01pm

But value for money uncertain and relocating posts was difficult, says Auditor General.

The Welsh Government delivered the objectives of its Location Strategy, and by April 2012 had relocated more than 550 posts from Cardiff to three new offices in Merthyr Tydfil, Aberystwyth and Llandudno Junction. But the overall value for money from the Location Strategy Programme is uncertain, according to a report published today by the Auditor General for Wales.

Although the Welsh Government delivered the new office buildings to the expected quality and within contracted costs, the buildings cost more than had been originally estimated in the business cases. Also, the Welsh Government did not give enough consideration to alternative accommodation options, robust estimates of programme costs were lacking and it is not monitoring all of the Programme’s continuing benefits.

The Location Strategy report in 2002 aimed to decentralise services from Cardiff and bring them closer to the people of Wales. The Programme to deliver the strategy was completed in December 2011, nearly ten years after it started, at a cost of £91.5 million and, at no stage was there a reassessment to confirm that the construction of three regional officers remained the best option.

Today’s report found that, while the Location Strategy had clear objectives, the Welsh Government did not establish effective governance over the Programme until 2008. It concludes that fewer employees have relocated from Cardiff to the new offices than had been planned, partly because the programme was delivered during a period of significant change. This included the merger of four Welsh Government Sponsored Bodies into the Welsh Government in 2006 and the loss of more than 1,000 staff through voluntary severance schemes between 2008 and 2012. There were particular difficulties in relocating posts to Aberystwyth and Llandudno Junction.

Auditor General for Wales, Huw Vaughan Thomas said today:

The Welsh Government’s Location Strategy has delivered some clear benefits including efficiency savings, a good working environment for staff who have relocated, and economic benefits to the Welsh economy. But, the Welsh Government is unable to demonstrate the overall value for money from the Programme, largely because of weaknesses in the way it was managed before 2008

The project has provided a range of benefits, including to staff, the public and the environment. In 2011, Bangor University estimated that the net economic impact of the Programme was more than £150 million over the period from the start of construction to 2015. However, this estimate did not take into account the negative economic impact in locations where staff had transferred from.

Other benefits include rationalising the Welsh Government’s estate, which has reduced by 60 per cent, to 41 properties. In addition, the three new offices have each achieved the BREEAM ‘excellent’ rating for their environmental performance.

The report makes recommendations to the Welsh Government, including:

  • strengthening the way it identifies and appraises options to inform key decisions on how its strategic objectives should be delivered, such as undertaking option appraisals and cost-benefit analysis in line with HM Treasury’s Green Book guidance;
  • that major projects and programmes should be subject to effective strategic overview and scrutiny, with robust governance and financial controls in place; and
  • at the start of any programme or project, the Welsh Government should make sure that the anticipated benefits are clearly established, realistic and deliverable and should compile and deliver a benefits realisation strategy.