Five-year refund order to council

Cardiff Bay and Penarth would have been connected for walking and cycling

The Vale of Glamorgan council is to repay £500,000 a year to the Welsh Assembly Government for five years after dropping a development scheme.

It received nearly £2.5m assembly government cash towards the Penarth Headland Link but had an £8m shortfall.

It asked to pay back the money over 15-20 years, but Deputy First Minister Ieuan Wyn Jones insisted on five.

The project was to provide a pedestrian and cycle link between Penarth Esplanade and the Cardiff Bay Barrage.

By July last year, the estimated total costs for the project were at £21.5m.

With an assembly government grant of up to £7.5m, £1m from Cardiff Harbour Authority and £5m from the council, the local authority concluded that this left an £8m shortfall which could not be met.

Documents reveal that, in an exchange of letters with Mr Jones, the council pleaded to be able to pay the money back over 15 - 20 years.

But Mr Jones has now decided that the £2.43m must be repaid over the next five years.

Towards the end of 2007, Mr Jones told council leaders that he had examined the terms of the grant and decided to claw back the full amount from the authority.

The five-year repayment decision comes at a time when local authority budgets are already stretched after a below-inflation settlement from the assembly government.