MPs on the cross-party Commons Public Accounts Committee said they were dismayed that no disciplinary action had been taken against staff at the Development Board for Rural Wales, who kept a secret set of rules for allocating tenancies and awarded houses to themselves and to close relatives.
Documents were destroyed and executives received cars under a car-leasing scheme which flouted Welsh Office rules - yet Michael Scholar, the new Permanent Secretary at the Welsh Office, said that nobody had been dismissed or even reprimanded.
He claimed that disciplinary measures were the responsibility of the development board and not the department.
The National Audit Office, the public spending watchdog, found that 238 of the board's 1,084 tenancies had been allocated according to unpublished criteria. Prospective tenants had been misled into believing that the development board, based at Newtown in Powys, was following rules set out in its own publications when, in fact, another set of conditions were operating.
Two properties had gone to the board's housing officer and his former wife. However, an internal board review and an external inquiry led by Roderic Bowen QC, had cleared individual officials of any impropriety.
Mr Scholar acknowledged that what had occurred was 'wholly unsatisfactory and wholly indefensible' and that the Welsh Office had been kept in the dark.
The Welsh Office was writing to the chairman of the development board to express its views, but otherwise its powers were severely restricted.
Following this and the Welsh Development Agency affair, Mr Redwood had instigated a 'Compliance Review' covering all 16 Welsh quangos. 'We want to ensure that in future they are complying with Welsh Office requirements,' he said. 'That review is still going on.'
At the same time, a separate 'Efficiency Scrutiny' was examining the Welsh Office's relationship with the quangos.Reuse content