|Angela Burns AM||Yn dirprwyo ar ran Mohammad Asghar|
|Substitute for Mohammad Asghar|
|Lee Waters AM|
|Nick Ramsay AM|
|Rhianon Passmore AM|
|Vikki Howells AM|
|Anthony Barrett||Swyddfa Archwilio Cymru|
|Wales Audit Office|
|David Michael||Cyfarwyddwr Adnoddau Corfforaethol, Llyfrgell Genedlaethol Cymru|
|Director of Corporate Resources, National Library of Wales|
|Gwyn Williams||Cyfarwyddwr Cyllid, Cyngor Celfyddydau Cymru|
|Director of Finance, Arts Council of Wales|
|Huw Vaughan Thomas||Archwilydd Cyffredinol Cymru, Swyddfa Archwilio Cymru|
|Auditor General for Wales, Wales Audit Office|
|Linda Tomos||Prif Weithredwr a Llyfrgellydd Cenedlaethol, Llyfrgell Genedlaethol Cymru|
|Chief Executive and National Librarian, National Library of Wales|
|Matthew Mortlock||Swyddfa Archwilio Cymru|
|Wales Audit Office|
|Mike Usher||Swyddfa Archwilio Cymru|
|Wales Audit Office|
|Nick Capaldi||Prif Weithredwr, Cyngor Celfyddydau Cymru|
|Chief Executive, Arts Council of Wales|
|Rhodri Glyn Thomas||Llywydd, Llyfrgell Genedlaethol Cymru|
|President, National Library of Wales|
|Claire Griffiths||Dirprwy Glerc|
|Katie Wyatt||Cynghorydd Cyfreithiol|
|1. Cyflwyniad, ymddiheuriadau, dirprwyon a datgan buddiannau||1. Introductions, apologies, substitutions and declarations of interest|
|2. Papurau i'w nodi||2. Papers to note|
|3. Craffu ar gyfrifon 2016-17: Cyngor Celfyddydau Cymru||3. Scrutiny of accounts 2016-17: Arts Council of Wales|
|4. Craffu ar gyfrifon 2016-17: Llyfrgell Genedlaethol Cymru||4. Scrutiny of accounts 2016-17: National Library of Wales|
|5. Cynnig o dan Reol Sefydlog 17.42 i benderfynu gwahardd y cyhoedd o'r cyfarfod||5. Motion under Standing Order 17.42 to resolve to exclude the public from the meeting|
Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.
The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.
Dechreuodd y cyfarfod am 13:33.
The meeting began at 13:33.
I welcome Members to this afternoon's meeting of the Public Accounts Committee, and welcome to our witnesses. Headsets are available for translation and sound amplification. Please, to the best of your endeavours, ensure that any electrical equipment is on silent. In the event of an emergency, follow the ushers. We've received a number of apologies today, from Mohammad Asghar, Neil Hamilton and also Adam Price, and can I welcome Angela Burns back to this committee after a very long spell when you first sat on it, substituting for Mohammad Asghar? Thanks for being with us today; I realise that diaries are very busy. Do Members have any declarations of interest they would like to make?
Yes, I'd like to declare for the further item on the agenda that I am a member of the National Library of Wales Welsh political archive committee.
Okay, item 2. We've got a number of papers to note. First of all, the minutes for the meeting held on 23 October. Happy with the minutes? Okay, minutes are agreed.
Secondly, the Welsh Government have written with additional information that they agreed to send following the scrutiny of the accounts in committee on 2 October. Note the letter?
Also, Sport Wales have written with additional information that they agreed, again, to send following scrutiny of their accounts in committee on 9 October, so we need to note that paper from Sport Wales.
Can I just ask about that paper, Chair? We had a discussion with Sport Wales about their lack of any evaluation of the Dragon Sport and the 5x60 programmes. I'm just wondering if the auditor or the team have any reflections upon the letter in that light.
I think at the time the impression that we were left with was there hadn't been much evaluation of these schemes. I think the letter provides some clarification that there has been some evaluation—maybe not to the level and detail that the committee was expecting at the time. I note also that they've just gone out, or they're going out, to tender for a formal evaluation of one of the programmes. It might be interesting to know whether that was prompted by PAC's inquiries or whether that was already in the pipeline, just out of interest—clearly, it's a good thing to do, but just out of interest.
Okay, happy. Okay, the Cabinet Secretary for Finance and Local Government has written advising that Dyfed Alsop has been appointed as chief executive of the Welsh Revenue Authority and will have the relevant accounting officer responsibilities associated with the position. It's a standard notification; we just need to note that letter.
Okay, item 3 and the scrutiny of accounts for 2016-17. This is the second occasion that the committee has scrutinised the Arts Council for Wales on their annual reports and accounts. The previous committee scrutinised the 2013-14 annual report and accounts. Can I welcome our witnesses? Thank you for being with us today. Would you like to give your name and position for the Record of Proceedings?
I am Nick Capaldi and I'm the chief executive.
Gwyn Williams. I'm the director of finance.
Great, thank you for being with us today. We've got a number of questions for you, so, if I'm moving things on at any point, it's just so we can get through as much as possible. If I can kick off with the first question, in 2015-16, the committee made a recommendation to public sector organisations to present their accounts in a manner that was engaging and accessible and transparent, which I know that you are already trying to achieve. Can you inform our understanding of the progress that's been made by organisations to do this?
Well, what we've tried to do is to use a mixture of different types of information within our annual accounts. So, as well as the prescribed text over which we have little discretion—it has to be presented in a particular way—nevertheless, we've tried to increase the number of charts, diagrams, we've tried to make the non-required text as readable as we can, and to try and provide everything within the report that a reader might reasonably require as a first point of contact in terms of understanding what we do. I think we can go further and we can do better, and that's what we intend to do. I think it is very important that, as a public body, we are clear and informative and we will, as each year goes by, experiment with different additional ways of presenting the information.
It's a common issue that this committee comes back to—the presentation of accounts and ensuring transparency. Are there any future ways of changing those accounts that you might think make it a more readable item?
I think we can probably show more information in terms of diagrams and tables. I think that a lot of people find those easier to engage with. The length of the report is always an issue. However, as I said, there are certain things that are set out, both in terms of the framework that we have with the Welsh Government in terms of the way we present information and possibly because constitutionally we're quite a complex organisation. We're a royal charter body, a Welsh Government sponsored body, a registered charity—all of whom require certain types of information. But, without making the report too long, we will be looking at ways that we can make it more readable.
Thank you, Chair. I understand that most of your targets were met this year, but I'd just like to hone in on some of the ones that weren't. So, firstly, in your accounts, you said you were looking to increase your engagement of people from protected characteristics and that that will be a priority for you now in 2017 to 2018, but could you expand for us as a committee as to why you didn't see the increase that you hoped for this year, and also what steps you will be putting in place to try and ensure that you do see that increase in the following year?
I think the difficult answer—difficult from our point of view—to give to that is that we can’t be absolutely certain exactly what we did achieve, and that was because we were lacking resource within our research department. Sadly, one of our key members of staff has been on long-term sickness, and it's been difficult for us to backfill that. So, we haven't been entirely confident about the quality of the data, which is why that was one of six targets within the 2016-17 plan that we felt we couldn't say had either been partially or largely achieved. I think we will be more confident. We are starting to collect the data on protected characteristics, and I think that we will be in a much better position this year to report on progress.
Thank you. Moving on to the projects that required dependence on European funding as well—so, that was your Momentum project and the transnational projects—you weren't successful in obtaining the funding for those. Firstly, could you explain to us in more depth why the two bids for the transnational projects failed, and how you intend to address that in the future?
The reason given to us for the failure of the two bids was, firstly, that they were competitive European funding rounds—this is the Creative Europe funding scheme—and, secondly, that the bids didn't present as persuasive a case for support as other projects that the European Union decided to support. We've had feedback. We always seek feedback on unsuccessful applications, and we will be making further applications in the future.
Okay. How do you go about deciding your funding priorities, then? I'm thinking within the context of the fact that the Momentum project was for those not in education, employment or training, and that wasn't progressed. So, how do you decide on your funding priorities?
We obviously work to the requirements that are set out in our remit letter from the Welsh Government. That covers the funds that the Welsh Government makes available to us. The remit letter has around 10 different areas of work that it's asking us to be active in. We then have our council, which looks at the remit letter and considers how best to progress with those. The council also has to take into account the fact that we have lottery funding as well. So, what they try and come up with is a single strategy, which is advanced by the two sources of money. The Momentum programme, in order to repeat it at previous levels, would have required a significant injection of funding on our part. Given that budgets have been reducing and our funds for 2016-17 were less, we felt that we couldn't invest the time, the energy and the funding into that particular programme with the resources that we had.
So, is there any project that you're running currently for NEETs then, because, obviously, art is a very therapeutic way of engaging that sort of individual?
Yes. We have extensive programmes of activity working with young people—young people and disadvantaged areas—and we have a network of community arts organisations: so, everything from Valley & Vale Community Arts to Head4Arts in the Valleys, who do excellent work, working with disadvantaged youngsters and individuals. It's also an important part of the work of our Arts Portfolio Wales, some 67-odd organisations who are working the length and breadth of Wales and who we ask to engage with young disadvantaged people.
There are also specific initiatives. We are a partner with the Welsh Government on its Fusion programme, which takes particular areas of the country that are at risk of particular disadvantage, and we work with a range of other bodies to provide activities and funds in those areas.
Thank you. Just one final question then, this time relating to the recruitment of your national advisers. We understand that, in spite of several recruitment campaigns that you’ve run, you’ve struggled to find appropriately qualified individuals, particularly those who speak Welsh. How are you addressing this recruitment issue, and do you think you might need to adapt your recruitment drive in order to try and successfully recruit the types of individual you need there?
I think we certainly will have to adapt it. After two attempts and it not working, I think that says to us that we both need to adopt a different approach, but also look in different places to try and find them. Our national advisers, yes, they are volunteers and they work on a voluntary basis, but they add something additional that our professional staff don’t bring in terms of an awareness and activity. We had a useful session at this year’s National Eisteddfod, where I think we will be able to sign up a cadre of new advisers. But often we’re looking for specific pieces of advice in specific parts of the country, so sometimes you can face the perfect storm where we might need a Welsh-speaking adviser who is expert in dance to go and attend an event in Pembroke, and we’re not always able to get that happy coincidence of skills.
Thank you. In regard to the situation of evaluation of the data, in terms of the non-anecdotal evidence that suggests that they’re having to research around diversity, you say that you didn’t do anything in that particular area because of a member of staff being off. What are you doing in terms of those non-prescriptive priorities around diversity so that you can assure me that the arts council is taking seriously previous criticisms, in particular in terms of the lottery, that we’re not actually accessing a whole sector of our audience out there? How can you reassure me that you are doing more now around those areas?
The data exists. I think that the problem that we’ve heard is our ability to satisfactorily evaluate it and analyse it. We have now been able to plug that gap in our research area. We are collecting more specific data from all of the projects and the organisations that we fund, so we will have very specific data.
Sorry, I didn't explain it very well. In terms of projects, you mentioned some of them. In terms of your overall spend, you’ve got a lot of spend—73 per cent—on projects and the portfolio area. How much of your spend is dealing with, say, for instance, the NEETs project, which, obviously, was unsuccessful, around those areas of those who may be in disadvantaged communities?
I can’t, off the top of my head, say how much of the budget goes to that area, but we do have that information, and I’d be happy to provide you with it.
I would be very interested in understanding what projects are out there and how much of a priority it is for the Arts Council of Wales.
I'm happy to do that.
I'm just finding it curious that an organisation with a budget of something in the order of £40 million is failing to be able to report on one of your key targets set by Government because of a long-term sickness issue. Surely, if it’s long term, by definition, you can plan around that.
Up to a point, but, because of the nature of the illness, we were never entirely sure when the member of staff would be able to come back to work, and so it was a complicated issue to manage.
Okay. I just think it’s rather embarrassing for an organisation of your size to fail to be able to report on a key target.
We would prefer to be able to report on that, but I think that, where we have not been able to provide the information, we’re very clear about that.
Indeed, and we’re not criticising your clarity. And just the overall impression—you know, the targets you’re struggling with are in terms of reaching out to disadvantaged groups. So, there’s people with protected characteristics, there’s diversity and there’s NEETs. Again, are you concerned with the overall impression this gives, that the arts council is less interested in admittedly a difficult area? Also, to give you credit, you’re doing a lot better than you used to do in this area, but it does leave us with a residual impression this is still an area that the arts community and the council in particular aren’t that fussed on.
You asked whether it worries me. It worries me hugely, and it worries council too. It's an issue that our equalities monitoring group has been looking at, and the very clear message that council is accepting is we're not doing good enough, and I can't be clearer than that. We absolutely need to do better.
Starting this week, as it happens, we'll begin a series of meetings and public events right across Wales, where we will be talking about our future activity and what we're trying to do. We'll be making some very strong and clear statements about the need to improve engagement with a whole range of disadvantaged communities, for whom, in spite of our best efforts over recent years, we are simply not closing the gap sufficiently quickly between the best and the least well served. It's not good enough and we need to improve it.
Thank you. You've clearly laid out in the accounts that there are multiple organisations that your members' employers could have conflicts of interest within. You've obviously got a code of practice around that, and I'm slightly interested—or very interested, actually—in terms of what mitigations you put in place, because it seems to be that you could be in a situation whereby you're not, effectively, practicably operating in terms of people walking out because of conflicts of interest. So, could you extrapolate on what mitigations you've now got in place? Because it's not an ideal situation and it doesn't sound very professional.
I don't think that we experience any practical difficulties as a result of those conflicts of interest. I think that, perhaps, it's inevitable within the arts in a small country like Wales that there will be many connections and that people will have family or friends who are working in the arts. We feel that it's very important that we disclose those in absolute detail and absolute clarity, so that everybody knows where they are. It's been suggested to us that sometimes we take our disclosures too far, and that they are too detailed. We would prefer to have all of that information in the public domain.
Every member of staff who starts with us is taken through our code of best practice—every council member, every adviser—so that they are familiar with our expectations. If ever a circumstance changes or if somebody feels there will be a conflict of interest, then they are asked to declare that at the appropriate time. They either absent themselves from a meeting or we substitute for another member of staff. We've not found a situation where, through either absence or substitution, we've been unable to conduct our business.
It's a very fine balance, obviously. I accept your point in terms of Wales being a small world. I suppose the subtext within that is: are there any further mitigations apart from your code of practice that can be better deployed? Because, obviously, it's a matter that has been raised and has been stated as being of some concern in the past. So, I don't know if there's anything further that can be done to improve that.
I think that we have to constantly remind staff and council members, as we do, of that. Council members, at the beginning of every meeting, are specifically asked to declare any potential interest. Staff members, at the beginning of every grant decision meeting, are likewise expressly asked to do that. In case something might have slipped through the net at any particular time, then there is a fail-safe; each year, everybody is expected to fill out and to return a declaration. We have had a number of instances where members of the public have written to us asking for clarification around what they perceive to be a conflict of interest. We have not yet been able to satisfactorily answer that in all cases. We've been able to demonstrate that appropriate controls and declarations were in place.
Thank you. Good afternoon. I wanted to talk to you about your organisational review. Mr Capaldi, in your chief executive statement, you make the comment that,
'during 2016-17 we undertook a comprehensive review of our costs and staffing, reducing both so that we could invest more funding directly into the arts.'
Could you please tell us if your redundancy programme was part of trying to achieve that objective?
Yes, it was.
And was it council-wide—and when I say council I mean the greater council, not the main organisation—was it throughout the whole of your organisation, and was it voluntary, or were you targeting specific areas where you decided to alter the way you work?
It was across the arts council as a whole. It was a mix of voluntary and compulsory redundancies. There were two compulsory redundancies and nine voluntary. There were many more requests for voluntary redundancy than we actually granted, but we turned those down either because there was an appropriate post in the new structure for that member of staff or because they were particular skills that we needed.
Yes. It's a difficult balancing act, isn't it? Because I've run compulsory and non-compulsory redundancy schemes and you want to get rid of the people you need move on and to alter your business but you want to keep the good people. I was surprised, though, to see how much it cost the arts council. I think you've made nine redundancies—
It's 11 redundancies—
—and I think, off the top of my head, it's about £527,000. Yes, it's not an insignificant amount of money, but we also have looked at the pay-back period, and specifically on those 11 posts, then the pay-back period for the redundancies is less than a year; it's about 11 months. And so, whilst we're going to have to take that hit in the short term, going forward over the longer term it repays that cost.
I was quite surprised to see that one of the posts was the director of finance and resources, because that was a substantial redundancy package that it appeared to be, and yet you obviously have a director of finance there—nice to meet you. So, can you just explain the thinking behind that organisational change, because it's cost the arts council a significant amount of money, and yet I think what I'd like to try and understand is whether it was key to your organisational restructure and, if so, in what way, because of the cost that that particular one ended up being.
It was an important part of our overall cost reduction plan. We were determined to make sure that we tried to achieve savings at all levels within the organisation, including the senior management team. What we've opted to do is to make the post of director of finance and resources redundant and to replace that post, which was a full time post, with 0.6 of a post, which is the post that Gwyn currently occupies, and for the functions that were in the resources bit to be allocated across the remaining members of the senior management team. As it happens, we have got members of that team who are expert in things like human resources and IT. So, although, because of the cost, it will take a while to recover that, it is part of that overall cost-cutting strategy.
But you're able to assure the committee, obviously, then, that the actual financial element of that is well covered with the staffing levels that you currently or you now have, because it's not an insubstantial budget that you hold and we would like to know that it is being monitored effectively. I'm very fond of having finance guys on board, I have to tell you.
Yes, as is our audit and risk assurance committee—
—which looked at that in some detail, and, as we were developing our organisational review proposals, as well as council, our human resources and renumeration committee and our audit and risk assurance committee really did test the proposals in some detail. One of the options that was put forward was to do without that senior management post itself, to have finance covered at a slightly lower tier within the organisation. The audit and risk committee were just not convinced by that proposal, and I think they were right. Like you, I gain reassurance from having somebody as experienced as Gwyn sitting at my shoulder keeping an eye on how finances are managed.
I absolutely applaud your intention to try to drive more money to the front line and to help the organisations that come to you for funding, yet despite these changes, despite the £527,000 of redundancy costs, your running costs have slightly increased. I wonder if you could perhaps explain that to us—why they are, after all that, still a little bit higher again this year.
There's a combination of reasons, one of which is obviously because we are taking account of the redundancy costs. Those are factored in and you see them in the accounts for 2016-17. There are other areas where we've had some increases. National insurance and social security costs have gone up a little. We've also had some additional pension costs, but I think that, by taking action now, what we're able to do is plan for the longer term in terms of making sure, as you say, that as much money goes to front-line activity. It has been painful. Since 2011-12, we've reduced our staff by about 22 per cent and the running costs that are associated with our general activities accounts have reduced by about 39 per cent. But it does leave us with an organisation that is stretched and is having to think very imaginatively about how it delivers its work.
I'd like to come back to that, actually, about the organisation being stretched, but could I just very quickly ask you one final question on the staffing element? Are you still able to, and do you run, a succession planning scenario, and has that been impacted by the organisational change that you've undertaken?
We do. It's something that we bear in mind on a constant basis and, indeed, partly because of the impact of the organisational review and what that revealed, the council has been very keen to ensure that my position as chief executive is reviewed and is looked at for the council to feel confident that the load across the senior management team is well spread and that I don't become some kind of single autocratic figure who, if taken out of the equation, would mean the organisation wouldn't be able to operate. Personally, I'm very confident that I have a very talented senior management team who would be perfectly capable of running the organisation.
That's very good news to hear because that's what we need. We need lots of strong people around. You mentioned—
Ange, just before you continue, I think Lee had a supplementary particularly on that point.
Can I just clarify I've understood what you said properly? Did you say your director of finance is now working on a 0.6 per cent basis?
You said earlier that the organisation is stretched. So, could you just explain to me briefly the situation in regard to your reserves? Going through your accounts, I sort of ended up at the end thinking, 'Ooh, you've got an awful lot of money in reserves.' I'm slightly unclear as to the free access reserves and the constrained reserves, and I wondered if you could just go through that quite clearly with us, because I've got a bit of a bee in my bonnet—I'll be honest, I'll tell you now—about public organisations sitting on large amounts of reserves if—if—it's not appropriate and they could be deployed. So, I'd like to understand why you feel that you need these levels of reserves. And also your reserves have gone up, so I'd like to understand that as well.
The reserves, if recollection serves me correctly, and I'm sure that Gwyn will correct me if I have got this wrong—. I think that reserves themselves—the unrestricted reserves—are around £1.4 million, which is broadly comparable with the year before. Cash balances are higher, but, as you'll know, the cash balances are different from the levels of the reserves. One of the reasons why reserves are higher is because we have agreed with the Welsh Government that we will use some of those reserves to cover the cost of redundancies. We've not gone to the Welsh Government to ask for additional funding. We are managing the consequences of our own reorganisation within our own resources. There's also quite a significant sum of money—I think in the region of £680,000—which relates to the Creative Learning through the Arts programme, where there are timing issues, and I think that's largely to do with the fact that, obviously, school years don't coincide with financial years. But if you would like a detailed breakdown— I think there is a breakdown in the accounts—I'd be quite happy to provide additional information.
Yes, I did try to go through that breakdown in the accounts. A quick question on that is: the reserves shown in your accounts, are they the results of the whole organisation? In other words, do they include the National Lottery contribution reserves—anything you've reserved there?
No, these are specific to general activities.
Specific to—. Okay. So, my second question then is: you just, for example, said that you're going to use the reserves—at least some of that £525,000 redundancy payment—but as your accounts already show that in there, I don't understand why the reserves figure hasn't dropped. Because it seems to me you're showing the cost of that £527,000 in redundancy and you're still showing the reserves of £1.4 million.
Sorry, that should have been clear. The reserves, as well as including cash amounts for the Creative Learning through the Arts—the substantial sum is nearly £700,000 of that—there are timing issues where projects couldn't take place in the year in which they're due, and so we were able to persuade the Welsh Government to allow us to exceed our 2 per cent, which is the area of flexibility to exceed that. But I'd be very happy to provide you with a very detailed breakdown of those reserves.
Could we ask for that, Chair? I think that would be very useful, actually. Thank you.
Yes. Happy to do that.
Just for clarification on that, then—2 per cent is the rate of reserve that would be expected for you to carry, but a proportion of that reserve that you carry is for redundancies.
Two per cent of the standard level of carry-forward, which were permitted under our agreement with the Welsh Government to carry forward, to deal with timing issues to do with taxation and social security payments or various other issues. We have to present a business case to the Welsh Government if we want to exceed that 2 per cent. Their agreement is necessary for us to carry forward above the 2 per cent.
Thank you. In regard to the drivers for reorganisation of staffing, has that been motivated by financial austerity in terms of yourselves as a public body, and is the £0.5 million for redundancies included in the £100,000 compensation for the finance director?
The £100,000 compensation for the finance director is included in the £0.5 million.
Yes, it's part of that. The driver for the reorganisation was financially driven. We could see far enough into the future to know that, unless we took action now, in future years we would be cutting arts expenditure in order to pay for our own running costs, and I think the council's view is that that's not a sustainable position. I agree with that. Now, in accepting that it's a financially driven set of costs, we obviously have to do what we can to make sure that they also enable us to deliver the programme of work, going forward. In one or two areas, we have been able to make some changes, which I think will be beneficial in the longer term.
Yes, indeed. So, some 90 per cent of your funding is on funding the five national organisations—Welsh National Opera, Wales Millennium Centre, Theatr Clwyd, National Theatre Wales and Sherman Cymru. You've described the ongoing pressure austerity has had and how you are stretched to be able to deliver in future. As that goes into the future, how difficult is it going to be to maintain spending that much of your budget on just a handful of beneficiaries?
It will become more difficult. It is something that we have regular conversations with the national companies about. Taken as a group, all of our national companies account for about 60 per cent of our spending through the arts portfolio of Wales, and that is a very significant proportion, which means that every 1 per cent that one were to give to that portfolio could have quite a significant impact elsewhere on the budget. So, when council is setting its budget when it's undertaking its funding reviews, then these are issues thatoccupy its discussions very closely. We've arrived at, for the moment, the portfolio that we believe we can sustain for the next three or four years. We generally have a detailed look every five years, and we are asking our national companies particularly to do what they can to make themselves less dependent as a proportion on arts council funding, to offer their expertise and their knowledge to smaller organisations and to collaborate together wherever possible to share resources, because we are conscious that if you want to have national companies that are of national and international standing, then there is a cost attached to that, but it can't be at any cost.
Through a variety of different measures. Some of them are quantitative, so we can look at the leverage in terms of what organisations are delivering. We have a comprehensive survey that goes to all members of the portfolio so that we can look at how many people they're employing, where they're working, how many people they're reaching and all of those quantitative aspects build to give us a view of how well they're performing. Then there are all of the qualitative measures. We obviously see and attend the work of our national companies. We read about their work in their press, and we're able to compare how well they're doing in comparison with other peer organisations. And personally, I feel very proud of the national companies in Wales. I think they do excellent work on far fewer resources than they would be getting in England or in Scotland.
And what about the—. You're engaging with the portfolio holders themselves. What about the community of artists around them? How much of an opportunity do you give them to push back and challenge whether those organisations are achieving their potential?
We do invite and ask the organisations themselves to have those programmes of survey, consultation and working with artists. We don't currently survey individual artists and ask them how they think individual X or Y is performing.
Is that something you might consider doing? Because, obviously, if you go through the gatekeeper of the organisations themselves, they have a vested interest to maintain their position, and as funding is tighter there may be, through crowdsourcing your intelligence gathering, some insights that the artists themselves have that you've been missing out on.
I think you're right. As part of—. And this is in response to the earlier question about national advisers, our dissatisfaction with our performance in that area has led us to look at other ways that we could get opinions about the performance of the organisation. And whilst I think there are dangers with the kind of TripAdvisor approach to members of the public offering views on individual organisations, nevertheless I agree with you—I think there is something there that we need to explore to get the artist and also, crucially, the audience view of the activity that we're funding, and it is something we intend to look at.
I'm not sure why you're so sniffy about TripAdvisor; it's a rather successful way of getting real-time intelligence about the performance of an organisation.
Yes, but it could also be something that is abused.
Sure. I'm not suggesting the exact model, but the principle of tapping into the expertise of the community I think is something that there's a resistance to, clearly.
I don't think we want to get too sidelined by the relative merits of TripAdvisor or any other social—
No, but—[Inaudible.]— Chair, to be fair. I'm trying to make a serious point here.
My response to Mr Waters's comment is he's raised a very important point. How do we get those wider views into the assessment of what we do? We are looking at it. I agree with you: it's very important.
Okay, just to move it on, in deference to the Chair's sensibilities, you said you're encouraging organisations to become more self-sufficient, and I believe this is something we've discussed in the context of the culture committee's inquiry into how to diversify funding for the arts. Given the very real restrictions there are on the ability of organisations to raise funds themselves through private sector sources, realistically, how much of an opportunity is there, do you think, for them to leverage in additional investment? Or do you think that the arts sector needs to confront the fact that, because of austerity, it's going to have to shrink in the next few years?
It's tough. I certainly don't want to approach this on the basis that we're encouraging shrinkage. I think there is some scope for looking imaginatively at other sources of income, and we've had the opportunity to discuss some of those in the culture committee. But when I look at, for example, local authority funding to the sector since 2011, that's reduced from about £10.5 million to £5.5 million a year. That's a very big reduction and gap that's having to be made up.
I think it's horses for courses. I think that certain organisations, and inevitably the larger organisations, are sometimes better placed to generate income. Ironically, you were asking about the larger organisations and the national companies—they tend to be the more successful at leveraging and generating income. But we are working with around 54 members of the portfolio to invest real time and energy in helping them to develop their income-generating potential.
But we're watching this very carefully because I think there is a real danger that we will not see a significant shift. I think the portfolio will be more resilient because it will use funding I think more effectively and better, but whether it will deliver large amounts of new and additional funding, I think the jury's out on that one.
Can I just finally ask, Chair—? You've explained in the context of the review of Literature Wales that you run a risk system based on traffic lights and the organisations that are seen to be at red risk are the ones you monitor particularly closely. How many of the organisations within your portfolio are at red risk? Do you know roughly, as a percentage or a proportion?
I would be hesitant to hazard a figure. I can certainly let you know those figures, but it's the minority of organisations in the portfolio. The phrase that sticks in my mind, because the audit committee said this when it looked at it last time, is that it's at the lowest level that it's been for some years. So, it's been coming down, but if I guessed I'm sure I would only come up with the wrong figure.
It could. Although I have to be clear—and we did have the opportunity to rehearse this in the culture committee—just because we've identified an organisation as a red risk, that doesn't necessarily mean that they are in danger of failing. It could be that they've embarked on a particularly exciting, innovative but risky programme of development, and so we use that as just an internal shorthand to remind us that we need to keep an eye on that organisation.
Organisations that have gone through capital refurbishment as a matter of course—we identify those as red because so many things can go wrong in terms of capital projects. I think, for inevitable reasons, high risk has somehow become conflated with failure, and I want to just draw what might be a subtle distinction.
In regard to the projects that you grant fund within that portfolio, how do you evaluate how successful those projects are, and could you talk me through how that process works? Additionally to that, in regard to the risk factor, in the financial climate that we are in, what is your view in regard to an arts levy ticket tax?
'Arts levy ticket tax'—I'm not familiar with that.
It’s just a proposal in regard to how we raise money for the arts.
Oh, I see. Yes, okay, proposals to put a levy on ticket sales. I’m sorry. Dealing with your first question—how do we assess and monitor the performance of those organisations—there is a cycle or schedule of activity that takes place over the course of the year, and kicks off about now, with our receipt of updated business plans from each of the organisations, which are then scrutinised and looked at. In the new year, once our funding has been confirmed, we discuss and negotiate with all of the organisations what will be included within their funding agreement in terms of targets and our expectations of them in the year ahead. During the course of the year, we then monitor their performance, and we do that in a number of ways.
Firstly, we will receive quarterly financial reports from all of the organisations so that we can track and make sure that financially they’re on line. At a six-monthly interval, we ask them to complete for us what we call our arts portfolio Wales survey. That looks at everything, from the activity that they’re doing to attendances, to participants, the number of people they’re employing, and includes the protected characteristics that we’ve been talking about earlier. That is then aggregated when we repeat that survey for the full year. That information is available. We then have our staff. Every organisation has a lead officer who is there attending board meetings, meeting with the organisations, attending events, as we all do, and we’re keeping a close eye on press, publicity and criticism. So, it’s a pretty continuous process.
On levies, I’ve heard suggested various different types of levy. Personally, I have a concern about them. I think that evidence shows that we are probably at about the peak of what most people feel able to afford. I think if you’ve ever, within the commercial sector, bought a ticket and then been faced with a booking fee and a fee for this and a fee for that—levies are pretty unpopular. In our conversations with arts organisations about levies, they have generally said they’re not in favour of them, although some do. Some will offer the option to pay £1 in addition to the ticket to help, for example, with a refurbishment.
I just wanted to ask you about the creative learning programme. I noticed, in the audit and risk section of your accounts, that you talked about the fact that the management of the project has been reviewed by the arts council’s internal auditors, and substantial assurance given. Could you perhaps just break down for us what substantial assurance means? Because I do see that the creative learning programme is one of the key risks that you actively monitor.
To deal with the second part of your question first, our internal auditors, Deloitte, adopt three levels of assurance: substantial is the highest, then there’s moderate risk, and the lowest is limited. So, substantial assurance is the highest level of assurance that they give. The reason that it’s there on the risk register is because it is such an important, iconic project of some scale, and, indeed, a project that we’re delivering in partnership with the Welsh Government. Therefore, we feel a particular responsibility to make sure that we’re doing everything possible to manage that well.
Okay. I just wonder if you could tell us which position within the arts council holds the SRO for the IT and data systems.
That's our head of IT.
Just going back to your previous answer to Rhianon Passmore on the question of a possible levy on tickets, did you say—? I appreciate you said that it would be unpopular. Most levies or taxes are—initially, at least. Do you think that would be to such an extent that it could actually dissuade the current numbers we've got purchasing those tickets? Was that the point that you were making?
Well, that's the impression that we've been given. I have to say we've not undertaken detailed research of the ticket-buying public, but as part of the piece of research that was done into the establishment of the music endowment fund for Wales, one of the proposals and one of the propositions was that every performing arts venue put a levy on its ticket funds to generate income. We got a pretty clear message back from the venues themselves that they felt that would be a negative step.
And you said there could be an optional element, an optional levy where you say, 'Do you want to give an extra £1?'—or whatever it might be—to an organisation. That tends to be far more amenable, because it's a choice.
Indeed, because that's in the hands of the ticket buyer themselves.
Yes, okay. Are there any other questions from anyone? Rhianon Passmore.
In regard to the creative learning plan, obviously it's a substantial amount of money and, as you said, it's a joint partnership. In regard to the effectivity of the impacts of that programme, and particularly around the creative agents acting as a catalyst, I'm slightly interested in the fact that there seems to be only 48 engagements that this has brought forward. Obviously it's a huge project and it's over a number of years, but how are you actually measuring the impact of the success within the school in regard to the curriculum that it's enhancing and the opportunities—both ways—from pupil to artist being engaged? How is that being measured?
There is a very detailed programme of evaluation, which will—or is—tracking the progress of the projects on a year-by-year basis. All of the schools have to provide detailed self assessments as part of the evaluation process, and we also have independent people who are looking at that. That evaluation will last over the five years of the project, and then for a further two years beyond that, to look at some of the longitudinal impact of that.
The programme has also attracted the interest of the Organisation for Economic Co-operation and Development, who feel that this an internationally unique programme. The programme is being benchmarked alongside five other countries from around the world, including New Zealand, Australia and America. So, we will have other fields of evaluation and research to benchmark and to compare what we're achieving through the programme.
Thank you. And finally, in regard to your role as the Arts Council of Wales and the concerns that have been voiced in many areas around the depletion of music support services across Wales due to financial austerity measures, how do you see your role in terms of addressing that as a potential risk for arts development, creative industries and, potentially, even tourism in the future? Where do you sit with that agenda?
Well, we've given evidence to the culture committee around these issues. This is an area that, as you'll know, has been funded by local authorities, and therefore we have to be very careful about our ability to intervene in an area that is expensive and for which we've not had previously a funding responsibility. But we have tried, through, certainly, the creative learning programme, to make sure that there are plenty of music projects—and there are—across Wales. We're also supporting individual projects where music is the centre of the project, which are for children and young people. But we certainly won't be in a position to replicate a local authority music service in 22 local authorities.
Do you see that there is a need for, perhaps, enhanced synergy between yourselves as a lead body, perhaps the WLGA, and those in that field, to be able to develop a more cohesive strategy? Because as you know, music support services will actually be the engines that are driving many of the musicians for the future. I don’t want to go off track, but in regard to risks for the future, and in regard to your overall mandate, and in regard to this report, I just want to underscore where you sit with that.
I would very much agree with your comments on the need for synergy. We were part of the review that was looking at this area, and I think one of the recommendations and suggestions that we made was that we should be working more closely with the WLGA on this, but also that, across the portfolio of organisations that we’ve got, we’ve got a number of music organisations who are very keen, and want to play a productive role. So, I’m sure that the kind of integration and the synergy that you’ve talked about is where we will be going.
Diolch, Gwyn Williams and Nick Capaldi. Thank you for being with us today. We’ll send you a transcript of today’s proceedings for you to check for accuracy. Thank you. That’s been really helpful.
Thank you very much.
We will now take a short break, five minutes or so, before the next witness session.
Gohiriwyd y cyfarfod rhwng 14:31 ac 14:43.
The meeting adjourned between 14:31 and 14:43.
Welcome back. This is the second occasion that the committee has scrutinised the National Library of Wales on their annual report and accounts. The previous committee scrutinised the 2014-15 annual accounts. I welcome our witnesses to this afternoon's meeting. Would you like to give your names and positions for the Record of Proceedings? Who wants to start?
Rhodri Glyn Thomas, llywydd Llyfrgell Genedlaethol Cymru.
Rhodri Glyn Thomas, the president of the National Library of Wales.
Linda Tomos, prif weithredwr a llyfrgellydd cenedlaethol.
Linda Tomos, the chief executive and national librarian.
Chief executive and national librarian.
David Michael, head of corporate services.
Always good to see some familiar faces back in the committee room. Welcome back, Rhodri Glyn. If I kick off with the first question, can you give us a brief overview of how the library has responded to the recommendations made by our predecessor committee on the accounts of 2014-15?
Wel, a gaf i ymateb yn y lle cyntaf, a chaiff David wedyn roi'r manylion ichi? Mae'r llyfrgell genedlaethol wedi ceisio bod yn sefydliad uchelgeisiol o fewn sefyllfa heriol iawn o ran cyllid gwasanaethau cyhoeddus yn gyffredinol. Yr hyn yr ydym wedi ei wneud dros y tair, pedair blynedd diwethaf yw ymateb yn gadarnhaol iawn i argymhellion y pwyllgor yma, ac hefyd i'r argymhellion a gafwyd yn adroddiad PricewaterhouseCoopers, ac hefyd, wrth gwrs, Swyddfa Archwilio Cymru. Fe welwch chi, o'r adroddiad diweddaraf gan Swyddfa Archwilio Cymru, a llythyr Archwilydd Cyffredinol Cymru, fod yr holl waith o ddiwygio ein gweithdrefnau ni ar waith gan y llyfrgell genedlaethol, ac ein bod ni’n symud ymlaen gyda’r rheini i gyd. Ond fe droaf i at David i ymateb i’r argymhellion penodol gan y pwyllgor yma.
Could I respond first, and then David can provide the details to you? The national library has tried to be an ambitious organisation within a very challenging position in terms of funding for public services generally. What we've tried to do over the last three or four years is to try and respond in a positive way to the recommendations of this committee, and also to the recommendations that we've received in the PricewaterhouseCoopers report and the Wales Audit Office report. You'll see, from the most recent report by the Wales Audit Office, and the letter from the Auditor General for Wales, that all the work of reforming our procedures is in place in the national library and we’re moving forward with that. But I will turn now to David, to respond to the specific recommendations by this committee.
Diolch, Rhodri. Wel, heb fynd drwy bob un argymhelliad, mae rhestr o argymhellion Swyddfa Archwilio Cymru yn rhan o bapurau’r cyfarfod. Felly, mae gwaith wedi cael ei wneud i fynd drwy’r argymhellion ac ateb y pwyntiau a oedd wedi cael eu codi. Rydw i’n credu, heblaw am rai manion, rydym ni wedi ymateb yn llawn i ofynion yr adroddiad.
Without going through each recommendation, there is a list of the Wales Audit Office recommendations in the papers for the meeting. Work has been undertaken in going through the recommendations and in responding to the points that were raised, and I think, except for some minor details, we have responded fully to the report.
Do. Yr un, hwyrach, o ran elfen o’r gwaith a fydd eisiau ei symud ymlaen tan y flwyddyn nesaf fydd datblygu’r gweithlu. Rydym ni’n derbyn bod gwaith i’w wneud i wneud awdit sgiliau i edrych ar anghenion y llyfrgell yn symud ymlaen. Rydym ni’n rhagweld y bydd cynllun ar gyfer y gweithlu yn barod erbyn diwedd 2018.
Yes. Perhaps an element of the work that needs to be moved forward to next year is workforce development. We accept that there is work to be done in terms of an audit of skills and to look at the needs of the library moving forward. We foresee that the workforce plan will be ready by the end of 2018.
Yes, thank you. The last time the committee looked at your accounts, it highlighted the fact that your pension scheme was relatively generous and recommended that you review it. In your response last February, you said that you do review it, but the pension was fully funded. In this year’s accounts, you say that there’s a deficit of £370,000 and the pension scheme is now regarded as a key risk. So, were you rather complacent in your response of last year, and what are you doing to mitigate this key risk?
Na. Yn sicr, mae bwrdd yr ymddiriedolwyr wedi bod yn cadw llygad manwl ar ein cynllun pensiwn ni. Mae gennym ni is-bwyllgor sydd yn ystyried y cynllun pensiwn dan gadeiryddiaeth y cyn-drysorydd, ac rŷm ni’n derbyn adroddiadau cyson am hynny. Mae yna resymau technegol am yr hyn rŷch chi wedi cyfeirio ato fe. Fe ofynnaf i David i esbonio’r sefyllfa, ond rŷm ni’n hyderus bod ein cynllun pensiwn ni yn hyfyw, ac ei fod e mewn sefyllfa iach iawn, mewn gwirionedd, mewn termau real.
No. Certainly, the trustees' board has been keeping a detailed eye on the pension scheme. We have a sub-committee that considers the pension scheme under the chairmanship of the former treasurer, and we receive regular reports. There are technical reasons for what you have referred to, and I will ask David to explain the situation, but we are confident that our pension scheme is viable and that it is in a very healthy position in real terms.
Diolch, Rhodri. On the balance sheet of the library, the pension scheme is shown as having a deficit of £9 million. That is because we are required to use the discount rate specified by the Treasury. When the trustees of the pension scheme come to assess the pension scheme, they’ve got more freedom to choose longer term discount rates. So, when the scheme was assessed, as at March 2016, it was 99.4 per cent funded, and there was a deficit of £370,000. At the time, the actuary said that, also, the cost of accruing service in the future would increase, so, in this financial year we’ve negotiated with the staff some changes to the scheme, and the staff were able either to opt for an increase in retirement age to 65, or pay 3 per cent extra. So, that choice was offered to the staff. So, we’ve addressed the cost of future service.
In terms of the historical deficit, the problem with the pension scheme now is it’s quite large in relation to the employer. There's a balance sheet with £70 million of assets and liabilities on it, so a small fluctuation in the pension scheme can create financial consequences for the library. Although £370,000 is quite a small deficit in terms of the pension scheme, it means that the library then has to make deficit contributions to fund it.
But we do monitor the pension scheme, and as at the end of September this year, it was actually assessed as having a small surplus in it. So, we think the historic liabilities are under control. It’s at or around fully funded, and we’ve taken action to assess, then, the cost of future service accrual.
Given what you’ve said, it does have the potential to really cause mayhem in the future budgets of the library.
It’s a risk to the library and we need to keep our eye on how it moves in the future. One problem is that the next triannual valuation is at 31 March 2019, which is two days after Brexit. So, I don’t know what—. We have to take a snapshot then of the value of the assets in the fund, so it’s a big risk. We’ve started discussing with the actuary if there’s a way around this, moving the valuation date away from such a sensitive valuation date.
Do you anticipate having to make further changes in the way the fund operates?
Not at the moment. We’ve done what the actuary recommended in terms of the future service accrual. There’s nothing much we can do about the historical liabilities that have accrued. There are some further changes we could make, from moving to career average away from final salary, but that's a relatively small element of the cost. We'll have to see what comes out in the next valuation and then assess how much the library could afford to put into the scheme, or go back to the membership and say, 'We'd like to make changes in the future.'
With the two changes we did offer, retirement age of 65 or paying more, at the time, we made it clear that there could be further changes required to the scheme, but we'd done everything the actuary had asked us to do at that point.
Final salary schemes are becoming fairly unusual now, aren't they? How much longer do you think you'll be able to maintain that position? Is it desirable to maintain that position given the budget constraints you're under?
Mae'r bwrdd ymddiriedolwyr wedi bod yn cadw golwg ar y sefyllfa yma. Ar hyn o bryd, rydym ni'n hyderus bod modd cynnal y cynllun pensiwn fel ag y mae e gyda'r newidiadau sydd wedi cael eu hawgrymu i'r staff. Ond, mae'r bwrdd yn agored i ystyried ffyrdd newydd o sicrhau pensiwn i staff yn y dyfodol os bydd yn rhaid gwneud hynny. Ond, ar hyn o bryd, rydym ni'n hyderus bod modd cynnal y cynllun pensiwn fel ag y mae e, ac mae'n gynllun pensiwn sy'n hynod o lwyddiannus o'i gymharu â sefydliadau cyhoeddus eraill yng Nghymru.
The board of trustees has been keeping an eye on the situation. At present, we're confident that we'll be able to maintain the pension scheme as it is, with the changes that have been suggested to the staff. But, the board is open to considering new ways of ensuring a pension for staff in the future, if they have to do that. But, at present, we're confident that it will be possible to maintain the pension scheme as it is, and it is a pension scheme that is very successful compared to other public institutions in Wales.
There's a constant theme in your representations that the cuts in public spending are biting hard into the library's ability to fulfill its duties. So, I just wonder, given that very few private sector organisations are still running final salary schemes, whether or not this is the correct use of resources and priorities.
Ar hyn o bryd, fel roeddwn yn dweud yn gynharach, mae'r llyfrgell genedlaethol yn llwyddo i fod yn sefydliad uchelgeisiol o fewn sefyllfa heriol iawn. Dros y pedair blynedd ddiwethaf, rydym ni wedi gorfod cwtogi'r staff o ryw draean. Rydym ni wedi mynd lawr o 300 o staff i 223 o staff. Felly, mae yna doriadau wedi’u gwneud yn y fan honno.
Ond, rydym ni wedi llwyddo nid yn unig i gynnal y gwasanaethau traddodiadol rydym ni wedi'u rhoi, ond wrth gwrs rydym ni wedi mynd ar lwybr cyffrous iawn, sef y llwybr digidol, er mwyn digideiddio y deunyddiau sydd gennym ni a sicrhau bod mynediad i'r cyhoedd iddyn nhw—roedd yn rhywbeth roedd yr Ysgrifennydd Cabinet yn awyddus iawn i'n gweld ni'n gwneud.
Wrth i ni gynnal y cydbwysedd rhwng yr arian cyhoeddus sydd yn dod oddi wrth y Llywodraeth—ac rydym ni'n ddiolchgar iawn am y cytundeb rhwng y Llywodraeth a Phlaid Cymru dros y ddwy gyllideb ddiwethaf, sydd wedi rhoi rhyw gymaint o sicrwydd i ni ac wedi ein galluogi ni i sefydlogi ein sefyllfa—ond gyda defnydd cyfrifol hefyd o'r asedau sydd wrth gefn, rydym ni'n gallu parhau i weithredu fel llyfrgell genedlaethol yng Nghymru.
Ond rydym ni, fel roedd David yn dweud, yn cadw llygad barcud ar y cynllun pensiwn, oherwydd rydym ni'n sylweddoli bod yna botensial o risg yn y fan honno i sefydlogrwydd ariannol y llyfrgell.
Mae'n rhaid imi ddweud, fel sefydliad yn y sector gyhoeddus, os ydym ni'n edrych ymlaen pump neu 10 mlynedd, ac os oes yna gwtogi parhaol yn mynd i fod ar y cyllid sydd ar gael oddi wrth y Llywodraeth, yna mae yna her enfawr yn wynebu pob sefydliad yn y sector gyhoeddus. Ac os nad oes yna fodd i reoli y gwariant ar iechyd, a bod yna barhad i sefyllfa o gyllideb cyffredinol sydd yn crebachu a mwy a mwy o wariant ar iechyd, yna mae sefyllfa pob sefydliad arall yn y sector gyhoeddus yn mynd i fod yn argyfyngus.
At present, as I said earlier, the national library is succeeding in being a very ambitious institution in a very challenging situation. Over the last four years, we have had to cut our staff by about a third. We've gone down from 300 to 223 in terms of headcount. There have been cuts in that area.
But, we have not only succeeded in maintaining our traditional services, we've also gone on a very adventurous journey, the digital pathway, in order to digitise the materials that we have and ensure that the public has access to them—that was something that the Cabinet Secretary was very eager to see us doing.
As we maintain the balance between the public funding that comes from the Government—and we're very grateful for the agreement between the Government and Plaid Cymru over the last two budgets, which has allowed us to have some kind of certainty and allowed us to stabilise our situation—but also with responsible use of the assets that we have in reserve, we can continue to operate as the National Library of Wales.
But, as David said, we're keeping an eagle eye on the pension scheme, because we realise that there is potential of risk in that area for the financial stability of the library.
I have to say, as a public sector institution, if we look forward five to 10 years, and if there are continuous cuts that are going to affect the funding available from the Government, then there is a huge challenge facing every institution in the public sector. And if it isn't going to be possible to manage the expenditure on health, and that there is a situation of a general budget that is contracting and more and more expenditure on health, then the situation of every public sector institution is going to be critical.
Yes, I understand that. That's why I asked whether or not maintaining the final salary scheme was the right priority.
Rydym ni'n teimlo ar hyn o bryd fod modd gwneud hynny, ac rydym ni'n awyddus i wneud hynny, ond rydym ni'n agored i newid y sefyllfa honno ar gyfer staff newydd a fydd yn dod i'r llyfrgell pe bai'n rhaid gwneud hynny. Ar hyn o bryd, nid ydym ni'n teimlo byddai hynny'n fuddiol, ac rydym ni'n teimlo bod cynnal y cynllun presennol gyda rhai newidiadau yn cynnig gwell opsiwn ariannol i'r llyfrgell hefyd.
We feel at present that it's possible to do that, and we're eager to do that, but we are open to changing that situation for new staff who will come to the library, if we have to do that. At present, we don't feel that that would be beneficial, and we do feel that maintaining the current scheme with some changes offers a better financial option for the library as well.
Rydym ni yn cadw llygad ar beth sy'n mynd i ddatblygu efallai yn y dyfodol, hynny yw, rydym ni'n edrych ar yr opsiynau i sefydlu beth maen nhw'n galw'n defined contribution pension scheme yn hytrach na defined benefit. Felly, pe byddem ni'n cyrraedd sefyllfa lle na fyddem ni'n gallu ariannu'r cynllun pensiwn, fe fyddem ni yn edrych i symud tuag at defined contribution lle mae'r costau'n llai ac mae'r risg o fuddsoddiadau yn mynd ar aelodau ac nid ar y cyflogwr.
We are keeping an eye on what is going to develop in the future, namely we're looking at the options to establish a defined contribution pension scheme rather than a defined benefit. So, if we did arrive at a situation where we wouldn't be able to fund the pension scheme, we would look to move to a defined contribution where the costs are lower and the risk of investment goes onto the members rather than the employer.
Rwy'n meddwl mai'r elfen bwysig arall hefyd ydy bod unrhyw newid i'r cynllun pensiwn yn amlwg yn rhywbeth sydd yn gorfod digwydd mewn cyd-destun trafodaethau gyda staff. Rwyf eisiau canmol y staff ynglŷn â'r trafodaethau sydd wedi bod yn y chwe mis diwethaf am y newidiadau sydd wedi’u cytuno. Mi fuaswn i'n hoffi teimlo bod unrhyw newidiadau yn y dyfodol yn rhai sydd yn gallu ennyn cefnogaeth y staff y tu fewn i’r sefyllfa yr ydym ni ynddi. Ond, fel mae pawb wedi'i ddweud, ar hyn o bryd, rwy’n meddwl mai ein hasesiad ni o’r risg ydy ein bod ni’n gallu fforddio parhau â’r cynllun presennol.
I think that another important element is that any change to the pension scheme is something that's going to have to happen in the context of negotiations with staff. I want to praise the staff in terms of the negotiations that we've had in the last six months, in terms of the agreed changes. I'd like to feel that any changes in future will be changes that will elicit support from staff in the position that we are in. As everyone has said, at present, I think our assessment of the risk is that we can afford to proceed and continue with the current scheme.
Thank you. You suffered from a—the library, I should say, experienced a fire in April 2013, I think. That raised some issues about insurance and about liability. The deputy permanent secretary has decided not to pursue potential legal claims in respect of the fire. How do you respond to that decision?
Roedd bwrdd yr ymddiriedolwyr eisoes wedi penderfynu peidio â symud ymlaen gyda’r achos. Nid oeddem ni'n teimlo bod unrhyw fudd i’r llyfrgell o wneud hynny, ond roedd Llywodraeth Cymru ar y pryd yn awyddus inni wneud hynny. Felly, fe barhaom ni yn ôl eu gofyniadau nhw nes inni ddod i sefyllfa yn awr lle mae yna benderfyniad terfynol wedi’i wneud i beidio â dilyn y llwybr hwnnw.
The board of trustees had already decided not to move on with the case. We didn't feel that there was any benefit for the library in doing so, but the Welsh Government at the time was keen to do so. Therefore, we continued with that until coming to the situation where a final decision has been made not to go down that route.
Have you changed your processes in the light of what you’ve learnt from the experience of that fire and the consequences?
Yes, we’ve had a look at the forms of contract that we use for building contracts, and we’re taking legal advice on that. Of course, the framework document with the Welsh Government says that we’re not allowed to take out commercial insurance. So, we’ve looked at ways in which we can put the wording in the contract to put the insurance burden on the contractor, whereas the Joint Contracts Tribunal contract specifies a joint insurance contract between both parties.
Yes, thank you. Good afternoon. I just wanted to talk to you about the 2016-17 performance of the national library and also ask you whether any lessons from 2016-17 are now currently being translated into 2017-18. I wanted to start off by asking you what tensions there are, if any, that you might face, given your dual roles as both a Welsh Government-sponsored body and also a charity. When it comes to setting your goals, do you find any differences arising out of that, or any directions you would like to go down that the Welsh Government are a little less keen on?
O ran ein cynlluniau ni ar gyfer y dyfodol, mae gennym ni gynllun strategol sy’n mynd â ni o 2017 i 2021. Hefyd, mae gennym ni yr adolygiad blynyddol o’r flwyddyn y buoch chi’n cyfeirio ati. Rŷm ni’n falch iawn bod yr Ysgrifennydd Cabinet wedi derbyn y naill adroddiad a’r llall. Felly, rŷm ni’n adeiladu ar y gwaith yr ŷm ni eisoes wrthi yn ei wneud. Fe roeddwn i'n cyfeirio yn gynharach at y llwybr digidol. Rŷm ni wedi derbyn cymhorthdal loteri o bron i £5 miliwn er mwyn creu archif—yn benodol archif y BBC yng Nghymru, ond rŷm ni’n gobeithio datblygu hwnnw yn archif darlledu cyffredinol. Mae archif ITV Wales eisoes yn y llyfrgell, a buaswn i’n dymuno hefyd cynnwys archif S4C yn yr archif cyffredinol hwnnw. Mae hynny’n golygu ein bod ni’n gorfod defnyddio arian y loteri a defnyddio cyfraniad oddi wrth Lywodraeth Cymru, a hefyd ein bod ni’n gorfod defnyddio ein harian wrth gefn er mwyn cyflawni’r prosiect hwnnw, ynghyd â chyfraniad gan y BBC ei hun.
Felly, rydych chi’n sôn am y tensiwn posibl sy’n bodoli rhwng bod yn elusen a hefyd bod yn gorff sy’n cael ei ariannu gan Lywodraeth Cymru. Ar hyn o bryd, rŷm ni’n llwyddo i gynnal y berthynas honno. Ond, wrth reswm, fel ymddiriedolwyr yr elusen, mae yna gyfrifoldeb statudol arnom ni i ddiogelu buddiannau’r llyfrgell. Felly, petai unrhyw sefyllfa’n codi lle ein bod ni’n teimlo bod buddiannau’r llyfrgell yn cael eu bygwth, byddai’n rhaid inni ddiogelu’r llyfrgell yn y sefyllfa honno. Ond, ar hyn o bryd, mae gennym ni berthynas gweithio arbennig o dda â’r Ysgrifennydd Cabinet, ac rŷm ni’n mawr obeithio y cawn ni berthynas debyg â’r Gweinidog treftadaeth newydd sydd wedi’i benodi dros y dyddiau diwethaf yma.
In terms of our plans for the future, we have a strategic plan that takes us from 2017 to 2021, and we also have the annual review for the year that you refer to. We are very pleased that the Cabinet Secretary has accepted both reports. So, we're building on the work that we've already undertaken. I referred earlier to the digital route. We have received lottery funding of nearly £5 million to create an archive speficially for the BBC in Wales, but we're hoping to develop that to be a general broadcasting archive. The ITV Wales archive is already in the library, and we would also wish to include S4C's archive in that general archive. That means that we have to use lottery funding and a contribution from the Welsh Government, and also that we have to use our own reserves in order to deliver that project, as well as a contribution from the BBC itself.
So, you're talking about this potential tension that exists between being a charity and a body that's funded by the Welsh Government. At the moment, we succeed in maintaining that relationship. But, of course, as the trustees of the charity, there is a statutory responsibility on us to safeguard the interests of the library. Therefore, if there were any situation that would arise where the interests of the library were under threat, we would have to safeguard the library in that situation. But, at the moment, we have a very good working relationship with the Cabinet Secretary, and we very much hope that we will have a similar relationship with the new heritage Minister who's been appointed during the last few days.
Rwyf yn meddwl bob amser bod yn rhaid inni, ar ochr reolaeth ac, wrth gwrs, y bwrdd, geisio gofalu bod y person sydd yn ein hariannu ni, sef Llywodraeth Cymru—ein bod ni’n gwrando’n astud areu hanghenion a'u blaenoriaethau nhw, yn ogystal â, fel oedd Rhodri'n cyfeirio, bod buddion yr elusen yn cael eu gwarchod. Mae tipyn yn dibynnu ar berthynas dda, cyfathrebu da a dealltwriaeth o'n gwaith ni. Felly, mae yn bwysig, rydw i'n meddwl, i ni fel llyfrgell i esbonio pwysigrwydd y gwaith a phwysigrwydd y gwaith statudol rŷm ni fel yr unig lyfrgell adnau cyfreithiol yng Nghymru a'r unig lyfrgell genedlaethol yng Nghymru, wrth gwrs—. Ond, ar y llaw arall, rydw i'n gobeithio, trwy gydweithio a thrwy gadw'r berthynas weithiol dda yma, nad yw hyn yn arwain at densiwn nad ydym ni'n gallu ei ddatrys. Hyd yn hyn, ers i mi fod yn y swydd, rydw i'n teimlo ei bod hi'n bartneriaeth lwyddiannus ar yr ochr honno.
Beth rydym ni wedi cytuno ei wneud sydd yn wahanol—. Pryd ddeuthum i i'r swydd, mi oeddem ni'n gwneud cynllun gweithredol blynyddol, ac roedd hi'n amlwg bod sawl blaenoriaeth i Lywodraeth Cymru ddim yn mynd i gael eu gwneud mewn cwta flwyddyn. Felly, mi wnes i ofyn a fyddai'n bosib inni baratoi strategaeth a chynllun gweithredol pedair blynedd er mwyn inni fod yn realistig efo'r blaenoriaethau yr oeddem ni'n eu gosod ac yr oedden nhw'n eu gosod. Mae'r Ysgrifennydd Cabinet wedi cytuno i fabwysiadu cynllun gweithredol pedair blynedd. Felly, bob blwyddyn, mi fydd yna atodiad i'r cynllun lle mae blaenoriaethau'r Ysgrifennydd Cabinet neu'r Gweinidog am y flwyddyn honno yn cael eu hamlygu. Rydw i'n gweld hynny yn gyd-destun llawer mwy realistig ac effeithiol er mwyn inni allu cynllunio a blaenoriaethu ein gwaith, ac rwy'n falch o ddweud yr oedd y swyddfa archwilio hefyd yn gweld honno yn ffordd fwy effeithiol o ddarganfod a gweithredu ar y blaenoriaethau.
I think that we always, on our side, and the board's side, have to be sure that the person who funds us, namely the Government of Wales—that we have to listen their priorities and their requirements, as well as, as Rhodri referred to, that the interests of the charity are safeguarded. A lot depends on a good relationship, good communication and an understanding of our work. So, it is important, I think, for us as a library to explain the importance of our work and the importance of the statutory work that we, as the only legal deposit library in Wales and the only national library in Wales—. But, on the other hand, I do hope that, through collaboration and through keeping this good working relationship, this doesn't lead to tensions that we can't resolve. So far, since I've been in post, I do feel that it is a successful partnership on that side.
What we have agreed to do, which is different—. When I took up this post, we produced an annual operational plan, and it was obvious that several Welsh Government priorities weren't going to be delivered in just a year. So, I asked whether it would be possible for us to prepare a strategic and operational plan over a four-year period in order for us to be realistic with the priorities that we set and that they set. The Cabinet Secretary has agreed to adopt a four-year operational plan. So, every year, there will be an annex to that plan where the priorities of the Cabinet Secretary or the Minister for that year will be highlighted. I do see that as a much more realistic and effective context for us to be able to plan and prioritise our work, and I am pleased to say that the audit office also saw that as a more effective way of identifing and acting on the priorities.
Wrth gwrs, mae cael cyllideb sy'n ymestyn dros ddwy flynedd yn gymorth mawr inni o ran ein cynllunio. Fe fyddai cael cyllideb sydd dros dair blynedd hyd yn oed yn well inni. Fe fyddai cael llythyr cylch gorchwyl ar ddechrau tymor Llywodraeth yn ymestyn dros dymor y Llywodraeth honno o bum mlynedd yn dweud beth yw gofynion a gobeithion y Llywodraeth ar gyfer y llyfrgell genedlaethol eto yn ein helpu ni i gynllunio yn hirdymor. Y broblem rŷm ni wedi bod yn ei hwynebu ydy cyllideb o 12 mis a llythyr cylch gorchwyl bob blwyddyn oddi wrth y Gweinidog, neu'r Ysgrifennydd Cabinet fel oedd e'n ddiweddar. Byddai unrhyw beth sy'n ymestyn y ddau beth hynny yn help mawr inni wrth gynllunio ymlaen.
Of course, having a budget that extends over two years is of great assistance to us in terms of planning. Having a budget that's over three years would would be even better. Having a remit letter at the beginning of a Government term, extending over that Government's term of five years, telling us what are the hopes and requirements of the Government for the national library would also help us to plan in the long term. The problem that we've been facing is a 12-month budget and a remit letter on an annual basis from the Minister, or the Cabinet Secretary as was the case recently. Anything that extends those two things would be of great assistance to us in planning ahead.
But, at the moment, you are basically saying that there is no diversion between your goal as a charity and your goal as an organisation that is functioning under a remit letter. You and Government are all going in the same direction.
Mae bwrdd yr ymddiriedolwyr yn hapus ar hyn o bryd ein bod ni'n cydweithio â'r Llywodraeth, bod y Llywodraeth yn deall ein dyheadau ni a'n bod ninnau hefyd yn ymateb i'w gofynion hwy ynglŷn â chyfeiriad gwaith y llyfrgell. Rydym ni'n unedig yn ein barn bod y llwybr digidol yn mynd i ymestyn gwasanaeth y llyfrgell nid yn unig i Gymru gyfan ond y tu hwnt i hynny. Ond bydd e'n golygu mynediad llawer iawn mwy eang i gasgliadau'r llyfrgell. Felly, ar hyn o bryd, mae'r Llywodraeth a ninnau'n cydweithio ac mae'n dyheadau ni'n cyd-fynd.
The board of trustees is happy at the moment that we are collaborating with the Government, that the Government understands our aspirations and that we also respond to their requirements in terms of the direction of the work of the library. We are united in our view that the digital pathway is going to extend the services of the library not just to the whole of Wales, but beyond that. But it will mean much wider access to the library's collections. So, at the moment, the Government and ourselves are working together and our aspirations match.
I know that we've got more questions we want to ask later about safeguarding the future, so I just want to go back to 2016-17 for a moment, because, according to the Government's remit letter and your key performance indicators, there have been areas where you haven't fulfilled the KPIs. Going forward, back to the plans for the future period and your strategic plan 2017-21, I don't necessarily pick out of the narrative how you would meet those—opening up access, not just the reading rooms, but the visitor numbers, pushing out the use over the internet, et cetera. I don't pick up from this narrative how you're going to meet the current set of objectives, let alone any objectives any new Minister may care to visit upon you.
Wel, yn y pen draw, mae o i gyd yn dibynnu ar yr adnodd sydd gan y llyfrgell—pa mor gyflym bydd y llyfrgell yn gallu cyrraedd unrhyw flaenoriaeth. Mae hynny yn destun trafod gyda gweision sifil a gyda'r Llywodraeth ei hun. Rydw i yn hyderus, dros gyfnod o bedair blynedd, y byddwn ni'n cyrraedd y targedau. Mae yna rai targedau yn mynd i newid oherwydd bod yr oes yn newid—er enghraifft, ymwelwyr ag ystafelloedd darllen y llyfrgell. Nid ydy hyn yn unigryw i'r llyfrgell. Mae sawl llyfrgell academaidd a llyfrgell ymchwil, ac mae yna lai o bobl yn mynd yno oherwydd eu bod nhw'n disgwyl cael yr adnoddau dros y we. Wel, mae hynny, chwarae teg, yn rhywbeth yr ydym ni eisiau ei annog hefyd oherwydd byddem ni'n gallu cyrraedd mwy o bobl am 24 awr. Ar sail hynny, rydw i'n meddwl y bydd angen i ni drafod a negodi gyda'r Llywodraeth a ydy'r ffigurau ar gyfer ymwelwyr a defnyddwyr yr ystafelloedd darllen yn realistig yn y cyd-destun hwnnw. Ar y llaw arall, mi fyddech chi, ar sail hynny, yn disgwyl i'r nifer sydd yn darllen ar y we gynyddu, ac rydym ni wedi gosod targed uchelgeisiol iawn i gynyddu hynny i 3 miliwn erbyn 2021, ac mi fyddwn ni'n gwneud hynny drwy gael mwy o ddeunydd ar y we a rhoi mwy o bwyslais ar yr isadeiledd technoleg y bydd y llyfrgell ei angen er mwyn gwneud hynny. Buaswn i'n tybio y bydd hi'n bosib y bydd yr asesiad o berfformiad yn newid drwy'r llythyr cylch gorchwyl. Hwyrach y bydd y Gweinidog yn edrych mwy ar yr isadeiledd technolegol. A ydy hynny'n mynd i ddod â'r ymwelwyr ychwanegol, yn hytrach nag edrych, hwyrach, ar y ffyrdd mwy traddodiadol o fesur perfformiad y llyfrgell?
Well, ultimately, it depends on the resource that the library has— how quickly the library can reach any priority. That is the subject of discussion with civil servants and with the Government itself. I am confident, over a period of four years, that we will reach those targets. There are some targets that are going to change because the world is changing—for example, visitors to the reading rooms in the library. That's not unique to the library. There are several academic and research libraries, and fewer people are going there because they expect to get those resources online. That is something that we want to encourage as well, frankly, because we could reach more people on a 24-hour basis. On the basis of that, we're going to have to negotiate and discuss with the Government whether the figures for visitors and users of the reading rooms are realistic in that context. On the other hand, on that basis, you would expect the number who read content online to increase, and we have set an ambitious target of increasing that to 3 million by 2021, and we will be doing that by having more online materials and putting more of an emphasis on the infrastructure, the technological infrastructure, that the library will have in order to do that. I would suspect that it would be possible that the performance assessment will change through the remit letter. The Minister may want to look more at the technological infrastructure. Is that going to bring additional visitors rather than looking perhaps at the more traditional ways of measuring performance at the library?
I totally buy into your point about the fact that the way we access library materials now is highly different and people don't go to reading rooms in the droves that we used to in the 1960s and 1970s and 1980s et cetera, but I was surprised by the fact that the internet side of it, the access over remote users hadn't taken off and that you hadn't made those targets, and that was concerning. I wondered if that was to do with investment in the IT infrastructure within the library.
I think that's where the four-year aspect is important. It's not going to rise overnight and it's not going to rise without that investment taking place. So, I think our negotiations with the Minister and with the civil servants will be around setting performance targets that are based on improving the infrastructure, extending the range of material we can deliver over the internet and to a broader range of audiences. I'm delighted that in Hwb, for example—the platform for schools in Wales—the library's resources are continually in the top five resources accessed by teachers. So, I think there's also a quality aspect to this. As a national library, we want to be a library—. In the context—the very sad context—of fake news, we want to be an authoritative source of information about Wales, as we have always been. So, it's important, I think, that we look at investment in infrastructure, we look at investment in the quality of the resources we provide and that we look at a diverse audience who could benefit from those resources, and that I think is really where the four-year plan is needed, because you can't do that in nine months.
Okay. My final question really is around whether or not you feel that your goals—or what was the rationale behind the Royal Commission on the Ancient and Historical Monuments of Wales moving into the library? Did that help you achieve your goals? Do you think it's going to be helping you to achieve your objectives to become the locus for Welsh—our collective wisdom, if you like? And what analysis was made of the costs and benefits of bringing that organisation in and what impact has it had on the library, particularly in terms of costs?
Absolutely. We are already seeing the benefits of that new relationship. Clearly, for the royal commission, it's a lot cheaper because they are no longer looking after an extremely expensive building. They are now in a purpose-built part of the library, which has been specifically designed for them. We have synergy already in terms of our work. We are also providing the payroll for the royal commission, so I see in the future that there will be other back-office functions that I hope we will be able to contribute. And, of course, in the context of Historic Wales and its development, having the commission in the library ensures that we have opportunities for joint working and joint collaboration. So, it's a very exciting time, I think, both for the commission and for us, and I would hope we would start to see the benefit of that very quickly.
Well, it cost the Welsh Government, I think it would be fair to say, rather than—. But, David, the cost benefits, I think, are there—
We had to spend quite a lot of money on one of the blocks where they're located, which we would have had to have done anyway. So, it was a cost that would have happened at some point in the future. Also, the library gets an income of £95,000 for rent and service charges in respect of the commission occupying space at the library. So, for us, it was financially very beneficial because it helped us to address the maintenance backlog in part of the building and we're also getting a higher level of income from the Welsh Government for the future, so it made sense for the library.
Mae'n helpu'r cydweithio rhwng y naill ffordd a'r llall, hefyd. Mae Linda eisoes wedi cyfeirio at rai meysydd lle'r rŷm ni wedi llwyddo i gydweithio, a bydd yna feysydd eraill yn y dyfodol lle y bydd hynny'n bosibl oherwydd ein bod ni nawr yn gweithio yn yr un adeilad.
Un o'r pethau rŷm ni wedi llwyddo i'w gwneud ydy cynorthwyo gyda'r gwaith o estyn cyfleoedd i staff y comisiwn brenhinol ddysgu'r Gymraeg. Gan fod gan y llyfrgell staff llawer iawn yn fwy, roedd gennym ni'r adnoddau i sefydlu cyrsiau a rŷm ni wedi gallu gwahodd aelodau o staff y comisiwn brenhinol ar y cyrsiau hynny ac mae hynny wedi bod yn llwyddiant mawr hefyd.
It does help in terms of collaboration. Linda has already referred to some areas where we have succeeded in working collaboratively, and there will be other areas in the future where that will be possible because we're now working from the same building.
One of the things that we've managed to do is assist with the work of extending opportunities for staff of the royal commission to learn Welsh. Because the national library has a bigger number of staff, we had the resources to establish courses and we've been able to invite members of staff of the royal commission on to those courses and that has been a great success as well.
Yes. Can I ask, on Historic Wales, there was a great deal of anxiety in the sector when Historic Wales was first announced—do you now feel you're at a position where you're satisfied that it's going to produce added value?
Rhodri, a ydych chi eisiau ateb yn gyntaf, wedyn fe wnaf i edrych ar yr ochr weithredol?
Rhodri, do you want to answer first, and then I will look at the operational side?
Yn sicr, fe oedd yna gonsýrn ar y cychwyn fod yna ryw gorff newydd yn mynd i gael ei osod uwchben y sefydliadau cenedlaethol sydd yn bodoli. Wrth reswm, fe oedd yna gonsýrn ynglŷn ag annibyniaeth y sefydliadau cenedlaethol hynny. Wedi i'r Gweinidog, fel yr oedd ef y bryd hynny, sefydlu gweithgor—a buodd Linda a minnau'n eistedd ar y gweithgor—i ystyried y mater ac i edrych ar sut y gallwn ni symud ymlaen i gael mwy o gydweithredu rhwng y sefydliadau yma, fe baratowyd adroddiad a gyflwynwyd i'r Gweinidog. Fe dderbyniodd y Gweinidog yr adroddiad hwnnw; fe wnaeth e ddatganiad yn y Senedd ynglŷn â hynny, ac felly, rŷm ni'n teimlo, nawr, ein bod ni'n symud ymlaen i sicrhau llawer iawn mwy o gydweithredu rhwng y sefydliadau, a rŷm ni'n croesawu hynny, ac mae hynny'n hwyluso'n gwaith ni, a gobeithio, yn mynd i arwain at rai arbedion. Ond mae'n cynnig cyfleoedd newydd.
Un o'r pethau y gwnaethom ni nodi yn yr adroddiad, er enghraifft, petaem ni'n sôn am brentisiaethau, petai prentisiaeth yn cael ei chynnig i unrhyw un ar draws y pedwar sefydliad, yn hytrach na dim ond cael prentisiaeth yn y llyfrgell, y ffaith eu bod nhw'n gallu mynd i'r amgueddfa hefyd a'r comisiwn brenhinol—mae hynny'n mynd i ehangu'r profiadau o fewn y brentisiaeth honno.
Felly, ar sail yr adroddiad a gyflwynwyd i'r Gweinidog, sydd wedi cael ei dderbyn ganddo ef, rŷm ni yn teimlo nawr bod yna symud ymlaen gyda chydweithredu rhwng y sefydliadau heb fod annibyniaeth y sefydliadau hynny'n cael eu bygwth mewn unrhyw ffordd. Hynny yw, mae Cymru'n brin o sefydliadau cenedlaethol, ac fe fyddai erydu annibyniaeth unrhyw sefydliad cenedlaethol yn rhywbeth y byddai gennym ni gonsýrn enfawr amdano fe. Felly, rydw i a bwrdd yr ymddiriedolwyr, bellach, yn hapus bod y cydweithio'n digwydd heb fod annibyniaeth y sefydliadau, mewn unrhyw ffordd, yn cael ei thanseilio.
Certainly, there was a concern initially that there was a new body going to be placed above the national organisations that exist. And, of course, there was concern about the independence of those national organisations. Following the Minister, as he was at the time, establishing a working group—and Linda and I were on that working group—to consider the matter and to look at how we could move forward to establish more collaboration between these organisations, a report was prepared and presented to the Minister. The Minister accepted that report; he made a statement in the Senedd on that, and therefore we feel now that we are moving forward to ensure much more collaboration between the organisations, and we welcome that, and that facilitates our work, and, hopefully, leads to some savings. But it does offer new opportunities.
One of the things that we noted in the report, for example, was that, if we were talking about apprenticeships, if an apprenticeship was offered to someone across the four organisations, rather than just having an apprenticeship in the library, they could go to the museum and the royal commission also—that would expand the opportunities within that apprenticeship.
Therefore, on the basis of the report that was presented to the Minister, which has been accepted, we do now feel that there is a moving forward in terms of collaboration between organisations without the independence of those organisations being threatened in any way. Namely, Wales is very short of national organisations and eroding the independence of any national organisation would be something that I would have great concern about. I and the board of trustees are now content that this collaboration is ongoing without the independence of those organisations in any way being undermined.
Rydw i yn teimlo bod Cymru Hanesyddol yn symud ymlaen yn dda yn y gyd-destun ein bod ni'n trafod pethau gweithredol. Fel llyfrgell, rwy'n meddwl beth rydym ni eisiau allan o Gymru Hanesyddol ydy gwelliannau—gwelliannau yn ein gwasanaethau ni neu yn y gwasanaeth ar draws y sector. Ond, wrth gwrs, mae gan y llyfrgell genedlaethol flaenoriaethau yn ogystal â rhai Cymru Hanesyddol, ac felly dyna fel yr oedd Rhodri yn sôn: ni fyddai Cymru Hanesyddol yn gallu cyflwyno, er enghraifft, ein gwasanaethau statudol ni, fel llyfrgell adnau gyfreithiol. Mae yn elfen bwysig o'n gwaith ni—wrth gwrs ei fod o—a dylem ni wneud cymaint â fedrwn ni i wneud Cymru Hanesyddol yn llwyddiant. Ond, os byddai Cymru Hanesyddol dim ond wedi diffinio gwaith y llyfrgell, mi fydd yna gymaint wedi cael ei adael allan o bethau rydym ni'n gorfod cyflawni'n statudol.
Felly, ar hyn o bryd, rydw i'n gweld o'n gweithio, oherwydd mae pawb yn gwirfoddoli ac yn gobeithio, allan o'r holl waith a holl ddeinamig y peth, mae gwelliannu'n mynd i ddod i wasanaethau. Dyna beth mae'r llyfrgell eisiau yn y pen draw.
I feel that Historic Wales is moving forward well in the context that we are discussing operational issues. With the library, what we want out of Historic Wales is improvements—improvements in our services or in services across the sector. But, of course, the national library has priorities as well as Historic Wales priorities, so, as Rhodri mentioned, Historic Wales would not be able to undertake, for example, our statutory services, as a legal deposit library. It's an important element of our work—of course it is—and we should do as much as we can to make Historic Wales a success. But, if Historic Wales only was defining the work of the library, so much would be left out in terms of the things that we have to achieve on a statutory basis.
So, at present, I do see it working, because everyone is volunteering and is hoping, out of all of the work and the dynamic of this, that improvements will be achieved in services. That's what the library wants, ultimately.
I sense a theme in your evidence that we've heard from other organisations, which I understand, given the cuts there have been in recent years, which is, if only you had more, if only you had greater security over longer period to be able to plan, then all would be well in the world. And that's not the situation we find ourselves in. And I note the letter that the auditor general has written to the committee last week, which says:
'The Library has not yet addressed explicitly in its strategic planning the difficult questions of what core services it may need to reduce or cease providing in future if levels of Grant-in Aid reduce'.
What I take that to say is that there's a degree of denial about the declining level of public spending we've faced in the last couple of years. Whilst it's comforting to keep saying, 'If only we had more', for sure, it seems from the auditor general's letter there's some frustration that you're not focusing your mind on what we know is going to happen.
Nid ydw i'n darllen llythyr Swyddfa Archwilio Cymru yn yr union ffordd rŷch chi wedi ei ddarllen e. Rwy'n credu ei fod e yn nodi y pryderon am y sefyllfa sydd yn ein hwynebu ni. Fel y dywedais i ynghynt, os ydym ni'n edrych ymlaen pump i 10 mlynedd, mae yna her ariannol enfawr yn ein hwynebu ni a phob sefydliad arall yn y sector gyhoeddus. Rwy'n dod yn ôl at y pwynt y gwnes i yn wreiddiol hefyd: mater i'r lle yma, i wleidyddion y lle yma—y Llywodraeth yn benodol, ond i wleidyddion o bob plaid—yw mynd i'r afael â phroblem sylfaenol y ffaith bod y gwariant ar iechyd yn cynyddu o flwyddyn i flwyddyn lle mae'r gyllideb ar hyn o bryd yn crebachu o flwyddyn i flwyddyn. Tra bod hynny yn parhau, mae'r bygythiad i bob sefydliad arall o fewn y sector gyhoeddus yn cynyddu.
O ran y llyfrgell, rŷm ni'n ymwybodol iawn o hynny. Rwy'n credu ein bod ni wedi cymryd agwedd bragmatig iawn. Rŷm ni wedi dweud, wrth gwrs, petai gennym ni fwy o arian, byddem ni'n gallu gwneud mwy. Ond nid oeddem ni ychwaith eisiau bod mewn sefyllfa lle'r oeddem ni yn wynebu sefyllfa lle'r oedd staff y llyfrgell yn mynd o flwyddyn i flwyddyn yn gwneud yr un gwaith o ddydd i ddydd gyda llai a llai o adnoddau. Felly, rŷm ni wedi mentro ar y llwybr digidol, sydd yn golygu bod yna heriau newydd yn wynebu'r staff ac rŷm ni'n falch o ddweud bod ein staff ni wedi ymateb yn gadarnhaol iawn i hynny. Rŷm ni wedi newid y strwythur rheoli, sy'n golygu bod y tîm uwch-reoli wedi mynd i lawr o saith i dri, felly mae yna lawer iawn mwy o gyfrifoldebau wedi mynd i lawr i benaethiaid adrannau ac maen nhw wedi ymateb yn gadarnhaol iawn i hynny.
Felly, rŷm ni'n cadw llygad barcud ar y sefyllfa. Fel y dywedais i, rŷm ni'n ddiolchgar iawn am y ddwy gyllideb ddiwethaf, y ddau gytundeb rhwng y Llywodraeth a Phlaid Cymru sydd wedi rhoi rhyw gymaint o sefydlogrwydd ariannol i ni. Ond, ar yr un pryd, rŷm ni wedi gorfod cymryd mesurau fel cwtogi y staff o 300 i 223, sydd yn golygu bod yna bwysau ychwanegol ar ein gwasanaethau ni. Ond rŷm ni'n ymwybodol iawn nad oes yna ddim byd yn mynd i newid yn y tymor byr o ran y sefyllfa o ran ariannu cyrff yn y sector gyhoeddus. Rŷm ni'n mynd i ymateb i'r sialens honno drwy edrych am arian allanol, fel y gwnaethom ni gyda'r cymhorthdal rŷm ni wedi'i dderbyn oddi wrth y loteri treftadaeth a hefydd y gwaith o edrych am fwy a mwy o roddion elusennol hefyd er mwyn ceisio—
I don't read the Wales Audit Office's letter in exactly the same way as you've read it. I think it notes the concerns about the position that's facing us. As I said earlier, if we look ahead five to 10 years, there is a great financial challenge facing us and every other organisation in the public sector. I come back to the point that I made originally: it's a matter for politicians in this place—the Government specifically, but for politicians of all colours—to address the fundamental problem of the fact that expenditure on health is increasing year on year whereas the budget is shrinking. While that continues, the threat to every other organisation within the public sector is increasing.
In terms of the library, we are very aware of that. I think we have taken a pragmatic approach to this. We have said, of course, if we did have more money, we could do more. But we also didn't want to be in a situation where we were facing a situation where the library staff were going from year to year doing the same work day to day with fewer and fewer resources. So, we have gone on this digital pathway, which means that there are new challenges facing the staff and we are pleased to say that our staff have responded very positively to that. We have changed the management structure, which means that the senior management team has gone down from seven to three, and therefore there's much more responsibility that's gone down to heads of department and they've responded positively to that.
Therefore, we're keeping an eagle eye on the situation. We're very grateful for the last two budgets, the arrangements between Plaid Cymru and the Government that provided us with some financial stability. But, at the same time, we've had to take actions such as reducing the number of staff from 300 to 223, which means there is extra pressure on our services. But we are very aware that nothing is going to change in the short term in terms of the situation relating to the funding of organisations in the public sector. We're going to respond to that challenge by looking for external funding, as we did with the grant aid that we received from the Heritage Lottery Fund and also with the work of looking at more and more charity gifts in order—
Okay, can I just jump in there? I'd like to come on to the fundraising in a second. I note you said earlier you read the letter differently from me, but the letter is pretty clear in its intent. I note again your comments in praise of the Plaid Cymru budget deal and your view on how the Welsh Government should spend its budget. In terms of the role you currently have, which is managing the library's budget, the auditor general clearly feels the library is not doing enough to look forward at what core services it may need to reduce or cease providing in future if the level of grant in aid reduces. There's a very clear challenge from the auditor general, which you don't seem to accept, from the tenor of your comments.
Nid ydw i'n derbyn ein bod ni ddim wedi wynebu y sefyllfa yma. Rydw i'n derbyn y rhybudd y mae Swyddfa Archwilio Cymru wedi'i roi fod yna heriau yn ein hwynebu ni yn y tymor pum mlynedd nesaf, y 10 mlynedd nesaf. Rŷm ni wedi llwyddo i ymateb i hynny hyd yn hyn drwy beidio â thorri nôl ar y gwasanaethau craidd rŷm ni'n eu cynnig ac ymestyn gwasanaethau y llyfrgell i gyfeiriadau newydd a sicrhau mwy o fynediad gan y cyhoedd i'r casgliadau sydd gyda ni. O ran yr archif ddarlledu, er enghraifft, fe fydd yna bedwar pwynt mynediad newydd yn cael eu sefydlu ledled Cymru er mwyn ymestyn y gallu i gael mynediad i'n gwasanaethau ni. Yn sicr, fe fyddwn ni fel bwrdd yn cymryd ystyriaeth o'r hyn y mae'r swyddfa archwilio yn ei ddweud ac yn sicrhau bod yna olwg barcud yn cael ei gynnal ar ein gwasanaethau craidd ni. Mae'n rhaid cofio bod yna ofynion statudol arnom ni i gyflenwi y gwasanaethau craidd hynny, a dyna pam roeddwn i'n dweud yn gynharach bod ein rôl ni fel ymddiriedolwyr nid yn unig yn rôl o ymateb i ofynion y Llywodraeth fel ein prif ffrwd ariannol ni, ond hefyd mae gennym ni gyfrifoldeb i sicrhau buddiannau yr elusen i'r hirdymor. Ac rwy'n hyderus ein bod ni'n gwneud hynny, ond rydw i'n ddiolchgar i Swyddfa Archwilio Cymru am ein hatgoffa ni o hynny hefyd.
I don't accept that we haven't faced this situation. I accept the warning that the Wales Audit Office has given that there are challenges facing us in the next five to 10 years. We have succeeded in responding to that by not cutting back on the core services that we offer and also extending the library's services to new directions and ensuring greater access by the public to the collections we have. In terms of the broadcasting archive, for example, there will be four new access points established across Wales in order to extend the ability to access our services. Certainly, we as a board will be considering what the Wales Audit Office have said and ensuring that there will be an eagle eye on our core services. We have to remember that there are statutory requirements upon us to deliver the core services, and that's why I was saying earlier that our role as trustees is not only a role of responding to the Government's requirements as our main funding source, but also we have a responsibility to ensure the interests of the charity in the long term. And I'm confident that we're doing that, but I'm grateful to the Wales Audit Office for reminding us of that as well.
Can I ask about the fundraising? I think the BBC project does sound very exciting, so you've obviously had success in raising large grants. In terms of your ongoing fundraising from private sources, which is a challenge constantly being put out to the cultural sector, if I read your accounts properly then you have some historic legacies that you clearly find very helpful. But, in terms of the annual fundraising you're doing from private sources beyond that, you've not had enormous success in recent times. Is that right?
I think it's fair to say that managing prospective donors is a long-term relationship; it's not something you can magically get out of the air—I wish it was—and therefore I think it's fair to say that this, again, is a long-term strategic planning issue. For example, not so long ago, we were extremely fortunate of the generosity of one individual; we had £1.5 million, which—of course, one would wish for that every year. So, I think it's fair to say that our management of donors is through relationship, communication, talking about the library's priorities, talking about our requirements, and that over the years has borne fruit. I think over a long-term period the library has accumulated its charitable reserves. It uses those reserves for the benefit of the library's work, and therefore I would, to be honest, say that actually the donor relationship is working in the library, but from year to year it will vary. We obviously have to do more. As Rhodri says, we have to be very, I think, proactive because that is a far more likely source of funding for us in the future than perhaps increasing Government funding.
David, a wyt ti eisiau dweud rhywbeth?
David, do you want to say something?
Just a supplementry to that: do you have targets on how much money you're seeking to raise from—?
In terms of our donor strategy, what we are trying to do is to set targets for each library department in terms of their relationship with prospective donors because, obviously, donors have individual interests, and those are internal targets, which are then accumulated. But I think it's fair to say that annual targets for receiving charitable donations would be rather difficult, I think, both to assess and to set, but I do think it's reasonable over a period of time that one does look to see if those donations are continuing to come, and that's where the management comes in.
David, a oes gen ti rywbeth ti eisiau ategu?
David, do you want to add anything?
We do have targets for where we want to be, because, clearly, we want to accumulate our charitable reserves so that we can invest that money and use the income—sorry, that's where I was going to see if David—in terms of the longer-term strategy.
Yes, our longer-term strategy—once it became apparent about five or six years ago that austerity was going to begin to bite, we had to look at where we could generate non-Government sources of income. We've got limited potential for trading income, but we have been historically successful in attracting legacies. So, what we've done is use that legacy income, and invested it. It generates an income of about £300,000 a year for us now, and also, the capital gains, we can use that to as match funding for the BBC Heritage Lottery Fund archive funding. So, it's got benefits in terms of our long-term revenue income, and also capital funding.
Very, very briefly, because I've got to bring Vikki in because there are a number of other questions as well.
So, the sum of £300,000 is your current level of income. What is your longer-term target to get that up to?
We would hope that we would have at least £1 million a year coming from all sources of income for the library by 2021. That is the target in our strategic plan, which is pretty ambitious but will be required, as you quite rightly say. Our other sources of funding are not going to increase.
Building on the questions that my colleague Lee Waters has just asked you, it's not just the auditor general that's asking you as an institution to look again more carefully at your finances; I note that the Welsh Government also in its remit letter has asked you as an institution to increase your financial sustainability. So, you've given a raft of pieces of evidence to my colleague already, so, without going back over that, then, do you not think that looking again at the pensions issue with the final salary scheme that you’ve got in place now could be the missing piece to the jigsaw to ensure your financial sustainability moving forward?
Na, nid ydym yn teimlo mai dyna ydy'r ateb ar hyn o bryd, er, fel y dywedom ni yn gynharach, rydym ni yn cadw y drws hwnnw ar agor petai rhaid gwneud hynny. Y realiti ydy y byddai newid y cynllun pensiwn ar hyn o bryd yn golygu mwy o gostau i'r llyfrgell na chynnal y cynllun fel ag y mae. Felly, rydym yn cadw golwg ar hynny, ond ar hyn o bryd, mae hynny dan reolaeth. Rydym yn gweld cyfraniadau elusennol, yn enwedig drwy ewyllysiau, fel ffordd yn draddodiadol y mae'r llyfrgell wedi llwyddo i dderbyn arian, ond yn ogystal â'r arian a ddaeth o'r loteri treftadaeth, mae yna ystod o gymorthdaliadau llai wedi dod oddi wrth y loteri a chyrff eraill. Felly, rydym yn edrych ar ystod o bosibiliadau o ran arian allanol i gynnal gweithgaredd y llyfrgell, oherwydd rydym yn llawn ymwybodol o'r ffaith nad oes mwy yn mynd i ddod o'r pwrs cenedlaethol oddi wrth y Llywodraeth. Roeddem yn ddiolchgar am gyllideb fflat am y ddwy flynedd nesaf, oherwydd ein bod ni'n sylweddoli mai dyna realiti'r sefyllfa, a bod yn rhaid i ni ffeindio arian allanol wedyn i wneud yn iawn am hynny.
No, we don't feel that that is the solution at present, although, as we said earlier, we are keeping that door open if we have to do it. The reality is that changing the pension scheme at present would mean more cost to the library than maintaining the scheme as it is. So, we are keeping an eye on that, but at present, that is under control. And we are seeing charitable contributions, particularly through wills, as a traditional way in which the library has obtained money, but as well as the money that came from the heritage lottery, there's a range of smaller subsidies that have been obtained from the lottery and other bodies. So, we are looking at a range of possibilities in terms of external funding to maintain the activity of the library, because we're very aware of the fact that we're not going to get any more money from the public purse and from the Government. We were very grateful for a flat budget for the next two years, because we realised that that is the reality of the situation, and that we have to find external funds in order to compensate for that.
A gaf i ychwanegu hefyd bod y llythyr cylch gorchwyl wedi gofyn i ni edrych ar ffyrdd rydym yn gallu alinio amodau gwaith staff y llyfrgell gyda staff y gwasanaeth sifil? Felly, byddai symud i ffwrdd o'r cynllun pensiwn yn symud i ffwrdd o delerau tebyg ar y gwasanaeth sifil. Ac hefyd, byddwn i'n dweud bod cyflogau yn y llyfrgell yn tueddu i fod yn isel. Median salary y llyfrgell yw £23,000 y flwyddyn. Yn y Llywodraeth, mae'n £35,000. Felly, rydym yn bell i ffwrdd o amodau gwaith y gweision sifil. Felly, rwy'n meddwl, pe byddem ni yn symud i ffwrdd o'r cynllun pensiwn presennol, byddai hynny'n ergyd i'r staff ac yn ein symud ni i ffwrdd o alinio amodau gwaith.
If I could just add that the remit letter has asked us to look at ways we can align the working conditions of library staff and civil servants. So, a move away from the pension scheme would be a move away from similar conditions in the civil service. And also, I would say that salaries in the library tend to be low. The median salary is £23,000 a year. In the Government, it's £35,000. So, we're far away from the civil servants' conditions. If we were to move away from the present pension scheme, that would be a blow to the staff and would move us away from aligning working conditions.
Thank you. Looking at the 2 per cent limit for cash balances at end year, what impact does that have on the library, and what action do you take to address that issue?
The 2 per cent cash limit is a problem for us, because it actually is an incentive to have a weak balance sheet—that you have low levels of cash and low levels of working capital. And it means we can't build up reserves of public funds. We've got £110,000 in reserves of public funds, and we're turning over over £10 million, so it's very, very small. There's no margin for error in that at all. Ideally, especially in uncertain financial times, it would be better to have more flexibility over reserves, and be allowed to build up our reserves as a cushion. But we are restricted within this 2 per cent cash.
We can apply to the Welsh Government, in special cases, for us to say 'Well, we need to carry over more.' In this financial year, there were some capital retentions that we had held back, which weren't due until the current financial year. So, they gave us permission to carry that over. But the 2 per cent cash figure is quite frustrating and it doesn't help us run our business effectively.
Is there anything else the Welsh Government could do to help mitigate that? It's sort of an ad hoc basis that you're talking about now. Would you like a firmer arrangement to try and mitigate that moving forward?
As a relatively small body in the overall scope of the Welsh Government, I think perhaps we could have more flexibility to move our cash over 2 per cent, because even if our cash was 10 per cent, within the Welsh Government's budget, that's an absolute drop in the ocean, and it would give us more flexibility to manage our budgets from year to year. It would get rid of the incentive to spend our money by 31 March. So, we think perhaps some flexibility around the cash balance would help.
I have a question on workforce development, if now is the appropriate time to ask.
I notice again from the auditor general's letter to the committee of 25 October reviewing the recommendations he made to the library last December that he'd recommended you produce a workforce development strategy. In beautifully stated auditor's language, he says that
'Most of the work required for this recommendation lies ahead'.
I take that to mean that you haven't done it. So, can you tell us what's been the problem there?
Nid yw'n broblem gymaint â'r amser y bydd yn ei gymryd i wneud hyn yn iawn, oherwydd, wrth gwrs, rydym eisiau ymgysylltu â staff y llyfrgell, ac rydym eisiau cynnwys eu barn nhw. Nhw sy'n gwneud y gwaith. Nhw sydd yn llawer mwy cyfarwydd â'r anghenion mewn sawl maes. Felly, y ffordd rydym yn mynd ati yw, yn y cynllun strategol pedair blynedd, byddwn yn cychwyn gydag awdit o sgiliau—hynny yw, pa sgiliau y bydd y llyfrgell eu hangen yn symud ymlaen, yn enwedig wrth feddwl ein bod ni'n trawsnewid y llyfrgell i fod yn llyfrgell ddigidol. Ac, o hynny, byddwn ni'n gweld beth ydy'r gaps, beth sydd gennym ni ddim, beth mae'n rhaid i ni ei lenwi o ran hyfforddiant, ac o ran cael staff gyda'r hyblygrwydd, hwyrach, i ddysgu sgiliau newydd. Byddwn ni'n symud ymlaen wedyn i gynllun ar gyfer pobl—hynny yw, cynllun i helpu unigolion yn y llyfrgell i ymdopi â gwaith newydd, sefyllfa waith newydd, yn enwedig nôl i'r cwestiwn yma o ychwanegu at ein darpariaeth ddigidol. Ac yn 2018—diwedd 2018—mi fyddwn ni'n cyflawni un drafft, cynllun gweithlu drafft, i'r bwrdd ac i'r Llywodraeth, er mwyn datrys beth sydd, ar hyn o bryd, yn sefyllfa anodd iawn i'r staff. Fedrwch chi ddim mynd lawr a cholli traean o'ch staff mewn pedair blynedd heb fod angen ailstrwythuro'r ffordd rydym ni'n gwneud pethau. Ac felly, mae hyn yn mynd i gymryd 18 mis i ni i'w gwblhau. Mae'n well gen i, fel prif weithredwr, gwblhau hynny yn gadarn, gyda'r staff, gyda'r bwrdd, yn hytrach na thrio gwneud rhywbeth yn sydyn, ac wedyn ffeindio nad yw'n gwneud y tro. Rhodri, dydw i ddim yn gwybod a ydych chi eisiau ychwanegu—.
It's not a problem so much as the time that it will take to do it properly, because, of course, we want to engage with the library staff, and we want to include their opinion. They do the work, and they're much more familiar with the needs in several areas. So, the way that we're proceeding is that, in the four-year strategic plan, we'll be starting with a skills audit—that is, what skills will the library need, moving forward, particularly in thinking that we are transforming the library to be a digital library. And, from that, we will see what the gaps are, what we don't have, and what we have to fill, in terms of training, and in terms of having staff with the flexibility to learn new skills. And we'll be moving forward then to a people strategy, to help individuals in the library to cope with new work, and new working situations, particularly back to the question of adding to our digital provision. And, in 2018—the end of 2018—we will be delivering a draft workforce plan, to the board and to the Government, in order to resolve a very difficult situation for the staff. You can't lose a third of your staff in four years without a need for restructuring the way that we do things. And so this is going to take 18 months for us to do. I would rather, as the chief executive, complete that in a robust way, with the staff, and with the board, rather than trying to do something very quickly, and then finding that it doesn't work. Rhodri, do you want to add something?
Yn ychwanegol at hynny, wrth gwrs, yn yr adroddiadau gawsom ni gan PricewaterhouseCoopers, a hefyd gan Swyddfa Archwilio Cymru, roedd yna bwyslais ar wella ein cyfathrebu mewnol ni, a chydweithredu gyda'r staff a'r undebau. Ac rydym ni'n hyderus ein bod ni wedi cryfhau y berthynas honno. Ond, wrth gwrs, mae hynny'n golygu ein bod ni'n cymryd mwy o amser wedyn i ddatblygu y math yma o gynlluniau, oherwydd rydym ni'n gwneud hynny drwy drafodaeth a chyd-ddealltwriaeth, a gwrando ar yr hyn sydd gan y staff a'r undebau i'w ddweud wrthym ni. Ac mae hynny'n golygu—fel yr oedd Linda yn ei ddweud—y bydd y broses yn cymryd rhyw 18 mis. Ond rydym ni'n hyderus ein bod ni wedi gosod seiliau cadarn iawn ar gyfer datblygu hynny, a hwyrach mai dyna oedd y tu ôl i eiriad y swyddfa archwilio—mai yn y dyfodol, hwyrach, y bydd y gweithredu yn digwydd. Ond mae'r cynllunio a'r paratoi yn digwydd ar hyn o bryd, ac wedi bod yn digwydd ers peth amser.
In addition to that, in the reports that we had from PricewaterhouseCoopers, and also the Wales Audit Office, there was an emphasis on improving our internal communications, and collaboration with staff and unions. And we are confident that we have strengthened that relationship. But, of course, that means that we take more time then to develop these kinds of plans, because we do that through discussion and understanding, and listening to what the staff and the unions have to tell us. And that means—as Linda was saying—that the process will take about 18 months. But we are confident that we have set good foundations, robust foundations, in order to develop that, and perhaps that's what was behind the wording of the Wales Audit Office—that it's in the future, perhaps, that the action will happen. But the planning is happening at present, and has been happening for quite a while.
Thank you, Chair. In regard to the restricted funds, how does library use those restricted funds for the purposes for which they were intended?
Well, of course, with any restricted funds, we have to respect the wishes of the donor. Where a donor has specified that they wish the money to be spent in a particular way, then we are, of course, obliged to do that. The restriction can vary, in terms of whether it's a particular area, whether it's a particular action that the library can take. And, on that basis, clearly, we have to make sure that there are processes in place that will ensure that the donor's family can be assured that that money is being spent on what the donor said. David—.
I'm not sure whether the question was about the accounting behind it, or just how we manage it.
With the accounting, with the actual cash in those restricted funds, that's pooled together with all our other charitable funds, and it's invested on the stock market. And then we have an accounting exercise to share out between the different funds at the end. And also it comes back to accounting systems and procedures, where our finance staff will be making sure that the accounting goes in the right place, and that we don't actually charge expenditure to a restricted fund when it should be somewhere else in the accounts.
Wrth gwrs, y sialens sydd yn wynebu'r bwrdd, wrth i ni geisio cynllunio ymlaen, ydy sicrhau bod rhoddion elusennol yn cefnogi gwaith creiddiol y llyfrgell, a hefyd y weledigaeth sydd gan y bwrdd ar gyfer dyfodol y llyfrgell. Yr hyn y mae'n rhaid i ni ei osgoi ydy bod cyfraniadau ariannol yn ein bwrw ni i gyfeiriadau nad ydym ni'n dymuno mynd iddyn nhw. Felly, mae yna waith pwysig yn y fan honno, er mwyn cynnal y cydbwysedd. Un o'r pethau y llwyddom ni i'w wneud yn ystod y flwyddyn ddiwethaf yma oedd sefydlu archif cerdd Cymru, gan bwyso'n drwm iawn ar gasgliad personol Meredydd Evans a Phyllis Kinney. Roedd modd defnyddio arian a oedd wedi ei roi i'r llyfrgell er mwy cefnogi y fenter honno. Pan mae yna amodau caeth yn cael eu gosod ar roddion i'r llyfrgell, mae hynny yn creu rhyw gymaint o densiwn, ond hyd yn hyn rydym ni wedi llwyddo i ddelio â hynny.
Of course, the challenge facing the board, as we try to forward plan, is to ensure that charitable donations do support the core work of the library, and also the vision that the board has for the future of the library. What we have to avoid is that financial contributions take us in directions that we don't want to go in. So, there is important work in that area, in order to maintain that balance. And one of the things that we succeeded in doing in the last year was to establish a music archive for Wales, pressing heavily on the personal collection of Meredydd Evans and Phyllis Kinney. And it was possible to use money that was given to the library in order to support that initiative. When there are restrictions imposed on donations to the library, that does cause some tension, but so far we've succeeded to deal with that.
Okay. Thank you. There are a number of different headings on expenditure of library activities that have increased. How did you decide to focus on these areas and how did this prioritisation enable your organisation's strategic objectives?
The statutory accounts aren't always the easiest way of actually drilling down into how an organisation operates. In our statement of financial activities, those are our charitable objectives and for curatorial staff that maps reasonably well onto their activities, but there's a complicated system of apportionment of other activities. So, probably, underlying those costs, you've got about 30 per cent that's reasonably well allocated directly and then we sort of pro rata various different amounts on top for the building, for human resources, finance, IT and so on. So, a lot of apportionment goes on. So, quite a small change in the underlying staffing costs can determine that the actual final figure is different. For instance, I think we spent—. In the accounts, on conservation, that's gone up to £3.4 million from £3.3 million. We had external funding for the two trainee conservators during the year so we'd have allocated that directly to conservation and then the overheads allocated will have built it up to a slightly greater figure. It's quite sensitive to being distorted because of the accounting arrangements we have to have behind it.
So, you don't see anything at this point in your strategic planning and in regard to the mention of the 2 per cent earlier—you don't feel that there's anything that's anomalous about these rises at this stage.
It's more to do with the accounting treatment we have to apply to the figures. Our underlying business has probably pretty much stayed the same. They'll be vacancies in one year, then the next year we'll fill them so it will actually increase the cost, but it's more to do with accounting treatment rather than actual underlying business.
Can you briefly go through the £3.1 million in regard to other direct costs?
Yes. The £3.1 million is all our costs other than staff. Basically, we spend about 75 per cent of our running costs on staff and about a quarter on non-staff. Of that £3.1 million, about £340,000 will relate to project expenditure where we had specific grants—for instance Libraries Inspire, where we bought electronic subscriptions for the library sector in Wales. So, the actual underlying amount in our base budget is about £2.7 million, and that has to cover everything. So, about £900,000 of that will be for running the building. There will be the cost of IT, another £250,000, and the libraries management system—all those non-staff costs.
We're in the process of going through that budget again. It's been the same for about five years and, in the meantime, inflation is going up, so there's less and less potential to look at that for savings. We had an exercise that looked at whether there's any spare in that budget. Perhaps there is £60,000. We're currently assessing the risks of that, because if energy costs go up by 15 per cent, that'll wipe out £50,000. So, we're currently having to assess the risks of whether we can factor those savings into our base budget, which would reduce the amount of savings we need to make in the future. But because our budget's been cut and we've been through several iterations of looking at the budget, there's not an awful lot of scope to cut it back, really.
Can you outline for me—thank you for that—the disparity between the evaluation of assets of £7.6 million? That seems quite a gap, doesn't it?
What happens every five years is that we have to have a proper valuation of the building done by professional valuers and, in the meantime, because our accounts have to reflect the actual value of the assets, we index the value up. We use a particular buildings index. So, what's happened now is that we've indexed it up for five years according to the index and when the valuers come in they've reassessed it with a different value. If you look at the balance sheet, our revaluation reserve has gone from £26 million down to £19 million. So, those additions we've accumulated into the revaluation reserve by indexing up are then written back when we put—
It still seems, with respect, an awful big gap. So there's no other rationale—just that.
For a lot of bodies, it would be quite serious if the value of fixed assets had gone down because it'll affect gearing. Lots of organisations actually borrow against their fixed assets so, if the value fell, it risks breaching—
I understand that, but in terms of the amount it still seems surprising.
It's a big amount, but it's not actually—. For us, it's just an accounting entry. It doesn't have any other consequences other than it changes the value of the balance sheet.
Okay. And in regard to the highlighted significant building issues, which are referred to in the operational plan, could you extrapolate a bit in terms of what those are?
The main works are to the older parts of the building, and we are about to commence, after Christmas time, the removal of asbestos from the original extension to the library and fire safety works there. So, that will be the first tranche, and then we’ll be moving on to works on the original library building, where there are works to the roof and the windows and also the infrastructure—asbestos problems as well in that part of the building.
Mi fyddwn ni hefyd, wrth gwrs, dros y pum mlynedd nesaf, yn ychwanegu at yr ystâd oherwydd fe fydd angen adeiladu adeiladau newydd i gartrefu’r archif darlledu. Felly, fe fydd gwerth yr ystâd yn cynyddu gyda hynny, ac un o’r pethau rydym ni wedi eu gwneud yn y llyfrgell er mwyn ymateb, eto, i argymhellion yr adroddiadau rydym ni wedi eu derbyn, yw rŷm ni wedi sefydlu ystod o is-bwyllgorau nawr i drafod y materion yma mewn dyfnder. Felly, yn hytrach na’r bwrdd yn penderfynu pedair gwaith y flwyddyn ar y weledigaeth ar gyfer yr agweddau yma ar eu gweithgaredd, mae yna adroddiadau sylweddol yn dod o’r is-bwyllgorau ac argymhellion penodol y gall y llyfrgell eu trafod. Felly, rŷm ni’n credu bod rheolaeth dros y materion yma yn llawer iawn cadarnach nawr nag oedden nhw, yn sicr dair neu bedair blynedd yn ôl.
We will, of course, over the next five years, be adding to the estate because there will be a need to build new buildings to house the broadcasting archive. Therefore, the value of the estate will increase with that, and one of the things that we’ve done in the library, again, to respond to the recommendations of the reports that we’ve accepted, is we’ve established a range of sub-committees now to discuss these issues in depth. Therefore, rather than the board deciding four times a year on the vision for these aspects of the work, there are now significant reports from the sub-committees and significant recommendations that the library can discuss. Therefore, we think that managing these issues is now more robust than it was, certainly three or four years ago.
Thank you. Diolch. Do you feel that you are responding to the auditor general’s sentiment with enough pace and rigour? You mentioned the word ‘robust’ yourselves. Do you feel that you have grasped these sentiments?
Rydw i'n gobeithio bod llythyr yr archwilydd a Swyddfa Archwilio Cymru i’r pwyllgor yma yn cadarnhau ein bod ni wedi gwneud hynny a’n bod ni wedi ymateb i’r holl argymhellion a wnaethpwyd, ac ein bod ni ar waith gyda phob un ohonyn nhw, a bod nifer ohonyn nhw wedi symud ymlaen yn sylweddol dros y blynyddoedd diwethaf. Felly, ydym, rŷm ni yn teimlo ein bod ni wedi ymateb yn gadarnhaol i’r adroddiadau hynny ac rŷm ni’n ddiolchgar amdanyn nhw oherwydd y maen nhw wedi ein galluogi ni i gadarnhau ein gweithdrefnau ac i sicrhau bod ein rheolaeth ni o weithgaredd ac ystâd y llyfrgell gymaint â hynny’n gadarnach.
I hope that the auditor general and the Wales Audit Office’s letter to this committee confirms that we have done that and that we have responded to all the recommendations made, and that we are undertaking work on each one of them and that many of them have moved forward significantly over the last few years. So, yes, we do feel that we have responded positively to those reports, and we are grateful for them, because they’ve enabled us to confirm our procedures and to ensure that our management of activities on the estate is much more robust.
A gaf i ategu hynny? Rydw i’n teimlo, o’r sgyrsiau rydym ni wedi eu cael gyda swyddogion o’r swyddfa archwilio, eu bod nhw’n gweld y gwelliannau’n digwydd, ac nid ydym ni wedi cael sylw ganddyn nhw fod yna oedi wedi bod. Mae yna ddealltwriaeth, rydw i’n meddwl, fod hyn yn cymryd amser, ac wrth gymryd amser, rydym ni’n mynd i gael gwell cadarnhad wedyn fod y llyfrgell yn symud ymlaen ar y pethau sylfaenol yma mewn modd sydd yn gynaliadwy. Yn y pen draw, mae’n rhaid inni greu llyfrgell genedlaethol i Gymru sy’n gynaliadwy yn y cyd-destun rydym ni ynddo fe, ac rydym ni’n ddiolchgar iawn, iawn i’r swyddfa archwilio am y gwaith maen nhw wedi bod yn ei wneud gyda ni, ond yn sicr, rydw i yn hyderus bod y llyfrgell wedi ymateb mewn ffordd gadarnhaol, ac mae yna waith i wneud—wrth gwrs, mae yna waith i’w wneud—mae yna welliannau i’w gwneud, ond ar hyn o bryd, rydw i’n meddwl bod y pace rydym ni’n eu gwneud nhw yn adlewyrchu’r ffaith ein bod ni’n eu gweld nhw’n bwysig ein hunain.
Could I echo that? I do feel, from the conversations that we’ve had with officials from the audit office, that they do see the improvements happening, and we haven’t had a comment from them that there’s been any delay. There is an understanding that this does take time and, in taking time, we’re going to get better confirmation that the library is moving forward on these foundational things in a way that’s sustainable. Ultimately, we have to create a national library for Wales that is sustainable in the context that we’re in, and we’re very grateful to the Wales Audit Office for the work that they’ve done with us, but certainly, I am confident that the library has responded positively, and there is work to do be done—of course there is—and there are improvements to be made, but at present, I think that the pace that we’re making these changes at does reflect the fact that we do see those as important ourselves.
Mae yna wastad mwy i’w wneud, mewn unrhyw swydd, unrhyw sefydliad.
There’s always more to do, in any job or any organisation.
Because we're completely out of time now, can I just add onto the end of that question as well? The auditor general recommended that public bodies make their annual reports as short and as engaging as possible, so in answering Rhianon’s question, if you can bear that in mind then it’ll wrap things up nicely for the Chair.
Sorry, could you repeat your question?
I was afraid you might say that. I didn’t help things, did I? As well as Rhianon’s question about what you can do, how do you make your reports more engaging and shorter for the public?
Right, thank you.
Rydw i’n credu bod y cynllun strategol yma, os caf i ei godi e eto i’ch sylw chi, gyda’i glawr lliwgar e—
I think that this strategic plan, if I could draw your attention to it again, with its colourful cover—
—yn amlinellu ein bwriadau ni am y pedair blynedd nesaf, ac mae hynny’n cyd-fynd, wrth gwrs, â’r argymhellion yn llythyr ac adroddiad Swyddfa Archwilio Cymru. Felly, rŷm ni yn hyderus ein bod ni’n mynd i’r cyfeiriad cywir, ac fel roeddwn i’n dweud, rŷm ni wedi cael cyd-ddealltwriaeth lawn, hefyd, gyda’r Ysgrifennydd Cabinet dros y tair blynedd diwethaf yma o’r cyfeiriad hwnnw. Rŷm ni’n mawr obeithio y gallwn ni sefydlu’r un berthynas gyda’r Gweinidog sydd newydd ei apwyntio i barhau i fynd i’r cyfeiriad hwnnw, ac rŷm ni’n hyderus bod sefyllfa’r llyfrgell genedlaethol wedi'i sefydlogi ar gyfer y dyfodol, ac ein bod ni hefyd yn gallu bod yn heriol ac yn uchelgeisiol, hyd yn oed o fewn sefyllfa o grebachu ariannol, o ran y gwasanaethau rydym ni'n eu cynnig i Gymru o'n sefydliad cenedlaethol ni.
—does outline our intentions for the next four years, and that corresponds, of course with the recommendations in the letter and the report of the Wales Audit Office. Therefore, we are confident that we are moving in the right direction, and as I said, we’ve had full co-understanding with the Cabinet Secretary over the last three years of that direction. We very much hope to establish that relationship with the Minister that has just been appointed to continue going in that direction, and we are confident that the library’s position has stabilised for the future, and that we now can also be challenging and ambitious, even from a position of contracting finances, in terms of the services that we offer to Wales from our national organisation.
Great. Thank you. That brings this session to a close. I thank our witnesses for being with us today. We'll send you a copy of the transcript for you to check before it's finalised.
Diolch yn fawr iawn.
Thank you very much.
bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42(vi).
that the committee resolves to exclude the public from the remainder of the meeting in accordance with Standing Order 17.42(vi).
Cynigiwyd y cynnig.
I propose, under Standing Order 17.42, that we go into private session. All content? The ayes have it.
Derbyniwyd y cynnig.
Daeth rhan gyhoeddus y cyfarfod i ben am 15:45.
The public part of the meeting ended at 15:45.