The Welsh Labour Government has approved the sale of a hotel it controversially bought with £1.6million of taxpayers’ money amid plans to turn it into a Chinese martial arts centre.
In 2012, a scathing Wales Audit Office report concluded that the purchase of the River Lodge Hotel in Llangollen provided no benefits to the taxpayer, that Ministers paid more than its value and that decisions surrounding the purchase were flawed.
Ministers wasted a further £200,000 maintaining the derelict hotel, but plans to develop a kung fu centre there collapsed.
The 25 bedroom hotel is being sold to the Betsi Cadwaladr University Health Board, which plans to demolish it and build a health centre, after Llangollen Community Hospital was closed last year. It is expected to open in 2015.
Approval from Welsh Labour Ministers to sell the hotel to the North Wales health board was quietly slipped out on the Welsh Government’s website this week.
In October 2012, the Welsh Government told the Assembly’s Public Accounts Committee that the return to the taxpayer when the hotel was eventually sold could be £500,000. It was also reported that if the hotel was demolished prior to sale, the value of the land would actually increase.
Paul Davies AM, Shadow Minister for Finance, said, “It’s no surprise that Labour quietly want to get rid of this aborted kung fu centre, which cost taxpayers nearly £2million for absolutely no benefit.
“The Wales Audit Office was scathing in its assessment of the unbelievable incompetence of Labour’s purchase of the hotel, which was beset by a major conflict of interest, a lack of risk assessment and no proper valuation.
“It is unthinkable that any individual, business or organisation, let alone a government spending other people’s money, would buy a property for £1.6million without a proper valuation.
“This decision has been quietly slipped out to cover up what has been a scandalous waste of public money by Labour Ministers, who had no robust measures in place to analyse risks or monitor their own spending, effectively ripping off taxpayers.
“It is the job of Labour Ministers to invest in public services and create the conditions for economic growth not to go round buying hotels for Chinese martial arts.
“The Welsh Government’s earlier estimates suggested that the taxpayer would only get back between a third and a quarter of what the administration originally paid for the hotel.
“At a time when Labour Ministers are imposing record-breaking cuts on the Welsh NHS, evidenced by the recent closure of Llangollen’s community hospital, patients will be angry to see more evidence of millions of pounds thrown down the drain.”
