National Assembly for Wales

Okay, can I welcome members of the committee to this afternoon's meeting of the Public Accounts Committee? We've received no apologies today and no substitutions. Do Members have any declarations of interest they'd like to make at the start of the meeting? Good.

I think everyone understands how you get my attention if you want to speak at any point during the meeting, and I know that you're all sorted—the witnesses as well—with the translation on Zoom. As was said earlier, the microphones will be remotely operated, so you don't need to operate them yourselves.

Item 2 and papers to note. First of all, the committee correspondence on Senedd electoral reform—the Auditor General for Wales has copied me into his response to the consultation undertaken by the Senedd Electoral Reform Committee on the current capacity of the Senedd. Auditor general, did you have anything you wanted to add to the response?

[Inaudible.] But, obviously, if Members have questions, I'm very happy to take those.

Do Members have any questions on that item? No. Okay, well that is noted, then.

Secondly, the inquiry into COVID-19 and its impact on matters relating to the Public Accounts Committee's remit. Following the evidence session held with the Permanent Secretary on 4 May, she's written to me with additional information as we requested. Again, auditor general, is there anything that you particularly wanted to comment on in that response?

Helpful, Chair, clearly, as information to inform today's meeting, but also the subsequent meetings we have with other senior Welsh Government officials and the Perm Sec herself later in the term.

Yes, it was a helpful document, and, as you said, we're going to be meeting with the Perm Sec—I think it's on 6 July—later in the term. So, any questions, we can put to her again then.

Thirdly, housing adaptations, and the Welsh Government has provided an update on the implementation of the final two recommendations included in the committee's report, which was published in July 2018. This was scheduled to be the final update, but the COVID-19 emergency has impacted on concluding the implementation. If the auditor general doesn't have anything he wanted to add to that, then it's for us to note the response, and I will respond to the Welsh Government noting the update. And once the work is finalised, we'll seek a further additional response. Okay, that's noted.

So, item 3, and the Welsh Government financial support for business, and our evidence session with the Welsh Government. Can I welcome our witnesses to this afternoon's meeting? Thanks for being with us today. As usual, would you like to give your name and position for the Record of Proceedings? Andrew, do you want to start?

Good afternoon, Chair and committee members. I'll kick off and then invite my colleagues to introduce themselves. So, I'm Andrew Slade, director general for economy, skills and natural resources with the Welsh Government.

Prynhawn da, pawb. My name's Sioned Evans. I'm director of business and regions in the Welsh Government.

Good afternoon. My name's Duncan Hamer. I'm the chief operating officer for business and regions.

Prynhawn da. Good afternoon, everybody. I'm Emma Watkins. I'm deputy director for economic policy within the Welsh Government.

Prynhawn da to you as well, and can I thank you, Andrew and your colleagues, for being with us today, because I know these are unprecedentedly busy times? So, we appreciate you taking time out for us to have the opportunity to provide some scrutiny to this difficult time.

As you expect, we've got a large volume of questions for you, so I've asked Members if they could be as succinct as possible in their questions. If you and our colleagues can be succinct in responses, that would help as well. And, as usual, any issues that we don't reach, perhaps we can write to you with those issues so that we can get your take on it after the meeting.

Okay, I'll kick off with the first few questions. The current situation is clearly complex, but, just to set the scene, can you briefly give us your overall assessment of the risks facing the Welsh economy as a result of the COVID-19 pandemic and, of course, with the clock ticking now too on the Brexit timetable as well? So, it's going to be a busy next few months, isn't it?

Well, thank you, Chair. I'll say a few opening remarks and then colleagues may want to come in to add to what I say. Just to echo my thanks, in fact, my thanks back to you as a committee, because you've postponed a number of sessions we were due to have earlier in the spring precisely because of the coronavirus emergency, and I'm very grateful to you all for that. And it goes without saying that, if there is more information that we can provide, we'll follow up with you directly after this meeting, because I think it's very important that the Public Accounts Committee knows what's going on and gets a sense of the work that's under way, in addition to the opportunity to scrutinise what we're doing.

I think I've probably run out of terms to describe what's happened in recent weeks. 'Unprecedented' is the term of art. It has been an absolutely extraordinary period, and the superlatives, in terms of numbers associated with the economy, come thick and fast. GDP drops: in one month, GDP drops in a quarter—. You know, a just over 5.5 per cent GDP drop in one month alone, never mind where we end up by the end of June—just extraordinary. The amount of Government borrowing: so, again, one month's borrowing earlier in this crisis exceeding the predictions on the part of the Treasury for the whole of the borrowing for this year in question—just incredible sets of numbers.

The jobless count in April went up by about 850,000 people—that was the biggest single jump since the early 1970s—to around 2.1 million. And we've got about 80 per cent of companies, we believe, drawing down support from Government in its various forms. Here in Wales, we have deployed roughly 2.5 per cent of Welsh GDP in terms of the amount of money that we're pumping into the economy. If you look at the Office for Budget Responsibility's figures for the Treasury as a whole for this year, in terms of the amount of money going into the investment, it's of the order of £300 billion. These are absolutely extraordinary numbers, and we've had to move with enormous pace because of the damage being done to the economy.

And I would like to pay tribute to my team and everybody who's been involved in this effort across the ESNR group, across the wider Welsh Government, our key partners out in the development bank, local authorities—there's a long list, and, if ever there was a time when team Wales has come to the fore, it has absolutely been through this COVID-19 emergency.

You asked, Chair, about economic impacts—it is very clear that the economy very nearly went off cliff a few weeks ago, and that had a major bearing on what we, and, indeed, the UK Government, decided to do in terms of interventions in the economy, or in relation to protecting the economy. But I think the key point to make here is that we are in for a very long haul with this disease. Until we get to a point where we have a vaccine, therapeutics that are reliable, and a test, trace and protect system that is operating fully and effectively everywhere, we are going to have to deal with social distancing and a range of other protective measures in the workplace. Certain types of activity will be hard to perform, and therefore our recovery from this is going to be gradual.

Even if we can get measures in place, as we hope to do, in relation to workplace guidance and a range of other measures to underpin the economy, including the support that we're providing, it is going to be very difficult to get things mobilised again in the way that people would recognise as anything like normal. So, this is going to be a long haul to come out of recession, and it's going to be a long haul, in particular, for sectors that are directly affected by social distancing—hospitality, tourism, leisure, the arts, to name but some—impacts on aviation, civil aerospace, civilian aerospace design, and manufacturing, the car sector, the automotive sector, experiencing difficulties. And then all of these things will then play into potential further issues down the track, including, as you note there, Brexit, with all the pressures that we have talked about before in relation to EU transition, impacts over the longer term on GDP, and just that potential harshness of an adjustment in trading terms if we end up moving to a WTO-terms deal by the end of this year.

As we've said before in this committee and elsewhere, our closest trading partners are at our doorstep—they are the people we mainly do business with on a regular basis. There will, in time, be other trade deals with other parts of the world, but they will take time to come on stream, and the majority of economists predict that that won't cover the gap caused by our move away from the European Union. So, two very, very significant head winds affected.

A lot of research has been done in recent weeks that demonstrates that, in the jobs market, the worst affected will be the poorer in society, young people, women. So, we have a situation where, once again, disadvantaged groups and people with less power in the marketplace may be further disadvantaged by coming through C-19 and then the impacts of Brexit.

Just a last point, before I just see if any colleagues have got a particular point on this—we are still, as you pointed out, Chair, in a live emergency right now. This week, we will open up the next round of our economic resilience fund funding in terms of the process by which people can begin to assess their eligibility. We have a lot of companies who are talking to us at the moment, so there will inevitably be a limit to what we can say in some of today's session that we can perhaps come back to at a later stage, but we are very much in the live emergency as we talk to you today. I don't know whether Emma wanted to say anything else on the state of the economy, if you're willing, Chair.

Can I just ask you first—? Just going back on your comments, going back to the start of when this was all panning out, there have been some concerns about the pace of the early COVID-19 response and gaps in support from the Welsh Government; it's not just a Welsh Government issue, of course. Looking back now, with the benefit of hindsight, Andrew, do you think that the development bank, Business Wales, et cetera, and local government, they could have been primed and got off the mark quicker?

I think it's very hard to say at this point, Chair, whether we could have done anything very significantly different, given the circumstances that we faced. We've moved with extraordinary speed, and with a great team ethic across all of the players that you've just mentioned, to put in place this suite of measures to underpin our economy and to fill gaps, wherever possible, in the package of measures that's been launched by the UK Government—as I mentioned a few minutes ago, a very extensive range of support at UK level. We have moved as quickly as was possible with the systems and the information that we had available. One of the things I think we will learn from this experience was that Welsh Government does not have access, for example, to Her Majesty's Revenue and Customs data. I think that might have helped with some of what we've faced, and that's a discussion that we'll have with UK colleagues. But, actually, we have done a tremendous amount in an exceptionally short space of time, and, I think, moved through this process with rigour as well. So, this has been about doing things at pace, with the right controls underpinning what we were doing.

Okay, thanks. Emma, did you want to come in?

Yes. Thanks, Chair. Just a couple of additional comments to Andrew's, really, I guess. I suppose one thing to note is that we are, in the Welsh economy, much more exposed in employment terms to those sectors that are likely to be impacted more strongly and in the longer term. That's particularly automotive, aerospace and tourism.

Then Andrew talked about the economic data. I think, thinking back to the very early days within the crisis, this was absolutely underpinned by the very real-time business intelligence that we were receiving from our colleagues right across Wales, and there was a particularly intense period of that as well.

I think also—just a point in terms of where the economy is ebbing and flowing—it means we are all having to take decisions as to the emphasis we place on the rescue phase, as opposed to restart and recovery, recognising that it's a bit of a continuous process and we will move between, probably, a number of those at any one time. Thank you.

Great. Just going back to the local authorities issue, do you think the Welsh Government has been sufficiently clear with local authorities about what's been mandatory and what's been discretionary for them? Do you think that there's been some confusion there?

I think it's fair to say it was a very rapidly evolving situation and it remains exceptionally dynamic now. In the early phases of the crisis, we were working at great pace with UK Government to understand what interventions were likely to be brought to bear by HM Treasury. We've had very regular dialogue with finance directors and other colleagues within local authorities, and one of the advantages for us in the Welsh Government context is that we've been dealing with 22 local authorities, rather than getting on for a couple of hundred in the England context, and we have been able to do that team Wales thing.

As we were moving through our understanding of the state-aid position, we had to update information, and so I think it's fair to say—and Duncan may wish to comment on that—wherever we've got new information and new guidance to share, and indeed to develop with local authority partners, we've got on and done that as swiftly as was possible. It's undoubtedly the case when you're in an emergency, in a crisis, that not everybody has all the information they need always at the right time, but a lot of effort has gone into keeping people in the loop and communicating with people, not just among our delivery partners, but also amongst the business organisations and businesses themselves.

And in terms of the relationship with the UK Parliament, the Welsh Affairs Select Committee have acknowledged some positive examples of communication between the two Governments. Are you broadly happy with the communication channels that you've had with the UK, and indeed with the other devolved administrations throughout the crisis?

We've had very good liaison with UK Government at official level, and with other devolved administrations. I think it's fair to say that there have been some examples where we would have appreciated more notice of what was coming, and part of that is a function of the speed with which everybody was moving, and part of it, I suspect, in relation to some of the announcements that Treasury made, was in respect of Treasury not wanting to give too much information out more generally around potential market-making measures, and I guess that would be as true for some Whitehall departments as it would be for us in the devolved administrations.

We spend a lot of time working with partners in this area, including in the UK Government departments, about where we can collaborate and share information. There are regular meetings, and I will, if you're willing, Chair, just bring Emma in on some of these, because there are at both ministerial and official level regular dialogues that we participate in, and we've had some success along the way in influencing the course of events, I think it's reasonable to say, in terms of discussions that we've had with UK Government and other partners, accepting that we haven't got everything that we wanted, and that there's been a suite of other policy dimensions to bring to bear in terms of what UK Government has been looking for. It's not always been plain sailing, but I think for a crisis of this sort, information channels have been open and information has been pretty fairly exchanged, including with colleagues in the Wales Office as well as in mainline departments in Whitehall. But Emma might want to add to that in terms of some of the dialogue that we're having. 

Emma.

Yes, thanks, Chair. So, in addition to a number of ministerial-level engagements, for example, there's a weekly economy Ministers' quadrilateral with BEIS, which Ken Skates participates in, and he also has weekly calls with the Secretary of State for Wales—that's just on the economy side—we have a high-level economy directors' forum with BEIS and Treasury, which is fortnightly. That was something that didn't happen before. We've also had two, and we're lining up a third, Permanent Secretary economic workshops with the Permanent Secretaries of BEIS, Treasury, and indeed the Permanent Secretaries of the devolved administrations as well. Myself, Duncan, Sioned and others regularly participate in ad hoc discussions, whether that's about business support or, indeed, whether it's about recovery activity as well.

Andrew referenced some of the successes we've had, and I think some of the engagement we had around the coronavirus large business interruption loan scheme in particular, and changes to the limits of the loans there, I think we were quite successful in securing that. I think, as ever, a lot of the communication is down to people and personalities and relationships, and also understanding of devolution. We—myself and colleagues—have really good relations with the Scottish Government and Northern Ireland Executive as well in terms of sharing understanding, so we probably haven't landed everything we want, but we've made significant progress, and I think that's really important in terms of where we go now, not just on COVID-19, but on issues like EU exit as well. Thank you.

Okay. I'd like to make some progress, if that's all right, Sioned, and bring in a couple of other Members to speak, but I'll bring you in then afterwards to fill in the gaps there. So, Delyth Jewell.

Diolch. Prynhawn da. I've got some questions about ministerial directions and the decision-making processes. As of the beginning of May, I think there were 11 ministerial directions at a UK Government level relating to the COVID-19 response, but could I ask you first, please, why you didn't seek ministerial directions relating to the Welsh Government's business support interventions, because presumably you would have been facing similar constraints in terms of decision making?

I think with the 11 that the UK Government have published, two in relation to the non-domestic rates decision are the most relevant in our context. Everybody who has accounting officer status, every accounting officer, must make their own judgments about what's needed in relation to directions and the advice that they seek, or the instructions that they seek, from Ministers. I'm not really in a position to comment on all of the detail that would apply in terms of the context at UK Government level.

I think our operating environment in Wales is a little bit different. So, if I think about the four categories that we would base any accounting officer-related decision on—regularity, propriety, value for money and feasibility, can the thing be delivered—I think because of our operating environment and the way that Welsh Government is structured, I would have very few concerns or qualms about deliverability or the ability to control what we were doing. Our close working with local government has borne dividends in that sense—back to the team Wales approach—and, actually, we have a very good knowledge of our business base, our SME community, and the sorts of people who would be applying for a grant or some form of rate relief. And we work closely with local authorities to make the delivery of that element of the scheme as smooth as possible.

So, that really then brings into question or issue the value for money point. I think all I would really want to say here is that there are a whole suite of issues that come into play in respect of value for money. Right at the early point of this crisis, we were looking at the economy, as I said earlier, basically going off a cliff. To put it at its most blunt, no businesses, no economy, and I think in terms of the value for money position, the conclusion reached was that this was a justifiable use of public money, basically to keep the economy alive. And it was for that reason that ministerial directions were not sought.

I don't think, to be fair to colleagues in Whitehall, there's been any particular obvious pushback from Ministers. Ministers responded to their particular sets of circumstances very swiftly, and I'm sure had I needed to do so, Welsh Ministers would have done exactly the same, but we didn't feel that that was necessary in our context. There are a whole suite of controls that we put in place around all this, and you might want to explore that a little bit further with us, but—

Absolutely, yes. Thank you so much for that. And in terms of those four categories that you set out, could you talk us through how you were able to make assessments to ensure, for example, that the value for money—that if it was going to be effective, that it didn't need the usual ministerial direction? Could you tell us how those decisions were documented and how you were, in these unprecedented circumstances, able to ensure that there was appropriate room for scrutiny and challenge of those decisions?

There are several things there. In relation to the NDR decision, we had to move at very significant speed, not least because England effectively—the UK Government on behalf of England—had said, 'This is the set of measures that we're going to put in place', and I would be lying to you if I said that what England was doing in this context was not highly relevant in terms of the measures that we might seek to put in place. And it's true that both Scotland and Northern Ireland have put identical measures in as well. So, partly for consistency across the United Kingdom, but also just to get money into the system as swiftly as possible. We can talk about the delivery against what we put in place back in late March, if that would be helpful to you, in terms of money out of the door and the number of businesses supported. But moving at incredible pace. 

So, did we have time to do the full ex ante considerations that we would ordinarily wish to do? Not really, no. You have to work on the basis, as I say, of the information that you already have available to you through your knowledge of our own economy and the business base that we've got, and then you put options to Ministers based on the money that you have available and where you think you could target effort. In an ideal world, you'd have weeks or months to design systems and schemes of this sort. We had about 36 or 48 hours to do it. All of that at that time, of course, was documented in advice to Ministers to allow them then to take a view on how they wanted to proceed in relation to non-domestic rates. 

Throughout this process, we've been very alert to the fact—. Indeed, as a group, the Economy, Skills and Natural Resources Group got out there early in March and said, 'We need to have a set of measures in place to allow us to record what's gone on, a swift means of being able to capture decisions that are often having to be taken at very short notice, and some sense of checking and challenge along the way.' And in designing particularly ERF, the economic resilience fund, for which we had a bit more time, we put a whole suite of measures in place to provide checks and balances both on the policy side—what we were trying to achieve with the interventions—but also in relation to the delivery, and Duncan and Sioned are very closely positioned to tell you about those things. But that included cross-Government challenge: challenge at the ministerial level so that Ministers' thinking was being challenged by other Ministers; work put in place at official level within our group, within ESNR, to test what we were proposing to do; a team drawn from across Welsh Government, including Treasury and accounting colleagues, to help us do our design work and a team of officials brought in to challenge that thinking process. But maybe Emma and Duncan might want to say a bit more about that. 

Certainly, I'm happy to—

Sorry. Yes, go on. 

So, just to add, it's probably worth, Andrew, related to all the previous questions, noting the timeline in this, and it's still fresh in our memory. So, as a reminder, the budget got confirmed with the consequential on 17 March. Through that week then we put in place process. We started to pay out non-domestic rates the last week of March. Quickly after that, the Development Bank of Wales for 30 March came in and started doing the loan based finance, which was the first section of the economic resilience fund, and then, by mid April, we had live the economic resilience fund. And I think, throughout those, we've seen an evolution of our due diligence around it.

So, with non-domestic rates it's a property based transaction, so it's an historic list, and I think we've worked really closely with local authority finance directors in that space. We've met with them several times a week through the Welsh Local Government Association, so we can make sure to use that local intelligence and, ultimately, you are funding a property that's there and has paid rates historically. On the economic resilience fund, we always use two points of check. So, be it the VAT number or the company number, we're always able to triangulate the self-declared application. And we very much deployed a—. There is an element of 'appraise now and check later' to that. But even in coming into that, we are making sure that we verify what people are telling us through the data sets we have. And Andrew mentioned earlier that would be a much easier task if we had the HMRC database, but we're using what we've got, which is allowing us to, as compliantly as possible, meet and get finance operating costs out to businesses that, within days, had been closed down. So, we're able to verify as much as we can and we'll follow that up with post-completion checks as well, to check that what they told us was accurate. 

Great; thanks, Duncan. 

Thank you. Emma, did you—

Delyth. 

—want to say anything before—? No, diolch. Okay. I'm glad to hear about the retrospective checks that you're going to be employing. Specifically, could you say if there will be any clawback mechanisms in place for any businesses that received support but then it subsequently turned out that they didn't need that support? 

We have a variety of clawback mechanisms in place, not least if people end up not doing the things that they've signed that they will do, which I appreciate is a slightly different matter. But in relation to need, the ERF is a scheme that is partly based on demonstrating need in the first place. It's based on turnover loss, so there's a real problem for us to help address. And, as Duncan was mentioning a few minutes ago, in relation to property and rates, we've got that direct tie-in there. I don't know if Duncan wanted to add to that in relation to clawback.

I think Andrew's right to point to—. This is a—. It's different to our normal grant scheme that we would appraise normally under the economic futures fund, for example. This is an emergency operating cost budget. So, to be eligible for ERF in particular, you have to have seen a drop in turnover of 40 per cent for micro or 60 per cent for SME and large. So, you've already lost the money in effect. So, there isn't a clawback for the traditional need, but there absolutely is a clawback for those who don't tell us full factual information. For example, on the micro scheme—under nine employees—you're only eligible for one lot of £10,000, so either the non-domestic rates or the ERF. So, if you came to the ERF, didn't declare, and we found out you had done that—and, by the way, we crosscheck that anyway—but any area there would be clawed back straight away, and likewise with any other areas they declare. So, for example, in the SME there was a requirement not to make redundancies during the job retention scheme. So, that would be another one where we would look at it, and we do have a clawback facility in a grant offer letter as we would do under any other scheme. 

Thank you. You mentioned there, Duncan, that obviously because of these circumstances there are going to be different criteria and different circumstances from the usual support or from the usual contract that you would expect with businesses. In terms of the economic contract, I know that you've said that the Government has said elsewhere that there's still proportionate consideration being given to the economic contract. Could you tell us how that works specifically? So, to what extent would businesses be expected, in the context of the support that they're getting because of COVID-19, to comply with what would usually be expected from them from the economic contract?

So, if I can let Emma come in shortly on the policy issues, on the policy area, but in terms of delivery, on entry to the scheme, every company signs up to the principle of the economic contract, so, basically, they are accepting those principles, but it is—. We are basically looking to enhance and supplement a business's ability to live within those core themes—so, fair work et cetera—and we appraise and assess. But I think that these are predominantly—so, the vast majority bar 60—are in the SME space. So, from my side, we're putting in place the support, the non-financial support to help and support businesses bring those through. I don't know, Emma, do you want to mention anything from the policy perspective?

Yes, if possible, Chair. I think it's really important to emphasise that, despite the fact that we're operating in a crisis, it is absolutely vital that we set our interventions in a wider policy context of Welsh Government, and in our case in the economic action plan and the economic contract. So, we worked very hard when pulling together the scheme to look at the ways in which we could give a proportionate consideration to making sure that we were still deploying public money for a social and economic good, as underpinned by the economic contract.

It's probably proportionate to the size of business. So, prior to the COVID-19 crisis, we had just under 400 economic contracts that had been agreed to across all of Wales within a sort of 18-month period. We're now, as a result of what we've done with the crisis, looking at over 4,000 of those. However, the level of commitment within them is proportionate to the size of business. So, companies have either formally agreed to it, particularly at the larger end, or they've committed to the principles of it at the smaller end.

So, here, we're talking about commitments to fair work, to climate change and supporting mental health, skills and well-being in the workplace. And although some of the initial work we'd been doing on expanding the contract had been on pause because of the crisis, we are at this very moment, actually, just resurrecting some of that work to make sure that we're properly embedding and evaluating the economic contract. So, it's actually been a really important part of this intervention, and one that the Minister in particular and the First Minister were really keen on in terms of how we made our interventions. 

Diolch. Thank you for that. The final questions that I have are relating to reducing the risk of fraud. Could you say—? I know that the Minister has told the Economy, Infrastructure and Skills Committee that there are criteria built into the ERF to reduce this risk. Could you tell us more about what those criteria would be and also tell us how you've been raising word, the UK Government word, with the development bank and with local government to manage the risk of fraud, which we know that we have to all be alive to in these circumstances?

Perhaps—. Duncan, go on, you're the expert.

Sure. So, I mentioned a couple of the elements earlier in that we automatically verify, and we've actually got artificial intelligence built into our application system. So, ERF, I think, is the first time we've got an end-to-end digital transaction with companies, and that means that we can automatically link, 'Does the VAT number match what they've told us?' and 'Do their bank details match?'. And we have a number of checks through. So, there's the CRM check—sorry, the customer relationship management system check—then the appraisal check, and then the finance check. So, we've got at least three checks and balances, and wherever possible, we use data sets and verification, plus also we'll add to—. Where a customer's known to us, we can obviously add that local intelligence. That's in particular in non-domestic rates.

So, there are a series of checks and balances we add through, plus we're also putting in place cold and hot reviews. So, basically, if during the day, the individual's appraising, their line manager signs it off, that then goes through a finance check, but the pod leads also hot review those cases to check everything stacks, and then, on a weekly basis, we bring a cross-Government cold review team just to look at random sample checks: 'Has this stacked up like it does?'. And that allows us to kind of develop and amend live the lessons learned as we go, basically, to build in. The teams are now going through a lessons learned on phase 1 so that we can implement that into phase 2. So, there's quite a lot of detail in what we do to verify as far as possible using those digital tools. 

Fantastic. The final question from me is relating to that. Obviously, it would be local government who would be processing a lot of the grants. What support and guidance is the Government able to give local government, again, in terms of minimising the risk of fraud, please?

Well, I was going to say, we have regular liaison with local authorities through the Welsh Local Government Association and then, there's this direct set of discussions happening with finance directors on a very regular basis within the week. Duncan's described the sort of cross checks between different databases—that's part of our control mechanism. I don't know to what extent our own fraud unit is dealing with the WLGA and other colleagues directly, and that's something that we can certainly follow up after this session. But certainly, controls through the whole process will have been an integral part of the discussions that we will have been having with local authority partners through this process.

That's helpful. Thank you, all.

Thanks, Delyth. Vikki Howells.

Thank you, Chair. I've got some questions around the expenditure to date and how that's been administered as well. So, to begin with, we've got some figures to hand about the number of applications or approved funding under the different schemes, but I wondered if you could run briefly through some of the headlines for the different schemes for us, and if possible within that, to confirm how many businesses have now actually received the financial support, as well as the amounts that have been paid out.

Performance in terms of delivery from concept and design of the scheme's operation and delivery has been very impressive across the piste, both within the local authorities and within Welsh Government. But if he's got the figures immediately to hand, because he's more adept at wielding these than I am, I'll ask Duncan to come in on that very specific question.

Thanks, Andrew. I'll break down and do this as—because I appreciate that you're tight for time, Chair, so I'll try and rattle through the figures.

So, starting with economic resilience funds: the micro fund, so for less than nine employees, you'll see 6,857 applications at a total of £66.6 million. The SME fund received just over 2,500 at £142 million. And we had 61 large applications around the £30 million mark. That is the application level detail, so as I go through this now, as we go from application into appraisal, those numbers change. That is raw data that basically, the applicant puts in.

So, on the grant offers made, on micro, that scheme is all but finished. So we actually made 5,202 offers at a value of £51 million, but 368 of those were subsequently withdrawn for various reasons, for example, having the non-domestic rates grant that came through after the event. So, that left us with a final figure of 4,808 offers at a value of £47.1 million for micro. And it's worth noting that we actually rejected 1,600 applications and they were mainly on core eligibility, so they just weren't eligible—if they didn't have employees or they weren't VAT registered, et cetera. And also, we actually overturned 89 of those rejections for good reason, where somebody said, 'Well, actually, that's a mistake'. So, again, that cold case review working in action.

On the SME side, we've now appraised just over 2,000 of the 2,500 applications. We've rejected 250 of those and we've got a couple of hundred left in the system, which are just complex cases, so lots of detail around various things that we're working through. So, we're very much in the final bits of phase 1. That converts into cash out for ERF of £47,471,000 to micros—4,830 of them. We've put out now 1,496 offers at £58.6 million for the SMEs, and to date, there are four—so, these are the funding in business accounts—four non-SMEs at just over £2 million, so a total of £108 million to 6,300 businesses. So, that's where we're at in ERF.

In terms of the non-domestic rates, as of this morning, we've awarded 55,600 grants at a cost of £678 million. As you know, that is more challenging, to identify the direct businesses. The way that works is that a small business can only receive a maximum of two grants, so that 55 number is not the gross business count, but we will verify that at a later date. The scheme is closing on 29 June, so once we have all the data in, we'll be able to come back to you with, as close as we can, verified data sets on a number of individual businesses. 

Some very brief stats to give you a feel around the ERF: so, for the micro strands, the average employee is 2.4, an average turnover of £252,000, so these are reasonable businesses of scale. In the sizes, 36 per cent of those employed one person; 50 per cent, two to five; and 14 per cent, five to nine. On the SME supported, average employees of 18 full-time employees and an average turnover of £3.6 million. So, basically, 90 per cent of those—so, what, 1,800 of those—in the 10 to 49 small category, and 10 per cent just less in the medium size. It's also worth noting that those are proportional across all the regions of Wales, so they're sector agnostic and we're reaching all parts of Wales. So, broadly proportional to population and business count on the north, mid, south and west regions. Thank you, Chair. Sorry, I tried to make that brief. Happy to put that in writing if it would help, because it was a lot of content.

That's really useful, thank you.

If you could put that in writing that would help, yes.

Talking about putting things in writing, the Minister recently wrote to Members of the Senedd and the Welsh Government with a statistical release that said that 2,600 ERF applications from SMEs totalled £142.8 million. But, in the annex to that letter, which provided a sectoral breakdown, it showed a total sum of just £114.8 million for SMEs. So, would you know whether there's been an error somewhere in the production of the information contained in that very important letter to Members of the Senedd?

My guess is that that's the difference between raw data and data once it's been through the first phases of our processes. I don't know if Duncan—.

Apologies, I haven't got the letter to hand, but that sounds absolutely right. So, the raw data from the applicant will always decrease to the SME. So, it's different in the micro, but for the SME, we have a split process. So, the application drops into the queue, it's then appraised, and before it's entered onto our appraisal system, we take out any noise in the system. So, a company might have applied for £200,000, when they're only eligible for £100,000 or whatever else. But, could I again come back to you on that point? But that sounds—that's what I'd imagine. The detailed reports come off the verified data, not the raw data, whereas the application is just what people put in the system.

Okay, thank you. I can see that Sioned maybe looked as though she wanted to contribute something there. 

Go on then, Sioned.

Thank you very much. I was just about to say that—it was a confirmation between the applications received and what we had paid out up until that point. But, we will come back to you just to confirm that, because that £114 million will have changed since that letter would have gone out, as well. 

Thank you—very useful indeed. Looking at the kind of support that Business Wales will need to launch phase 2 of the economic resilience fund, how have you mobilised the additional capacity that they will require for that to ensure timely administration? 

Well I was going to say, I'll bring colleagues in on that in terms of the design. Sioned has been senior responsible owner for this work, and she and Duncan can talk about what's happened just to get ERF 1 up and running, never mind, as you were just saying, moving onto ERF 2. But, around a 150 to 200 people have been redeployed from other parts of Welsh Government, and one or two places elsewhere, in order to make ERF 1 a success, and have moved at huge speed, turning their hands to this overnight. And we've put in place a mechanism that's allowed us to do that safely while having expertise in each of the pods that were working on ERF, and we will use the same sets of disciplines with colleague support for mobilising ERF round 2, learning from what we've done in the first round. But, Sioned first, perhaps, if the Chair's happy with that, and then, Duncan.

Yes, thank you, Andrew. So, as SRO, obviously, this element of trying to make sure that we've got the resources in place has been a real challenge, but I think what's been really interesting is with a—. What we've seen is with a specific purpose, which this has been, the response from colleagues, directors across the economy, skills and natural resources group and wider, has been phenomenal in terms of enabling staff and resources to move to support us with the delivery of ERF 1. We paused that as the end of last month in order to review what we'd undertaken to far, to have a look at the lessons identified and, indeed, to look at any further gaps that there may be in the support we're able to give. So, the Minister has agreed some tweaks to that. The triage for the next phase is opening this week, and we are looking again to directors across the piste to release staff and resources to come and support us.

To now, the response has been really, really positive. I recognise that, as other areas of ESNR are also feeling the pressure now with delivery in their own areas, it's going to be a tougher ask, but we need fewer people this time because it's the second phase, and we have ironed out so many of the potential issues, and some of the things that were unknown with phase 1. We're in a lot more comfortable space and, of course, we've got a team of resource now that is really quite expert in what needs to be delivered and the best way to do that. Shan Morgan, the Permanent Secretary, as you know, will have signed off for us a slightly increased risk appetite, which we've been able to benefit from with ERF 2, and we have a real blend of rigour and pragmatism in terms of the teams that are taking forward, as pods, these individual requests when they come through for ERF 2. I might hand over to Duncan now for some of the detail, if you want the detail, Chair. 

Can I just interrupt you, briefly? Both you, Sioned, and Andrew Slade referred to the pod model. Would one of you be able to just talk us through how that actually works and what it looks like?

I'll ask Duncan to talk you through the details. Essentially, something was developed with the Development Bank of Wales and we picked that best practice and put it into operation. But I'll ask Duncan, if you don't mind, to just fill you in with the details on that.

Yes, certainly, it's worth noting. I sit as the observer on the development bank board, so I picked up—. I worked with them on the brief, and we picked up this interesting concept of pods. The principle, which is quite a simple one, is that it allows you to bring in people who aren't directly experienced. So, if you think about a scheme like ERF, we need people with commercial awareness and grant experience. They're not everywhere, so what we do is use the pods.

So, you might have a pod lead with experience and, of a group of 10 in a pod, you'd perhaps have four or five or six experienced in that space, and then it enables you to add numbers to that team, so you could bring people in from—. For example, in our area, we brought people in from Cadw on the monuments, where they can work with those experienced individuals and kind of learn and develop on the job. So, we provided a core group with training, and then we let the experience talk, and they develop their experiences as they go through that process, but using the check and balance of the pods. They operate in isolation and then report up through a singular reporting vehicle. It just allows you to expand your resource, simply put, and make sure you've got those checks and balances around new people coming in.

That's great, thank you. Looking at the time it takes for these bodies to respond to requests from businesses, I know that, in the early weeks of the crisis, the development bank reported turning around funding decisions in an average of 10 days. Is there any equivalent data for the support that has been processed through Business Wales about its general call handling performance?

I don't know whether Duncan can add to that, but, from a strategic perspective, look how much money we've already paid out, and we're only a few weeks into the scheme. Duncan touched on the NDR money going out even as we were moving into the following month. It's been an extraordinary turnaround from scheme design to scheme payment. We've bolstered the teams as we've gone along, so we've added additional pods to Duncan's operation and added more people into the call centres. But, on performance generally—Duncan.

I think it's worth adding that our due diligence is in line with the level of investment. So, it depends, in answer. So, for the micro-scheme, which is the smallest entity and is an automatic process, we were up to around 700 appraisals a day going through there when we were at full steam. Then, you'll have noticed we've pretty much finished the SMEs—2,500—which has basically taken a month to get through, and that is purely because the level of detail is more complex and we're doing a more detailed appraisal of those schemes, representing that higher figure of finance.

But also, it's worth me pointing out that the numbers around this activity were just off the charts. So, just our web presence, the COVID pages, were getting 0.5 million weekly touchpoints, so people going on each page 0.5 million times; our normal week is about 70,000. And that will be replicated across all our contact points for a fairly crazy three weeks. So, for some of our systems, we did have to add people. My front of house helpline, for example, we added people from Cadw, again, to answer the phones, and even then it was a real challenge for us. If you've tried to cancel your Sky TV or anything else in the last few months, you'll know that the numbers are just at real scale at the moment. But I think the teams have really risen to that challenge. And, as Andrew mentioned, the finance has got to businesses within weeks. So, we're progressing pretty well and learning as we go, as well. There'll be a lot of lessons learnt for phase 2.

Back in April, the development bank actually said that around 90 per cent of the applications it was receiving were from businesses that it hadn't had any previous relationship with. To what extent do you think that's been true of enquires and applications through Business Wales as well?

I don't think it'll be quite the same numbers, but it won't be far off, will it, Duncan? One of the things that this has demonstrated, this whole process, and one of the potential benefits, if you can have benefits from such an extraordinary and difficult set of circumstances, is an expanded database of businesses with whom we will do more business in future, who won't necessarily have had the extent of contact with us that they might in future. But, Duncan, just on that business categorisation in relation to DBW—

These aren't verified, so, again, I'll confirm these, but approximately, for the SME schemes for more than 10 employees, it's in the mid 70s, of new clients—so, about 2,500. On the micro, it's close to 90; it's in the late 80s, of new businesses. I should clarify that as, obviously, a lot of those who have accessed our online and digital information are those who have actually now got an account with us on our system. So, it's where that extra level of detail—.

And to Andrew's point, and linking back to the economic contract discussion earlier, it's quite an exciting opportunity in that we've got these new 6,000, 7,000, 8,000 businesses that we're now directly involved with and will be going back to seek, to give them that non-financial support for the future.

That's great. And my final question, really, is, from this current situation, what opportunity you see developing to engage with these businesses, both in terms of Business Wales and the development bank and, perhaps particularly, around the economic contract as well.

I think there are lots of opportunities. We've just touched on one: how we work as an organisation. I'm very happy to talk to you, either in this session or at some later stage, about what we think this might mean for ESNR's group operations as we move forward and the implications for the wider world of work. Because, as I was saying earlier, we're now in a situation where coronavirus is going to be with us for some time to come. I can't remember what the figures are; there are about 120 vaccines in development at the moment, around the world, of which 10 are being trialled in people. But we're some way off that yet, so we've got to come up with a new way of operating. And I think that that will lead to further opportunities to work with businesses about shaping the future of the Welsh economy and about that level of engagement that we may not have had in the past. That's one that I think all colleagues, all of my team on the call, might have a view on. I don't know whether Sioned, Duncan or Emma want to add to anything there.

I'd like to add a brief point and then I'll—sorry, Emma—hand back. I wouldn't lose the point on the local authority contact as well as our services. I think that's been a real big benefit. So, the finance directors of local authorities are probably sick of this sight of Huw Bryer in my team, Deb Carter and me, but actually, that is, for want of a better term, money in the bank for the future. I can see real good opportunity there for the city deals and that joint working—so, again, that Team Wales approach for the future. So, in addition to the Welsh Government, I think there's a broader ecosystem piece, and for DBW the same. So, lots of benefits we can draw on going down the line.

Okay. Thank you very much.

Okay. Done, Vikki?

Yes, thanks.

Great. Thanks. Mohammad Asghar.

Thank you very much, Chair, and thank you very much to every witness here. Andrew, I just very keenly listened to your opening speech, and you said a couple of times we are in for the long haul on this. So, basically, I'm a bit concerned about that, when you depicted the picture of our economy—£300 billion borrowing, reduction of GDP, and all the rest of it. How long do you think this will go on? Because we have borrowed £300 billion—you already mentioned this big haul. How long do you think it's going to be, and what economic impact are we going to have in Wales, in respect of all these devolved areas— Northern Ireland, Scotland and England—and why are we not working together on the same track for economic recovery?

Well, on that last point, Mr Asghar, I think the first thing to say is that we are working very closely with colleagues around the rest of the United Kingdom, and we're also working very closely with colleagues across the whole of Welsh Government on what the future might look like. Duncan talked about local authority colleagues being fed up with the sight of him and some of our wider Welsh Government colleagues; I think colleagues on this call are fed up of hearing me describe the different phases of this thing. But we're still in the emergency, as I mentioned at the top of this session. We're also now increasingly moving into what we could describe as the temporary normal and resetting expectations about how we will work, how we will do things.

We are also, then—again, none of these phases is completely clean and none of them just stops and a new one begins; they blend into each other—in the process of restarting things. So, that's getting bits of the economy and society mobilised again, using whatever headroom—I'm sure you've heard this term before, and it's a tricky one, because it's hugely sensitive and problematic, about the reproduction rate—and how much room we have for manoeuvre, given the passage of the disease. Then we move from restart into recovery, and out the end of all that we will end up in a new normal. Our Council General in Welsh Government is leading a lot of work thinking about what the new normal could look like and how that brings into play all of the things that Welsh Government is involved with on the public service side, our health services and then also what we do in respect of the economy and other bits of society that we work with. The aim, very much, for all of that is for it to be a team effort within Wales, as we would want to do across the United Kingdom as a whole.

On how long all this is going to last, I don't know. We are working hard to prevent the disease emerging again in a significant way. The lockdown that we went into in March brought the reproduction number for the virus substantially down below one, but at the point you hit one and go beyond that, you get exponential growth in the passage of the disease. We have to be very mindful of that. A significant second wave with a big lockdown again, coming on top of what we've already done and at the huge cost that you mentioned there, would be very difficult to manage. So, that's very much in the minds of Ministers and policy-making colleagues across all administrations in the United Kingdom.

I think that we had hoped that we might be in a position where you would have a sort of v-shaped recovery—you're into a very difficult situation very fast, but you come out reasonably quickly, as well, as you begin to restart the economy. I don't think it's looking very v-shaped at the moment, and the fact that the Chancellor very recently extended and amended the terms of the job recovery scheme, or the retention scheme, I think, demonstrates that colleagues in the Treasury are also concerned about that. And then, as the Chair set out right at the very beginning of this session, you've got to play that into the implications of Brexit. So, it will be long, slow going.

Some sectors will be more adversely affected over the medium to longer term because of the tail associated with this disease. Against that, there are other bits of the economy where all the books are fine, and if we can get safe working in place, with a combination of protective equipment and guidance and rules around working safely, then different bits of the economy may get going again a bit more quickly. But, overall, we are in for a slow process. Sioned, I think, wants to come in.

Thank you. Sioned.

Thank you very much. I just wanted to pick up this point, as well as something that I was going to pick up at the beginning of the session and in Duncan's piece around the importance that we found in the delivery with our regional approach to this. So, we have chief regional officers based in the regions, and we are, therefore, able to respond to the crisis in a very cohesive way with our partners in the regions and provide a very bespoke model. So, it's not the Welsh Government dictating how regions support their businesses, but it's health, local authorities, social services, emergency services, social partnerships working together in a region collectively.

It may mean the city and growth deals having to be looked at again, because we're now in a really different environment, but I think everyone is looking to reassess on that place-based basis in order to make sure that the response is as focused as possible.

Okay, thank you. The Minister has indicated that there have been 64 applications from large businesses for ERF, totalling just under £28 million. How are you deciding whether large businesses merit support, because they are of critical economic and social importance? Can you tell us anything more about the businesses that you've already approved for support?

Well, I think you make a very important point there about the value of our large businesses, not just in their own right, but as the feeding-in point from different bits of supply chains of the SME sector into large business. So, to shortcut all of that, large businesses need small businesses, and small businesses need large businesses.

The danger for us today, I think, is, almost inevitably, once you're into the larger sized grants, you are talking about case-by-case decisions, so I fear we won't be able to say a lot about individual awards. We are looking very closely at the different circumstances of different businesses that have applied—[Inaudible.]—and what we might do to support them. I think I'm right—but Duncan, again, is the expert on this—that we're going to end up funding probably in the order of 50 businesses; around a total, across all of the awards, of about £20 million. But, Duncan, I don't know if there's anything you can add to that. 

No, that's correct, Andrew—50, around, businesses, £20 million total offer. It's probably just worth pointing out, on the large business scheme, it's a different scheme, so whereas the micro and the small and medium-sized enterprises are fully delegated to Sioned and her senior officials, the large scheme is still subject to MA—sorry, ministerial advice; you know, to go to Ministers to sign off. So, I guess this makes the point about the difficulty of decisions. They're also quite strict criteria: so, this is based on quite large companies showing a 60 per cent drop in their turnover since the COVID crisis, so it does have a selection element—with those companies you'd expect, those retail hospitality businesses, perhaps the aerospace businesses, those that are really hardest impacted. But, as Andrew said, it's difficult not to get into individual cases to be able to describe that in a bit more detail. 

And how far has the Welsh Government gone with its consideration of discretionary business rate relief for businesses with a rateable value of £0.5 million, and what would a 'compelling economic case' for the support look like?

Again, that's down to a case-by-case judgment. Ministers took the view, at the point that we were putting the NDR schemes into play, that there was an opportunity to fund more small and medium-sized enterprises and micro-enterprises through putting the £500,000 cut-off point in there. That indeed, to some extent, is borne out by the figures that Duncan has just explained to you. But it will be about the particular circumstances that the company in question faces—its strategic importance in a local economy or in a supply chain, the impact on jobs, and considerations of that sort, on a case-by-case basis. 

Okay. And the UK Government has put provision in place for this coronavirus business interruption loan scheme, whereby businesses who wish to borrow more than £50 million will be subject to certain restrictions—for example, dividend payments or payments of bonuses or pay rises for senior management. Has the Welsh Government considered any similar provision in its support for larger businesses in Wales?

I'll bring Duncan in in a moment. It's a slightly different set-up here. So, as you've just described, Mr Asghar, the CBILS—coronavirus business interruption loan—set-up is a slightly different instrument from the one we're talking about here, and actually the scale of intervention is much more limited here. Even with the larger businesses, we're not talking about any kind of award above—and Duncan will correct me—about £680,000. So, in orders of magnitude, it's different again. Anybody going forward for ERF is signing up to the principles of the economic contract, as colleagues were setting out earlier on, and we have a range of conditions that apply to grants generally, but it's a different order of issue from the one that the UK Government's dealing with in the sense of the scheme that you've just described. 

Okay. Thank you. The Welsh Government has—

Oscar, just before you go on, Jenny Rathbone, did you have a supplementary on this point? Then I'll bring you back, Oscar.

Thank you. Okay. So, I'm particularly interested in this because these large companies are the ones that are potentially fleet of foot and have the capacity to disappear elsewhere and therefore to bully us, if you like, if we don't comply. So, I just wondered if you could tie down a little bit how you're ensuring that this is a proper partnership in line with the social partnership that is already part of our economic action plan. Are they actually having to sign up to not paying themselves grotesque, large sums of money for directors, for example? And my second point was really about equity stakes, because the UK Government has written into its schemes that loans from the coronavirus future fund will be automatically converted into equity at the end of the loan if they're not repaid. I just wondered what sort of progress on that sort of thing you might have made. 

Well, both—[Inaudible.] On the first one, as I mentioned, the principles of the economic contract you must sign up to if you are going forward for one of the ERF grants. I'll invite colleagues to come in as appropriate on the extent to which that puts a particular lock on salaries, remuneration, bonuses and all the rest of it, but the core principles of the economic contract they are definitely signing up to. 

I suppose it's fair to say some companies are more mobile than others. So, some large companies in the context of the threshold for NDR won't really be very mobile in the sense that they're very, very rooted in their local communities, major employers in the local supply chains, and so on. So, I think—. It's back to this case-by-case thing; not all large companies are the same in that context. 

The point about equity stakes is a really important one. As we look to the future, restart and recovery, and recovery in particular, we are already starting to turn our attentions—where we can, given that we're still managing the emergency—to what does the future need to look like, what conditions are we going to attach to how we invest in things in the future. And that sort of point that you just made about the potential for taking equity stakes is very much in the mix of thinking.

I can't really say any more than that at this stage, but, for the particular scheme we're running here and the size of it, we are not talking about that type of provision in these sorts of cases. There's a cap on the amount of money, even for a large business, through the ERF that we have put in place already, and it's a different set of provisions to apply in those cases. But I don't know whether colleagues wanted to add anything to Ms Rathbone's points.  

Okay. Duncan. Duncan, you're muted. 

Oh, I think it's—. I'm not in control; they're doing it to me. [Laughter.] Yes, so, briefly, on ERF, just to explain the £690,000, as Andrew mentioned, it's related to the €800,000 that we're allowed to do for operating costs under the state aid. So, if it's a funny figure, that's why. And I guess, when they report under ERF, it's an emergency fund, so, in terms of salaries this business has already seen a 60 per cent drop in their turnover, so they are going to be in a managed position, in a sense. 

But moving to our normal provision, it's worth noting that we already do plenty of equity investments through the Development Bank of Wales; in fact, DBW is the biggest equity investor in numbers in Wales. So, we're already in that space, and we're looking, under Sioned as senior responsible officer, to explore that further, but it's not part of ERF. But we are using redundancies in the job retention scheme, and also we safeguard jobs. So, part of the condition is on numbers of jobs in that grant offer, but it doesn't go as far as paying dividends for shareholders. But, as I say, the context is probably quite challenging for that anyway. 

Okay. Thank you. 

Okay, Oscar, back to you.

Yes. Thank you very much, Chair. The Welsh Government has expressed concern about the tourism sector, and is calling for UK Government to do more in this area. Has the Welsh Government looked afresh at its own offer to this sector, please? 

Well, we've put in place some very targeted support, which I think you're aware of, in total across those different sectors to address some very specific needs and concerns that they've got right now, and the same would be true for a couple of other areas: fisheries is an example; there's another in relation to the dairy sector, and particular problems that they face. But, by and large, we have worked on the basis—as I think one of my colleagues has already mentioned—of ERF and the support being provided through that being sector and place agnostic. This isn't to say that we're not interested in the implications for a sector or a supply chain, but, rather, given that this is a whole-economy impact, we should take a whole-economy impact in the interventions that we've put in place.  

Tourism businesses most definitely have applied for ERF; there have been a number that have gone through that mechanism and are in the process of going through. Duncan may have the figures to hand in terms of proportions there. And, more generally, we will need to keep an eye on all of the sectors, as your question implies, that are most seriously affected by this disease emergency and are likely to do so over an enduring period. That will be one of the things that we need to take into account when come to look at wider recovery, where we put our effort in the future. Tourism is very definitely affected, but so too, as I mentioned earlier, are a number of other sectors, including elements of manufacturing, aviation, civilian aerospace and so on, and these are very much uppermost in our minds as we think about the economic response that we need to provide from Government.    

I don't know, Duncan, have you got the figures on—it's a bit unfair dropping that on you at short notice—on tourism? 

I was just looking for the actual finance figure, Andrew. I know we had over 500 applications from the tourism sector out of the 7,500. I don't have the figure. From memory, it was around £10 million to £12 million. I'll have to come back to that and I'll cover it in the letter, Andrew. 

I think Jenny wants to say something, Chair. 

Before we move off tourism, I just wanted to say, at the moment, clearly, the tourism sector is in hibernation for obvious reasons. But, going forward, as we manage living with coronavirus, there will be lots of tourist opportunities to expand and repurpose other organisations, because not many people are going to want to clamber on a plane to go on holiday while we still haven't got a vaccine. So, I just wondered if there's anything you can tell us about how you might have been assisting businesses to repurpose and expand, looking to the opportunities that may come in the not-too-distant future. 

I think it's fair to say that, at the moment, our main concern is about rescue. So, it's keeping people afloat and making sure that we've got an economy to come back to in however many months' time it takes for us to get to a point where things are moving more normally, although, as we've already, I think, all said in our different ways in this session, what the new normal looks like could be quite different, certainly for an extended period.

But it is undoubtedly the case that we are thinking about potential opportunities for the future, and we're trying to do that as well in the context of Brexit. Most of what I'm having to deal with, looking across my group—colleagues on this call are dealing with—are the challenges associated with Brexit. But there will be, in certain areas of our economy and some sectors and sub-sectors, opportunities, including for, as you were just mentioning, more domestic tourism. So, if we can get to a point where we've got an operating model, which is safe and works effectively, there will be increasing opportunities, I think, down the track. Because, as you point out, fewer people, for a while, are going to be going further afield, I think. There's plenty of evidence that that's how people are thinking and that's how businesses in the aviation sector are reflecting on things as well. 

Now, my final question to the witnesses is: the Welsh Government has identified around £18 million in targeted support to safeguard businesses and jobs within the culture, creative and sports sector. Working with the relevant sponsored bodies and the Federation of Museums & Art Galleries of Wales, how have you weighed this up against the value for money of support for other sectors? Thank you. 

That brings us back to the point I was making a minute or two ago. We're trying, as far as possible, not to go down a sector-related route at the moment, because the challenges faced, in terms of the economic impact, are pan economy. But we are aware that there are certain sectors that are so stuck in terms of things that they're having to deal with in the context of coronavirus, that support to help them with very specific sets of circumstances is a sensible use of public money alongside our main economic interventions. 

So, in relative terms, the £18 million total pot, which breaks down into smaller sums for the different sub-sectors, is pretty small when you think about the wider money going through NDR or, indeed, through ERF. And, again, some very small schemes apply in relation to fisheries and dairy, and they are triggered not so much by classic economic considerations, but more to do with particular challenges faced by the sector. But it's a good challenge for us here.

What proportion of this, as we move forward, is about the general economy? What proportion, in future, is about employees—the worker, rather than the company? Is it about people, rather than businesses? And what proportion is about sectors and opportunities for sectors versus risks for sectors? Because we're going to have to come up with a set of answers, working with partners, that helps the economy through this extended period of turbulence. 

Okay, thank you very much. 

Okay, we're heading into the last 15 minutes or so now, so if Members can be succinct, as I said before, and succinct answers too, that would help. And the next question—. Well, back to you, Jenny Rathbone.  

Thank you very much. The Government has stated that the economic resilience fund is being closely monitored to assess the impact it's having on sectors, regions and types of businesses in Wales. What does that monitoring look like in practice? And what are the key measures of success?

I'll bring, if I may, Sioned and Duncan in on that, because there's a lot of work gone into how we might monitor how the ERF is performing and what we can learn from it, including internal lessons, identified processes. I suppose my headline answer to that is it's going to take a little while for us to know whether any of this stuff has worked. We're right in the middle of the crisis now; any evaluation undertaken right now will of its nature be a bit, sort of, like a damp finger in the wind because so much is changing and changing around us fast. But we are putting in place mechanisms to help us assess that and we will continue to monitor and review how we've done over the lifetime of the scheme and then some time beyond that. But I don't know whether Duncan, Emma or Sioned would like to talk to the point about what specific measures have been put in place.

Would you like me to start? I think Sioned—

This is where it gets tricky in choreography terms.

I mean, just a line, really, from me is that we've been really clear, as I mentioned, that we've got almost a single purpose with this, and the Minister's expressed it a number of times, that a good business in 2019 ought to be a good business in 2021, and that really is our guiding principle through this, and in following that, it's given us a really clear purpose. And I think we recognise that there are some real challenges around this. We are doing everything we can to make sure that we can put some really robust governance around this to make sure that we can monitor this and then evaluate it and build on that in the future. But that's our guiding principle throughout all of this. But if I hand over to Duncan, he can give you some more of the detail around it.

I think in answering this question, it's worth also remembering that the ERF and NDR are the emergency response; we also have pretty significant 'business as usual', as you might call it, activity. So, for example, the creative fund that we've just mentioned is actually a repurposing of their departmental budgets and we've done much the same with Business Wales and innovation, so things like trying to allow businesses to innovate into the future. So, impact: Sioned's absolutely right, we're all about a good business being there in a year's time and more importantly, and as importantly, their employees as well. So, that's what we're looking to monitor and assess, that we want to maintain as much of the economy as we possibly can, while accepting, just like in any normal economy, we will have some failures, but we want to try and minimise those as far as possible.

I alluded to my report earlier as well. Interestingly, both on a sectoral and on a regional basis, we are reaching all parts. So, it is broadly proportionate, particularly at a regional level, and we can see that impact coming through. I think what will be interesting—and we're about to commission a full impact study—will be to see how that works through over the next 15 months and just to check whether there are any regional difference in the survival of those businesses we go through, and, indeed, sectorally.

Okay. So, I know the Government has committed to refine its reporting capability for this current year. Do you think that the COVID crisis has enhanced that capability or put it a little bit on the back burner as a result of dealing with this crisis?

Duncan, correct me if—. I think that was in relation to the join-up between BAS, our customer relationship management system, and our payment system. Is that right? 

Yes, that's correct. Again, I made reference earlier to an earlier audit report and one of our challenges has been linking our relationship system with our payment system, and we've actually done that through a crisis, basically—it's forced that. So, we're now able to generate a joint report that shows that end-to-end process. So, I think my broad observation would be it's improved. What's interesting is we've had a singular objective to focus on, so that's really brought people together to work, and we work across Government, so necessity has driven the change, actually, and we've been able to really improve our processes and systems as a result, which I have every intention of carrying on into when we eventually go back to whatever the new normal looks like.

Well, congratulations—that's excellent news. How easy is it for you to know what's going on in relation to UK Government-generated loans and how do you know that companies aren't simply double-bagging?

Well, I mentioned the slight issue over HMRC data earlier. In terms of what our different schemes are doing, I don't think the potential for overlap is all that significant. The most obvious potential area of overlap will be over loan provision through the Development Bank of Wales, but, actually, as one of the team was saying a few days ago as we were preparing for this session, 'What's the incentive for a company to take on more debt than it needs to?', basically. So, I think in terms of double counting with what's happening with the UK, I'm less concerned about that.

Getting precise data on who's getting what from the UK Government and who's getting what from us is quite tricky. We think that somewhere in the order of 80 per cent of businesses in Wales are making use of the job retention scheme, but I think it's—. And also, we must be careful here not to read too much into this figure either, but we think more or less 80 per cent of businesses have carried on trading through this crisis, so I think you could tentatively assume that that was with Government support to some extent. But differentiating what's been an impact from us versus the UK Government scheme versus trading conditions, what's happened to your workforce, what's happened to your sector, is very difficult to do. Through some of our ex-post work, we may be able to tease some of that out, but it's quite tricky. Duncan, would you say that was fair: it's quite tricky at the moment to—?

It's tricky to do. Part of our methodology around the impact assessments, so three stages of that, which we're about—. It's going to the—[Inaudible.]—board, the Office for National Statistics, Cardiff University—joint work next week. We'll be doing a quick three-month day data crunch, then a counterfactual by the end of year, and then a full evaluation of its impact, and as part of that, we do want to identify, as closely as we can, the kind of net effect of our intervention. So, this is building on on some experience to do with Business Wales and other services, and I think we can, to a degree, get an net effect—what's the additionality of our offer? But as Andrew states, we've not been here before, so I think it will be challenging to separate out each individual aspect, but we'll certainly make an attempt at it. That's our intention.

Okay. Sioned, you wanted to add something.

Yes, please. Thank you, Ms Rathbone. I just wanted, really, to say that the Welsh Government has really worked quickly and really focused to try and realign its funding to support businesses, but compared to the UK Government offer, clearly, it's a drop in the ocean compared to what UK Government is doing. So, we've been really, really clear throughout that the money that we are deploying to support business doesn't duplicate what's already out there, so we've gone out of our way to identify forms of support for business, which plug the gaps and really make a difference in the Welsh offer, as opposed to duplicating anything, because, actually, it wouldn't have any impact if we were just duplicating, because of the difference in the quantum. But as individual interventions, we've been able to use that money in, I think, the smartest way possible.

Okay. Well, thank you for that. Just following up on the committee's call for greater transparency around financial support, the Minister told the Economy, Infrastructure and Skills Committee that any business that applies for support under the economic resilience fund has to sign up to their details being published. When and where are you expecting to publish information about businesses that have received ERF support, and will you be providing detail of the value of the support in each case?

I'll see if colleagues want to add anything on the detail, but I think in broad terms, yes, absolutely to publication of data under ERF, because state-aid rules require us to do so, even if we didn't want to, and we do.

On the NDR work, I think that's the intention, although I don't know that we've necessarily got to that point yet, and DBW's own loan arrangements would tend to be commercial matters with business concerns, so that's a slightly different category. Timing-wise, we will get to it, but I suppose, Duncan, it's fair to say it's probably not top mission right now.

So, the intent is—I was tempted to use the summer statement, but bearing in mind ERF phase 1 is all but complete, we will look to verify the data through this month, and I would hope we'll be publishing that sometime in July, basically. That's the intent on phase 1. And as Andy says, we just need to agree with all our partners on non-domestic rates, but we do intend to publish. On ERF, it will be business name and value, which scheme that we go out with.

Okay. And what about the support provided by the development bank, and, indeed, grants local authorities may be administering? Is that information going to be in clear sight?

It's the same set of considerations on NDR, as Duncan's just set out. I think the situation is slightly different for the development bank because of the nature of the intervention that they're providing. I'm imagining that companies wouldn't be too keen to know who was loaning them money, certainly at the point where they were in the business of taking that loan out. I don't know, again, Duncan, whether—is that right?

Yes, that's—. It's more complex—it's borrowing, because they're paying it back. So, we don't plan to publish—. I think's what's different for ERF specifically, which is the first time—the companies have signed up to that before they've even come into the system. So, a pre-requirement of access was, 'We will be publishing this data.' So, I think that is a slight departure from what we've done historically, and I guess that that will be a consideration as we go forward on other new schemes.

Okay, and just generally, this level of transparency—do you think that this is going to be one of the most powerful tools for ensuring that there are proper audit trails for all the resources that get given to businesses, which will enable both the UK Government and the Welsh Government to ensure that somebody isn't pulling the wool over people's eyes? 

This is good practice, and we try and do as much of it as we can. There are constraints sometimes, either in terms of commercial confidentiality or other matters—legal issues that we need to take into account—but, by and large, being clear who's getting from Government, broadly how much and for what reason, I think is a sensible thing for us to be publishing. It may not always be contemporaneous, we may want to wait a little time, but, generally speaking, the aim is to be as transparent as we can be, and I see no reason why we shouldn't continue with that aim. As Duncan's just said, people signed up to that readily as part of the support that they've had, or sought from Government in the context of ERF. I think it's implicit, actually, in the economic contract, if it's not explicit, that we need to be more open going forward. 

Thank you.

Rhianon Passmore.

Thank you. With regard to the questions that I have around the ERF phase 2 for businesses, I'm also interested in scoping the 'what comes next' strategy, and you inferred earlier around potentially conjoined thinking around the parallel risks—duality of risks in terms of both the trajectory of the long-term recovery from COVID-19 and also the imminent EU exit. So, I just want some sort of sight as to how you're dealing with that. Is it in isolation or is there a duality of approach with that—before I go on to my listed questions? Very briefly, if I may, because I wanted to come in earlier, Chair. 

Briefly, then, on that, because it is a very good question: what governance do you put in place around all this to make it all work and come together? I think that's a fair challenge, and I wouldn't say it's perfect, but it's a continuum, isn't it, from where we are now in the emergency, through to where we want to end up eventually? There's no point in us trying to do all these things in silos; the attempt is to try and get that all joined up. The Counsel General's group is helping us think about the end state where we might want to get to, and there's work putting together project recovery, which is the sort of investment decisions you need to underpin that new normal, and then there's project restart, which is getting the economy moving again to a point where it can then move into a slightly fuller recovery phase. And all of those areas of work, they are conceptually joined up, and we need to make them joined up, both within Welsh Government but also with partners. You know, I've given this commitment to all of the people that we deal with outside of Government, who are many and various and who are keen to be involved, that we need to do this in a collaborative and integrated way, as the Well-being of Future Generations (Wales) Act 2015 requires us do to.

Emma Watkins, did you want to come in on that, briefly?

Yes, just on a practical point, following on from what Andrew said. Those of us who've been involved in the rescue piece around the economic resilience fund and the COVID crisis are the same people who we will be involved in EU exit. And I speak personally here, my team are looking at the implications of EU exit just as much as we are the impacts of COVID-19. And I guess that one of the benefits of being a small Government is, very often, we have the same people looking in both ways, and it's certainly something the Minister is very committed to ensuring, and these things are absolutely not being looked at in isolation.

Thank you for that reassurance, and, obviously, we'll come at a later date to questions—not today—around business intelligence and capacity around these substantive unprecedented conditions that we're working in. With regard to the economic resilience fund phase 2, and really to address the gaps that you've highlighted earlier with regard to non-duplication, you've talked about equity stakes—you referred earlier—with regard to adjusting turnover limits. What sort of changes are you considering for the next phase of the economic resilience fund?

I think the main issue is around the window that we're using to gauge when turnover impacts were being felt. So, in the very early stage of ERF, it was about what had already happened in the very early phases of coronavirus. As I was saying earlier on, and indeed a number of committee members have brought out into the discussion, this is dynamic and things are changing all the time and impacts on sectors will be felt differently. I don't want to pre-empt too much what the Minister may say later this week, and indeed the opening up of our triage arrangements, so that's our online eligibility checker, but Duncan or Emma do you want to talk to the tweaks to the scheme such as is publicly available?

And can you address, if I can interrupt, because there's very little time, if businesses will have to reapply in full if they were rejected in phase 1, within this question?

I'll come in briefly, Emma, and I'll hand back to you on the policy. So, we are looking at a below the VAT threshold. So, as a recollection, you're required to be VAT registered, which by default is £80,000-something turnover. Going back to the original audit check, to be able to verify, we're looking at a lower turnover figure for limited companies, and that means we still have two verification points: Companies House and then one of PAYE, VAT and that lower turnover data. So, that's where ERF will go and it just allows us to manage that automation. So, for the first time, it brings in that sub-VAT, but only for limited. If you're a sole trader, for example, you'd still have to go through the higher level. And that is purely based on the fact we need to be able to verify who they say they are. So, it manages the risk principle while working at pace.

Can you outline what the HMRC issue is before I go on to my next question?

So, when we reference, basically, we just don't have access to the data.

Why not?

HMRC don't allow any department, including BEIS, to have their data set. 

[Inaudible.]—around that? 

I'm sorry, I missed that. 

What is the logic, from Welsh Government's perception, as to that? Because, obviously, this is a critical element in terms of being able to do our jobs.

My view would be it's obviously a very sensitive data set, so it's the accountability risk of spreading that further. So, each and every one of us has our record on there. But if you think about it for scheme development, it would be a real benefit for departments and devolved, because I could prove who an individual was, who they said they were, whereas I'm reliant at the moment on those commonly available data sets like NDR, like Companies House, like VAT registration. You'd need to ask, I guess, the director general of HMRC, but they obviously don't release it, and they never have done as far as I know. I'm not sure of your side on that, Andrew.

We're unlikely to see much change on that front for the reasons that Duncan has set out. One of the elements we had to factor into the design of the scheme was not having access to that data.

Okay. And in regard to answering my question on if businesses will have reapply in the next phase if they were rejected in phase 1, is there a simple 'yes' or 'no', or do you not know yet?

Yes.

Okay. In regard to the developing of options for businesses that have not been supported as yet, and we've not really touched upon self-employed persons, how quickly do you expect to be able to confirm those new arrangements? You mentioned announcements coming this week.

I think elements of the next phase will be announced pretty quickly, and then some other elements are under consideration—I think that's probably the simplest and quickest way to address that one.

Thank you. And in regard to the FSB, there's been some discussion around the Scottish Government in terms of their self-employed hardship fund. Have you been looking at these elements? You've mentioned your good working with other devolved nations. What is there around that?

We are looking at it. I think we just have to set that suite of issues against, among other things, the control environment—some of the stuff that you and colleagues were asking about earlier on in terms of assurance around schemes of that sort. It's much trickier in that environment than it is for some of the other things that we have worked on. Duncan, will you come in?

Yes. So, this is quite a specific group. So, the individuals and the start-ups, for example, which is an issue, are eligible for ERF, as are self-employed. It's a sub-group that are below those turnover thresholds that we're looking at with partners at the moment.

And, yes, I have got access to the Scottish model and their bursary model, which we are considering with local authorities and others in how we might access that gap at the sub-ERF level. So, it's those sub-VAT businesses, and particularly those that have just started, so are not eligible for the UK Government self-employed offer.

Okay. Thank you for that. Finally, in regard to the Welsh Government holding back any economic resilience funds to support recovery, have you any early indication of what those likely areas are in terms of future links to expenditure?

I think it's back to the points I was making a few minutes ago, that we want to try and work out where we want to get to in terms of the shape of the economy into the future. We need to analyse the key risks for particular places and sectors; we need to analyse what the key opportunities are; and then we need to factor in Brexit. I mean, there are lots of other things we need to think about as well, but those will be amongst the key considerations.

And then, is this about businesses or is it about people? Where is the real burden going to fall in the restoration of the economy? Emma has been doing a lot of thinking about all this, and she may—indeed, she does want to come in.

Yes. Just very briefly as well, and I wanted to come in on the question from Mr Asghar earlier on, regarding what we're doing with the UK Government and the other devolved nations around this as well. I think it's really important to highlight that we are very much sharing ideas, experience, and looking at areas where we can work together. If I think back to the conversations I was involved in way back in early March with the Minister, with the BEIS Ministers and the Scottish Ministers, they were mentioning recovery right at that point whilst we were also in that very, very precarious early phase as well. So, we are working quite actively across the four nations at economic analyst level, at senior official level, to look at what we can all do together, because we recognise there are some areas where a cross-UK approach will be a lot more effective than a Wales-only approach. But we're clear that our approach has to be tailored to the needs of Wales and set within the context of what it is this First Minister wants to achieve.

I think Sioned wants to come in, and then Duncan.

We also have to factor in the potential of a second peak, a second wave, or, indeed, even a third wave. So, that's another thing that we have to—. Whatever we model, we need to be able to find a way to step back from that, if needs be. Thank you.

Okay. Duncan.

Just before Duncan comes in, I'm mindful of the time. We've got a bit of flexibility in our time. Are you able to stay for an extra 10 minutes or so, or do you have something to—?

Yes. It's fine by me.

I think so, Chair. Yes.

Yes. Okay. Not much longer, but that'll just give us a bit—we'll get a few more questions in. Okay, sorry I interrupted there. Who did I interrupt? Duncan.

I've nothing to add, I was just moving. I raised my hand by accident.

It does happen. They're easily misunderstood, these signals on Zoom. Okay. Are you done, Rhianon?

In regard to the question that I posed around capacity, because, you know, we've talked about the potentiality—possible or probable, we don't know yet—in terms of a second or third peak, and also the duality of risks that we're cited of in terms of this really harsh, unprecedented landscape. So, in regard to the capacity within Welsh Government to deal with these really, really wicked issues, is there any comment on that, and do you feel that we have sufficient expertise, bearing in mind what Emma's already stated?

It's a wicked set of issues and it's a wicked question as well. Because the truth is, I don't think any administration can cope with a massive pandemic, everything that that has for the economy and do everything that you want to do in Government, and do everything that you need to do, you want to do, in terms of delivering on a suite of Government commitments, and deal with Brexit, and on and on and on. So, it requires prioritisation.

We have worked very hard, through this crisis to date, to move resources around as swiftly as possible to the areas that need it most. In short order, I'm going to have to start moving more resource into Brexit-related stuff at the end of the transition period, and that will have consequences elsewhere. That's the truth of it.

Good. Okay, thanks. Vikki Howells, back to you.

Thank you, Chair. I've got some questions on the impact of COVID on the business-as-usual support, starting off with the fact that the development bank and, to some extent, the Welsh Government, have relied upon the repayment of loans and repayable grants to recycle money to undergo ongoing business support projects. So, has the Welsh Government assessed the impact that the COVID pandemic may have on expected repayment profiles from earlier financial support and what, crucially, this may mean for its ability to fund business-as-usual support in the future?

I think the fair answer to that question is, 'Not in any detail.' We are alert to the loan book risk or the risk to our future income in general terms. The trouble is the situation is so live and dynamic at the moment that none of us quite knows what normal is in terms of how the economy should be functioning in these very, very strange times. So, it wouldn't be fair—I'll bring Duncan in, because he's closer to it than I am—to say that we've done lots of work around this area, or indeed had the time to do so. I don't think, though, we're at any particular or undue risk from the loan provisions made. It's a fairly spread range of risks, as you would hope and expect from Government anyway. Duncan.

Just to add to your point, in the development bank context, it's worth noting their total book is one point something billion—£1.2 billion I think it is now—and the coronavirus Wales loan system will have offered around £90 million to 1,600 businesses. So, the risk is, even at the macro level, spread across that whole, so it's 10 per cent of the total book, and then within that 10 per cent—. You know, businesses generally want to repay their debts. So, we expect there to be a higher default rate than the norm. A normal fund is 4 per cent to 8 per cent typical default rate for the development bank in normal times. The bit we don't know is what the coronavirus economic impact means, but we are planning for a higher default risk. But within the overall context and the fact that that money can be reinvested over a 20-year period does mean that, I think, it's a manageable position. But as Andrew said, it's something we'll need to monitor and assess as this crisis—and, indeed, into Brexit—rolls on.

Okay, thanks. In terms of the impact that the diversion of resources to the response to the COVID crisis has had on your ability to maintain your usual practices in terms of monitoring delivery against previously agreed business support packages and providing other support and advice, have you had the opportunity to assess the impact of that, or is it the case that, actually, that kind of normal support has just withered on the vine anyway?

We've worked hard to maintain our normal support functions, because that's an important contribution to keeping the economy going. So, we haven't walked away from all of that, we've seen that very much as part of our coronavirus response. Duncan can talk about all the work that he and his teams are doing and then Sioned's wider regional teams out in the field, talking to businesses and gathering intelligence, and working with partners out on the ground.

The basic answer, I think, generally, is the one that I just gave to Ms Passmore around prioritisation. We can't do everything, we can't do everything all at once, so you use a risk-based set of assessments to work out what you need to do and what you need to keep a close eye on, and things where you will come back to it a bit later on, because you have less concern about that area, or the materiality of it is lower. Have I fairly reflected the position there? I think both Duncan and Sioned might want to come in on that.

So, briefly, and then I'll hand to Sioned, things like our business as usual, take Business Wales as an example. Start-ups: six weeks ago, they weren't any happening, and then now, all of a sudden, we're having to relaunch those services as forced start-ups, frankly, come, where people see them as an action and an option. But we've been able to turn down services that we can't do, so face-to-face workshops and one-to-one, and re-prioritise what's really needed.

But I'd also point out that we're seeing quite a level of what you might call business-as-usual activity: the development bank's still taking development debt on; innovation is doing a lot of work in helping people to expand and explore their work. So, we're just about prioritisation, to Andrew's point; we've just stopped doing some things and we're doing some other things better. It's challenging, but it's, at the moment, manageable.

The big impact across the wider remit, the business and regions, is, of course, we've cancelled all the events that we normally participate in, in terms of supporting businesses, drawing in investment and introducing Welsh Government to some businesses that would not otherwise know us. That international event element has had to move, but that's really as a consequence of those events not going ahead more.

But it does mean that, for us, this is very much—. I normally say, 'It's a marathon not a sprint,' and it seems to be a sprint and then a marathon afterwards, in this particular case. So, there's been a long lead-in time for businesses. Different businesses will succeed or fail at different rates, and that's the real challenge for us—trying to support them all through these many, many different stages that they'll have.

Okay, thank you. Could I just ask the Chair—is there time for me to ask the question on Aston Martin, or would you prefer for that to be submitted as written evidence from the team?

You can ask it if you're very, very quick.

I'll be very quick. So, we've previously heard about the Welsh Government's support for Aston Martin, but we're aware of some concerns around the company's financial position now. What are you doing to assess its exposure?

We work with all companies, especially the bigger ones, on a case-by-case basis, as I was outlining earlier. Probably, I think, you knew I would say this—I can't say very much more at the moment, because it is company specific. But I don't think we're sat here wishing to convey a message of particular risk or concern, but we are working with all of these large companies. 

Thank you, Chair. 

I think we're pretty much out of time, but I'm mindful that Gareth Bennett hasn't had time to ask his questions yet. Gareth, are you happy for those to be submitted in a written form? If you're there. Obviously he is. I take the silence as acceptance. So, if you're okay with that, we'll table the last few questions in writing. 

Okay, can I thank our witnesses for being with us for this public session? That's been really helpful. I know that you're going to be with us for some of the private session as well, so with that, I propose that we take a short break.

I move Standing Order 17.42, to meet in private for items 5, 6 and 7. Okay.