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Pwyllgor yr Economi, Seilwaith a Sgiliau

Economy, Infrastructure and Skills Committee

11/10/2018

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

David J. Rowlands AM
Hefin David AM
Joyce Watson AM
Lee Waters 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

Dr Roisin Willmott Cyfarwyddwr Cenedlaethol, Y Sefydliad Cynllunio Trefol Brenhinol yng Nghymru
National Director, Royal Town Planning Institute Cymru
Gareth Elliot Mobile UK
Mobile UK
Kamala MacKinnon Vodafone
Vodafone
Paul James Pennaeth Materion Cyhoeddus, Telefonica 02 UK
Head of Public Affairs, Telefonica 02 UK
Paul Wheeldon Cymdeithas Syrfewyr Sirol Cymru
County Surveyors Society
Philip Meade Davis Meade Property Consultants
Davis Meade Property Consultants
Richard Wainer Materion Corfforaethol BT Group
BT Group Corporate Affairs
Tom Corcoran Three
Three

Swyddogion Cynulliad Cenedlaethol Cymru a oedd yn bresennol

National Assembly for Wales Officials in Attendance

Abigail Phillips Ail Glerc
Second Clerk
Francesca Howorth Ymchwilydd
Researcher
Gareth Price Clerc
Clerk
Robert Lloyd-Williams Dirprwy Glerc
Deputy Clerk
Robin Wilkinson Ymchwilydd
Researcher

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 09:47. 

The meeting began at 09:47. 

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

Croeso, bawb, i Bwyllgor yr Economi, Seilwaith a Sgiliau.  

Welcome to you all to the Economy, Infrastructure and Skills Committee. 

I'd like to welcome Members to committee this morning. 

2. Sesiwn dystiolaeth Prynu Gorfodol
2. Compulsory Purchase evidence session

This morning we have a panel with regard to the compulsory purchase evidence session this morning. We've got three members on the panel this morning, who are prepared to give us evidence to help us with our short piece of work, and I'd be very grateful if you could to introduce yourselves. 

But I should, first of all, just say that we haven't got any apologies this morning, and are there any declarations of interest? We're not aware of any. 

In that case, could I ask the panel members to introduce themselves and who they represent, please, for the record? I will start on my left.

Okay. My name's Roisin Willmott. I'm the director of the Royal Town Planning Institute for Wales. 

My name is Paul Wheeldon. I'm representing CSS Wales, which is the County Surveyors' Society Wales. The society is made up of 22 directors from all local authorities throughout Wales and we're responsible for the strategic direction of traffic, transport, engineering performance and waste. Thank you. 

I'm Philip Meade. I'm a fellow of the Royal Institution of Chartered Surveyors. I'm sort of representing them here today. When they heard that I was coming, they decided not to send someone else as well. So, I didn't produce their paper; I produced my own paper, but I can hopefully answer some of the questions on their paper as well. 

Lovely. Is there anything in their paper that you particularly disagree with or are you broadly agreeing with them? 

No, we're pretty much on message. 

Well, that's a good start. That's fine. I'll start with quite a broad question, and no doubt we'll dig into some more detailed questions as we progress. What do you think of the compulsory purchase system in Wales? It's very broad, but we'll come on to detailed questions later. 

The compulsory purchase order system in Wales, in my experience with it, is that it takes a long time and you need a team of experienced people to actually deal with compulsory purchase. Within local government we have expertise, but with any CPO process it needs expert guidance. Normally, we need to get QCs and professional people. We need to set up development teams, and across the board in local government within Wales there is expertise, but it's diminishing.  

I would say similar. Really, I'm here I suppose from the claimant's side of the fence, as it where, and certainly nearly all claims need significant amounts of professional assistance. It is a real minefield, everything from dealing with the public inquiry, the draft CPO, how you deal with when they first take entry on the land, ongoing issues whilst they're—I'm talking about the bigger schemes like the Newtown bypass, for example, I'm involved with at the moment—the ongoing day-to-day stuff throughout the project, which in the case of the bypass can be two or three years, and then it's still not finished. When the bypass is finished, there's probably another year or 18 months dealing with compensation claims. Then you get what we call Part 1 claims, where people who didn't actually lose any land but who are affected by the bypass because they built the road in front of their house or something like that, can then put a claim in. So, it is a long, complicated process; not particularly clear to claimants, not particularly clear to the professionals. 

09:50

Have you acted on behalf of clients on other schemes in Wales as well? 

Yes, I've acted on—. I've been doing this job for 25, 26 years now. I've acted for clients—I did some claims on the Bath eastern bypass in Wiltshire. I've done claims—

—throughout Wales. Anglesey A55—I cut my teeth on Anglesey, really, when the bypass went across Anglesey back in the late 1990s, early 2000s. I represented about 35, 40 claimants up there—baptism of fire. I didn't know as much about CPO as I did afterwards. 

And what are the main conflicts between the landowner and the acquiring body? What are the main issues?

I think the tension is because they have different goals, I suppose. The people building the bypass want to get it built as soon as possible, get it done, get on with it and they don't want delays, et cetera, et cetera. The claimants don't want it. You get a whole range of people—some just say, 'We all need roads, we all need schools, we all need town centres; it's got to be done and if it takes a bit of my land then so be it.' But the system is very difficult for some claimants to understand. You know, you get a farmer who, for example, loses 20 acres—we've got one at the moment who lost 20 acres through the middle of his farm and he got explained to him he's going to get paid agricultural value for that land because that's the way the law works, but no farmer in his right mind would sell 20 acres through the middle of his farm. So, it's a necessary evil. You can't pay these people more than market value, but there needs to be a little bit more understanding, I suppose, and a little bit more of a softer approach sometimes, I think. 

Mr Meade, in your evidence you referred to contractors as the public face of the scheme where CPOs are used.

What I'm trying to get at is I think it's often overlooked that the first person or the first people that the claimants, the public, the people affected by the bypass—or if it's a pipeline going through, a gas pipeline, or any other type of CPO—the first people that they come across, really, other than if they go to the public inquiry, are the contractors. The contractors are the ones that are there every day. The contractors are there to do a job, there's no denying that, but they are the first port of call, if you like. They are the first people that the public, the claimants, see and if there's a problem—. The way the contractors deal with the public, I think, is an issue—not that it's necessarily bad, but I think they need to be very mindful of that; that's what I'm saying. They are the cutting edge, if you like; the first person or the first people seen by the claimants.  

I understand. If I could perhaps ask the other two panel members. So, compulsory purchase is being devolved, but land compensation is being reserved. How's that going to work in practice? Do you think that's an issue?

It could be an issue because generally, what normally happens—and I think this came about because of some legislation that came through in 2017—what used to happen—and I can speak through experience here from when I was with Gwent county council previously and we dealt with a significant number of bypasses, both east and west and north and south within the former Gwent area—the process was that you would negotiate with landowners as part of the process. The district valuer would make the recommendations and then the Welsh Office or the Welsh Assembly would confirm the CPO. It was a more straightforward process. With this possible new process, it may be more difficult because it would be probably devolved to central Government to deal with the valuation side of it. 

09:55

I think anything where the process becomes more complicated is not something that we would favour. So, obviously, trying to find a way that makes this as simplistic as possible. We've heard already from my colleagues about how complicated and time consuming CPO can be. But, actually, CPO can be a very good tool, or the principle of CPO is a very good tool, for bringing forward public interest projects. But how we do that in the interest of everyone in a simplistic way, and having the legislation background split, could lead to problems, so there would need to be read-across on that.

And what I wanted to ask as well is that a lot of the evidence that we received talked about issues with the appeals procedure and landowners not being able to make an appeal very easily. Would you agree with that evidence? The evidence that we received is saying it's very difficult to appeal a decision and perhaps the procedure needs to change. Do you have views on that, any of you?

Landowners' aspirations, generally, are always more than what the land is actually worth. So, it can be systemic in the CPO process that they always see that there is an issue that they're not getting what the land is worth. And from the outset, then, they would always want to appeal through a process that would probably increase the value of their land, or appeal against a decision that has been made through a CPO inquiry.

My view is that the current process is fair and reasonable. If there were a number of other appeals, it could only, possibly, lengthen the process even more than what it currently is. 

I think, once you get to that process, it's fair and reasonable, but access to it is the problem, because what is prohibitive is the cost and the risk. The only real route you have at the moment is through the upper tribunal. There's a chap who writes the leading text on compulsory purchase, Barry Denyer-Green—I think I might have said it in here—and his comment once in a seminar was that you don't go to the upper lands tribunal unless your dispute is worth more than £250,000. In 20-odd years of practicing, I think I've probably come across one or two claims that get to the overall value of £250,000, not the difference between the parties of £250,000, so I've never come across that. I've appeared in tribunal a couple of times on claims where neither party ended up winning because they ended up filling the pockets of the lawyers that are paid to be there. The whole appeal process, once you get there, yes, it is judicial, it fair, but it's just not accessible. That's the problem. 

So, how do you make it accessible? How do make that part fairer?

The analogy I would use is if you have a dispute with your neighbour or an electrician comes round to your house and fits a plug and charges you £20 and you want to dispute it, well, you don't take that to the High Court. You go to the small claims court. We don't have a small claims court for compulsory purchase. We don't have a lower level for claims under £10,000, £20,000. That would hoover up a huge amount of claims, where you could have an appeals process for smaller claims. And, actually, that would resolve an awful lot of issues for claimants.

Certainly the clients that I act for, all they want, really, is to have someone independent look at it. Because I end up going to a client and saying, 'Well, if we don't agree on the compensation for the reasons I mentioned—.' You know, a farmer loses 20 acres through the middle of his farm; it's worth more than 20 acres of land to him. And you're quite right, he doesn't understand why he's only getting 20 acres of compensation—there's a little bit more than that, but that's the essence of it—but if he could have his day in court, if you like, without risking putting the farm on it, because to argue about the compensation he would literally have to, probably, remortgage the farm if he lost, or lose the farm or sell the farm, whereas if he had a forum where he could go and appear in front of an independent person who has no links to either side, and that independent person says, 'Well, I've listened to your evidence and actually the acquiring authority are correct', or, 'Actually, they're a little bit wrong, it should be a bit more', I think you'd solve an awful lot of problems.

I think we've got another Member who wants to ask some questions around that, so I won't pursue that for a moment. David Rowlands.

I want to discuss, really, that running throughout all of the reading that we've had is the fact as to whether the expertise is available there, particularly for local authorities. So, your views on whether a central support unit to provide training and expertise for acquiring authorities is needed—do you think that, Paul?

10:00

From CSS Wales's viewpoint, and from a local authority viewpoint, we would welcome any central place that could give expert advice and some expertise. As I alluded to earlier, as a local authority if we are dealing with, say, a highway scheme or a highway process, it's quite linear, and we used to have highway experts that would deal with the CPO process. What we tend to do now is if we've got to deal with any CPO, we buy in a lot of the expertise. Primarily, always, it would be a QC or a barrister that would give the primary advice, and the CPO specialist. We would build up teams within local government with expertise within valuation, within highways, and planning expertise, and we have that expertise, and we have that expertise as part of a team. But we would always welcome, once we've got that CPO process sorted, if we could pass it to, say, for instance, Welsh Government and they would have expertise, because you have expertise where you deal with trunk road CPOs, for instance.

Local authorities seem pretty reluctant to use the CPO process, don't they? Stan Edwards, one of the contributors here, says that

'Pooling of shared service CPO teams is an obvious answer for groups of local authorities in Wales',

but could that work in practice, do you think?

It is difficult to work that in practice. There is no reason why it shouldn't work, but in practice that would be difficult, because local authorities these days concentrate so much on their day job.

But things like—. A lot of us will have seen, in our constituencies, houses that have been left empty for many years. I can think of one now that must have been left empty for 40 years—a semi-detached property. The people next door must have thought all the time how appalling this is, and yet there doesn't seem to have been a compulsory purchase order used to get that property. Why is it on smaller things like that that they're reluctant?

I'm no expert on compulsory purchase of derelict properties or empty properties, but as far as properties are concerned that would be necessary or seen as necessary as part of a highway improvement scheme, what we would do is build that in on a highway scheme at the very early stages. We recognise that you need to negotiate with property owners, and in parallel to that, you must be running the CPO process because—. If I give you an example: we did a scheme once in Pontypool where there was a terrace of 15 houses. We negotiated with 14. There was one property left that we then had to go through the CPO process and an inquiry, which extended that development for a substantial length of time.

Of course, Paul, if you know that one, you'll know the one that I'm talking about in Cwmbran, probably, which is on Lowlands Road, but that's 40 years. Why has something not been done about that? Anybody passing it would wonder why it's not been sorted.

Yes. That is probably different legislation. That would be under housing legislation rather than a CPO for a highway improvement scheme.

Yes, I'm sure it would be. Phil, can you expand on the suggestion that an ombudsman service should be set up for the complaints relating to contractors delivering schemes? I know you've just touched on that, as such, but an ombudsman—.

As I say, the public side or the public-facing element of a compulsory purchase scheme, certainly a big scheme, does tend to be the contractors, because they are there 24—not 24 hours a day, but certainly 12, 14 or 16 hours a day. They are the ones that, if there's a mistake made, if they knock a gatepost down, if something goes wrong—. A common one at the moment is working outside the hours that they promised they would during the public inquiry. It's an issue, and you have to realise that these people, these claimants, were under a huge amount of stress because their homes were sort of under siege, if you like, for two years almost. These guys go out, and like we all do, have stressful jobs, and they come home, and home is their place to hide at the end of the day, if you like, and to have a big vibrating machine making noises until eight o'clock at night or whatever can cause huge amounts of stress, and I think that a lot of the issues we see—and we saw this on Anglesey, we're seeing this in Newtown, we see this in other schemes—are that a lot of promises are made, for example, at public inquiry in order to get the CPO through, but then, because of changes in weather, because of delays caused—unforeseen delays, et cetera—they stretch what was promised. They work on a Saturday, they work at six o'clock in the morning, they go outside the noise boundary—you know, they're recording—equipment is noisier than it should be. All these sort of things. And what you really need is some sort of incentive to behave, if you like. Not that they're misbehaving all the time, but, if there was a sort of veiled threat, something in the background, saying, 'Well, look, you made these promises at public inquiry; you need to, basically, have respect for the people who are suffering because of this and there is an ombudsman who will, if push comes to shove, have some teeth—'. And I think it's the threat of that. I rarely see it actually being used and sort of striking a contractor from the list or something, but the fact that they could come off what is a very valuable list for them if they didn't adhere to what they promised I think would be quite a useful incentive or disincentive and would also give, again, the claimants and the public who are under the scheme, a voice, if you like, or someone they feel they can go and talk to and say, 'These are the issues. What are you going to do about it?'

10:05

Okay. You mentioned earlier the restraints with regard to—for the—objectors, in that the costs are quite—. So, what does the panel think about public sector support? Do you think that that should be provided for objectors and the public in general? 

Public sector—

Well, it's money coming out of the public sector, basically. 

[Inaudible.] In any scheme, the Government would pay for agents to act on their behalf, but are you perhaps asking whether there should be additional funding on top of that? Is that what your question is?

If I could draw a parallel from the planning sector, in Wales, we have Planning Aid Wales, which does receive funding from Welsh Government—not solely funded by Welsh Government, but it's an independent charity that does provide advice to members of the public who are affected by planning decisions who perhaps couldn't pay for planning advice themselves. So, it wouldn't act on their behalf in planning inquiries, et cetera, but it would provide advice and show them the way through the planning system. So, maybe a parallel system to that might be useful in the CPO—so, just providing clear advice about what their rights are and what's happening in the process, explaining the process in a clear, clear way. 

Part of the compulsory purchase claim is that you're entitled to have professional advice. There's no shying away from that: you're entitled to have a surveyor act for you, and for his reasonable fees to be paid. But that doesn't deal with the dispute, necessarily. If you have a dispute and you lose the dispute, then those costs wouldn't be paid, whereas—. In terms of public sector support for some sort of ombudsman or some sort of arbitrator or independent expert or some sort of ADR—alternative dispute resolution—mechanism, my view is that it should be funded by both sides, because, if you said to all objectors or complainants, 'Well, we've got this scheme where you can basically have a dispute and they'll pay for it', then you're going to be flooded. But if the claimant has some financial costs to him to have to make that claim, then it's going to make them think, 'Well, have I really got a claim here?' If they have, then they're going to put their money where their mouth is, as it were.

Just picking up on what you commented on, on this ombudsman idea, Mr Meade, you're telling me at the moment, in a public inquiry, that the inquiring authority, whether it's a government or local authority, can make commitments—for example, you gave the example of starting time—and then those could be broken during the course of the scheme. I mean, talk me through: what would somebody who is a landowner affected, what would be their course of action when they see—?

We struggle with this, because there just doesn't seem to be. We've had, 'Yes, well, we know we said we'd only start at seven o'clock in the morning and finish at six o'clock at night, but it's been raining for three weeks non-stop so we have to start at five o'clock in the morning now. We know we said we wouldn't work on a Saturday, but we're going to have to now.'

Despite the fact that they've made those commitments at a public inquiry.

At a public inquiry. And I understand that there are extenuating circumstances that mean they—. But then the other way to look at it is—as I said in this—why does a road have to be built by the beginning of March 2019? Why can the contractors not go back and say, 'Well, actually, this has happened, and therefore we need a couple of extra months'? What is the route to that? If there are big economic reasons for it, fair enough, but, if it's just because they've got to get on to another scheme, or there's no real reason, then maybe extending the deadline would help, but maybe having some sort of way of making sure that these promises at a public inquiry are kept—. A constant problem I see is that the public inquiry is seen as a kangaroo court. That's the trouble—it's, 'Well, yes, justice has been done.' It's not—it's being seen to be done, but not necessarily being done.

10:10

That's pretty shocking. So, if somebody makes a statement at a public inquiry, and a local authority or Government says—the inspector says—'Right, you must not start before 7 o'clock', and then they do, you're just saying that there's no course of action.

We've tried to take legal advice on this, and they say, 'Well—not much you can do', and that's the advice we've had.

And you're suggesting—so, your suggestion is this ombudsman to deal with that threat.

Well, just as a disincentive, an ombudsman who would say, 'Do you know, you promised this and you haven't done it? Don't keep on breaking your promises, because, if you keep on breaking your promises, then you're going to get black marks, and too many black marks might have an effect on your future contracts.'

Yes, lovely. Okay, then. In a moment, I'm going to come to Oscar. Who's coming in, sorry?

Could I come in there, please, Chair? 

With regard to public complaint about a particular scheme and that they're not dealing with the scheme, the contract, in accordance with what was said at a public inquiry, a lot of schemes are promoted by highway authorities and by local government, and the contractors are employed by local government or by highway departments. Their contact with the contractors is quite good, and the complaints system that leads from contractors and persons on site are dealt with quite often by local authorities and local government.

So, it is local government that is the front face to the public. The public—I agree, they do see the contractor and the contractor does sometimes go there and do things that may aggravate the public, but there is always this relationship between the local government and the public, which is quite good, through the process that we have now, and the relationship between the contractor and local government is quite tight as well, so they can be dealt with.

But another issue, as well, is things that need planning consent. Following the public inquiry, for instance, and the suggestions by the inspector, prior to the inquiry, when the planning consent was issued, there's a whole host of conditions on that planning consent regarding working hours. So, it can always be enforced by a planning authority. 

Yes, I agree.

You agree. I've got Oscar next, then I'm going to come to Vikki, who wants to cover some areas that I know haven't yet been covered, and then Lee and then Joyce. So, Oscar first.

Thank you very much indeed, Chair, and thank you, panel. Just apart from the question that I'm going to ask you, I've yet to see one person or one company, or any individual, who is happy with CPO. They all complain, and the reason is that, when the property comes into this sort of objective, there are valuations that are always disputable. There's the market value, forced sale value, bricks-and-mortar value—you know, the Zooplas and red book. There are a lot of things involved.

People live in certain areas or on certain land for many, many years—centuries, in some cases—but you just go for bricks and mortar, which is, I think, not fair. In certain areas, you should be considering—. If you look at the antiquity of different assets, why not the land? Have you ever considered that? Because some people are living on certain land for hundreds of years, and you're just paying them a pittance to leave the land because it's come under CPO. Why don't you consider that? If you own some antique or anything, it grows a hundredfold in value—why not land?

Chair, I'm not an expert valuer, but my understanding of the CPO process is that, through the district valuer, they decide on the valuation of that land. There could be an appeal process on that valuation, or, as my colleague said, some sort of ombudsman service or some other expert view that is taken on that, but there are experts on both sides. There's an expert for the person who's living in the property and an expert dealing for the council. Together, they come to that valuation of that property—valued at market value.

I don't think, as a council, or as an authority, we could—. We have got to pay the market value for things. We can't overinflate any costs that we would pay. It's got to be at market value.

10:15

I think it's a point very well made, but the problem is, as you quite rightly say, that the parties are constrained by the six rules, the valuation rules, that are set out in the Land Compensation Act 1973 and the compulsory purchase Acts. There are rules that define how we—. We, representing the claimants, and the local authority, with their valuers, are constrained by—. And it's that law that's wrong. You go back to my example of a farmer—. I've got one at Newtown now—150 acres, and they've cut a 20-acre swathe of land right through the middle of his farm, and he will get 20 times the market value [correction: he will only get the market value] of that land, plus he'll get what they call 'severance' for the fact that the farm is harder to manage because it's now got two different parts. So, he will get a bit more than just the swathe [correction: just the value of the swathe] of land that's been taken out of the middle. But—I repeat it—no farmer in his right mind would sell 20 acres right in the middle of his farm for market value, because it's worth more [correction: more to him], in the same way that a house has got a lot more value to it than just the bricks and mortar. But it's the statute—it's the legislation—that's at fault, I'm afraid.

The thing is that that is the land side, which I think is still not fair, in the system.

Yes, a specific question, following on from my colleague's question, is: is there any central support unit to provide training and expertise for acquiring authorities, if needed?

Could I say something here, in that there is the expertise within local government and other public authorities involved in CPO? It's perhaps about the experience, the regular experience, of dealing with CPO. So, you have a broad range of different professionals involved with CPO, so they have their professional skills, but it's how that's regularly used in a CPO context, so, having that overriding support. There is definitely a need for training in that, because that would then provide authorities with the confidence to take forward CPO, because it's a long process, takes up an awful lot of resources, and, perhaps, as Paul's referred to, resources that aren't there currently within local government, the way that budgets are. So, it would improve confidence to bring forward CPOs in that, but under a clearer scheme.

Okay, thank you. And the thing is views on Stan Edwards's comment. He commented that:

'pooling of shared service CPO teams is an obvious answer for local authorities in Wales.'

Quote closed. Could this suggestion work in practice, please?

From my experience, and I actually know Stan Edwards—. From my experience, it used to work well with the Land Authority for Wales. They were a body that was put together. As local authorities, when we had packages of land, or we were looking to develop areas, or perhaps build a bypass and include in there parcels of land for development, it was the Land Authority for Wales that used to provide that expertise.

I would welcome that expertise wherever it is. If there is something like that that is in Welsh Government—that there is a team of expertise that we can go to and we can use that expertise— local authorities would put together the CPO and then pass it to Welsh Government, Welsh Government would assist with ensuring that all of the i's and t's were dotted and crossed, and it could progress at a faster pace because everything was in order; I would welcome that.

I would also welcome—. At the moment, there's an age demographic within local government highway departments—. And this is through our work with the County Surveyors' Society Wales. The age of people within highway schemes is about 50 to 55. We'll be losing another team of expertise within the next five, six or eight years, and we haven't got the young people coming through. So, there's this chasm in the middle. That is where the expertise needs to be now for the future.

Thank you. The next question—to Mr Meade now. You've suggested that an ombudsman service should be set up for complaints relating to the contractors delivering schemes. 

I think we've already—I think David just covered this.

And the panel’s views on whether public sector support—[Interruption.] Yes, sorry. Whether public sector support should also be provided for objectors and the public affected by CPO—

10:20

On the impact of the Scottish Government implementing a technical check service for CPOs, what is the panel’s view on whether a similar service should be implemented in Wales?

My view, Chair, is that, yes, it should. It appears from what I've read on the Scottish system that it works quite well, so CSS Wales and local authorities would welcome that.

Thank you, Chair. In the community I represent, and in many other Valleys communities I would argue, there is a very strong feeling regarding compulsory purchase orders but very much the flip side of how we've discussed them in the meeting to date. What I'm alluding to there is in the context of town-centre regeneration. There are so many buildings in our Valleys—old disused hotels, pubs, chapels—that have been bought up by private investors who have arguably perhaps bitten off more than they could chew or who have no intention of developing them and are just buying them up in order to prevent competition, particularly in the pub sector. My constituents say to me, 'How are people like this allowed to get away with it? Our town centres look so dilapidated. Why aren't there more powers for councils or why don't councils use their compulsory purchase orders in order to actually buy those buildings and to improve the town centres?' So, what would you say to constituents like mine and other people across Wales who feel very strongly about this matter?

Paul? Just to say that the equipment comes on by itself, as if by magic.

Yes. We would welcome regeneration of the town centres, and where areas of town centres are owned by the council, we would look to regenerate those areas. And very often other developments will stymie that development simply because that person who owns that property wants more for that property than what it's actually worth. Other properties that are derelict within our area—if the public would like to see the council purchase those properties, what do we do with those properties and have we got the money to spend on those properties without a strategic plan and an action area for that particular area and the budget and the money as part of a strategic plan that would allow you to progress in the area? So, without a strategic plan for the area and secure funding—. 

If I could give you an example, again, if you wouldn't mind, looking at the regeneration of the town centre, what we did once—we owned some of the land; some of the other land was in private ownership. We wanted, as part of a development partnership, to build a supermarket, some other retail outlets and a significant amount of car parking. We had to choose a developer who was going to take that forward, which meant that we could secure funding for that. So, we had a preferred developer; he knew that he could make a profit on it. We looked to ensure that this profit wasn't excessive—all of the normal development procedures. We then purchased land through negotiation to enable that because we knew that the money was there within that scheme. We had a developer who wanted to go there, we had a development company who was willing to build it. We then had to go through the CPO process, which was long and protracted, but from the outset we had a plan for that area of what we needed to do. As an authority we can't work piecemeal—it's so difficult. I can understand where residents are coming from. In town centres, if there are derelict properties: 'Council, what are you going to do with those properties?' Well, unless it's part of an action area, it's so difficult to do that.

Isn't it the case also that, even if there are plans, perfectly viable plans, the cost of actually going down the CPO route can mean that it's just not feasible?

Yes, I'd support that position. Town centres are extremely important, as you said, not just for economic reasons, but for social reasons as well, and environmental reasons. So, very, very important. The CPO can be a very useful tool for addressing the market failures that you've already outlined that we can have in a lot of town centres—not just in the Valleys, even in parts of Cardiff, perhaps, which you'd think has a very vibrant city centre. So, across Wales, it could be an important tool, but because of its complexity and the length of time to take it, it makes it more difficult for local authorities to bring that forward. So, it could be several years, and for a lot of town-centre activity, particularly regeneration in the Valleys, we'd need grant funding for that. So, you need the funding upfront for the CPO process, that's another factor, and how many grant providers will give you confirmation that you will have the funding in two years' time? So, that's a major issue in terms of using the CPO process for that. So, a simplification and speeding up of the CPO process would help, along with resources in the public sector to bring them forward.

10:25

Yes, I want to ask about the situation where you don't have a local development plan, so you can't have a strategy, in my view, for going forward, and if you put that lack of an LDP alongside a ransom strip and you're trying to develop with your plans—. How are we going to resolve this? How are we going to resolve, in the first place, the fact that local authorities don't actually make an LDP, and all the complications that come from that?

Well, I think that's a very good argument for having an LDP, so let's have the LDPs in place. The majority of authorities across Wales do have LDPs—Wales is one of the success stories in that—but there are some that don't and now there's a time limit on them. So, authorities need to be incentivised and that's perhaps the stick in the process that you've just outlined for having local development plans in place.

And then how do you deal with—? I'm thinking of a particular case where there's no LDP and then suddenly there's a grand plan to build a hospital, but then you've got ransom strips stuck in the middle and it's all come about, in my opinion, from a lack of an LDP and focus. So, how do you then deal with a situation like that, where, of course, it doesn't happen in the end? What can we do, I suppose, as a Government to ensure that each local authority does have a development plan, should have a development plan, in my view, and, consequently, those people in that area know exactly what to expect—where things are going to be built and whey they're going to be built, because there's due process? It takes time for an LDP and everybody will have their say along the way. Or do you think that we ought to insist that each local authority has an LDP?

The Cabinet Secretary does have the powers to bring that into Welsh Government and produce the LDP in-house. Whether they'd want to implement that power is another matter, but there is that stick. But I think it's for the authority itself to realise that they do need their local development plan and understand that process and put the resources in for doing that—and that isn't just officer resources, that's the political resources as well, and giving that an address.

So, using the CPO is a bit of a faff, the skills to do it are not applied evenly and it's only really worth the hassle if there are big schemes. Is that a fair summary of the evidence so far?

I can only speak from my experience, to be honest, that when we put together CPOs—I wouldn't call it a faff, because as professionals we know that we need a skilled team around us to enable us to progress with the CPO, and the skilled team normally starts with either a QC or a barrister who gives quite sound CPO advice. We've got professionals within local government, highway experts, we've got planning experts, we've got valuation experts. You've got experts within Welsh Government, you've got experts in planning, you've got highway experts and development experts that I deal with on a regular basis.

10:30

Assembling all these people—. We work together at the moment, and we work on joint working. We do talk to our fellow experts, and I can call on experts whenever I need experts within my own authority, and through CSS Wales there are technical experts throughout Wales—22 directors, 22 heads of service who promote technical expertise. So, there is the technical expertise there, and through the development team process that we all try to encourage, we can get that expertise together. There is the issue that we all have—the cost of that, and the cost of paying for your QCs. All I can say is that we have the expertise, we have the will, and we need to build that into the process—

But from the description of that, you're going to think twice before using it, because it's no small thing to do that. 

It is no small thing.

So, the question I'm interested in is—. The evidence we've had is about the requirements for smaller schemes. Clearly, if you've got a massive bypass where there's a lot of political will and there's a budget, that's what needs to be done. But the evidence we've had on its application under the Active Travel (Wales) Act 2013, for example, is for small schemes for cycle and walking routes. It's something that there's a great reluctance to do because of the cost, and also because of the legal framework, which suggests that if there are alternative routes available, then there's a fair chance that this will be turned down on appeal. Is that a picture you recognise?

With active travel, we've got all our local plans. What we try to do with local plans is to put the network on existing highway. Where we will get difficulty is where we've got the integrated maps where we link from one area to another, and generally, then, that will need to go on somebody else's land. What we do—and we've been quite successful at it—is by negotiation. But I recognise that, for these integrated areas, what we should be doing is running in parallel with that CPO process. 

Welsh Government have made some money available to authorities to look at this particular issue with our integrated maps, and now we deal with it. Part of that will be looking at the CPO process and how we deal with that for active travel. You've heard evidence here of how difficult it is to deal with it, and how complex CPO processes are. My greatest wish is that for active travel there is some sort of CPO process that would be small, which would make it easier to deal with a straight route. But all I would say is: think of this—a highway is a straight route, and is so complicated, and so is an integrated travel route. So, those difficulties are there, but if the legislation changes in some way, or there is something that could make it easier, we would welcome it. 

I think that's exactly the point, isn't it? The hassle involved in doing a CPO for a small route is just as much as the hassle for a large prestige project, and there's that imbalance. I don't know if Roisin Willmott has anything to add. 

Just that I'd echo that. Simplifying the system—I think that's what we need, and the length of time, particularly for things like active travel, which will be reliant on grant sources more often than not—. It's that issue of: will the grants still be there when the CPO comes through? So, that's a big issue. And, of course, active travel routes aren't yet recognised, I don't feel, sufficiently as an economic asset, as to the economic benefits that they would bring. They do, I believe quite strongly, but I don't feel that that is strong enough yet to help them through that CPO process. 

Just more of a recognition that, perhaps, a cycle route is just as valid as a highway in terms of—

In the schemes, or the evaluation of schemes, and the public understanding of them. So, a road scheme is always justified in terms of economic savings and time savings but, actually, cycle routes can provide that, or walking routes.  

10:35

Can I just put two specific points that have been put to us in evidence, just picking up on that? One is the issue of the funding, you said, and the need to have funding in place before an application goes in, which is difficult when there is short-term grant funding for active travel routes. And the second issue, then, is this issue of a single option being stipulated because, as you said, Mr Wheeldon, where there are alternative routes being identified, it's possible for an inspector to say, 'You don't need to go on this direct route, you can go next to a road', which we know from active travel research is going to be less likely to be used, but in CPO terms could be an attractive alternative. But in terms of the objective of the scheme, it's not going to encourage people who currently do not cycle or walk to do so. So, do you think those two elements in particular need to be looked at in the reform of CPO, to make them fit for purpose for the active travel Act?   

I definitely think there should be something with the active travel Act, because what we get as an authority is we generally get year-in, year-out funding. So, we would get funding in April for an active travel route. That's got to be built and constructed by the following year. Then, we've got to apply again for another route. So, it's year in, year out. What would help in this process is if active travel had a higher profile, such that the funding was spread over three years, possibly. So, within that process—the CPO process could be within that. So, the funding—. Say where we used to have a five-year capital highway programme where the first year was preliminary design, the second year was looking at the CPO, the third year was design, the fourth and fifth years were probably build. An active travel route, for instance, is not as complicated as a highway, obviously, but the same issues—. The first year would give you some funding for preliminary work and to look at the CPO, the second year to deal with—hopefully, if it comes about—a simplified CPO, and then the third year, build, but the funding would—. What is the worst thing is you would have your first year's funding, and then you couldn't progress with it. 

Sure. So, that's clear on the funding. What about the point about specifying a single option? 

I don't really understand what you mean by specifying a single option. Could you—. 

So, currently, as I understand it, if a route's put forward and an objector's able to show that there is an alternative available, even though that may not be an attractive alternative for people who currently do not walk or cycle, then it's likely that that will be accepted, whereas if they were to specify a single option as complying with the objectives of the Act, then that might be more encouraging for authorities to have the will to take it through. I don't know if Roisin has a view on that. 

I would suggest that we'd need stronger guidance to steer the inspector that the off-site cycle routes, walking routes are much better, and that they are a preferred option. So, much stronger guidance in terms of design and selection of routes—that would be helpful for inspectors.  

I think you'll also find that market forces work quite well on the smaller CPO matters, but they do tend to break down when the party—we often represent the claimant—gets wind of the fact that maybe the CPO powers aren't going to be used because they're too expensive, too long and that sort of thing. I've done any number of negotiations under the shadow of CPO on the Sustrans route, for example. I've been involved in two purchases of land for schools, which were done by negotiation with the threat of—because you have CPO powers [correction: the threat of CPO powers] under the Education Act 1996—and they could go down the education Act route, and it could cost you a small fortune. But, actually, the compensation the farmer has received for his field [correction: for his field in these cases] is significantly more than he would have got through the CPO route, but [correction: and] that's market forces in action, because the local authority has taken a pragmatic view in saying, 'We could spend x hundred thousand pounds on barristers, CPOs and public inquiries, or we could just put in a bit more money in this chap's pocket.' 

It breaks down where the claimant, the affected—. As [correction: the affected party, as] you're saying, with the single route and that sort of thing, says, 'Well, they're not really going to do it, are they, because it's too expensive?' I think what you're saying is that [correction: I think that] if you'd make the smaller schemes CPO a little bit easier, then that perhaps puts the balance of power a little bit back, and you could then rely better on negotiation rather than having to resort to CPO—  

I also wonder if your experience tallies with the evidence Sustrans have given us. They're saying that, often, it's the ability to use the land—a permissive right of way is more important than the ownership of the land. Actually, what we want is the access to the land, not necessarily owning it. 

And it's also the ancillary issues, because if you're taking a cycle route through farmland, then it's making sure that that cycle route, or footpath, or whatever it is, is properly separated, I suppose. Because, otherwise, you get dogs, you get dogs messing, you get litter, you get trespassing—all issues that might sound fairly trivial to us sitting here today, but when it's someone's livelihood, and they've got dogs running towards their sheep, or they're treading in dog muck, or they've got kids running in the fields, or there's litter because someone's been to McDonald's and then walked down and just chucking it, as they do—. And the evidence is there; some of these Sustrans routes I've walked down, you can see the problems occurring. So, that needs to be built into it; there needs to be an acknowledgement of the fact that these things need to be accounted for. It's not just, 'Oh, we're just taking a couple of feet of land—what's it worth to you?' There are these ancillary effects, if you like.

10:40

Oh, it is, yes, but more so, I think, with some of these routes where you have—especially where you've got them near some of the big conurbations, and where people are constantly using them, and trespass and that sort of thing.

So, were we to suggest a reform to this, how would you build all of that into it? Any practical suggestions of recommendations we might make? So, increased guidance, I think Roisin Willmott has suggested. Any other things we might recommend?

I think that, with the CPO process, what's always difficult, as you mentioned earlier, is alternative routes. To enable the process, you've got to look at every possible option for any route, and you've got to discount routes and go for a route, but you've always got to look at all the different options. It would be good if the agreed option between landowners and the authorities and everyone concerned was the route, and that was the route, at the inquiry, that would be the route that the inspector, or whoever, would look at.

And maybe simplify the process, but, at the same time, give the local authority the ability to negotiate. Because, at the moment, it's, 'Well, it's taxpayers' money—we have to account for it. If we're going to pay you more than we would if we went down the CPO route, we have to explain that to the taxpayer.' Well, maybe a little bit more flexibility there, but simplifying the two would work together quite well, probably.

I'm going to discuss with you proposals relating to CPOs and the Welsh Government infrastructure consenting process. Within their consultation, there's a suggestion that Welsh Government could incorporate CPOs into the main consent for a project. I would like your views on whether you agree with the proposals that suggest delegating certain decisions regarding CPOs to the Planning Inspectorate, and any impact you think that might have—positive or otherwise. And do you share Geldards's concerns that there is a lack of inspectors experienced in CPOs within that Planning Inspectorate, should that go ahead?

We would welcome any streamlining of processes. So, obviously, single consenting for major infrastructure is a benefit, if the resources are in place to support that procedure and it doesn't become bogged down in issues, or lacking in inspectors, for example. I don't know categorically whether there is an issue with inspectors with the specific expertise, but I imagine that there are relatively few who do have that expertise, because how many times does it come forward? So, is there a regular stream of work to keep people with that experience? I suppose, in terms of the single consenting procedure, it's just to make sure that, by putting CPO within that procedure, for streamlining purposes, it doesn't then complicate that process. So, it needs to still flow through on that.

My view is that anything that would complicate the process, we wouldn't welcome that, and anything that would simplify it—whatever that may be—we would welcome that. As CSS Wales, and as myself from an authority, we couldn't speak for the Welsh Government and the Planning Inspectorate. And I would agree with Roisin, in that CPO inquiries are few and far between now. Prior to local government reorganisation in 1996, and in the early part of the 1990s, we did CPO. But, since then, hardly any. So, that might be with the inspectorate as well—they're not as regular as they used to be. I don't know whether that is because we do a lot more by negotiation or not, but, yes.

10:45

Can I ask—? As a committee, this is a short piece of work for us on compulsory purchase orders, but I think we've had enough written evidence and now today's session, I think, to form and make some recommendations to Government. Is there anything that you would like to say that you haven't said already and that's not been drawn out by questions, that you think is important to say to us in terms of what you think our recommendations to Government should be?

Just one aspect that I'd just like to point out: it was the UK Government's consultation on compulsory purchase in 2016—they provided an attempt to clarify the issue around valuation to provide more guidance upfront, and I think that would be helpful in terms of how you value the assets in terms of expectation and aspirations, from both sides, of land value. So, that would be helpful.

Okay. That's not a devolved area, I don't think, is it? But we can consider that still, all the same. Paul.

Thank you, Chair. We would welcome guidance, again, because the latest guidance from Welsh Government is from 2004, so an update of guidance would be welcome. 

I'm sure that's something the RICS would welcome and would help with as well.

Okay, great. Thank you all for your time. We appreciate you're busy people, so thank you for your evidence this morning. You will be sent a transcript of proceedings, so please have a look through it and if there's something that you do want to add afterwards or you don't feel was represented correctly, then, of course, let us know as a committee. So, thank you for your time. We're very grateful, thank you.

We'll take a short break and come back at 11 o'clock.

Gohiriwyd y cyfarfod rhwng 10:47 ac 11:01.

The meeting adjourned between 10:47 and 11:01.

11:00
3. Y Seilwaith Digidol—Y Wybodaeth Ddiweddaraf am y Cynllun Gweithredu ar Ffonau Symudol
3. Digital Infrastructure—Mobile Action Plan update

Good morning. I move to item 3, in regard to digital infrastructure—mobile action plan update. It's been 12 months since the Government introduced its mobile action plan and this is the committee's first session in regard to looking for an update in this regard. I'm very grateful to have a large panel before us this morning, which brings its challenges as well, but we're grateful to you all for being here this morning. Next week, we have got Julie James, leader of the house, coming in to give evidence to us as well, so your evidence is ahead of us scrutinising the leader of the house on her mobile action plan next week. Perhaps I could, just for the record, ask you if you could just introduce yourselves for the record. I'll start from my left. I should say, you don't need to touch the equipment; it all comes on by itself.

Perfect. Tom Corcoran from Three.

Kamala MacKinnon from Vodafone.

Paul James from O2.

Gareth Elliot, Mobile UK.

Richard Wainer, BT Group, of which EE is a part.

Lovely. I was going to say you don't all have to answer every question, but maybe for this one you will have to. I ask you, what are your plans for expansion of mobile coverage in Wales?

If I can kick off and just give you—. We've had an update from Ofcom of where we are with coverage at the moment, and there's some positive progress that we'd like to convey, in Wales especially. In terms of 4G premises coverage, that's now standing at 67 per cent, which is up from 44 per cent in June 2017. Geographically, that stands at 56 per cent now, up from 28 per cent again in June 2017. In 3G and 4G, so that's data specifically, we're at 86 per cent, and geographically it's 73 per cent at this stage. So, that means that where there is no—. Just to explain that point, it means that a further 27,000 people have 4G coverage against the spring update from Ofcom and only 2.1 per cent of premises now have no 4G coverage from any one operator. That essentially means that only 0.7 per cent of premises have neither 3G or 4G indoors at this stage. They're the Ofcom targets; other operators may have their own.

Thank you for that. I can see, we've got that data in front of us as well. So, thank you, that's very useful data. Tom.

I think actually for competition reasons we probably can't discuss our individual expansion plans in Wales, but I'm very happy to follow up individually with the committee afterwards and talk about that. I can talk about Three's improvements since 2015. Our coverage in Wales was 68 per cent geographical coverage, and we're just at 89 per cent geographical coverage now. That's in the space of three years, and what's significant about that is it's all 4G coverage. So, it's new 4G coverage.

Again, the same from Vodafone's perspective. I think it's important to say upfront we're really committed to improving coverage and to delivering good-quality voice and data for our customers across Wales. In the UK more broadly, we've invested around £2 billion in the last few years to upgrade the network as part of our largest ever investment programme. We've committed to investing a similar amount across the UK over the next few years. We are building new sites, we're also increasing capacity in some of our existing 2G and 3G sites. Similarly to Tom, we can't talk about—for competition reasons—we can't give the exact detail of our upgrade plans but we're happy to write to the committee separately to talk you through that.

11:05

Okay. Paul, if I ask the same question to you—but perhaps if I could also say, perhaps tell us as well, do you think that the gap is narrowing in terms of how Wales is being covered in terms of the UK average? 

I think the short answer to that is 'yes'. Just to explain—and I won't go through the same competition lines—

Sure. Yes, yes, you can't tell us anything—yes, I know. 

I think it has improved significantly and I think if you look at the stats generally the answer is, 'Yes, it has improved a lot.' A lot of work has gone in in the last few years by all the operators. I think 4G coverage across the whole of the UK has significantly improved. Personally, I think where we are now and what we actually need to be focused on is, by and large, there are improvements going on in Wales and other places. I think those improvements will not be seen at the same rate as you've seen the rapid expansion of 4G, to be very honest about it. The real, key focus is how you look at that business environment going forward, which needs consistent—what we've said in the past—and working with the likes of yourselves, the Welsh Government and local authorities to actually help improve the business case. I think this is an opportunity, from my perspective, to have that type of conversation here because I think that's the crux of where we need to get to. As people have said, there's 1 or 2 per cent that don't have any coverage—how do you actually try and do that? From a business case perspective, it's going to be very, very challenging to do that, so how do we work together to do that? 

Thank you, Paul. I'd better ask the same question of EE.

From an EE perspective, I think in terms of our coverage progress I would just point the committee towards the written evidence that I've provided that shows some good steps forward there. I would completely agree with Paul. I think we are now reaching the edges of commercial viability in terms of direct private investment. The Welsh Government, I think, have to work—as with all Governments across the UK—with a steely focus on reducing deployment costs and barriers. So, the framework that was set out in the mobile action plan was welcome; I think we need to see some rapid action from that as soon as possible. Also, looking at the potential of public sector investment in the network as well. I think across the UK we've seen rapid improvements in 4G coverage, and that's almost exclusively been delivered by private investment. We are now reaching the point where we need a different model, a better relationship with local and national government to get us further. 

Thank you. And, Gareth, if I can ask you this question: in your evidence, you said that mobile operators across the UK invest about 15 per cent of their revenue in improving their networks. What's the equivalent figure for Wales? 

Unfortunately, I don't have a figure specifically for Wales—it's not information we hold. I'd just like to reiterate on that point, we are seeing reform going on elsewhere in Scotland and England particularly. The point of the mobile action plan is to ensure that Wales can maintain and keep on par with the rest of the UK. 

I think, as we've heard, we've had improvements and that has happened independently of the mobile action plan. So, I think what we're saying is, if we want to increase and make this more rapid, we've got to improve on the action plans that have been suggested and agreed and we need to see progress on that. 

In terms of policy, I'd say they're not on par, to be clear about that. I think, in some of the evidence that was put forward by Mobile UK, if you look at things like the permitted development rights, I think it's 2014, guidance 2016, and then TAN, which is 2002 for Wales, so actually I think that answers the question.

I think Members will want to pull out some detailed questions around those areas. Vikki Howells. 

Thank you. I've got some general questions on the mobile action plan. I'm not sure who wants to take them. First of all, I'm wondering about the level of engagement that you've had with Welsh Government and the impact that you think that that's had. 

I don't want everyone answering this question—if one or two of you want to lead on that. Gareth. 

I have to say, there has been engagement with the Welsh Government and also with councils—we recently had a round table. So, that engagement is ongoing. I think what we need to see is action.

11:10

I think the plan, in itself, is definitely a step in the right direction. It addresses a number of the right areas, and the priority now, really, is to see it implemented.

I think 'pace' is probably the key word here. I think we absolutely recognise that, across these policy decisions, some important trade-offs are going to have to be made, whether that's on planning, the use of public sector assets, business rates. But we need those decisions to be made swiftly. And if we don't see that, then I think Wales will, on policy terms and the deployment environment, continue to fall behind other parts of the UK. 

And to pick you up on that point there, my second question is to really see how the engagement that you had with Welsh Government differs from that with the UK Government and Scottish Government as well.

I think I'll just reiterate 'pace' again. I think the discussions we've had with Welsh Government, in terms of developing the action plan, were good and there have been further round tables since the publication last year. What we haven't seen is concrete steps forward, decisions taken, new policies enacted.  

Vikki Howells's question is in terms of engagement, so what level of engagement have you had with the Welsh Government over the past 12 months?

Well, I think, they've published consultations on reforming business rates, consultations on reforming the planning system. I think we've had a number of round tables looking at better relationships with local authorities in Wales. Again, as far as I'm aware, we haven't seen any concrete decisions emerging from those. So, there has been engagement. I don't think we're sitting here saying there's no dialogue. We've submitted evidence, we've had discussions at both ministerial and official level.

I think you have to judge these things by outcomes, and the outcomes so far haven't been particularly significant. 

I would just concur with that. Okay, it goes back to putting the 'a' into the action, in the plan, and the point that Richard makes about pace. Because we can have conversations, but I think it's really about how you move it forward at the moment. You talk about other jurisdictions, so, in some respects, we were already talking about the planning regime in England for, say, 5G, and what that might look like. There's been a series of round tables and there will be ongoing discussions with the Department for Digital, Culture, Media and Sport on that. So, there are two challenges from a Welsh perspective: one is bringing it where the other jurisdictions are now, but then you need to start having a conversation about 5G, particularly when you have other parts of Welsh Government talking about things like the city regions and the need to develop digital connectivity in Wales to reap the benefits of 5G. To me, you need to grab something by the scruff of the neck and push it forward, really.

My question is to Gareth. In the evidence that we have, Mobile UK said that the planned reforms of the permitted development regime are, and I quote,

'along the lines of "catch up with England''.'

To what extent have differences in the planning regime in Wales, compared to England, held back expansions of mobile coverage in Wales?

Well, I think, just on the PD rights, we've had PD rights changes in England that came in, I believe, in November 2016, and we are now looking at getting further reform to PD rights. We're looking on par with England—it's also on par with Scotland as well. That hasn't happened here. So, as others move forward, we are now moving to the next stage and further forward again.

I think what we're trying to say is that we need to get this action in so that these changes are brought about so we can move forward. It's essentially to allow us to build these networks rapidly. I think the point was made about 5G: we're looking at 4G at the moment; next year, 2019, is the first expectation of the roll-out of the first commercial networks of 5G. So, we're at a point of almost just getting ourselves ready for 4G, when we've already moved on to the next technology.

Okay. And the leader of the house was quoted in committee as saying, and I'll quote her too: 

'The mobile industry would have you believe that it's a silver bullet to simply be allowed to build bigger and more masts.'

I think this is a package of measures we're looking at. We're not looking at a single silver bullet, as it was put. We're looking at (1) that there's engagement with local authorities, there's political leadership at a local level, there's PD rights reform and business rates reform. As we've seen with fixed line infrastructure at the moment, business rates can get 100 per cent off of that. We're looking at that, again, for mobile infrastructure so there's parity with the two. There's a lot of focus on fixed line, which is great—we need that as well; that's part of the backhaul that makes it up—but I think there is no silver bullet. I think we've come here and, as you see with the evidence we've provided, there is a package of measures here. 

11:15

Can I just add a supplementary point to that? The point about the mast and the—. In England, you can built to 25m under permitted development, subject to certain other criteria about conservation areas and things. In terms of geographic spread, that then helps you get, potentially, a wider spread, so you can get more coverage from one mast. A 15m mast, which is the old permitted development regime, which did exist in England before they changed it—obviously there is not as wide a coverage. So, you can cover a wide area. You can also, more importantly, potentially use—maybe, particularly at 25m—a radio for backhaul, so this is the aspect where you take the voice traffic and the data from the mast back to the core networks, and that's particularly useful in a rural environment, because you wouldn't have fibre or copper in order to be able to get that back to a site. So, fundamentally, that changes your relationship there. So, for instance, O2 in Scotland, we built a 50m mast with the exact purpose of doing that in the highlands, because it enabled us to cover quite a wide area, and with the backhaul.

So, there are some important practical aspects between the height of the masts. It doesn't mean more masts; it just means that those masts are slightly higher, but potentially their range is wider, and you can utilise other aspects like the backhaul to be able to get the traffic back, and, at the moment, 15m masts don't really allow you to do that. That, to me, is the key point, so I'm not sure where that point came from about more masts, because I don't think we've submitted evidence to say that that would result in more masts. 

I cover rural Wales and I've got two phones. I've got two phones because one of them will work in one area and the other will work in another area. So, I suppose there is an elephant in the room, so I'll ask the question: why is it that you don't share facilities so that there would be wider coverage for all your different networks just with one single mast? That clearly cannot be the case, because I wouldn't be losing signal in one and maintaining it in the other.

Perhaps one of you would want to take that point. Richard.

Across the country, I think we would all agree that there is extensive sharing across all four networks.

There's not enough, though, is there, if I'm losing signal?

I'll make the general point, which is that EE and Three have got a joint venture sharing arrangement—Mobile Broadband Network Ltd. O2 and Vodafone have got a similar, although not exactly the same, joint venture, Cornerstone Telecommunications Infrastructure Ltd, and there is extensive sharing there. There is also extensive sharing between those joint ventures, and we also use wholesale infrastructure providers, so those companies that build their own towers and seek to get mobile operators to come onto site. So, I don't think it's fair to characterise the industry in that way; I think there is extensive sharing. I think one of the challenges we have, actually, is if you want to be able to share infrastructure, it needs to be large enough, big enough, to accommodate the equipment for multiple operators, and if, broadly, we are restricted to 15m-high masts in Wales under permitted development rights, it makes that incredibly difficult.

Okay. I'd like to explore what changes you've witnessed to the proposed planning policy in Wales in terms of catch-up in England. Do you want those proposals to go further than the changes that have happened in England, or do you just want a level playing field with England, since you've cited it in your evidence?

I think I'd go back to the point that, in England, we are actually looking for further reform. We can go to where we are at the present time, but we are moving that forward elsewhere as well. So, I think the intention here is: let's ensure that we get where we are with the mobile action plan and ensure that we are looking across borders, across England, Scotland and Northern Ireland as well, to ensure there is a level of certainty, which makes it much easier for us to understand what we're doing across the country. But I think what we need to ensure is that we do get up to a level of where we need to be at the moment. I think there are specifics, potentially, for Wales as well, but, as we say, I think the real concern that we have at the moment is that Wales is falling behind other areas.

11:20

Can I just, with your permission Chair—? I was a local elected representative long before I was a national representative, and what I've come up against always in this debate are two things: fear from the local population that putting up a mast is going to affect their health; and the other issue is lack of engagement or engagement that convinces people that it's safe, even though the same people want access—and you are right, they will want access to 5G very soon. How do you deal with that?

Well, I think there is extensive international research that doesn't provide any evidence to suggest that health problems are caused by mobile masts. We all abide by strict international regulations—the International Commission on Non-Ionizing Radiation Protection regulations that determine where we can place a mast, depending on the power it's radiating. So, across the piece, every one of our deployments will comply with those international rules. So, we are confident that there isn't any impact on health. 

Can I just say something very quickly on the engagement thing? I think we've had quite a lot of experience because we had the coverage obligation and, in doing that, I think the local engagement has been pretty good in all honesty in Wales and in the last couple of years it's improved significantly. So, actually, at a local level, it is actually fairly good, I think.

If the committee would value it, I'm very happy to point you in the direction of that research and those guidelines.

Can I just be clear, on permitted development rights, what is it that you want to see? What is your ask of Welsh Government? And are you all united on that position? Richard.

To be honest, I think it would be: get on and reform. Again, it comes down to—

So, I think the Welsh Government have presented a set of proposals—I think consultation has just closed on that—that broadly brings Wales into line with the rest of the UK, or at least England and Scotland. That would be a good first step forward. Clearly, if Welsh Government could go further, that would be better. Just to provide reassurance, I don't think that any of the operators here are going to be building larger masts than they feel are necessary. We're not going to put that investment in when it's not going to deliver any return for it.

Can I just check, Richard: you're saying that you would like to see permitted development rights go further than is the current position in England? So, wouldn't you therefore be suggesting that Welsh Government leapfrogged that position and go to the position that you want to see now? Is that right? And can you explicitly set out what you want to see?

Ideally, yes. I think Wales has some particular geographic and population density issues that we don't see in the rest of the UK. If we want to solve some of those problems then we need a more flexible, accommodating planning regime.

Okay, and be explicit about what you would want to see, just for the record here today.

So, I think Welsh Government have proposed for new masts in non-protected areas going up to 25m for permitted development. I think it would be reasonable to consider an increase up to 30m for the reason that Paul has set out.

Okay, so you think the height should be set at 30m. Does any other operator disagree with that position? So, you're all agreeing with that position. Okay.

Can I ask as well—? I raised the issue of planning with Julie James just before the summer during questions in Plenary, and what she said to me is—and I'm quoting it here:

'so what they're basically saying to me is they want me to get my Cabinet colleague to allow them to build any size mast they like, anywhere they like, and take all of the tariffs away that they have to pay to go there, and then they'll build a whole network right across Wales.'

So, which of you told the Cabinet Secretary that?

11:25

It wasn't me, and I'm reasonably forthright with my views. 

I don't know. 

Okay, we'll have to ask her which operator told her that. 

Just to reiterate, the key point here, to my mind, is that there's a need to improve coverage, and the conversation that we have with the Welsh Government is, effectively, about that aspect. We can have a conversation about 5G and that environment but, effectively, that. So, it's how, again, that business case environment can be changed to help improve coverage. That's the crux of the conversation that we as an industry are having with the Welsh Government and, in fairness, with Government in England and Government in Scotland. Fundamentally, it's around, I suppose, notspots and partial notspots, and how you can help that.

I can see Tom wants to come in as well, but let me just bring Lee in and then I'll bring Tom in. Lee. 

Just to pick up your point, Chair, and the Cabinet Secretary's summary of the position, because, to be fair, from what I've heard you're clearly commercial companies, you exist to maximise the profit for your shareholders, you've reached through commercial means, or reaching, the optimum you think you can get return for your delivery, and if the Welsh Government wants more, these are the areas where you think the profit is going to be less, so they're going to need Government help of some kind. That's what you've told us. So, the Cabinet Secretary's summary of the position is not an unreasonable summation of that. 

Joyce Watson asked you about the sharing of facilities. Clearly, that's not devolved, and you said you have partnership arrangements where you do that in pairs, but you don't do that as a collective. I wonder, in terms of a trade-off, what your view would be if, in exchange for having the ability to build taller masts, the Welsh Government were to say, 'We'll let you build taller masts, but we want fewer of them, so we expect you all to share'—what your view of that would be.

I can give a point on that. 

I think, again going back to that point about notspots, there is definite merit in looking at an environment where you build large masts to cover areas, but we might be talking about 40m or higher masts with all operators there, but also have backhaul and everything else to cover areas that are fundamentally notspots at the moment. So, I think there's merit in having that conversation. It needs to be mapped properly and you need to look at it effectively. That's one of the reasons we did the 50m mast in Scotland, and we will look at it again. If you look at Scandinavia, that's what they're effectively doing in Scandinavia—the average height of masts is 50m— 

And you'd be prepared to share, in principle, would you? 

From an operational perspective, a 50m mast, if you split the cost four ways, going back to your point about business, that's good business sense, particularly in areas where the business case isn't the easiest, and you've got, obviously, a CapEx environment, and then you've got an ongoing OpEx environment, then four operators paying for that in those areas would make a bit of sense.  

We do share, as Richard said. I think further sharing in that context, yes. 

In principle, absolutely yes. 

There probably are masts, I don't know, in the UK—maybe not ours—that all operators probably share, so maybe on our—

The issue is that there's a difference between sharing and roaming, isn't there? That's the issue. Julie James went on to say to me—. She was pointing out why they can't share and why they don't allow roaming. What she said to me in her answer before the summer was, 'I'm afraid the evidence we've had back is not good'. So, Julie James is saying to me that she would expect you to share masts, as you said you are, and she wants to understand the compelling evidence for roaming as well, and she said the evidence that she's had back has not been good. 

So, I think, from our perspective on the domestic roaming front, it was something that I know Government and Ministers looked at a few years ago. At the time, the feeling was very much that there were a number of challenges to it. The first one was that it would just be a poorer customer experience as you roamed across the networks. 

Just because of the technology—the challenges on it. 

There's no such thing as in-call roaming, so your call would still drop and then have to be picked up by another network. 

So, if roaming was permitted, you're saying that people's phones would permanently keep dropping out as they travel from one area to another. 

Potentially, as there are holes in the networks between masts, which still exist because of radio and everything else. There could be a situation where—. That's one aspect to it. 

The other concern was that it would disincentive investment by the mobile operators. And then the third challenge, I suppose, is the obvious one, which is, I guess, particularly important for this committee, which is for no-spots there's nowhere to roam onto in the first place because there's no coverage. 

11:30

The issue is that even if you roam, you're still not covered in the notspots—

And that reinforces the investment point, I think.

Exactly, yes. I think what we'd much rather see, from our perspective, is a policy and regulatory environment that incentivises investment, and then in areas, where the economics are extremely challenging, we're working in partnership with the local and national governments to find a solution to those areas, particularly those notspots.

So, Three takes a slightly different view on the roaming front. We are not in favour of a national roaming agreement, but as part of our response to Ofcom's 700 MHz consultation recently, we proposed a rural roaming obligation, and a rural roaming obligation would be for areas of notspots and partial notspots. It would involve Government contracting one network to build out to those areas—to build out to a coverage target of 95 per cent geographical coverage. Then, customers from other mobile networks could then roam on to that network. But those areas would be clearly defined as notspots and partial notspots.

Okay, but the other operators don't take the same position.

I'll build on that point, and it goes back to the previous question you asked about engagement with Government. So, on the back of things like the 700 MHz auction, but also the investment document that the Department for Digital, Culture, Media and Sport published back in the summer, we are looking at—and there is a certain amount of working groups—solutions for particular aspects of future network roll-out with DCMS in order to see whether it was the roaming environment or the greater sharing environment. So, we're looking at all of those in trying to build the best model to look at that from a wider perspective. So, those conversations are going on with DCMS, subject to the usual competitive environment, to see what the best solution is there. So, I don't think you'd rule out anything, but at the same time they need to be proven and worked through properly so that you've got a proper business case for all of that. As I say, there are working groups looking at that across industry.

We'd better move on because we've got quite a few other areas to cover. Oscar.

Thank you very much, Chair. I'll ask the final question: one of my constituents bought a house in Crumlin, Caerphilly. It was a brand-new development and BT Openreach said they won't provide superfast broadband because the development is fewer than 30 homes. Is that true?

I will speak from BT group. I can't speak on behalf of Openreach, but their policy is, where there is a development of over 30 premises, they will deliver fibre to those premises, and I think there are discussions ongoing about whether they can make a commitment to reducing that number.

You're answering that with your other hat on, aren't you, I suppose, Richard?

I am, yes. But that's a question for Openreach, which is now a legally separate part of BT group, so if you want to explore that in further detail, I would encourage you to speak directly to Openreach.

It does actually speak to a wider point, though, and it's something that we've been talking to councils about around the country and it's the connectivity consideration, so that when any new development is going up—whether that is a housing estate or if it's going through a shopping centre or something like that—those developers actually engage with mobile network operators before. Because, quite often, you'll have the case where something is built and then they'll be like, 'Oh, we don't have mobile phone coverage', and it's far more expensive and far more difficult to retrofit somewhere with mobile phone coverage. So, if that was part of the planning framework of that going forward, we, as networks, can plan, from a capacity point of view, but it also ensures that customers there get coverage.

Do you have any further questions, Oscar? [Interruption.] I don't know what that noise is.

The broadband is working now. [Laughter.] 

Thank you very much. I understand you had a successful round-table meeting with the local authority in Llandrindod Wells. What outcomes would you hope to see and when?

So, what was the outcome of that meeting in Llandrindod?

Was I the only one who was there? [Laughter.]

No, I was there.

I was there. So, I think, again, what we agreed and what we pushed on in terms of local authorities is more action and pace from the Welsh Government and that's the point, because, again, they're seeing the frustrations at a local level. We are engaging with them, but, actually, the point was that the mobile action plan was still being talked about, and I think one of the key things was that everybody in the room was asking for some more leadership from the Welsh Government to drive some of these changes through.

11:35

Before you ask your second question, Oscar, can I just ask: was it a talking shop, or did you actually have some outcomes? Do you think there were outcomes, tangible outcomes, that came out of that meeting?

No, I think it was probably more goodwill and a consensus, rather than tangible actions.

There was goodwill, Chair, so that's good enough. How receptive is the public sector in Wales to the use of public assets to site mobile infrastructure compared to England and Scotland, please?

I'm happy to begin on that one. I think we are looking at—. At the very stage where we are at the moment on public sector assets, it's very much considered as a last resort. There's a lot of bureaucracy involved and there's the revenue opportunities for the local authorities over connectivity. We'd like to see that flipped, and become a first resort. Public assets are there and available, and we should have the opportunity, potentially, to build on public assets, where that is relevant. So, I think that again is part of what we were discussing earlier, as part of a package of potential reforms that we're looking for—public assets to be made much more available to mobile operators.

Can I ask one things, Chair? Guernsey has got the largest number of broadband facilities—in that little island. Why can't we have that in Wales? What is the difference between us and Guernsey?

Yes, that is the broadband, superfast broadband—98 per cent of the inhabitants of Guernsey have access to superfast broadband. In Wales, we aren't near enough—

We can possibly ask that question to the leader of the house next week as well.

They are the ones who supply the broadband services to the country.

All I would say is that there's a collective will there. Again, obviously, I saw the Rory Cellan-Jones piece on that, and there seems to be a collective will to do it, effectively. So, everybody agreed—they dug up the roads, they put everything in together, and then they worked together to do that. So, again, it comes down to what your key priorities are. If mobile is a key priority and a focus, from an economic perspective in Wales, then you need, in a sense, to focus in the same way.

The leader of the house, in her evidence, said that the mobile industry didn't provide detailed evidence to underpin a compelling case for the introduction of a non-domestic rates relief scheme. So, are there arguments for such a scheme?

I think, again, it's about that wider package that we've talked about of incentives to improve, to roll out additional infrastructure, and rates relief are certainly a part of that. I know that in parts of Scotland, for example, it's ben trialled, and it has supported the roll-out of digital infrastructure. Again, it's back to this kind of silver bullet thing—it's about part of the wider package, and it—

But that still sounds a little bit vague. If the Government are going to do anything, they'll need detailed evidence, and the point the leader of the house was making is this is the kind of thing they hear—they don't hear any detail about how it would work. Perhaps you think that it isn't your responsibility to provide that detailed evidence.

No, I think it is.

If I can just add to that—I'm sorry. We are reaching the hardest-to-reach areas, the most economically difficult. Making that more cost-effective will only enable it to be easier to roll out into those areas, and that's what we're—. Those last few percentages are the most costly. I think Ofcom, their chief executive recently stated that, to cover these last percentages, the pricing increases exponentially, but also there's a rough cost UK-wide of £3 billion to £6 billion over and above where we are at the moment. So, as we say, we are investing at the moment—£2 billion annually; next year, we start to see the roll-out of 5G networks. We're still investing, and we're going to continue to invest, but these are areas that are the most difficult and the most economically challenging.

Do you think it's the responsibility of the mobile industry to put together a detailed written business case for that, specifically in relation to non-domestic rate relief? Or do you think it's up to the Government to propose to you?

No, I think we've got to work in partnership. And I think the point that colleagues have made is right, in that business rates must be viewed as part of the package—

So, have you put any documentation together, any written evidence together?

I think we've all responded to the consultation that was concluded in April, I think. Business rates, particularly in rural areas, do contribute a significant proportion of annual operating expenditure—I think in the region of 14 per cent, on average. So, clearly, in marginal cases, it will have an impact.

11:40

So, when the leader of the house says that the mobile industry 

'did not provide detailed evidence to underpin a compelling case'

—that's not actually true from your perspective. 

I think we'd be very happy to provide the written evidence we provided to the consultation to the committee. 

Can I just add to that, just looking at the Welsh Government's evidence also, in terms of the consultation they conducted on 'Planning Policy Wales' recently, they said they only had one response from the mobile industry there? So, there's a consistent piece you're telling us the Welsh Government aren't doing enough at pace and action and they're coming back to us and telling us you're not giving enough detailed evidence. There seems to be a disconnect. 

I think in the case of the planning consultation, there is a consensus across the industry in terms of what needs to happen, and therefore we felt that via Mobile UK was the best and most powerful approach to take. 

I think Mobile UK speaks for all four of the networks. 

And just to reinforce that, the two bodies that Richard referred to, which are MBNL and CTIL, who actually do the work on the ground actually made significant contributions to that document. So, it is a very comprehensive and very broad industry view on that. 

So, specifically with the issues that we'd raise with the leader of the house, we'd need to see the evidence you've given to compare with the position that she's stated, which is contrasting to what you've just said. So, we'd need that evidence promptly. 

Certainly, from a BT/EE perspective—

—I'd be very happy to provide that. 

You've offered that to us, so if you could provide it in the next few days that would be helpful, ahead of our session next week. Hefin. 

The leader of the house also says that officials are considering a more focused rates relief scheme. Are you aware of that? 

I don't want to do a disservice to the Welsh Government—I haven't seen, personally, any conclusions following or any decisions taken following the end of the consultation back in the spring of this year, so I can't comment. 

So, that's the consultation you're referring to, which you did have an input into, though, because you're awaiting the outcome. 

I think, to be fair, Chair, we've covered the issues that I wanted to raise, so I'm happy to save time and let somebody else have their say. 

Okay. I was going to ask a question around this: I know the leader of the house has previously accused operators of landbanking here in Wales, so are you able to clarify what you think she means by that, and is she right—is that the case?

I don't know what that means, to be honest. 

She said that we landbank?

Yes. She's said previously that she's concerned that operators are landbanking.

I don't know what that—. All I will say to the point—there's more to be made—we make commercial decisions about investment to deliver for customers. I don't think anyone here would be brave enough to go to CEOs and say, 'Let's just spend a load of money on something that wasn't going to deliver service to customers.' Fundamentally, you don't do that in the mobile sector and I wouldn't have thought you'd do it in many other sectors either. There isn't the money to go around to do that. 

Because the reality is to build a site is incredibly expensive. I don't think, at a time when the costs of airtime are going down but our costs are staying the same or going up—it just doesn't make sense. 

Okay. We can raise this with the leader of the house next week. 

If she gave clarification on what she actually meant, then we would happily then come back with an answer. 

Thank you very much, Chair, and, again, thank you very much, panel. What impact do you think emerging technology will have on mobile coverage expansion in Wales, and, especially, what engagement do you have with the Welsh Government in this respect, please? 

I think there's actually quite a lot of work going on in Wales around emerging technologies, specifically around the Swansea bay area. I know Three are engaged quite closely with the team there and were exploring a number of opportunities. I know from a digital skills point of view as well—that's quite big at the moment. From our discovery store in Swansea, I think we have met and trained almost 5,000 people in communities on digital skills. We're working very closely with the Department for Work and Pensions here in Wales as well on helping people find jobs online, so digital job hunting online. 

Thank you very much. I think you just mentioned the skills sector, so you've got expertise in the field—.

Yes. We have actual people in the community training people on digital skills, yes. 

And how are you engaging with the Welsh Government on that? 

I would have to go back and check and see how closely they are engaged with the Welsh Government, but the team are out in the community. They're out in schools and things like that and they're working quite closely with local government, with councils.

11:45

I am asking about Government engagement with you—Welsh Government.

I'd need to check and see if the team are engaging with Welsh Government on that.

In regard to 5G deployment, what do you think is the—? What does the Government need to do in Wales to create the right environment for 5G deployment? Anyone? Gareth.

I'll come back quickly on that one. I think the mobile action plan is part of that answer. As we've said, I think it's about ensuring that we do have that right environment, and what we've put forward is part of that and we would like to see that action taken forward.

I think 5G will, in many ways, be built off the back of 4G, so actually getting the policy reform right at this stage will be really crucial for any future plans.

Yes. A question around notspots. You can get them anywhere—you don't have to be in a rural area; they could even be in a city centre. What options have you explored with Welsh Government to infill notspots?