Y Pwyllgor Cyfrifon Cyhoeddus - Y Bumed Senedd

Public Accounts Committee - Fifth Senedd

16/09/2019

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Gareth Bennett
Jenny Rathbone
Mohammad Asghar
Nick Ramsay Cadeirydd y Pwyllgor
Committee Chair
Rhianon Passmore
Vikki Howells

Y rhai eraill a oedd yn bresennol

Others in Attendance

Adrian Crompton Archwilydd Cyffredinol Cymru
Auditor General for Wales
Matthew Mortlock Swyddfa Archwilio Cymru
Wales Audit Office

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Claire Griffiths Dirprwy Glerc
Deputy Clerk
Fay Bowen Clerc
Clerk
Joanne McCarthy 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 14:32.

The meeting began at 14:32.

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

I welcome Members to this afternoon's public meeting of the Public Accounts Committee. Normal housekeeping rules apply. There are headsets available, as usual, for translation and sound amplification. In an emergency, follow the ushers. We've received one apology today from Adam Price and no substitutions. Do Members have any declarations of interest they'd like to make? No. 

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

Okay, we've got a large number of papers to note that have arisen over the summer recess. First of all, we have a letter from the chief executive of Natural Resources Wales from 11 July—that's pack pages 1 to 10. Clare Pillman wrote to me on 11 July with an update on Natural Resources Wales's progress in implementing the recommendations of the Grant Thornton review into timber sales. Grant Thornton have concluded that NRW have made good progress to date, and also acknowledge, as do NRW, that there's still much to do and that full transformation will take some time. Members will be aware that the Auditor General for Wales qualified NRW's annual report and accounts 2018-19 due to the ongoing issue with the timber sales. Auditor general, did you want to say anything about the NRW response?

Sure. Just to remind the committee what I said before the summer break that we will be doing some further work ourselves between now and the end of November so that, by the time NRW come before you, you will be equipped with a broader piece of assurance work from us as well. And obviously, we'll provide you with a briefing in due time as well on the background and issues related to the qualification of this year's accounts.

Through the Chair, in that regard, that broad piece of work that we talked about previously, can you just briefly articulate its overview?

What I think it's important to shine a light on is the extent to which the issues that have been highlighted in NRW do or don't percolate through the organisation more widely. So, the Grant Thornton piece looks, as you would expect, at the specific recommendations that were made in relation to one particular sector within the organisation. So, I'm trying to get a little bit of assurance about the more general change that is occurring in NRW so that you're equipped with that.

Adrian, the Grant Thornton letter—look at page 4, the second paragraph. You have reported that you have qualified the report for them. What actually have they achieved from this Grant Thornton report—[Inaudible.]?

14:35

You actually have gone through those Natural Resources Wales accounts and exposed all these anomalies there. What extra have they found? Because according to this letter, they were not at the auditing standard in doing the audit. If you read the lines, it's 2.1.3.

'This engagement does not constitute an audit in accordance with Auditing Standards.'

So, what Grant Thornton have done is to follow up on the specific recommendations that they made last year to NRW to assess what progress the organisation has made in respect of those specific recommendations.

That's right. Exactly.

You've picked up on that paragraph, Oscar, on page 4. On page 5, 3.4.6,

'Legacy issues are being addressed including monitoring the completion of Long-term Timber contracts (LTCs) and seeking to exit Standing Sales Plus contracts'.

That's all fine as far as it goes, I would say, but of course we really need to see the end to these work practices that weren't in line with correct procedure. What the organisation is saying, and Clare Pillman is saying, is that this is going to take some time, because these things are in the pipeline already. I think it's fair enough to say we expect that. But I think we do need to be clear that sooner or later there will have to be some sort of closure on this. We can't have the accounts going on being qualified year after year after year ad infinitum.

The auditor general mentioned that we've got NRW in to see us before the committee on 9 December, so that would be a good occasion for us to ask questions on all of this, but I think we need to ratchet up the urgency and say, yes, we understand that contracts have a natural leeway time, but we do need to see a light at the end of the tunnel here, because we can't be saying every year, 'Okay, well, we'll put up with it for another year. Let's hope you're not qualified next year'. That's my take on it as Chair. We can look at all this again in December. I don't know what your thoughts are on it, but I don't think it can go on forever.

I would echo that. I mean, they're putting in a lot of senior people into sorting this out—the chief executive and another senior officer—but it's a bit difficult for us to disagree with the external opinion of Grant Thornton that these things take time. But we do need to see closure, I agree.

That's exactly the—you've hit the nail on the head. You need to unpick whether you're looking at a package of issues here that just take a bit of time to work through the system because standing sales plus contracts by their nature have a longevity. So there will be some issues that fall out of those, even though the practice itself has ceased. Then, as I said, more importantly, I'd suggest, you need to test the degree to which the organisation itself has changed so that the issues that gave rise to these sort of practices are no longer there and haven't percolated elsewhere in the organisation.

Yes, we need to see that deeper cultural change to make sure in future that the same issues don't arise.

Are you going to hire them again to pinpoint whether development has been made?

Grant Thornton? That's a matter for NRW.

The other issue in my mind is the capacity of businesses in Wales to provide some competitiveness in the issuing of contracts, because one of the major problems was that there was only this one large sawmill, which is why they kept on going to them, which is a self-fulfilling prophecy, but I think one of the issues that has to be asked is: how are we diversifying the procurement to ensure that we're not beholden to one large operator? So let's find out what—

I think the Grant Thornton decision itself seemed to be a good one; they really shone that light.

And that was initiated by NRW. They deserve credit for calling Grant Thornton in to take an even closer look, and indeed for getting them back now to see whether or not they're moving in the right direction. So I don't think they should be criticised for that, for what you see in this report.

14:40

So, just for clarity, really, the assurance report that we highlighted at the beginning of this agenda item, that's in November—it'll come to this committee in November.

It will do the work between now and November. NRW is coming in—

On 9 December.

In early December.

We're doing it so that it's ready for you for use in that meeting. 

And we can discuss this again in advance of 9 December, but that will be a good opportunity.

Okay. Moving on, then. Radiology services. The Welsh Government have submitted their second progress report on the progress being made in delivering the national implementation plan for imaging. The paper provides an update as at May 2019 on the progress that's been achieved in relation to the four Wales Audit Office recommendations to deliver the national implementation plan for imaging. Auditor general, did you want to come in on this, or is it pretty straightforward?

Pretty straightforward. I just think, in terms of timing, the letter envisages coming back to this committee in early October, so there's been a bit of slippage or overlap of the dates. So, if the committee is content, I'd suggest you just push that back a little and we pick it up towards the end of this year. 

So we should get a further update then and we'll take that from there. 

Okay. Moving on to the scrutiny of accounts 2017-18. The Permanent Secretary has written, providing further information on recommendations 1 and 28 from the committee's report on the annual reports and accounts. Did you want to comment on this?

Nothing specific on those that we won't be picking up, I assume, when the Permanent Secretary is before the committee later in the year. 

Yes, just to remind you, it's on page—have you got a page number? [Interruption.] Twenty one. I'm trying to find it. Twenty one. Yes, well done. Ahead of me there. Yes, recommendation 1—it was recommended that the Welsh Government takes the necessary measures to prevent any recurrence of officials refusing to provide information to the Public Accounts Committee on the grounds that it would be illegal to do so. Quite a major recommendation. So you've got the response in front of you. This is certainly something I think we need to pursue with the Permanent Secretary when she comes in, and we can clarify any issues that the committee has of concern then. Happy with that approach? Okay.

The financial reporting advisory board reports, on pack pages 26 to 85—we know that the FRAB acts as an independent source of advice on the setting of accounting standards for the UK Government. The board seeks to ensure that any adaptations or departures from generally accepted accountancy practices in the public sector are justified and appropriate. In accordance with the terms of reference, FRAB prepares an annual report on its activities, which is circulated to the House of Commons, the Northern Ireland Assembly, the Scottish Parliament and the Public Accounts Committee of the National Assembly for Wales. I don't think there are any issues there that come out of those reports that we need to be too concerned about, so are we happy to note the reports? Yes. Okay.

In response to the Wales Audit Office's 2016 report, the Welsh Government have undertaken a detailed review of community safety in Wales, which concluded with the publication of the 'Working Together for Safer Communities' report in December 2017. This report included 11 recommendations to improve community safety working in Wales. The review also established a new shared vision for community safety in Wales. Good progress has been made in implementing the recommendations, although two commitments have been temporarily deferred until the publication of the Commission on Justice in Wales report later this year, as they have a direct bearing on the future relationship of the UK and the Welsh Governments and further devolution of justice policy. Auditor general, did you want to comment on this one?

An interesting update. A similar issue to the earlier item in terms of the timing of further updates, if the committee's after those. I'd suggest, rather than the update in November, which is suggested, you should maybe look to defer that and look for something around the spring of next year as a closure of this with a link back to the earlier recommendations that you made. 

Because spring next year is when the programme is concluding. 

Will that be post the commission on justice report? Is that right? So it will be able to—.

I don't know the timetable.

14:45

Because, obviously, that will be significant in terms of the deferred actions. Okay. It sounds sensible. 

Happy with that? Okay. Moving on, and the implementation of the NHS—I told you there was a lot of papers to note to get through today—implementation of the NHS Finance (Wales) Act 2014. Dr Andrew Goodall has written to me providing details of the appointment of the external turnaround director at Betsi, and the transformation fund as agreed at the end of the evidence session held on 15 July.

In a separate letter, Dr Goodall has provided information in response to questions that were not reached during oral evidence in relation to NHS agency staff costs. Steve Moore, the chief exec of Hywel Dda UHB has written to the committee to provide further details in relation to questions that were unanswered when Hywel Dda gave evidence to the committee on 8 July 2019. So, a number of letters there to note. Any comments on those letters?  

The person who was originally appointed as the recovery director, who a lot of local people were concerned about because it was somebody who'd been internally involved in some of the more deplorable issues, he's disappeared, has he, or is he also on their payroll still? 

He's still there. 

I think so. This is an external one. 

So, they've got two recovery directors, have they? 

Yes, because when Dr Goodall came in, he didn't say that the internal appointee was not in post. So, it is an additional one. 

Can the auditor general's office clarify this? Because it seems odd to have two people doing the same job. It seems fine to appoint somebody externally, but—

Off the top of my head, Jenny, I don't know the situation, but I'm sure we can find out. So, we can drop the committee a note. 

Okay, because it's something we may need to pursue further. 

The external recovery director is in place for nine months. 

Nine months, yes. But, you know, Andrew Goodall's not saying a lot in the sense that we know, because we were up there at the time, that the internal appointee caused a lot of concern because of the previous work they'd done for this organisation. And therefore it didn't feel like a person who had the—

Shall we respond and say, 'Thanks for your information as far as it goes, and we understand the need to have an immediate impact on turnaround in health services, but we'd like to know what the situation is with the people who are currently employed or have been employed'?

Yes, what's happened to the person who was appointed. 

Because as you say, on our visit to north Wales there was a lot of concern about the personnel in place at the time. Yes. Okay. 

And if they're carrying somebody who's actually unappointable, that's a waste of money, isn't it? 

I seem to remember that that person was appointed because they said no-one else wanted it, which seems to be a bit out of date now. Yes. Okay. We can write and request clarification on that. But those letters are noted.

This is a tour de force of Public Accounts Committee materials, isn't it? Care experienced children and young people, and we have a letter from the First Minister—you have been busy over the summer, haven't you—from 5 August 2019. The First Minister has copied his response to Lynne Neagle as Chair of the Children, Young People and Education Committee, and her letter of 21 June. Members noted that letter in committee on 8 July. Happy to note the letter from the First Minister? Okay.

We now have a letter from the future generations commissioner from 9 August. The future generations commissioner has a duty to produce a report under the Well-being of Future Generations (Wales) Act 2015. It must provide advice on improvements public bodies should make in order to set and meet well-being objectives, which are the commitments they chose to make to improve the economy, society, environment and the culture of their area. The report will also include information on the progress to date and on what should happen in the future. So, this report is due to be published in May 2020. The commissioner has written to us inviting views on issues that we might like to be considered in the report. So, if Members have any ideas or any suggestions of possible contributions that could be made, they need to let us know now, or if you can inform the clerking team before the deadline, that would be helpful. I've already provided a few areas that I think would be of worth—transport, I think, is the area I identified. But if there are any other areas that you'd like to go into that report of the future generations commissioner, then let us know.

14:50

There was an interesting linked report from the Samaritans over the summer, which described the way in which we support children and young people with mental health issues, and the lack of support at the right time, which leads to more children being brought into care. It was a very clear report, and it had some very—. It was only 16 pages, and it had some quite clear recommendations for schools. So, there might be something—if we want to look at this, that would be something to compare it with.

Yes, sounds a good idea. Any other thoughts at this point, or if not, let the clerks know?

In terms of the core areas around working culturally, I'm very interested in what we are doing in pursuance of music education and the rights of young people around that. So, on a different point, the issues that you've brought forward as Chair—one is transport—would they be from this committee, or are they individually from you?

They'll come from the committee, so we'd all agree what—

So, what are the other issues that have been highlighted from this committee?

And that was in the wake of the M4 situation and how the views of the future generations commissioner were at variance, or certainly informed, I should dare say, the Welsh Government's decision. So, I thought that was an interesting area to look at in terms of developing the metro. But, no, you can come forward with any areas that you like in terms of improving public services, and I'm sure they can be passed on.

Chair, I did have one thought; I'm not sure how viable it is, though. We did some pretty interesting work last year about NHS informatics, and I know that there's recently been a roll-out of a new informatics system to try and get to grips with the long waiting list in orthodontics. But looking back, then, I can see the health committee has done recently a report on dentistry, so I don't know if they're going to be looking at that system to see how it beds in, but if they're not, maybe this is something that we could look at to follow on from the good work that we did last year.

Yes. Currently, in most places in Wales, you're looking at a two to three-year wait, and the aim of the information technology system is to really unpick where those long waits are, and to try and have a more streamlined system.

It's certainly an issue where equity is going to be a major issue, because anybody with money will just pay for this service privately.

In terms of the NHS Wales Informatics Service, we've got an update later in the year, in November.

We've got an evidence session with the Government. We could perhaps pick up your first point with them then.

Yes, and I think accountability is something that's really at the heart of it as well, because some health boards don't actually deliver orthodontic treatment themselves. They send all their patients to neighbouring health board areas. So, it's quite difficult then to try and track the accountability of the performance of one health board.

It did. There was a section in there; I was reading it just last week.

Because the two are often viewed quite in silos, aren't they?

A three-year wait, though. That's crazy. It's supposed to be—. Yes, that's something we can look at. Oscar.

Nick, what it is, it's future generations we are talking about, isn't it? Basically, I am concerned about the environment, and, secondly, about artificial intelligence. That is the future we have to think about, and we haven't mentioned anything, in future generations, on those areas. Because the skills sector will come into it, and future—

Yes. All these things are going to—. Because that is the future. Nothing's been mentioned anywhere, so it needs to be added somewhere because we shouldn't be lagging behind other nations.

Yes. I'm sure we can pass that on. Are members of the committee happy with all those areas that have been mentioned?

14:55

I'd throw in another area, which is—we've declared a climate emergency, both as a Government and Assembly and several local authorities. How much action has followed the intention, and how is that driving the way we set policy?

I think that's a very good area to raise with the commissioner. It's one thing for public bodies to declare these emergencies, but, as you say, to actually put the policies in place, to deliver them, is a different matter. So, yes, okay. Great.

3. Cynnig o dan Reol Sefydlog 17.42 i benderfynu gwahardd y cyhoedd o'r cyfarfod
3. Motion under Standing Order 17.42 to resolve to exclude the public from the meeting

Cynnig:

bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42(vi).

Motion:

that the committee resolves to exclude the public from the remainder of the meeting in accordance with Standing Order 17.42(vi).

Cynigiwyd y cynnig.

Motion moved.

Item 4, then, is—. That's the end of the public session, so I move, under Standing Order 17.42, to meet in private for items 5, 6 and 7 of today's agenda. Are all Members content? The ayes have it.

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 14:56.

Motion agreed.

The public part of the meeting ended at 14:56.