The Sleazy State: How the Web of Patronage Works / Day 2: Welsh try to slay scandalous dragon: The Principality: Three years of debacles involving government-appointed agencies have created a legacy of cynicism

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Welshness is magnificently depicted - with pits, chapels and red rugby strips - in the huge wall hanging in the foyer of South Glamorgan County Council in Cardiff. If the work of art was updated, quango scandals would surely find their place.

In the past few years Welsh quangos have become the soap of the cross-party Public Accounts Committee with Welsh permanent secretaries making regular appearances to explain the latest 'irregularity'. The PAC has castigated the Welsh Development Agency for an unauthorised pounds 1m redundancy scheme and an abortive pounds 300,000 attempt to privatise the agency.

The National Audit Office judged the Development Board for Rural Wales to be guilty of 'gross maladministration' after the revelation that it had operated a secret housing allocation policy, awarded houses to staff and close relatives and operated a car leasing scheme which flouted Welsh Office rules.

The latest debacle came last month when Professor John Catford resigned as chief executive of Health Promotion Wales after admitting an affair with a female colleague during a study trip to Brazil. A fraud squad inquiry is under way. The professor has denied misusing public money. Three years of scandal have left the Welsh cynical. 'That was a bonk on public money,' one Cardiff taxi-driver said. 'These quangos are just jobs for the boys.'

The scandals are interspersed with rows over closed appointment policies, multiple tenure of posts and the apparent misuse of the growing quangocracy for political patronage. The rest of the United Kingdom has had more expensive quango scandals but the concentration in this principality has raised the question Why Wales?

While some attribute the Welsh scandals to a 'better class of whistle-blower', Russell Goodway, leader of South Glamorgan County Council, insists 'the sleaze' says more about the 'profoundly undemocratic' governance in Wales than the character of the Welsh.

He argues that government by quango is further advanced there than in any other area of the UK. His view is backed by a recent University of Wales study which claimed the number of quangos in Wales has doubled in the 14 years of Conservative rule.

The report by Professor Kevin Morgan claims that this financial year pounds 2.1bn, or 34 per cent of Welsh Office spending, will be dispensed by quangos. The entire revenue expenditure budget for Welsh local authorities is pounds 2.5bn.

In 1991, the Secretary of State for Wales was responsible for 1,400 appointments to more than 80 quangos which employed 57,311 people. The report concludes that quangos now form an unaccountable system of political patronage which has created a profound 'democratic deficit'.

Professor Morgan claims that in Wales the minority Tory party has achieved through quangos what was denied it through the ballot box. Quangos are used to bypass the predominantly Labour councils.

As council leader, Mr Goodway is paid pounds 4,000 a year. He is responsible for a pounds 400m annual budget, 15,000 employees and 85 per cent of all local public services. Mr Goodway, a partner in an accountancy firm, believes in public service. He would have to. The council job eats into his working day and takes up much of his evenings and weekends.

His office overlooks Cardiff Bay. The regeneration of the area, once council-controlled, is in the hands of the Cardiff Bay Development Corporation. Mr Goodway is paid pounds 5,000 a year to be on its board. It has a turnover of pounds 45m and a fraction of the council's employees. He is contracted to work half a day a week, but the post rarely requires that commitment. 'I am being paid the equivalent of pounds 50,000 a year like the other dozen board members. The corporation is doing nothing that properly-funded local government couldn't do cheaper.'

He puts the misuse of public money down to the private sector ethos prevalent in quangos and complains that quango excesses go uncurbed because members never have to worry about re-election.

Mr Goodway is appalled that Gwyn Jones, the former chairman of the Welsh Development Agency, has found a new home as chair of the Welsh Broadcasting Council only months after leaving his pounds 40,000 a year post, working two- and-half days per week, just days ahead of the publication of the PAC's critical report on the agency. Philip Head, the WDA's chief executive who resigned after the report, joined the Further Education Funding Council for England as its pounds 46,000-a-year head of property.

'Why the double standard? If I screw up I am surcharged and can be disqualified from office. If quango appointees screw up they are moved on to bigger and better jobs,' Mr Goodway said.

He insists fewer, more accountable, democratically elected quangos are needed and a recognition of councils' real worth. But the latter may come too late. 'The reorganisation of local government is creating councils which may never be able to take back the bigger functions.'

Professor Morgan says key power brokers are easily identified and secrets harder to keep. Tony Lewis, chairman of the Wales Tourist Board, has admitted being appointed without an interview. In appointing Dr Gywn Jones, the WDA did not seek a reference.

Rhodri Morgan, Labour MP for Cardiff West, says multiple tenure is inevitable in Wales when the Tory party has so few friends to call on and so many quango places to fill. Professor Morgan's report identifies Sir Donald Walters, Dr Gwyn Jones, Glyn Davies and Sir Geoffrey Inkin as the Welsh 'quango kings' and concludes the Welsh Office fails to regulate quangos.

A Welsh civil servant said: 'Our relationship with quangos seems to be that we appoint them, give them the money and hope for the best.'

(Photographs omitted)

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