National Assembly for Wales

Back to Search

Pwyllgor yr Economi, Seilwaith a Sgiliau

Economy, Infrastructure and Skills Committee

09/01/2019

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Bethan Jenkins AM
David J. Rowlands AM
Hefin David AM
Jack Sargeant AM Yn dirprwyo ar ran Lee Waters
Substitute for Lee Waters
Joyce Watson AM
Mohammad Asghar AM
Russell George AM Cadeirydd y Pwyllgor
Committee Chair
Vikki Howells AM

Y rhai eraill a oedd yn bresennol

Others in Attendance

Alison Thompson Prif Swyddog Gweithredu, Llwybr Network Rail Cymru a'r Gororau
Chief Operating Officer, Network Rail Wales and Borders Route
Bill Kelly Rheolwr Gyfarwyddwr (Llwybr Cymru a'r Gororau), Llwybr Network Rail Cymru a'r Gororau
Managing Director, Network Rail Wales and Borders Route
Huw Morris Cyfarwyddwr Sgiliau, Addysg Uwch a Dysgu Gydol Oes (SAUDGO), Llywodraeth Cymru
Director Skills, Higher Education and Lifelong Learning (SHELL), Welsh Government
James Price Prif Swyddog Gweithredol, Trafnidiaeth Cymru
Chief Executive Officer, Transport for Wales
Kirsty Williams AM Y Gweinidog Addysg
Minister for Education
Nass Dadkah Metropolitan Railway Consultants Cyf
Metropolitan Railway Consultants Ltd
Professor Peter Halligan Prif Gynghorydd Gwyddonol Cymru, Swyddfa Gwyddoniaeth Llywodraeth Cymru, Llywodraeth Cymru
Chief Scientific Adviser for Wales, Welsh Government Office for Science. Welsh Government
Tim James Cyfarwyddwr Strategaeth a Chynllunio, Llwybr Network Rail Cymru a'r Gorllewin
Strategy and Planning Director, Network Rail Wales and Western Route
Tom Joyner Cyn-reolwr Gyfarwyddwr, Trenau Arriva Cymru
Former Managing Director, Arriva Trains Wales

Swyddogion Cynulliad Cenedlaethol Cymru a oedd yn bresennol

National Assembly for Wales Officials in Attendance

Andrew Minnis Ymchwilydd
Researcher
Gareth Price Clerc
Clerk
Lara Date Ail Glerc
Second Clerk
Phil Boshier Ymchwilydd
Researcher
Robert Lloyd-Williams Dirprwy Glerc
Deputy Clerk

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 09:31.

The meeting began at 09:31.

1. Cyflwyniad, ymddiheuriadau, dirprwyon a datgan buddiannau
1. Introductions, apologies, substitutions and declarations of interest

Croeso, bawb, i'r Pwyllgor Economi, Seilwaith a Sgiliau. 

A very warm welcome to the Economy, Infrastructure and Skills Committee. 

I'd like to welcome Members to committee this morning at the beginning of this new term of 2019. I do move to item 1. We have no apologies this morning, but as a result of Lee Waters' promotion to Government, we do have a substitution with Jack Sargeant this morning.

2. Papurau i'w nodi
2. Papers to note

I move to item 2. We have a number of papers to note. Are Members happy to note those papers? Thank you. 

3. Sesiwn dystiolaeth Ymchwil ac Arloesi gyda'r Gweinidog Addysg
3. Research and Innovation evidence session with the Minister for Education

In that case, I move to item 3. This is in regard to our inquiry into research and innovation, and this is our last session this morning. I'm pleased to welcome the Minister for Education, Kirsty Williams, and I'd be grateful if you could, or I'll ask your officials to introduce themselves. 

I'm Peter Halligan. I'm the chief scientific adviser. 

And I'm Huw Morris. I'm the director for skills, higher education and lifelong learning. 

Thank you for being with us this morning. If I can ask you, Minister, the first question. Do you think that the new Cabinet structure gives a clear accountability line for research and innovation in Wales? 

Yes, I do. I have responsibility now for science, research and innovation within the Cabinet, and I think that that is a useful addition to my responsibilities given that, obviously, as Minister for Education, I'm interested from the age of three right through to postgraduate levels. So, I think it is a useful linear structure that we now have. Having said that, it's also really important to recognise that, across a number of Government portfolios, research and innovation is significant and important—obviously economic development, but also health and social care. 

So, officials have established a research and innovation co-ordinating committee, because otherwise we're in danger, potentially, of losing sight of that cross-cutting responsibility. That committee will include the Welsh Government office for science, the Welsh European Funding Office, as long as it continues to exist, innovation and skills officials, higher education officials, health officials to try and co-ordinate that level of activity. But having taken on this new responsibility, I've had early discussions with Julie James who, of course, in a previous Cabinet had responsibilities for this area. It's not without its challenges. And, of course, those challenges were rehearsed quite extensively by Professor Reid in his report.

So, I will be looking for early discussions with officials about whether these structures are adequate, are best organised to deliver on what I hope will be an increasing focus and impact, crucially, of research and innovation. I will need to and I'm very mindful to ensure that there is very close working between myself and the Minister for economic development, and to ensure that aspects of the Government's economic action plan and 'Prosperity for All' are taken forward now that these responsibilities lie on my side of the Government. I'm very mindful of that.    

In regard to your work with the economy Minister, certainly in evidence sessions we've heard the value of industry working in collaboration with the education sector and universities. So, can you perhaps just outline how you're going to make sure that connection is—? You're working with the economy Minister; how is that going to transpire?

09:35

I, too, am very mindful of that, especially now that these responsibilities have come over. Obviously, this is not something new, or something that we will have to invent. So, our officials were involved in the development of the economic action plan. Ken Skates's officials have been involved in the development of the proposals around post-compulsory education and training, so those linkages are already there. This will be a new added dimension to those linkages, but, actually, if I may say so, on the challenge of how we can ensure that there is greater synergy and greater opportunities for business to engage in higher education and research and innovation within the education sector, I would argue that we actually need to see better business engagement with education in the round, including primary schools, secondary schools, so compulsory, as well as post-compulsory education and training. So, I'm hoping that we can renew that focus so that we don't just see the importance of business to post-compulsory education, but, actually, to try and better engage with business in compulsory stages of education. So, for instance, as we develop our new curriculum around the world of work, careers advice, we ensure that the voice of business and industry is heard as we develop the new curriculum. So, I think there is a greater emphasis than just having that linkage between post-compulsory education, research and innovation. Actually, I'd like to see a greater business engagement with education on the whole. 

That's good to know. And you mentioned a committee being set up of stakeholders. When was that set up?

It's an internal co-ordinating committee. Sorry, if I've given the impression it's external. It's an internal co-ordinating committee to ensure that each aspect of Government, where there is an interest and an imperative to engage in research development and innovation policy, that it's co-ordinated. I don't know if you would want to give more details of how that works. 

Okay. We didn't know about that. So, when was that set up?

So, that would have been set up within the last year as a consequence of the economic action plan, but as the Minister's indicated, there are other mechanisms in place. There's the research committee at the Higher Education Funding Council for Wales. There are also bodies that draw research and business interests together through the council for economic development and other representative machinery, not least the recently established ministerial advisory group for the Minister for Economy and Transport. 

Thank you, Chair. We've taken a lot of evidence on this topic, and one of the key points that we keep coming back to is that so much innovation activity in business isn't actually linked to research or to universities. So, how will the Welsh Government support this kind of innovation where it occurs beyond higher education, and will the research and innovation committee that you've just mentioned be the vehicle for that?

As we've just said, the committee is an internal committee to ensure that there is proper collaboration, sharing of information and joint working across the Government, rather than this being siloed and having different parts of Government. I think that's important for business because, in the last couple of weeks of reading that I have spent trying to get to grips with this new aspect of my work, I don't know about you and whether this is reflected in the evidence that you've had, or your experience, but this is a highly complex field. There are acronyms galore, there are committees galore, there are bits and pieces spread everywhere, and if I'm finding it a challenge to get to grips with all of this, if I'm a small business, or even a larger business, trying to engage in this area, I think it's incredibly complex. And one of the things I will want to do is to see what more we can do to simplify it, so that if businesses are choosing to do research innovation without a university because that's their choice, then that's fine, and I'll tell you how we can support that, but if they're doing it without universities because it's so complex and so difficult for them to engage in universities, that's our responsibility and we need to do something about that.

Now, clearly, you're quite right, there's lots of work that goes on that doesn't involve the higher education sector. Welsh Government has programmes that support businesses to engage in innovation, whether that's with the university or not, and that comes through our SMART programmes. So, there are two elements to the SMART activity: there's SMARTExpertise, which is about linkages with higher education, but also the SMARTCymru funding stream, which does not require the business to be working with a university. So, there are two ways in which that can happen. But, as I said, I would want to be able to continue to allow companies to do that, if that's their choice, but I am concerned, initially, in the first perusal of the system that we have here now, that, sometimes, companies are not working with higher education because it's incredibly difficult for them to navigate that particular path. And I think that that's something that I will need to look at, to see what we can address to make that simpler in the future.

So, SMART projects are in the region of about £300,000, so these are not insignificant amounts of money that a company can access. Of course, the challenge going forward will be how we replace the SMART programme, because it is currently funded by the European regional development fund. Huw, I don't know whether there's anything else that you'd like to add.

09:40

Just to add that, for a number of years now, the Minister and other ministerial colleagues, including the then Minister for Skills and Science and the Cabinet Secretary for Economy and Transport, have been championing the small business charter. And I think it's great evidence of the success in championing that that Cardiff University and Cardiff Metropolitan University have gained that charter as a demonstration of their ability to work with small businesses in a range of ways, including research and innovation. I think Ministers have indicated their desire for more universities to move in that direction, not just in the area of business activity, but more broadly.

I think this is an important part of my call since taking over this job, for universities to rediscover their sense of civic mission and their responsibility to place. So, obviously, they have a responsibility to the students who attend those universities, but, actually, these are significant institutions in helping to develop the economy and the opportunities and the sense of place. And therefore, being in a position to be able to assist Welsh business, large and small, is an important responsibility, I think, that universities have to the nation, not just to the students within it. And Cardiff Met have been very focused on being able to do that. Obviously, with the business schools, that's one aspect of support they're able to give, but I would hope that if small businesses are engaging with the business school, the business school is then able to signpost other aspects of the university's work, potentially, that would be useful to those businesses. But we need to make it simple, especially given the nature of Wales's business sector, which is predominantly small businesses. From what I can tell, if you've got your head down trying to make a profit, trying to keep your workers employed, and trying to do things practically, you haven't got the time to be trying to find your way through a maze of different committees and funding structures. And that's why I think we need to try and simplify it, get it into one place, so there's one door for somebody to knock on, or one portal, to be able to get that support.

That's good to hear. Do you have any further questions, Vikki?

Yes, just briefly. We've also had a session with student entrepreneurs, and they told us that gaining access to external funding was a particular obstacle for them. And Wesley Clover suggested that the Welsh Government needs to create a stronger relationship between researchers, innovators and venture capitalists. What is the Welsh Government doing regarding this?

Well, I certainly wouldn't argue with the basic premise that it can be challenging. Back in October, the Welsh Government did announce some additional funding of, I think, in the region of about £2.5 million—I recognise that that's spread over three years—to be able to assist in this area. It also says, in allocating that funding, Huw, if I'm right, that institutions applying to draw down some of that funding will have to set targets for how they hope to engage, and the businesses that will be created as a result of drawing down that funding. Obviously, there are other things that we are involved in, for instance, the BeTheSpark initiative, which came out of, initially, a project with the Massachusetts Institute of Technology. It's a community-interest company, but that's there to try and assist with stakeholders. So, there are things happening, but, again, we will need to look to see what we have within the auspices of Government, to try and break down some of those barriers. Of course, on the other side of Government, in terms of economic development, we've got the new investment bank for Wales. These are initiatives taken on the economic side that are designed to assist with some of these issues. But I recognise—. I wouldn't disagree with the basic premise that this can be a challenge.

09:45

I recognise that we've delved into the detail quite soon; I was just wondering, as you're new in post, what's your vision for innovation in Wales? When we've had people come in to give evidence, they've been saying that there is a lack of vision within Welsh Government and that they would welcome clarity so that they can understand, if they did want to develop research and development or a business in a certain area, that that would then correspond with what the Government would want to see potentially—not that you would be hands on, per se, but that you would, at least, be telling them—

Perish the thought I should be hands on, because then we'd have the whole debate about the Government interfering and directing.

So, just as you're new in post, what would be that vision, or how are you developing that vision?

Okay, so, I would argue that the Government has looked to set out a vision in its economic action plan and I would be looking to build upon that. For me, my early analysis of what we need to do is that we need to ensure that we draw more money into Wales from UK funding. So, that's what I want to do—I want to put a structure in place to make sure we get a bigger share of that money.

I think we need to focus also on a greater range of providers. We've talked a lot this morning very, very quickly about universities. I think our colleges, our further education sector and our newer universities, rather than our research-intensive universities, have a big role to play here as well. I think research cannot just be the preserve of our research-intensive universities. I think there are other institutions that have an opportunity to play a part here and I think we also need to look to see what are the barriers for business itself investing in research and innovation. If we look at the figures of levels of business investment in Wales—they are lower than you'd see in the UK—what do we need to do to address that challenge? I think we need focus on what our strengths are and what will really make a difference to the Welsh economy. Because we've got to have a purpose behind this research and innovation, and that's what we've got to think about: what is the purpose of investing in this area and what are we going to do?

Then also, the big strategic, immediate challenge is how do we replace European funds from a different source? So, to date, historically, because of the presence of European funds, Welsh universities and research and innovation have been highly focused on those funds. With, potentially, structural funds going away, we don't have clarity on what the UK's access to Horizon and the post-Horizon European programmes will be. So, if we're not going to be able to have access to that, what is going to replace that? So, that's my initial, 'Those are the wider strategic issues that we need to grapple with.'

Okay, thank you. And I think, adding to that, a question that I have is regarding the level of investment in R&D at the moment. In Wales, it's at 1 per cent, and it's at 1.7 per cent at the moment in the UK, but they want to achieve the 2.4 per cent. Are you thinking that you would want to get to that level or is that going to be too much for the Welsh Government to be able to do within the confines of the powers that you have? What's your ambition in terms of more investment in research and development in financial terms?

I don't think, necessarily, the issues are around powers. I think the biggest challenge, and I think it's not an insignificant one, is how we harness the financial resources to invest in this area. So, I don't think it's a question about powers; I think it is about actually how do we—. I think it's really difficult at the moment for me to, hand on heart, provide a meaningful target, given the uncertainty of the environment in which we are working. So, we are—

So, when do you think you'll be able to come up with a target?

I think the issues that are concerning me are: one, what will we have—what environment will we be working in post Brexit? So, what is going to happen to structural funds? The Westminster Government has promised us that we won't be any worse off and that structural funds will be replaced, but what will be the size of those structural funds and, actually, where are those structural funds going to lie? Are they going to be dictated from Westminster or is that money going to come to Welsh Government and are Welsh Government going to be able to direct those funds? I know that the sector is very, very clear that they believe that those funds should be under the auspices of the Welsh Government and I understand that Universities Wales met only this week with the Secretary of State for Wales to make that case. So, we need to have some clarity about that. We need to have some clarity about what the ongoing relationship will be with participation in European research programmes.

Then, the other big issue that potentially puts a massive spoke in our wheels is Augar. So, we just don't know what will happen with Augar and what the implications will be for our policy when Augar reports and when the Westminster Government responds to Augar. These are huge uncertainties, which make it quite difficult at the moment to know. So, the broad brush is we need to do more, we need to lever more funds in, we need to put Wales in a position so that we can lever more competitive funds in, but the ability of the Government to put resources in at the moment is quite challenging, it's an uncertain field in which we're working. 

09:50

But you can understand, from a scrutiny perspective, it helps us to understand what the Welsh Government would have as a target, because, of course, if the UK Government has that 2.4 per cent then they've got something to lead towards. So, is it a conversation that you will be having towards initiating discussions about what is realistic for the Welsh Government to achieve?

And it's not just useful from an Assembly point of view for scrutiny, it's useful for a Minister to hold civil servants and Government organisations to account. If you don't write it down, you're not going to achieve it. So, we need to be able to know what we're working to. If I was to be slightly mean about the target that has been announced in the UK, there doesn't seem to be a huge amount of rhyme or reason why that's the target. It is a target, but I don't see what the evidence base is to say why that's the important figure. But, you are absolutely right. We will need to be able to benchmark ourselves. Peter, I don't know if there's anything you'd like to add.

Yes, it would be useful to talk about the target itself. The 2.4 per cent is for 2027, and then it's 3 per cent on from there. The United Kingdom Government set up in 2004 a target of 2.5 per cent to be achieved by 2014. They never achieved it. So, there's a danger with regard to setting targets. I would have thought that the general direction is to raise Wales's performance with regard to that, but I think it would be a little bit presumptuous and a bit early to set a particular target at this particular point in time. 

Sorry, I have to move on, because I know we've got questions coming from other people. Just in relation to the Welsh Government policy aim for a 2:1 ratio of business investment versus other types of investment that you mention in your paper, if that's your aim, how will it be achieved and since there's a really very large increase in private business investment, how do you anticipate that happening? Obviously, at the moment, you've mentioned earlier about business not having that foot up. How are you going to shift that balance?

You're right. One of the potential areas for growth is to actually up the level of business investment in research development and innovation rather than constantly regarding the public purse as the only source of funding for this particular area. You'll be aware in the economic action plan that the Government is working on the basis of something for something. So, the Government will back business, but, at the same time, in receiving that backing from the public purse, there is an expectation that businesses themselves then will want to contribute in this way. We will look to again use resources that we've got within the education sector for a something-for-something approach, so incentivising the availability of moneys on a match funding basis so that everybody brings something to the table. Because it cannot just be the job of the Government alone, and we will not be able, given the competing demands for resources around this table—. You all know, every day in the Chamber, somebody gets up and says they want more money for this service and they want more money for that service and more money for that service, so we have to be able to bring different sources of funding into the pot, because if it's just left to the Government alone, we won't be able to get to the figures that I think that we will need to get. 

Is that your aim, then? That is your target, the 2:1 ratio. So, you'll be making the figures work so that you can reach that target. I'm talking a lot about targets. 

Well, yes, and forgive me, it's early days, I don't want to, in week three, set myself up for something that I can't, with confidence, think that we have a realistic change of moving towards. At this stage, what I identify is that we will need to do more, and the Government has already identified in the economic action plan that we will need to do more to incentivise and to assist businesses in being able to contribute to this particular area. But, Huw, I don't know is there any more—

09:55

I would just echo what the Minister has said and maybe give a little bit more detail. In the economic action plan, there's a commitment to encourage companies to move their research and development activity to Wales, so that if it's a branch operation, there's more of a presence of that R&D here, and that features in the way in which officials talk to companies about their growth and location decisions. Then, just to reiterate what the Minister said, in Graeme Reid's report, he talks about additional funding being on that basis to encourage universities and others to bid for competitively sourced funding, and I know that the UK Research and Innovation's initiatives require business engagement for many of the post of money that are available. 

Thank you, Bethan. I'll bring in Joyce Watson, and then I'll come to you, David. Joyce Watson. 

Thank you, Chair. I want to ask you if you can clarify the comments made in the technical consultation around Research and Innovation Wales that they're not being able to interact with UK Government without express permission to do so, and that does seem a little bit at odds with the findings of the Reid review. 

I'll have to go back and check the exact wording on that, Joyce. It is clear to me, and as I've just  said, that we will need to ensure that Wales is in a competitive position to allow itself to draw down more UK research money than we're currently doing at present. There will also be the need, where appropriate, to have some dovetailing between the Welsh economic action plan and the industrial strategy of the Westminster Government, because there are certainly synergies there, but, at the same time, recognising that there may be other aspects of research, development and innovation that will be of particular interest to Wales and might not be such a strategic, important issue for the Westminster Government. So, we certainly will need to, wherever possible, be able to work together on those synergies.

I think for me, the great disappointment has been—and the real strategic challenge that we're facing is how do we get Wales's voice heard in that UK and English context around, for instance, UKRI. So, both myself and the Scottish Government made representations to the Westminster Government at the time about having a designated—a named Welsh representative on UKRI and for Scotland to have the same. We were not successful in that particular case, but Peter has been working really hard since he took up office to try and find less formal but, nonetheless, not less successful ways of ensuring—. And he's done it in quite—'sneaky' is not the right word, because I'm sure the scientific adviser wouldn't do anything sneaky—creative ways to get Wales's voice heard. But perhaps Peter can tell you about some of the stuff that he's been doing to address some of these concerns about Wales's voice being heard in the UK context. 

Well, they won't be sneaky now, because I've just blown his cover, haven't I? Everybody will be aware now. 

So, with regard to my new role, I have set up a science and innovation advisory council. It's a small council with regard to that but the two representations on that are from the UKRI board—Sir Ian Diamond and Sir Leszek Borysiewicz, so there's an opportunity to talk, discuss and share opportunities. And, the other thing is, with that, we've invited the UKRI board, that is Sir John Kingman, the board and all the chief executives to come down to Wales in July, and they've agreed to do that. They did Scotland last year. So, it's an opportunity to bring the UKRI to Wales and an opportunity to share some of the opportunities in terms of our research excellence that we have here. 

The other aspect I'd like to point out is one that the Minister has alluded to and it is absolutely correct: we need to get that voice. And, before Christmas, the Welsh Government, in part with others, organised an event at the Royal Society with the Foundation for Science and Technology, where Ken Skates and Greg Clark spoke on the alignment of the industrial strategy and the economic action plan. Mark Walport, who's the chair of UK Research and Innovation, was also contributing with regard to that and David Willetts was actually chairing. But this was a very well-attended event and the Minister did very well with regard to it—but an opportunity for the voice to be heard with regard to it. And in that he indicated that the heart of the economic action plan, on page 33, the engine that drives that is research, innovation and advanced skills.

10:00

So, we wouldn't want to—. We would not want to inhibit the ability of the new commission to be able to facilitate those synergies, which will be important going forward. 

What we did hear when we were in London was that it might be an advantage, or it would be a definite advantage, for Wales to be represented in London, always, by an eminent researcher of international standing. Because what they were saying to us was, in order to get the money outside of London, of the big five universities—Oxford, Cambridge, et cetera—that we needed to be there and stake our claim. It is true and it is recognised internationally that particularly Cardiff University does extremely well in terms of medicine, Swansea University in other areas, and Bangor in other areas. So, if we're going to grab some of that money and influence those people, there was a suggestion that we needed to be in situ almost, with somebody fighting our corner. What are your views on that? 

Well, firstly, like you I want to recognise where we already have excellence in our system. I think, as always, we're quite—we sometimes talk ourselves down about what we've already got. Now, undoubtedly, we have strategic challenges regarding the landscape that we have here in Wales, but we have excellent research. The research excellence framework and the work that's been done by the Learned Society of Wales demonstrates the quality of that research that goes on in Wales and the impact upon it. A presence in London is really important; that was recognised in the Reid report. By creating a presence in London—and Welsh Government is taking that recommendation forward at the moment; I guess you can have a debate about the nature of the people who do that work—at this stage, the Government is setting up that presence in the Welsh Government offices in London to be able to be there. But it can't be just down to that individual alone. It has to be though the work that already Peter is doing, that soft power, that influencing—you know, it just can't be left to that one particular individual or a team of people. But we recognise that we need to be where the discussions are happening and that's why we're taking forward the office in London. 

Yes. Obviously, we've been mentioning the Reid report, so can we look a little deeper into the Welsh Government's views with regard to some of the recommendations in that report? In your budget scrutiny submission, Kirsty, to the Children, Young People and Education Committee, you said that there was no funding for the Reid review recommendations in 2019-20. Can you explain why the Welsh Government's not yet funded that review? Because obviously the whole idea of having this review is that you could see where money should be going. Is that right? 

Certainly. So, there are no timscales associated with that particular recommendation and, to use that now hackneyed phrase in Welsh politics, this has to be a process, not an event, and funding decisions have to be taken in the round of all the pressures on the Welsh Government. Since publication of the Reid review, my understanding is that colleagues across—the previous Minister has been looking to identify exactly what Government money is being spent on research at the moment, because it's all in disparate pots, to try and bring some understanding around what is the total amount of spend before we can look to move allocations forward. But these are challenging times and decisions around funding for particular initiatives are going to have to take their place within other pressures and priorities. But I am getting up to speed about how far the work of implementation of Reid has happened to date and we'll be looking then to see what needs to be done in the short and medium term. But, Huw, I don't know if there's anything further to add at this stage.

10:05

Just to emphasise these things need to be tackled in the round. You've heard already about Augar and the European funding settlement. The Minister is meeting next Friday with her counterpart from the UK Government and the Scottish Minister and representatives from Northern Ireland to talk through these issues. So, this is very much a live issue.

And it's been really quite challenging. The Minister next week will be my third universities Minister that I've managed to get through. I hope it's no reflection on me, but it will be the third UK universities Minister that I will have met. They don't seem to last very long.

We've already—. I suppose we all recognise the fact that there are some structural weaknesses around the size and location of Wales in regard to other regions in England, so how can the base be scaled up and become more competitive without further investment?

We will need to be able to support that investment, as you said. Because of the nature of where our universities are, that poses some challenges. But that doesn't mean that they can't be overcome. So, we will need—as I said, we will need to be looking at the opportunities for business to contribute more in this way, we'll be needing to review, as implementation of Diamond moves forwards, our approach to QR, to be able to put our universities in the stronger position to be able to compete in that competitive funding cycle, and that's the job of the Welsh Government as an enabling objective to allow universities to overcome some of the strategic disadvantages that they have to be in a better position to compete for that funding.

But that also—if I may, Chair, that also exposes why we have to have some flexibility in the Welsh system. So, for instance, because of the nature of our economy and our research strengths, we would want to be in a position to support the work of the Institute of Biological, Environmental and Rural Sciences. So, if we're looking at making our agricultural system more sustainable and competitive, then obviously the work that goes in IBERS is really, really important. And that might not be a priority for the English Government at all—sustainable agriculture and tackling some of those issues around those things—but us being able to have our own ability to invest is really, really, really important.

There's some really—. It might interest Mr George, and maybe not many other people, but, for instance, there's some really fantastic research going on at the moment with slurry down in Coleg Sir Gâr. Again, this is about sustainable agriculture, nitrate vulnerable zones, about how we can ensure the protection of our environment, and that demonstrates why we need also to look beyond just our universities, because it's the college there that is working really hard on looking at innovative and research solutions to some of these environmental problems. So, that tells me we need to be able to ensure that we can fund our own priorities within Wales as well as being able to compete for UK and global funds. 

Both the Reid and the earlier Diamond recommendations with regard to funding—obviously, both asking for extra funding—. Now, HEFCW— 

No, exactly. HEFCW signal they intend to re-establish the higher education innovation funding fund as soon as funding is available. Would you be in agreement with that? I believe England and Scotland have already re-established those funds. Is that right?

Yes. So, one of the reasons why we've had to undertake such a huge reform of HE funding is precisely these issues that you're raising, because our ability to invest in these areas has been compromised by the previous HE funding regime. That's why we are undertaking this significant set of reforms. I have accepted the recommendations of the Diamond report, but I have made it very clear, when introducing the Diamond reforms, that we couldn't do it all overnight, and that there would have to be a process by which, as the reforms worked through, resources would become available to fund other areas of the Diamond review. People have worked incredibly hard to see the successful introduction of the first part of Diamond from September of this year, but what Members I'm sure are well aware of is that by ensuring cohort protection we have to wait for those people who are already currently in the system to go through the system before we see some of the other consequences of Diamond unfolding. As they unfold, that gives us an opportunity to implement the rest of the Diamond report, including the resources that you've just talked about. So, that allows us to look at the level of QR funding as well as the ability for HEFCW to look again at an innovation and engagement fund. So, I would expect us to be in a position of looking to HEFCW to support QR by 2020—I think the 2020-21 year—and, potentially, hopefully an innovation and engagement fund at that particular time. So, I'm committed to seeing the recommendations of Diamond through, but you can't do it all at once.

Of course, the first impact the Diamond reforms will have on this particular agenda is, of course, that, for the first time ever as of this September, we are supporting postgraduate students. We've not been in a position to do that before—even through loans; we were behind England in even offering loans for postgraduate support. Of course, now, we are actually treating undergraduate and postgraduate students in the same particular way.

So, the first impact that the Diamond reform will have on this agenda is the increase in postgraduate students. Although it's early days and I don't think we've got the final figures from our universities, universities are certainly reporting back to us an increase in the number of students studying at postgraduate level, which can only bode well for this agenda.

10:10

Okay. You mentioned QR funding. Obviously, that's the primer pump for all of the institutions to get access to all of the funds that are available. If we can move on, there's a lot of focus on Research and Innovation Wales and the post-compulsory education and training Bill, which is very welcome, obviously—your focus on that. What actions will you be taking between now and the creation of RIW to strengthen and support research and innovation in Wales, because, obviously, there's going to be a little bit of a hiatus in between?

If you could be a little bit succinct, because we have quite a few questions to get through.

Sorry. First of all, I'm very glad that you're optimistic that the Bill will go through, so I'm grateful for UKIP's early indication of support for the legislation—I'm looking forward to seeing those votes come in when we take the Bill through on the floor of the Chamber. But you're right: we can't just wait for this new organisation. Hopefully, in answer to other questions we've outlined some of the work that we're already taking—the fact that we, hopefully, will be in a position to increase QR, hopefully be in a position to see HEFCW developing the innovation and engagement fund.

In terms of the—. Money is just one thing, though, isn't it? You actually have to create the environment and the desire and the capacity of organisations to respond to this agenda too. So, crucially, we're working with our colleges, HEFCW, adult training providers and business to create that environment already of those organisations working more closely together. So, although they haven't got a single organisation at the moment, working with them to be able to get themselves in a precursor, really—in that mindset of 'this is how it's going to be in the future'. So, we're doing some work on that. Huw—other actions that we're undertaking.

We've started the process of preparing for the Bill and the implementation strand that runs alongside that, which engages with the stakeholders that the Minister's outlined. I'm aware from the dealings we have with those organisations that they are actively planning to make sure that this doesn't happen on a particular day in the future—that they've prepared for it in advance.

I've been looking at the Welsh Government document, 'Consultation—Notes from Thematic Workshops', which was published on 12 October last year. You commissioned Miller Research to produce a summary of what was said at that series of events. So, what I'd like to do is just pick out some of the things that were said in the document and ask you how you respond to those things.

So, the first one is with regard to RIW. The note in paragraph 13.7 says:

'attendees from the HEI sector in particular were keen that autonomy and freedom was provided to RIW to build a competitive research base in Wales. At the moment, with some of the details in
the R&I proposals, there was concern that Ministers would wield too much influence over what should be an arms-length organisation, to dictate research and innovation delivery.'

How do you respond to that?

I understand HEIs' desire to ensure the principle of arm's length and no interference from Government in their work. We are reflecting on those concerns in how we take the work forward, but I can be absolutely clear to Members here today that I am committed to the Haldane principle and how those are taken forward in the legislation, and I am committed to a dual-stream approach to funding and ensuring that RIW will have the independence and the fleetness of foot to be able to direct their activities. But, at the same time, given that this organisation will be spending public money, I don't think it's unreasonable that there will be some Government oversight and that they are able to respond to, appropriately, strategic Government objectives, given that this is public money that that organisation will be spending.

10:15

What they seem to be saying at the moment is that there's too much Government oversight.

We are reflecting on all the feedback on the technical consultation, but I just want to be absolutely clear to people that the Haldane principles that have existed in the field of research in higher education for well over 100 years now are not going to be compromised by this piece of legislation.

Okay. To take another quote, with regard to the HE sector's concerns about the tripartite approach to RIW membership, particularly they outlined how the statutory RIW committee would require a wide variety of expertise, and the tripartite approach could set up silos or tribes within Research and Innovation Wales, and that the HE sector would prefer to see more flexibility in the membership, and look to appoint individuals with a wide range of experience, rather than an approach that suggested they were there as sector representatives.

We will be looking for exceptional individuals to populate RIW, but we also need to ensure that all sectors are represented. This cannot be the preserve of any individual sector, perhaps in the way that it has been perceived in the past. I want the voices of business, I want the voices of higher education, I want the voices of science, and I want the voices of our colleges heard in this regard. We will get the biggest impact from these reforms, and they are significant, significant reforms—we will only get the impact if we actually try and change the way in which we have done things in the past. If we just replicate what we've got at the moment, we will have the same outcomes, so we're trying to—

I don't think they're disputing that, but it's the fact that if they're sector representatives, then they're representing the sector, not, as you say, a broad-based mission.

That's what I will be looking for: to populate RIW with exceptional individuals, who can bring a wide variety of experiences, knowledge and background—

We will look to have, as I said—I can't make it any clearer—a wide variety of voices around that table. It cannot be the preserve of one particular part of the sector to dictate how this goes forward.

We are reflecting, as I said, on the exact nature, but what I am absolutely saying is that I want all voices heard around that table.

So, they may not be sector representatives in the future; you haven't decided.

Well, we will see, as we come forward with our proposals, how we will ensure—because this is what I want to ensure—that all voices are heard, and it's not just one sector that gets to dominate these discussions.

Why does the Welsh Government need to approve the chair and CEO of the TERCW body?

Because, just as in line with other Government appointments, we want to satisfy ourselves that that person is the right person for the job, and that is in line with how we make other public appointments to arm's-length bodies at the moment.

And do you think that would sustain sufficient independence in the HE sector?

Well, I'm sure the people that we appoint to the HEFCW board at the moment would say they are incredibly independent. There's nothing to compromise those voices, is there, from the evidence that they've sent you?

Well, can I just clarify, then? Does that mean that the vice-chair would then be the chair of Research and Innovation Wales, and would then be Welsh Government-approved?

So, the chair of the sub-committee will become the vice-chair of the commission, and, yes, it will be—at this stage, I've no intention of changing my mind that that will be appointed by Welsh Government processes.

Okay. And with regard to the proposals for oversight of spending: as I understand it, any RIW spending—all major capital programmes would require ministerial approval. Now, you've said that you are working in line with the Haldane principle. Is that not in line with the Haldane principle? If all major capital programmes require Welsh Government approval, how is that in line with the Haldane principle?

10:20

Well, as I said, we are in the process now of reflecting on all the feedback. So, this was a genuine technical consultation. If there are concerns that the correct balance between Government oversight, the ability of a Government to deliver on its strategic aims are going to be compromised—. And we will be coming forward with proposals, under the Bill, in response to the comments that have been made. But, again, what we're trying to strike here is the ability of the Government to achieve its strategic objective aims, as well as protecting the principles of Haldane. It's quite complex, this particular field, but the Government must be able to achieve its own objectives, but at the same time recognising the independence that this body will have to have.

So, that suggests you've got a little bit more flexibility there along the lines of the funding approval than the appointment of the chair, which you're quite categorical on.

Thank you. Kirsty, I was listening to you very carefully regarding agricultural research and development. Did you send somebody to the Welsh science conference in India only last week? Was there anybody from Wales there?

Gosh, I worked so hard for this morning, but I think you've got me there, Oscar. I don't know. I will have to find out.

What I am saying is: world innovation—the thing is, some countries are coming up with certain ideas, and it's mind-boggling. Scandinavians are coming up with making cloths with leaves and trees and things like that, which is unthinkable. Our country's predominantly an agricultural nation. Your research and development on that area is highly, highly appreciated; I just heard you saying that. And the other thing is—my question is—how are you attracting brains from the other side of the border to come in our part of the world and keep them—not brain drain—in our universities and colleges in Wales to go away and not to give, you know, service to other nations? That sort of thing. That is, I need to know how you're attracting people for research and development because it's a highly, highly attractive area for all these people all over the world—people are attracting those brains and these young children with highly innovative ideas. So, what is Wales doing on that side?

Well, as you'll be aware, Oscar, under our Diamond proposals, it is students undertaking postgraduate research in Welsh universities who are eligible for Welsh Government support for their postgraduate studies. You're right, we need to make sure that our universities are attractive to not just the best brains across the border in England, but, actually, the best brains across the world. That includes undergraduates as well as postgraduate students, and, indeed, academic researchers. And our Sêr Cymru programme has demonstrated our ability to incentivise those very people to come and live, work and contribute in Wales. I have to say, Oscar, the biggest threat to the ability of Wales to continue to do that is some of the issues arising out of Brexit and the challenges. Researchers want to be able to work in global, international networks. So, anything that happens as a result of Brexit that puts a question mark over an ability of an academic working in a Welsh institution to be part of those research networks is a real, real problem for us. But we've demonstrated, through our Sêr Cymru programme, the ability of Welsh universities to be highly, highly desirable places for those researchers to come and work on their own individual projects, but also to be able then to use their expertise to teach, train and co-operate with people who are already in the sector. Peter, I don't know if you want to talk about Sêr.

Yes. I think that particular programme—it started in 2012—has been used as a model by UK Research and Innovation with regard to their Future Leaders Fellowships fund. They looked at it and they contacted us with regard to information on how we did it. So, in terms of bringing in, from that point of view, we've got 12 chairs—a recent one appointed in Aberystwyth with regard to veterinary science, and we've got over 120 fellowships from 28 different countries. So, they have been looking at us. The question, as the Minister has rightly pointed out, is how you hold on to those and sustain them going forward with regard to Brexit—that is a big challenge.

10:25

Thank you, Chair. I'd just like to pick up, really, where Hefin left off with Research Innovation Wales, really. We've heard plenty of evidence that research and innovation activity extends beyond universities and higher education and I think we should encourage that. Businesses should actually do their own research and development internally, as well as extending that to higher education. But can you just help us understand the Welsh Government's intention to place RIW under a body that has overall responsibility for tertiary education?

Yes. What we're trying to do is create that synergy between aspects of post-compulsory education and research. When you think about it, the skills that we're trying to develop with people undertaking post-compulsory education—they're not just the specific research and innovation skills that people can draw upon. Intrinsically, we need to give more of our workforce, more people who are in post-compulsory education, those particular skills. So, what we're trying to do is that, rather than have two distinct organisations with barriers that make it difficult for people to negotiate, we actually have them all under one roof and they can help inform the work of one another. It's especially important, I think—. Jack, I know that you have a huge interest in the FE sector and the contribution of those studying in the FE sector in this. The fact that we've got that linkage between the post-compulsory education sector, which will cover our colleges, and research and innovation I think gives us the opportunity to really break down some of the barriers that have existed in the past.

We also have to think about value for money. We are a small nation, do we want to actually spend our resources on two separate organisations, or do we want to save our resources by having a single organisation that can do the job so that we can use the resources for the actual activity that will make a difference to our economy? Also, we have to have due regard for the principles of the sustainability and future generations Act, which actually requires Government institutions and public bodies to work together. We also know from the experience in Scotland that this is a very, very successful model and there are many advantages to having both bodies in one single organisation. And, actually, if you look at smaller nations across the world, this is a very successful model for them. So, I am absolutely confident that we will get better value for money and the systematic change that I think we're all looking for in terms of the linkages between work, research and development and innovation and the post-compulsory education sector in the round by having it all as a single body.

Thank you for that. You spoke earlier about the voice of businesses and how you want them on the board of RIW, and I think you've just answered this in your last comment there. Bringing those together, the RIW underneath the tertiary education commission, do you think the voices of private industry will be reflected in the best possible way then? Do you think that that will be better value for money for everyone, rather than if they were a separate body?

Yes, I absolutely do believe that that's one of the benefits of having a single organisation. It's not the only benefit by any means, because form has to follow function. So, we have to look at that, but one of the added benefits is that it'll be simpler. If we want business to engage, we have to make it as simple as possible and as accessible as possible for business. So, if you're saying to business, 'Actually, we want your voices over here and we want your voices contributing to Welsh Government policy over here and over here', businesses just think, 'My goodness me, that's just too much. I can't do all of that.' So, actually, again, for practicality and being able to engage business, making it one body and having it as simple as possible and for them to see the linkages of what they're doing right the way through the post-compulsory education sector, whether that's sixth forms, colleges, apprenticeships, adult learning, having that there hopefully gives them an added incentive to be part of it. Sorry, Huw.

I was just going to add, if you take an organisation like Airbus, for example, the relationship between Coleg Cambria and Swansea University, but also the relationship with Sheffield university and the development of the Advanced Manufacturing Research Institute in Broughton, is, I think, a case study example of the benefits of those synergies on the ground, and how business working with the university, the college and research specialisms can boost the prospects for a firm. 

10:30

I've just had an e-mail off Sheffield university as well, so I agree. [Laughter.] 

Thank you. Minister, can you just clarify: will the Haldane principle and the dual support system be enshrined in the PCET Bill? 

So, I haven't seen the wording of the Bill yet, but I'm absolutely committed to this. I know that this is a source of great concern to the HE sector in particular, but I am absolutely committed to the principle of an arm's-length body and that type of relationship. In fact, not only am I committed to it here, we are currently providing advice to the Vietnamese Government on how they can set up their own, because they're looking to create an arm's-length body in between their Government and their university sector, and we're actually providing advice. We've had people from Vietnam over only recently to look at how our model works. So, not only are we committed to it here, we're actually advising, even as a small nation, other countries about how they can go about establishing that in their own country. 

Thank you. Minister, thank you for your time this morning and your officials. We're very grateful for your time and, obviously, our report will be published shortly. 

Thank you very much for your time and your interest. Thank you. 

We'll take a 10-minute break. We'll be back in 10 minutes, and then we'll be taking evidence from Network Rail with regard to our autumn disruption inquiry. So, a 10-minute break. 

Gohiriwyd y cyfarfod rhwng 10:31 a 10:44.

The meeting adjourned between 10:31 and 10:44.

10:40
4. Ymchwiliad i achosion o darfu ar y rheilffyrdd yn yr hydref: Network Rail
4. Autumn rail disruption inquiry: Network Rail

Welcome back to the Economy, Infrastructure and Skills Committee. And I move to the next item—I'm looking at what item we're on—item 4, with regard to autumn rail disruption. And we have before us three sessions this morning: we have Network Rail in front of us now, and then Arriva Trains Wales, and following that, Transport for Wales. So, I'd like to welcome colleagues from Network Rail. And I would be grateful perhaps if you could just introduce yourselves for the public record as well.

10:45

Of course. Bore da. Good morning. My name is Bill Kelly. I'm the route managing director for Wales and borders, Network Rail.

I'm Alison Thompson. I'm the chief operating officer for Network Rail, Wales and borders. I'm a chartered civil engineer with 29 years' railway experience, including time as a track engineer.

Bore da. Fy enw i yw Tim James, ac rwy'n gweithio fel cyfarwyddwr strategaeth a chynllunio Network Rail yng Nghymru a gorllewin Lloegr. Mae gen i brofiad arweinyddiaeth dros 30 mlynedd yn y sector trafnidiaeth yng Nghymru, gan gynnwys saith mlynedd yn gweithio fel pennaeth adran trafnidiaeth gyhoeddus yn Llywodraeth Cymru.

Good morning. My name is Tim James, and I work as director of strategy and planning for Network Rail in Wales and the western route. I do have some leadership experience for over 30 years in the transport sector in Wales, including seven years working as head of the public transport department within the Welsh Government.

Thank you for being with us this morning. We appreciate we've got a really tight timescale this morning—we've got half an hour. So, I have mentioned to Members to be succinct in their questioning, but if you could perhaps be succinct in answers as well, just to make sure we get through every aspect.

I wonder if I could start and just ask for your assessment of the weather conditions—leaf fall et cetera—over this autumn period—[Inaudible.]

Yes, of course. Well, first of all, can I simply start by, on behalf of the industry, apologising to you and your constituents for what was clearly an unacceptable performance over the autumn period? There were a number of issues that contributed to what was clearly that unacceptable performance, and Alison will touch on these just in a second. Passengers are not interested in excuses—they want action, they want to understand and they want answers as to what was the root cause. For me, undoubtedly, the future fitment of wheel-slip protection will be a key factor in improving performance as we go forward. Alison, do you just want to touch on some of the—?

Yes. So, in terms of this autumn—no two autumns are exactly the same—during this particular autumn, we had a rough start, with storm Callum early on, which closed some lines due to flooding, and also impacted some of the units, in terms of damage. There was also a little bit more leaf fall early in the season this year, but, broadly, the leaf fall followed the same sort of profile as the previous year.

Yes, broadly, a little bit—the leaf fall fell a little bit more earlier on in the season, but, broadly, the profile was similar.

Okay. And that's a similar period—you've looked back over the last five, 10 years, and this autumn followed roughly the same pattern.

Every autumn is different, so there have been different patterns over the last few years. But compared to last year—it was similar to last year's.

Right. And perhaps if you could comment on the situation in Wales with regard to the disruption that we had on Transport for Wales—perhaps you could comment on that.

Yes. So, we had a lot of reports of low adhesion on the rail. And it's really important to note here that there are lots of different causes for low adhesion, not just leaf contamination. And evidence in industry studies show that moisture at critical points is a real big cause of low adhesion. And it's really interesting that we spent over twice as much on our vegetation clearance this year, because our autumn preparations continue through the whole year. We did over 2 million sq m of vegetation clearance, which is 110 per cent more than normal. And on one particular site, outside Pontypridd, at Trehafod, we completely cleared that site, and yet found that we had five times as many reports of low adhesion than we would normally have. And when we went to those sites and checked, we found that there was no leaf contamination on those sites. So, I think that demonstrates, to me, that there's something else happening that's not just vegetation—vegetation doesn't help if it's not managed—but that there's something else happening here as well.

I think Alison makes a really important point here. I think, as an industry, we really do need to develop our thinking in terms of what do we mean by low adhesion, and its causes. As she rightly said, we doubled the amount of vegetation we've cleared this year. In terms of the rail head treatment train, there was a 40 per cent increase, and we started to run it two weeks earlier. And yet, we were seeing sites where we had conducted this vegetation clearance, which had been identified by our train operating company, and yet on those sites, we'd seen an increase in slide and slip. So, that clearly suggests that there is more work we need to do, and we're working closely with James and the Transport for Wales team, collaborating with them, and investigating what could those possible causes be, and, more importantly, what do we need to put in place to mitigate that going forward?

10:50

Thank you very much, Chair. And, Tim, I remember when you went on the very first train with me on the Valleys lines over 12 years or 11 years ago, and I think—. I don't know whether the service has improved or not; that's a different point, but, at the moment, my question is: what action should be taken both by Network Rail and TfW to manage the impact of autumn conditions in future years?

I've always been very clear that wheel-slip protection, without doubt, will give us a significant improvement in performance. As I said, I think the industry has been, maybe not overly focused, but focused very much on the cause. But, autumn's almost—. It's a bit like winter; autumn is going to come in the same way that winter will come. And when winter comes, we put mitigation down, we take steps to try and make sure we're improving performance on roads and suchlike. And I would strongly recommend that mitigation in the form of wheel-slip protection on the railways would be the way to go. That being said, I think we need to continue to work to understand what the other factors are. We shouldn't stop thinking about vegetation, are pollutants potentially contaminating railhead, do the seasons affect the railhead? We need to continue to explore that and work collaboratively with Transport for Wales to make sure, in the future, we're not just dependent on the mitigation. And I'm absolutely committed that my team and I will do that. 

First of all, I'd just like to thank you for apologising because that's something we didn't get from the Minister. And, so, I think that's refreshing to hear, because if you acknowledge there's an issue, then I think that's decent of you to have done so.

We've talked a little bit about vegetation, and I would want to check the record, but from my understanding, the Minister seemed to say quite early on that it was to do with more vegetation on the tracks, and that that took some time to clear. But you're saying that the profile isn't that different to other years. There may be other problems here, and we'll come on to that a bit later, in terms of changes to the way you've treated the railways, but if it's not significant change to what's happened in previous years, what is this new phenomenon that's appearing, or have you put investigations in place to try and find out what that is, so that we can mitigate against that in the future?

If wouldn't be for me to correct the Minister at all, and I'm absolutely certain that what would have been referred to there is low adhesion, and there are a number of different reasons for low adhesion. We know that. We know that moisture, as I said, pollutants, dust and vegetation can create a problem on your railhead. I think the key thing for us this year is that what is identified, the investigation that we've already conducted—and I had sight of the report just recently with James, and we've already got a team jointly working together to understand some of the outputs from that report, which has clearly identified that it's not just about vegetation, and we need to be looking into other areas. And we're committed to do that. So, for example, really getting into things like swabs of the railhead, and so on and so forth. But what I would say is that we mustn't lose sight of the performance nationally in terms of what other operators were seeing, that had wheel-slip protection fitted. And, in actual fact, if you look at Great Western Railway, who were running on some of those same railheads in that time frame, and have wheel-slip protection fitted, they had one of the best performances they've had. In fact, they actually wrote to us and said 'Fantastic'—it was one of the lowest periods for wheel flats and having to use their lathes and suchlike. 

So, I think there's a number of things that we need to do. There is no one single silver bullet, so to speak, that will solve this. We need to be looking at a number of different—

So, when is this report coming out? When will this be acted upon?

So, I believe that if it's not completed, it will be very soon, within days. 

Transport for Wales are doing that. But we have endorsed that. So, we've agreed with—. So, I've had sight of that report, and I would agree with the content that's in there. An absolutely overriding theme that comes out of that for me is that we need to do more investigations and we need to work together. Again, I would suggest that by working collaboratively—. I think in the industry, the train operating company and ourselves work in good faith each year, and, each year, we've done more to try and do the right things to make sure we're delivering for our passengers. And, clearly, that wasn't good enough this year. And, therefore, what we need to be doing is working closer together as one team to make sure we're pooling the resources and taking the right steps to make sure the outcome does deliver that performance. 

Before Christmas, we heard from the officials that things would be better by the end of that year, which was last year. I'm seeing on social media, and people are coming to me already with overcrowding, with problems with the trains still in January. When do you think that this situation will be rectified so that we can reach a conclusion? Is it when this report is implemented? Is it when Transport for Wales gets more time to bed in? When do you think we will see conclusions, because that, as you said at the beginning, is what people really want to see. They don't care who does it—they want to see progress.

10:55

Yes, it's a real challenge—a transition from one operator to another. It was a once-in-a-fifteen-year event, and it's complex and it's challenging. I have to say, I have to commend Transport for Wales for that transition, because, notwithstanding, as I've said, that the autumn was just not acceptable, the transition itself between one operator and Transport for Wales actually went really well—it was very robust and lots of things could have gone wrong, and they didn't. 

I think Transport for Wales need to be given some time. I think the operator needs to be given some time to—. You know, we talk about the new fleet introduction, and they'd be better placed to comment on that in terms of timescales and the impact it'll have, but I'm confident that the plans that they have and what they've been talking to us about are both exciting and I think will deliver the right outcome for passengers.

And just quickly, do you think it's the failure to fit wheel-slide protection that led to some of these problems, and will you take responsibility for that failure, or is that somebody else's responsibility? 

I think, Bethan, perhaps to answer that—given that I've got 20 years' experience of running railways in Wales, and Oscar well remembers occasions previously—over the last two decades, there have been lots of changes for the better when it comes to planning autumn, particularly around preparations and particularly around working more collaboratively with operators, and we've had some really good sessions with James at Transport for Wales.

We've seen new technology over the last 20 years, particularly around automation of railhead cleaning. Sixteen years ago, people were manually cleaning the railhead on the Cambrian line. People were going out in the middle of the night, trying to scrape moisture and contamination off railheads. Since then, we've brought in a fleet of railhead treatment trains, which effectively pressure wash the railhead. So, we've seen big advances and lots of automation so that, last autumn, we pressure washed 40,000—

But it didn't make a difference, did it, because we still had the problems, so—

Well, I think we pressure washed 40,000 miles, but I think what hasn't changed, Bethan, to answer the question really, is the age of the fleet. So, lots of the fleet doesn't have wheel protection, which probably is similar to having an anti-lock braking system in your car. What we need to do is to support James from Transport for Wales to introduce a modern fleet as part of the new franchise. That's what we've really focused on: how can we actually get improvement for passengers by supporting James and his team to introduce a new fleet of trains quickly?

We need to be quite quick moving on this. I've got some supplementaries—be quick, if you can—from David and Joyce. David.

Bill, it does stretch credibility in terms of some of your comments with regard to the fact that you are now looking very seriously at what causes slippage et cetera on the railways and that this is a phenomenon that's been going on ever since we can remember—all being put down to the same sort of problems. Why hasn't this been addressed more seriously? Network Rail is responsible for the rail network in the whole of the UK. This isn't something that's just down to Wales. Why hasn't this been addressed seriously at some time in the past?

So, just to answer that point, David: I'm not suggesting that we should be starting to investigate now. I think what I said, to be very clear, is that it will need further investigation. We never tire of investigating and we never tire of putting the resources in to understand the phenomenon that is autumn. And you'll be well aware, I'm sure, that in northern Europe, it is a phenomenon—it is a challenging time for the industry across the whole of Europe, which is why technology and mitigation against what we know autumn will bring is a key factor, I believe, in improving the performance in any regard and in any sphere where you're operating the wheel-rail interface. 

What I would say in terms of investigations is that I think we need to understand better things like, for example: is climate change—or if we're seeing climate change, is that impacting the railhead? Are there things going on in and around areas that could potentially slow components? So, for example, one of the things that we're now looking into is the effects of dust. So, we're deploying new technology on trains so that it's actually filming the rail-wheel interface to understand what else is going on. So, I think it's an evolution—that's what I'm suggesting—that we'll need to continue to evolve.

What I would also say, picking up on Tim's point, is that the performance has improved—whilst this autumn was unacceptable, and I will never tire of saying that: it was unacceptable and I accept that; as an industry, we need to do more. Actually, we've made significant improvements, and I keep going back to—I firmly believe this year that if we can deploy this wheel-slip protection across the Welsh fleet, we will see a significant improvement.

11:00

I agree you need to do more, because I cover rural Wales, as you know, and trains were just stopped. People weren't moving anywhere. They couldn't go to work. They couldn't get to hospital appointments. It was absolute and utter chaos. It's not new—I have to reiterate what's just been said—it's not new. In my view, you should have seen it coming. It was shambolic, to put it mildly. We've heard from the Minister for Economy and Transport saying that the Department for Transport's current enhancement pipeline process is not serving Wales well. Well, it certainly didn't serve Wales well this time, did it? So, I would like some comments about that. 

But also, you have mentioned climate change. In the area that I represent, and the biggest problem area that you had, where the rail tracks exist and have existed for a long time is prone to flooding. So, recognising as you do that we're getting more frequent heavy downpours of rain, what plans do you have to do something about that? Because we're going to see this again in the very near future. 

Thanks, Joyce. If I can perhaps pick up on the question about enhancements first, essentially, Network Rail is funded in two ways. One is for enhancement of the railway, which is generally large projects that are transformational. Those decisions are made for England and Wales by UK Government Ministers because they involve large amounts of public money—many hundreds of millions or even billions of pounds. Currently, I can understand why this committee would want to see a geographic split, so I'm now looking at the latest figures from the Office of Rail and Road for 2016-17. So, for that year, Wales received 6 per cent of enhancement funding across England and Wales. That was £177 million compared to a spend across England and Wales of £3.1 billion. Clearly, our job in Network Rail is to plan the railway and to provide choices for UK Government Ministers around where they invest public money. The decisions on where money is spent firmly sit with Ministers, because, clearly, it's a large amount of funding. Equally, Joyce, while recognising the interest of the committee in Wales, I think we should also be aware that there is spend on infrastructure taking place in England that is of benefit to Welsh passengers, and I'll give perhaps two examples—

Hold fire on the examples because we're just short for time. We'll take your word for it. Are there any other points that you want to address from Joyce's question?

Of course, yes. The other point really was around—we talk about projects, but let's just talk about the co-operation of the Welsh railways—operating, maintaining or renewing the railway. For the first time, each route has its own settlement for control period 6 funding. So, Bill, Alison and the team have got a £2 billion funding settlement to run the railway in Wales and borders. That is a significant increase on the previous five years, 28 per cent more funding. What that will deliver is a big increase in asset reliability. There's £0.25 billion in there to renew 250 miles of track, and there's £115 million to improve signalling in west Wales. There's £50 million to improve more than 2,000 earthworks, and also there's funding to improve and refurbish Barmouth viaduct and to renew the pumps in the Severn tunnel. That's the first time that Wales has had an amount of funding to that degree, and I don't think anyone feels they're short-changed in that amount. The regulator believes that it's an efficient and deliverable settlement. So, I think—for ops, maintenance, renewals—Joyce, for the next five years, Wales has got a very, very good settlement for that. So, I don't necessarily think that funding is primarily the issue behind the autumn problems with experiences in terms of Network Rail. We've done more work than ever before, we've cut down more vegetation, we've run the railhead treatment trains more often, we've covered more mileage. So, I think, as Bill has said, there is something else in there. One of the key enablers is wheel-slip protection on trains.

11:05

Can I just touch on the flooding? I do take the point on flooding, and in particular on your constituents the impact that has, and I'm very aware of it. In the last 18 months, we've deployed some significant technology, particularly in rural areas where we know have hotspots for flooding. We can't stop the rain coming; we can't stop the water coming; but what we can do is get early-warning systems in place. And, this year, during storm Callum, we've seen for the first time sites historically that would have been flooded where we managed to take evasive measures and get works done out there early on, so that we did not see that same level coming in to those areas. So, we're continuously looking for technology to assist us to deal with those issues and we will, Joyce, continue to do that.  

Joyce, have you got any other questions that you want to ask? Because you have another set of questions towards the end, but we won't have time to get to those. Do you want to ask anything we can cover now? 

I just want to know—. You touched on an outline plan for the Wales route for control period 6, which is what we're entering. What's going to be delivered? I know you said, 'We've got more money than ever', but that doesn't mean we've got enough, because we've only got 6 per cent of the total in any case. So, let's not lose sight of that figure. So, what's going to be delivered between 2019 and 2024? What's going to make life better for commuters? 

As I mentioned really, there's lots more refurbishment or renewal of track infrastructure to make it more reliable. The plan suggests that it'll be 9 per cent more reliable again. But one of the key things that we're doing, Joyce, and I guess many of the committee members over the years will have heard about public performance measure, PPM, and industry talks about PPM in terms of a passenger measure, but in CP6 we're moving away from PPM because we feel that it's served its purpose. Working with Transport for Wales we are focusing the way we operate, maintain and renew the railway on a new measure that reflects more passenger experience. Working with James and TfW, we will be focusing and measuring ourselves based upon 'on time at stations' and 'average passenger lateness'. So, we'll be working to measures that are more meaningful to passengers and more meaningful to you as committee members, and we'll be organising the business and running the business along those metrics.   

Can I just ask briefly as well, if I can? You took a different approach to track treatment back in 2016. I don't understand all that and I don't want to get too technical, even if I could, but what was the rationale for that change if you could just briefly outline that? 

Yes, I think what we're referring to here is the adhesion modifier that we would use on the railhead. It's a sand-based gel that sometimes is sprayed onto the track by the railhead treatment train. Now, post autumn 2016, as part of a review with Arriva Trains Wales, we established that, in actual fact, the adhesion modifier in some areas was actually acting like a glue-like substance and actually creating problems for us.

Well, no, actually it's been happening in a number of areas. So, nationally, there are a number of other train operating companies who have since requested that actually we stop applying this application onto the railhead. It's route specific, so each route works collaboratively with the train operating company to decide what's best for them. But we decided in 2016, with Arriva Trains Wales, to stop using the adhesion modifier, because we felt that, in actual fact, what it was doing was hindering performance. It was doing a number of other things so, for example, we've got something that we call 'wrong side track circuit failure', which in essence is a safety system for the way the trains run around the network, and it was interfering with that, not to the point that it was making it unsafe, but it meant we then had to run the network slower than we obviously would have wanted to. So, we looked at this and said, 'Right, we're going to run a trial, we're going to avoid using it and just go to the water only', which we did, and we did not see any adverse impact on performance.

We did the same again last year, in 2017, and again on those areas that we would have used it historically we did not see an adverse impact on performance. What's really interesting for us is that one of the areas where we've seen the biggest increase in what we call 'the wheel flats', and where we had some of the greatest challenges, adhesion modifier has never been used. So, that clearly says that the adhesion modifier wasn't the key component here for us in terms of some of the issues that we're seeing. As I've referred to earlier, for me, the overriding issue here is around making sure that those trains have got wheels that have protection fitted. 

Okay. So, Wales wasn't the only area where this particular phenomenon was happening, if I put it that way. 

11:10

No. What we did see was in another area where we've got the same type of fleet as the Welsh fleet running, in northern England, where they were actually applying the modifier, they still had a significant performance issue. That was driven, again, I believe, by the fact that they didn't have wheel-slip protection fitted. 

Thank you, Chair. Just very briefly to come back to Joyce Watson's question and the answer that was given to her. In Plenary on 20 November 2018, the First Minister, responding to a question on service disruption, referred to the fact that Wales only gets 1 per cent of rail infrastructure investment. Can you explain the discrepancy between that and the 6 per cent figure that you quoted in response to Joyce? 

I can't, Vikki, although I would perhaps suggest that, at the time, the Cabinet Secretary was looking perhaps over a longer period. Certainly, the most recent figures for 2016-17 indicate it's 6 per cent. I'm more than happy to share that with the committee clerk for you to look at. 

Absolutely. Yes, of course. 

And just very briefly, are there no further stats than 2016 to 2017, because even those are outdated now, aren't they?

Yes, there are and we can provide them. I think these are the ones that the Office of Rail and Road, as the independent regulator, provide, and I can see what else I can provide to the committee on that. I was just perhaps going to make a point, really, because when I talk about investment, clearly, in order to support TfW, there's investment taking place north of Chester, outside of Wales, on something called the Halton curve, which I'm sure that Jack will know about, which is investment in England that is now allowing a new service to run from May between Chester and Liverpool via John Lennon airport. Now, I guess, Vikki, because that is funded from city deal money, that will not even appear in the overall stats. So, there are different ways of funding railways. So, I think we also need to be aware of that when we're looking at these stats. But the stat I'm quoting you of 6 per cent is UK Government spend in Wales for that year. 

You've mentioned the fact that you need to work more closely as a team across the various agencies involved. Arriva Trains Wales—your relationship must therefore have had some flaws. What were those flaws and how are you addressing them in your relationship with Transport for Wales? 

I think the relationship with Arriva Trains Wales—I don't think we had a flawed relationship. In fact, in the last two years, some of the collaboration we had was some of the best that we'd seen nationally. I know that I met a number of you when you visited the site at Canton and you've seen some of the collaboration and the work that was going on then. That has continued. We set up an operations governance board, we set up a communications board and planning board, and in my mind and from what we've seen evidentially, we've seen improvements out of that. Now, I think what's important going forward is working even closer with Transport for Wales and we're already seeing that.

Let me give you some examples of the types of things we're doing. So, it's an exciting time for Transport for Wales. We're talking about new fleet being introduced over the next few years—some as early as next year. That can be challenging. It can be challenging bringing new fleet onto your infrastructure, but we're already working collaboratively together, sometimes co-located to make sure that the work we're doing happens as quickly as possible.

But if I could just touch on one other aspect, and it touches very slightly on what Tim said earlier. We're both investing, over the next few years, in our infrastructure and rail generally in Wales. What James and I have committed to doing is both our teams working closely together to make sure those resources are pooled and we get the best benefit from them. There is little point in me renewing a fence in a station if, in six months' time, James and his team are then going to extend the platform and take the fence down. We need to work closer together, and that's a small example, but we need to work closer together to make sure those resources are being well deployed. 

So, your relationship with Arriva Trains Wales was flawless and the relationship with Transport for Wales is going to be even better. 

I would never say any relationship is flawless. In all relationships, you have your challenges. In all relationships—

So, what are you able to learn from what wasn't right and what can you put right?

So, I think the industry—. I think better collaboration. I think if we get this integration between track and train, we can all learn lessons from that and we can al work closer together as an industry. I firmly believe that. I think we've got a great opportunity to build on the work that was already started with Arriva Trains Wales. I'd say again, I think we'd done some good work there, particularly in the last two years, and I think it's important that we build on that. I am absolutely confident we will do that. We're already seeing—and I'm sure James would testify to that—in the last three or four months, some really positive work between our organisations so that we ensure we get the best possible outcome for our passengers. 

11:15

Can I just pick up on this issue of PPM and the movement to something that reflects better passenger experiences, which is the measurement of on time and lateness? Transport for Wales have said that performance management will change radically in the year ahead. Is that what they're referring to?

I would suggest that probably is what they're referring to. When you look at the perfect public performance measure and their aspiration to move to something that's more tangible for the passenger, I would support that. So, on time at every station, passenger lateness— 

So, that's what we mean by improved performance management.

Well, I think it's more than just improved performance management in that regard. When we talk about improved performance management, we're talking about how we improve the overall performance. But I think what's important out of that is what is the key metric you're going to use to measure what it is you're doing and the impact that's having.

Why are we moving to these new performance measures now? Why didn't we do it previously? It seems common sense.

Look, in my years in industry, one of the things that I have a great experience of is that measurement within industry goes around in cycles, and you measure different things at different times, depending on where you are and your evolution as a business, or some of the challenges and outside forces that you face at that time. I think, right now, measuring on time at station, as I said, measuring passenger lateness, is absolutely the way to go. If the measure is a measure that is simple, that our passengers can understand and holds us jointly to account for the performance and the service we are delivering, that's got to be a positive thing, and I'm supportive of that.

Okay. And Transport for Wales and yourselves are fully aligned in that respect then, and you're—

We are, we're working closely together to ensure that our goals are collaborative and, indeed, I would be a strong advocate of us sharing some of those very high-level goals together.

And to support Bill, if I can, Hefin, really, each route has got its own scorecard that measures the performance of Network Rail on that route. It's publicly available, it's there for scrutiny, we're transparent and, essentially, the targets that we will have, as Network Rail, on that scorecard, will be agreed with James from Transport for Wales. So there will be perfect alignment between the two.

I would never say flawless—no relationship ever is, but we will work hard at being perfect.

I'm looking around. Are there any quick questions at all to this panel before we move on? No. In that case, can I thank you for your time this morning? I know it's been short; I think we all could have done with more time, but other constraints stop us from that. So, can I thank you for your time this morning? Diolch yn fawr.

Thank you, Chair.

With that, can I invite Tom Joyner to the table?

Can I say to the witnesses as well, if you want to stay, you're very welcome to?

5. Ymchwiliad i achosion o darfu ar y rheilffyrdd yn yr hydref: Trenau Arriva Cymru
5. Autumn rail disruption inquiry: Arriva Trains Wales

If I could welcome Tom Joyner from Arriva, who was formerly the chief executive of Arriva Trains Wales, if I'm correct to say that. Can I thank you, Tom, for joining us this morning? If I could ask the first question, and perhaps then it opens up to you, giving any opening statement that you want to make.

There's been a lot of debate here in this committee and other committees and in the Assembly Chamber and in the media as well about the causes of the autumn disruption, and blame has been apportioned to different places. Do you think that Arriva Trains at all has been blamed unfairly for any disruption this autumn?

Thank you, Chair. I think our approach, first and foremost, at Arriva is to solve problems and not to try and apportion blame. What I do know is that we were determined to hand the franchise over in a really professional way to Transport for Wales, and to continue throughout 2018 to invest in our people, our infrastructure and our stations and our network right until the end of the franchise. So, it's absolutely not correct to suggest that the disruption later in the year was anything down to the way that the franchise was handed over.

My background is that I'm an experienced rail professional with over 25 years of heavy rail experience and I've been involved in a number of different franchise handovers throughout the UK, and I can categorically say that this was one of the smoothest franchise handovers that I've seen. 

In summer 2018, we ran our 'Diolch' campaign throughout Wales and the borders, to say 'thank you' to our customers 'thank you' to our stakeholders, who we've worked in partnership with, and also 'thank you' to our colleagues, 2,300 ex-Arriva colleagues now, who are the 2,300 staff that are running Wales's railways at the moment. And included in that number of colleagues are several hundred fleet and train-driving colleagues, who've worked extremely hard throughout 2018, and particularly in the run-up to the autumn, to prepare for autumn and to prepare for the franchise handover. I was disappointed that there's potentially an inference that those Arriva colleagues—now Transport for Wales colleagues—are in some way to blame for what's happened, or that in some way they've not prepared as they might have done for autumn, because the actual fact of it is that we handed the franchise over in a really professional way.

11:20

Thank you. That's really clear, and Members will have questions on what you've said. But can I ask? The level of disruption and the number of trains cancelled this autumn—was that a surprise to you?

I very much think that's a matter for Transport for Wales to comment on. We weren't running the railway at that time.

No, no, but I suppose I'm asking your opinion of—. You've offered the fact that you've got 20-plus years of experience in the rail industry, so I'm just asking for a general perspective, in that case.

Yes. I mean, that is a question for Transport for Wales. Very regrettably, I wasn't in Wales after 14 October, so I wasn't there to see—

—what was happening. So, it's a question for Transport for Wales.

Thank you, Chair. Tom, can you elaborate on the comment in Arriva's statement on 30 November? The quote is:

'this year we delivered our autumn preparedness plan in full and, in doing so, increased spending on train maintenance relative to previous years'.

Will you make sense out of it?

Yes, certainly. As I said before, our priority was to run the service for the customers to the best of our abilities, and then also to hand over the franchise in a professional manner to Transport for Wales. In preparation for autumn, we did far more than was contractually committed. In addition to all the hard work that I've talked about, we committed that all wheelsets would have a significantly greater than normal wheel life remaining, at the beginning of autumn; we discussed the best way to maintain the wheel lathe at Cardiff Canton depot with Transport for Wales and KeolisAmey; we employed additional resource throughout the summer; and we also employed an additional temporary gang of radiator cleaners to undertake leaf clearance duties. We communicated all this to Transport for Wales as we were progressing through the summer. We trained all train drivers. We've trained them over a number of years in what can be quite a difficult task of driving in autumn conditions. So, that's long been an Arriva policy to invest in the training of train drivers, and we did that again in 2018, preparing them for the autumn when we weren't going to be running the railway, but at the same time it was the right thing to do to invest in that training. We finally took Transport for Wales through everything that we've done at a formal meeting in October, and Transport for Wales acknowledged the work that we'd done—they thanked us for it, and recognised the work that the team had done in that formal meeting in October 2018.

The suggestion is that 2016 changes to Network Rail’s track treatment regime may have partly contributed to the disruption. What—?

I don't know if you've heard the evidence from Network Rail on this. Have you—?

Yes, I mean I was sort of in transition between the two.

It was before my time at Arriva Trains Wales, and I think it's probably best that Network Rail are the people who answer that.

Okay. What discussions did Arriva Trains Wales, ATW, have with Network Rail at this time? And how did the company manage any changes made by Network Rail?

To what specifically?

I think you're referring to the changes in the different treatment on the track, which was changed in 2016, and what discussions that you had with Transport for Wales in the handover process?

I mean, that is going to—. That's before my time, so I wasn't involved in those discussions.

Thank you, Chair, and thank you, Mr Joyner, for joining us today. I'd like to discuss the handover process. How did you feel that that process ran, compared to the process for other franchise handovers that Arriva might have been involved in?

11:25

I think it went really well. At the start of the year, I, my executive team and my own boss—the managing director for Arriva UK Trains—set our goal to finish the franchise on a high, to continue to invest, to continue to support our people, and to continue to try and put the best service out for our customers, and in my experience, it was a really smooth handover. I also was part of—requested, and was part of—a series of weekly meetings with Transport for Wales, with James Price and other senior TfW officials, and we regularly reviewed how things were going. I proactively asked for feedback, 'Is there anything that we could be doing differently?' And all the feedback that we got continuously was that everything was progressing really well. And that's my experience: that we had good relationships, and that, until 14 October, everything was progressing, really, very well.

How would you respond, then, to the comments by James Price, the chief executive of Transport for Wales, who said that access in the initial phases wasn't, I quote,

'as free as it should have been',

and that there was a bust up about this four or five weeks out?

Yes, I heard that. I—. I mean, we instigated a series of weekly meetings where we invited Transport for Wales to Cardiff Canton depot throughout the summer. I also had the weekly meetings that I talked about just then with senior Transport for Wales officials, which was very much a tripartite meeting between me, James Price and Transport for Wales Rail Services, KeolisAmey. We held those meetings to try and just ensure that if there were any problems, of any sort, we could resolve them quickly, because time was finite at the end of the franchise, and it was a huge period of change for a lot of our people. So, I wanted to make sure that, if there was an issue, I knew about it instantly and I could deal with it. Not once, ever, during the run-up to 14 October, was anything mentioned about a bust-up. So, I was surprised to hear that. There was never a problem with access. From an Arriva perspective, we've always been, I would like to think, open. Indeed, we invited the committee last year—. We were fortunate enough that you were able to come to Cardiff Canton to see colleagues there and the work that they were putting into preparing for autumn 2017. We've always had an open policy in that respect and that was extended to Transport for Wales.

Certainly, the director of rail operations said that,

'It's also worth adding as well that the previous operator'— 

Arriva—

'still had to run a safe operation as well',

and that you allowed access but it had to be in a controlled fashion because you still had a business to run and a service to deliver. So, bearing that in mind, do you think that the issue was over the perception of access and how much access it was practical for you to be able to grant to Transport for Wales when you were still operating the franchise?

My view is that, whether it's a perceived problem or there's a problem, if you've got a problem, then the thing to do is to say, 'I've got a problem. I'd like you to do something about it.' That didn't happen, and, as a result—. And, probably further than that, we continued to check whether everything was going smoothly from Transport for Wales's perspective. So, that's been a bit of a surprise to hear that. I suppose it is possible that there was a perception that access was difficult, but, certainly, you would have expected that to be raised with me, as the managing director, that there was some sort of an issue.

From a people perspective, we spent an awful lot of time investing in supporting our people through the change. They've worked for Arriva Trains Wales for 15 years, and Arriva Trains Wales has been a successful company. In fact, nearly 1,000 people actually started the franchise with Arriva Trains Wales and finished it with Arriva Trains Wales and are now working for Transport for Wales. We're very proud that people called working for the railway and working for Arriva Trains Wales a career and stayed there for decades. We, in 2018, undertook an employee survey, as we always do. We actually received record results. We'd invested a huge amount into trying to ensure that we engaged our people, that we communicated with them about all the changes that were happening, that we allowed them access wherever we could and wherever it was right and proper to do so, or whenever Transport for Wales wanted it. The results of that employee survey in 2018 were that 84 per cent of our people felt engaged and motivated to work for Arriva Trains Wales. That's a result that we were really, really proud of. So, we put huge effort into managing this change, looking after our people and also working with Transport for Wales. 

11:30

Thank you. One final question from me, Chair. The Minister for Economy and Transport said that the Welsh Government had to submit papers to the Department for Transport regarding what they saw as a breach in Arriva Trains Wales, particularly with regard to IT mobilisations. What happened there and why? 

Firstly, I did hear of that. I think it's worth mentioning that, to my understanding, that has absolutely nothing to do with the performance of the fleet, or autumn, and has no impact on the matters discussed here, but I'm very happy that you've asked the question. I can't comment on the papers that were allegedly submitted as I have never seen them. What I do know is that there was an IT problem, an issue, towards the end of the franchise and it was to do—I'm happily not an IT specialist—with files being held in the cloud. Technical problems at both ends—Arriva Trains Wales's end and Transport for Wales's end—about separating data held on servers. What we were trying to ensure was that this data that was held in the cloud transferred to the new cloud that was operated by Transport for Wales. What I saw and what I knew—I got regular updates from our head of IT—was that the respective IT teams worked really hard to transfer the data and the data was transferred. I know, particularly towards the end of the franchise, they were working literally through the night. I went to St Mary's House on a number of occasions—they were working through the night to transfer the data. 

I suppose, again, I'm going to come back to the fact that if it was a serious issue, then it should have been raised directly with me. It was never mentioned at any of the weekly meetings that we had with Transport for Wales or Transport for Wales Rail Services, KeolisAmey. And a couple of weeks after the franchise ended, there was a telephone conference where we volunteered to go on just to see if there were any other final issues that we could assist with, any snagging items or things that were left over that we could potentially help with. We did that as part of our, 'We want to hand things over professionally'—. It was me who went on to that telephone conference and it wasn't discussed. So, it was a surprise that that was raised. I suppose, at the time, if there is an issue, it should have been raised with me directly. 

Any other questions on this section? No. Bethan Sayed. 

I think the evidence you are giving is pretty enlightening because it seems to contradict a lot of what we've heard from the Government and its officials. Do you think that you're being scapegoated? 

I'll come back to what I said at the start, really, and that is that, from Arriva's perspective, we're here to solve problems and not to try and attribute blame. My perspective and my goals when I was the managing director of Arriva Trains Wales was to try and put the best service out we possibly could for our customers—

The reason why I'm asking is because, to me, from this seat, it looks to me quite unprofessional of the Government to try and act in this way. If they're acting in this way towards somebody they worked with for so many years, what's to say that they won't take this attitude with the current provider, down the line, if they are not happy with how things go? So, I'm a bit concerned on that level, on that moral level, as to how they're talking about you, considering that we're hearing two very different stories. What would you say to the Minister in relation to the criticisms that you've been attributed quite vocally in the Chamber, in here and in the media? 

I would say the same thing to anyone—that we're actually really proud of the record that we had when we were running the railways in Wales. We achieved a huge amount in the 15 years that we were running Wales's railways and we did that in partnership with the Government. If you look at some of the best achievements that we have completed together, we've taken passenger numbers from 16 million to 33 million. When we inherited the franchise, we ran 600 trains a day; we now run well over 1,000. So, Arriva Trains Wales and Arriva have invested significantly in the franchise over that time and we've done so in partnership with a whole range of different partners, including the Welsh Government. 

11:35

That's very diplomatic of you.

I'm going to talk about the franchise quickly now. Obviously, you've heard from the Minister that he's been critical of the actual franchise, saying it wasn't fit for purpose and so, essentially, Arriva Trains Wales had a lower bar to get over. Those are his words. You seem to be suggesting that you did invest over and above that. Can you give us a figure as to what additional to the contract you invested in Wales, which wouldn't otherwise have happened had you not done so?

I'd come back to what the customers' experience was. If you look at what the situation was before Arriva Trains Wales ran the railway, there was no Ebbw Vale line and there were no passenger trains around the Vale of Glamorgan line. When we took over the franchise, 168 of our stations had no customer information system whatsoever, and Arriva Trains Wales, during our time, and working in partnership, have changed that completely. We've got a fantastic service on the Ebbw Vale line. We've got trains around the Vale of Glamorgan line, which is essential for that community, and in rural Wales particularly every single station has now got real-time information. That's hugely important to our customers. We've transformed stations across the country—Cardiff Central, Cardiff Queen Street, Swansea, Newport, Chester, Port Talbot and then, in the borders, Shrewsbury as well has been amongst those to be transformed. We've worked—. Our people have worked tirelessly at managing some of Wales's biggest events. If you look at things like the Olympics, the Ryder Cup, and the Champions League—all delivered. We were proud to be a part of all of that.

So, we've invested quite significantly in achieving that. Obviously, there's been discussion about the fact that it was a zero-growth contract. What I've just described to you is not zero growth. We have transformed things in the time that we have been here, and particularly I come back to the fact that we've handed over a railway that now has over 30 million customer journeys, when previously it had 15 million.

Okay. You paint, obviously, a rosy picture, and I would expect you to do so, but the Minister has said that Arriva Trains Wales made profits in excess of £20 million. Wouldn't it have been reasonable, perhaps, to have put some more investment into the trains than you had already done, and even considering pricing? That's something that people come to me a lot about: that the level of pricing for train travel is higher than in other countries in Europe, and that that would then deflect from them potentially using that service. Could that have been something that you could have done as you look back on your time again?

We look back with pride on our time. We invested significantly in the railways in Wales. If you look at somewhere like Machynlleth, we were part of building a train maintenance depot there. You've now got a train maintenance depot employing people in mid Wales there, which didn't exist before Arriva Trains Wales. That's all part of the work and the investment that we've put in. I think that, in respect of the challenge about our investment, it is a matter of fact that, if you look at what was expected of the franchise—. I believe that the original investment was supposed to be something—I don't have the exact figure; it was in 2003, but it was less than £500,000 that was to be invested in the franchise over the 15 years. And in actual fact we've invested over £30 million over the course of that time. Well, that actually indicates that we have invested significantly in the franchise.

I've got another two—is it a quick question or shall I come back to you?

You're right, you did invest £31 million, and you might originally only have been required to invest significantly less. But do you accept that, because the passenger numbers had grown, and therefore your profits had grown, that it would be a rather foolhardy business process not to invest to make even more money considering that there was a profit incentive here? So, I do understand that you invested £31 million. I've got the figure here, but to claim that you did it out of the goodness of Arriva isn't entirely the whole picture. That profit only survives by reinvestment.

Well, I come back to the fact that—I mean, the facts are that we did invest significantly, and from my perspective, as the managing director, what my absolute goal was was to try and deliver the best possible service for people in Wales, and also to look after the 2,300 people who were part of Arriva Trains Wales, who now work for Transport for Wales. To answer your question from, possibly, a broader context, I think it's always going to be the case that if you look at a contract that was left 15 years ago in 2019, it's probably going to be viewed differently. The context has changed; there's possibly a case in the future to have more flexibility built into franchise contracts.

11:40

Thank you, Chair. I just wanted to move on to the maintenance regime, and I'd like to get a comment off you about the maintenance regime. I imagine you'll disagree quite strongly with these, but the fact that the chief executive of Transport for Wales has said, and I quote:

'the fleet as a whole has not been maintained quite as well as it could have been',

and the fact that the Welsh Government has actually criticised the maintenance customs and practices that have evolved over the 15 years of service—I imagine you'll disagree with that because you're saying you've handed over the service in the right way. Is that case?

It's absolutely the case. I absolutely know the hard work that the depot staff at Cardiff Canton, Machynlleth, Holyhead, and also at Chester put in. I've spent many times visiting, my senior team were there, particularly towards the end, through the night, working with them, and huge amounts of work were put in in 2018 to hand over in a good position.

I would also just talk about the fact that we had some really significant issues to deal with in 2018. In spring 2018, we obviously had the beast from the east and Emma meet here over Cardiff, and that had a really—. I mean, that was a once in a—. People talk about a once-in-every-so-often occurrence, but that was a once-in-a-generation winter event that had amazing repercussions for the railway, and particularly the fleet. And we put huge amounts of investment in to restore the fleet.

At the same time, we also had the request to support the Government with Great Western electrification and trying to get electrification to reach Cardiff. As a result of that, we agreed, in partnership with the Government, to a series of blocks that severed the Marches line and kept our units, effectively, north of Cardiff. They weren't able to access Canton for a period of weeks. In addition to that, we also had serious track damage at a place called Maindee Junction, which is near Newport, where over 25 of our units were seriously damaged by infrastructure damage caused by a fault. We had all three of those issues—really, really significant issues—to deal with. And we put huge resource—extra resource—into our fleet to restore the service.

The ATW normal traffic requirement was 110 trains. We would put 110 trains out every day. And even with those really significant incidents, as a result of the work that the team had done, and, obviously, the extra resources that we provided and funded—. There were problems, there were challenges, but we dropped down to 105 trains per day for a period of time, and then, after the summer, increased that to 106 as part of our recovery plan and we're on the road to increasing it to 107.

There are challenges in running a railway, but I really do believe that the evidence points to the fact that our teams worked incredibly hard, and we provided all resources available to them, and that is a really good example of it—where we've recovered from those three really fundamental issues that happened.

Thank you for that. I assumed that would be your style of answer to that. I'd like to talk about wheel-slide protection because it's been heavily suggested by various witnesses that if wheel-slide protection was actually on the class of train, you may not have had this problem and you may have got round some of the issues during the autumn disruption. For example, GWR had a similar class of train running at the time with wheel-slide protection, and they had one of the best performances of that period. Would you agree with that, first?

11:45

There’s a number of things that have been talked about with wheel-slide protection, and I was fortunate enough to hear the earlier session. Firstly, I do want to make the point that there are actually many Arriva Trains Wales trains that were fitted with wheel-slide protection. In terms of the fleets, the trains that were fitted with wheel-slide protection were class 175s, which are 27 trains that were fitted; all our locomotive haul trains were fitted with wheel-slide protection and the entire fleet of class 158s were also fitted with wheel-slide protection.

A report came out very late last night, which I’ve only had a chance to briefly read, that talked about the fact that there was some potential damage caused on the Valleys lines. I don’t believe that the Great Western trains run on the Valleys lines, but there’s no doubt that wheel-slide protection, potentially, can assist things, which is why we’ve got it fitted to the trains that we have got it fitted to.

One thing that has been discussed is, I think, class 150 trains, and whether they’re fitted with wheel-slide protection. The fact is that, when we were running the railway, there was not an available prototype for wheel-slide protection for class 150 trains. The two trains that potentially would be suitable to be fitted with wheel-slide protection are class 150s—. There’s a first-in-class fitment, I believe, that’s going on with Great Western Railway now, and it’s going to be concluded in January 2019, this month, and potential fitment can occur after that point. The only other potential fleet of train is class 153s and there’s a first-in-class that was developed last summer on Greater Anglia, and that was fitted through the autumn. So, from Arriva Trains Wales’s perspective, for those two classes of trains, there wasn’t the ability to fit that—the prototypes were still under development.

So, the 153 trains have now been fitted—they were fitted throughout, when the disruption was happening. Is that correct?

I think that’s a question for Transport for Wales, very much.

Okay. And, what about the class 142? Are there any prototypes out there?

I can’t say categorically 'yes' or 'no', but I don’t believe that there are.

Is it the case that, until you became managing director, there was no bid by Arriva to introduce new rolling stock?

I don’t know. Before—

I’m not sighted on that.

Okay. But, when you became MD, you did make a bid to introduce new rolling stock.

We spent quite a bit of time in the early part of this year developing a suite of options that we presented to Transport for Wales, and it was obviously, in terms of partnership working with them, ‘Here are some options.' Some of that was different rolling stock coming in, some of it was redeployment of existing rolling stock by us diagramming differently on our services to try and free up rolling stock for use elsewhere. We did that for a variety of different of reasons in partnership with Transport for Wales. It potentially could've provided extra units for the Chester to Liverpool service, or potentially have been used for strengthening elsewhere, or potentially have been used to assist with some of the modification programmes that are planned for 2019.

We handed that work over to Transport for Wales. We had meetings with them in May and June, and we handed the work over to them in June 2018 and I wrote to them formally about it and we received a response and had a meeting discussing how it would potentially be taken forward. And they were clear that they were taking it forward.

Well, it was a variety of different options. There were eight options, some of which was hiring rolling stock in to replace—

I was under the impression that you'd actually gone as far as purchasing rolling stock for modification, and you were modifying it last year and going through the process—from the London Underground or the Gatwick service. You weren't moving—. There wasn't an attempt to modify electric to diesel.

Right, okay. So, there were no plans for rolling stock during the Arriva franchise at all, then.

Well, there was rolling stock introduced by Arriva. I know, just from working in the industry, that Arriva did introduce rolling stock.

Yes, but what I do know is that, in early 2018, we produced these different options and presented them to Transport for Wales.

Yes. On some of the options, we potentially got some prices in as to how much it would cost to hire in the rolling stock and what cascade we might be able to provide as a result of that.

Okay. Because we understood that the Welsh Government had announced additional carriages and the Cabinet Secretary—

My apologies. Yes, indeed: 769s briefly floated from my mind there, but, yes, indeed. We did—. We were working significantly on bringing in five four-car trains, which were being converted from—

11:50

Indeed, yes. Yes. And those trains, unfortunately, met with delay. They were supposed to come in—. I'm extremely disappointed that I'd forgotten that, actually.

Yes, very much so, and I remember us meeting in Caerphilly to discuss it. That would have allowed strengthening, extra strengthening, on the Valleys. Those 769 trains were being converted at Brush Traction in Loughborough. They were conversions from London rolling stock. It would have been 20 extra carriages. Regrettably, the prototype for those trains was running late by the supplier, and as a result it became clear in about summer last year that we weren't going to receive those trains until the franchise. Now, my understanding is that it's very much a question for Transport for Wales that they'll be introduced as soon as they possibly can.

So, they're still in the process of being conditioned.

Very much so. I took a visit to—. We worked closely with Transport for Wales on this. I took a visit to Brush Traction in Loughborough in late summer, just to ensure that they were overcoming what problems they had, and things were progressing well. 

Okay. Because I was quite eagerly anticipating that to be in for the autumn of last year, and the delays were because of technological problems.

Yes, it was. There just wasn't—. It was about the conversion from electric to diesel, and the various modifications that were made to the train.

A quick question. The Minister said that there was no commercial incentive for Arriva to invest in maintenance over and above what was essential through law, and, clearly, that could be the case. I've been to the depot in Machynlleth and I've seen the staff—met them—and it's all pretty impressive. So, my question is this: those staff are still there, and the maintenance that they've carried out looked okay to me, but I'm no expert. Is it the case, then, that those staff that are there that have been trained have been trained to the highest standard going forward, rather than—I could be perhaps misunderstanding—the minimum standard to meet this contract?

Well, it's absolutely—. It's absolutely not the case that they were trained to the minimum standard under Arriva. There was a whole—. Even when it was clear that we were no longer going to continue in Wales, we continued to invest in both staff and management training, despite the fact that we knew that we weren't going to be continuing past October. We continued to hire and increase our apprentices, we continued to develop our managers, and, in terms of the staff at Machynlleth, at Machynlleth we actually had our first apprentice in the last year of the franchise and we worked with local colleges in mid Wales to provide training for the Machynlleth staff. So, no, it is not the case that they were trained to the minimum standards.