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<p>The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.</p>
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<p>The meeting began at 09:46.</p>
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1. Introductions, apologies, substitutions and declarations of interest
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Russell George
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George, Russell
<p>A warm welcome to the Economy, Infrastructure and Skills Committee. </p>
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Russell George
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George, Russell
<p>I'd like to welcome Members to committee this morning. I move to item 1. We have apologies from David Rowlands this morning. Mark Reckless is no longer a member of the committee, so I'd like to thank him for his work and contribution over the recent months he was a member of committee. </p>
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2. Papers to note
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Russell George
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George, Russell
<p>We have two papers to note. One is from the Minister for Economy and Transport with regard to Transport for Wales, in response to our inquiry. And the other one is a response to our piece of work from Transport for Wales. I think in both of those all recommendations were accepted. So, long may that continue. Are Members happy to note those two papers?</p>
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3. Ministerial Scrutiny—Regional Skills Partnerships
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Russell George
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George, Russell
<p>In that case, I move to item 3. This is our last session with regard to our piece of work on regional skills partnerships, and I'd like to welcome this morning Kirsty Williams and Ken Skates, the relevant Ministers for each of their portfolios, and their officials as well. Perhaps I could ask their officials if they could just introduce themselves for the public record. </p>
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Huw Morris
Morris, Huw
<p>Huw Morris. I'm the director for skills, higher education and lifelong learning. </p>
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Andrew Clark
Clark, Andrew
<p>Andrew Clark, deputy director, further education and apprenticeships.</p>
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Dr Rachel Garside-Jones
Garside-Jones, Dr Rachel
<p>Rachel Garside-Jones, deputy director, employability and skills. </p>
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Russell George
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George, Russell
<p>Okay. Thank you for being with us this morning. Perhaps if I could ask the Minister, Ken Skates, first of all. Minister, your paper talks about having responsibility to break the low-skills, low-pay cycle, and the words suggest that you believe that part of the Welsh economy is in a low-skills equilibrium. Is that your assessment?</p>
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Ken Skates
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Minister for Economy and Transport
Skates, Ken
<p>Broadly speaking, yes, and if we go back to the start of devolution and compare that point to where we are today, I think it's fair to say that we've made great progress, but we have, over the past 20 years, wrestled with the problem of underemployment and low skills. We've also struggled to ensure that there are clear pathways to higher skilled employment opportunities. Back in 1999, the proportion of the population that didn't have any qualifications was around about a third; today, I believe it's somewhere in the region of 10.5 per cent. So, great improvements have been made in terms of upskilling the workforce of Wales. </p>
<p>We developed the skills strategy back when I was skills Minister, and subsequently the employability plan, and more recently the economic action plan, to focus on driving inclusive growth and to improve the productivity of the country—two huge challenges that we've faced since devolution. And, in terms of the economic action plan, there is now a very clear focus through the economic contract and through the new regional structures on ensuring that we're able to identify the key strengths of each region, to invest in the skills that will power those key strengths, and to ensure that through, again, other parts of the economic action plan, like calls to action and the economic contract, we are driving inclusive growth and investment in the environment, if you like, the infrastructure that will support sustainable growth.</p>
<p>The development of the regional skills partnerships is part of that new regional mix, and although I recognise that there are challenges and there may have been criticism of the work of the RSPs to date, it's important that we reflect on them and make sure that we correct any failures, that we address any weaknesses, rather than abandon the regional approach to skills—which is largely based on the need to collaborate to respond to what the economy requires in the future—and revert back then to the law of the jungle; that would be the wrong thing to do. Indeed, Chair, I think the strength of the RSP approach was recognised by the UK Conservative Party, because the manifesto pledge in the 2017 manifesto concerning the approach to skills was actually based on the RSP model. I think that's right to say, isn't it, Huw?</p>
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Huw Morris
Morris, Huw
<p>That's right, yes.</p>
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Ken Skates
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Skates, Ken
<p>And therefore I think in order to address the equilibrium that you've identified, we need to ensure that, yes, the RSP approach is fit for purpose, that any weaknesses are addressed, but I would urge committee not to consider RSPs as something that we should move away from.</p>
<p>Chair, I think it would be very helpful if I offered Members a technical briefing on the SQW review at the earliest opportunity and perhaps ahead of publication in June. I'm more than happy to arrange that for next week if Members would wish.</p>
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Russell George
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George, Russell
<p>With your officials?</p>
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Ken Skates
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Skates, Ken
<p>Yes.</p>
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George, Russell
<p>Okay. We'll consider that after the meeting and get back to you. Thank you, I appreciate that. Part of the issue here is stimulating employer demand, especially when it comes to perhaps smaller businesses, small and medium-sized enterprises. What can you do, and what is the Government doing to stimulate demand there for higher skilled and higher paid jobs?</p>
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Ken Skates
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Skates, Ken
<p>There are a number of things that we're doing and that we have been doing to stimulate demand. First of all, we recognised some time ago, back when I was Deputy Minister responsible for skills, that there are still too few businesses investing in the skills of their workforce. So, there is a particular emphasis placed on engagement with businesses, on employability and alignment, making sure that the skills provision available for businesses is aligned with what the economy needs. In order to stimulate demand, we're also investing heavily in infrastructure and facilities that can ensure that demand is intensified. I could point to a number of centres of excellence across Wales, right across the country—for example, the development of the Advanced Manufacturing Research Centre in Broughton. There's a construction centre of excellence as well, not far from here in Swansea. They are creating the environment. They're the infrastructure components that will drive demand. But also the economic action plan places very strong focus on increasing the number of businesses that are headquartered here. In order to headquarter in Wales, we need to make sure that the skilled people are available in order to take those jobs. That is a huge, huge hook for training providers, and it's also a hook for businesses that are already existing here to upskill their workforce.</p>
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Russell George
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George, Russell
<p>Thank you, Minister. If I could ask the Minister for Education: when we took evidence from colleges and others, one of the big challenges that they were focusing on was the level of essential skills attainment. How much of a challenge do you think this is, particularly when RSPs are pushed to focus on the higher skill level?</p>
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Kirsty Williams
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Minister for Education
Williams, Kirsty
<p>I think it is correct to say that one of the challenges facing the further education sector is that some students entering into the sector have lower levels of attainment and skills, and this is why we have an education reform programme, so that those children and young people leaving our compulsory education system do have high levels of literacy, numeracy and the skills to go on to study at a higher level. That's one of the reasons, for instance, why we are undertaking curriculum reform, because, over a period of many years, businesses have told us that the curriculum that children are currently learning isn't necessarily meeting their needs as employers, and that's one of the reasons why we are undertaking this work, to ensure that, when children leave compulsory education, they have the knowledge but they also have the skills and the attributes to be able to be those resilient, flexible, creative employees of the future.</p>
<p>We support FE in that challenge, so, for instance, if a student is going into an FE college to pursue a qualification and they have a D in English or Welsh first language or maths, we do provide funding for FE colleges to be able to work with those students to resit. If students have below a D grade, then, actually, what colleges do is they switch them onto an essential skills programme that focuses on literacy and numeracy skills, and we fund colleges to deliver that programme because we think that's a more realistic choice for those learners. But, undoubtedly, it is a challenge, and that's why we have an education reform journey to try and lessen that impact.</p>
<p>We do absolutely want more people taking level 3 and level 4 qualifications. That's what we want, because we know that the impact for those individuals, the impact for their families, the impact in their communities will mean that they will enjoy higher wage levels and all the benefits that come with that. But we cannot close off a route to progression for those individuals who have low levels, and so what we are trying to do is ensure, and colleges take this very seriously, their social role in ensuring that there are entry-level courses, but with a clear line of sight for those individuals that, should they undertake a level 2 qualification, that's in the expectation that, having achieved that, they will go on to look at higher levels. It's not an either/or, but, of course, as a Government, our aim is to ensure that our population is as highly qualified as possible, because we know that that means better economic job prospects for individuals and for the nation.</p>
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George, Russell
<p>Thank you.</p>
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Ken Skates
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Skates, Ken
<p>Can I just come back—?</p>
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Russell George
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George, Russell
<p>Yes, just briefly.</p>
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Ken Skates
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Skates, Ken
<p>The point made on the, if you like, employability escalator is absolutely crucial, and in terms of stimulating demand, I should have also said that there are two other major developments in recent months and years that have and will continue to stimulate demand. One is the creation of Working Wales, the simplified system, the gateway for employment advice. We know that many people in the past have said, and many businesses have said, that the system is too complicated in terms of getting the advice and the signposting that's necessary in order to access training provision. And then, secondly, the move to all-age apprenticeship provision as well and the promise of at least 100,000 all-age apprenticeships. That's a huge, huge stimulus.</p>
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Russell George
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George, Russell
<p>I think Members may have some questions about that later on. Vikki Howells. </p>
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Vikki Howells
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Howells, Vikki
<p>Thank you, Chair. I think one of the most interesting and perhaps important areas for us as a committee to focus on is the interface between two Welsh Government aims: that's focusing on higher level skills and also focusing on learning demands, and how those two things interplay together regarding the supply of skills into the market. So, we've taken some evidence from regional skills partnerships, and they described learner choice as one of the biggest challenges faced by skills policy in Wales. I wonder what both of you think about that.</p>
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Kirsty Williams
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Williams, Kirsty
<p>Shall I—?</p>
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Ken Skates
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Skates, Ken
<p>Sure.</p>
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Kirsty Williams
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Williams, Kirsty
<p>Well, obviously, what people want to learn and what skills they want to undertake are what's driving them, and we have a job to ensure that, in making choices, those individuals are making those choices in the knowledge and with the best advice possible about what the progression route is. We know that information and advice haven't been as good as they should have been, but also recognise the limitations of information and advice. Survey after survey shows that when young people are making decisions about future courses, whether that's choosing which GCSEs they want to do or what they want to do after GCSEs, it is parental influence and peer influence that are a big driver of what young people choose. So, it's a real challenge for information and advice services to be able to counteract parental influence and that peer influence.</p>
<p>We have been able to reinstate careers advice into schools. Because of some of the cuts previously to Careers Wales, some of that provision had been diminished. We've been able to put that back in, but we also need to make sure that that's impactful. So, next month or maybe later on this month, we'll be launching a Gatsby pilot and this is benchmarking that process for really good information and advice. It's all very well putting the advice in, but, actually, is that working? Is it impactful? Is it making a difference to those individuals? We're also working with our Have a Go programme, which is a proactive programme where we take all sorts of innovative machinery and equipment out to schools to demonstrate to children and young people a wide variety of opportunities that are available to them, to try and influence that advice. I think further education colleges spend a lot of time discussing with prospective students the courses they want to study, and why they want to study them, to get a better understanding of where that student is hoping to go. </p>
<p>So, I think we recognise that there is a tension between it, and our job is to ensure that we are giving, as I said, best information and advice, and students are very, very clear about the economic opportunities and the job opportunities by pursuing this course. Obviously, the way in which we plan and fund FE is changing as well. We're trying to better align ourselves with the recommendations of the RSP, rather than what Ken described as the law of the jungle where it's a free-for-all and everybody gets to do whatever they want. But, actually, we are doing a disservice. If an individual studies a course for which there is not a demand in the economy for those particular skills, then that investment in that individual and the prospects of that individual are not as good as we would like them to be. </p>
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Ken Skates
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Skates, Ken
<p>I'd agree; experience of the world of work, exposure to the world of work and independent expert advice are all crucially important. We've got the Industrial Cadets programme, we've got an intensification of the employer engagement programme. There are some major developments as well in certain sectors that will assist in ensuring that young people are able to make the right choices. For example, if I point to the £20 million National Digital Exploitation Centre, which is going to be run by Thales, that will be tasked with reaching out to a very, very significant number of schools and colleges to ensure that learners have access and exposure to the world of work in the digital sphere. </p>
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Vikki Howells
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Howells, Vikki
<p>Thank you. And with the Government's emphasis on level 3 qualifications and above as well, not everybody learns at different rates. Not every learner is ready or feels ready to go in at level 3, and we've taken evidence from FE colleges who argue that those lower-level programmes that are perhaps currently struggling for funding can interest and engage students, and give them the confidence and the skills to progress to level 3. What would you say about that, both of you? </p>
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Kirsty Williams
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Williams, Kirsty
<p>I think those entry level courses are crucially important, and for some learners that is absolutely the route in, but we need to do that with the expectation of providing a clear line of sight to even higher levels of qualification. We also recognise that people will come to learning at different points in their life, and through a variety of Government interventions we're trying to make the opportunity to learn and to study available, breaking down barriers. At a higher level, of course, we've seen this year a tremendous rise in part-time applications for study at degree level, allowing people to progress that way. We're beginning to work on the pilots of the individual learning account; that's for people in work who want to upskill. So, there's a whole variety of ways that we as a Government are trying to recognise that people will come to learning and training at different points in their life and career, and how we can make that as smooth a journey as possible. But we do have to recognise that, for some learners, those entry level courses and level 1, level 2 courses are the route that they will need. </p>
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Clark, Andrew
<p>I think it's a balancing act. The evidence you've had from the FE colleges is very, very valid. We can't ignore the people who are at the level 2 stage, and, actually, below that as well. Further education colleges cover an awful lot of people who study for independent living skills, for example, which is another cohort of the community. So, the colleges are trying to balance their provision. What we're trying to do is to nudge gently towards level 3 and above, whereas perhaps 10 years ago we would have settled for a level 2 outcome. And the reason that we're nudging gently towards level 3 and above is because all the research tells us that an individual's life chances are better if they achieve level 3 or above. So, the logic behind it is for the individual to have a better life. If the individual has a better life, then the economy also benefits from that, and everybody wins. So, it's a nudging towards rather than us saying, 'We're not going to do level 2 anymore'. We're definitely not saying that. </p>
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Vikki Howells
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Howells, Vikki
<p>Okay. The Welsh Government has stated, though, that it will restrict or end level 2 provision that doesn't lead to progression or higher outcomes, and I'm wondering what is the criteria by which that can be measured, and why generally are those learners who leave a level 2 course less likely to have a sustained positive outcome. </p>
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Andrew Clark
Clark, Andrew
<p>That relates to the apprenticeship programme rather than the further education delivery. And what we've said is that we're looking for at least 100,000 starts in this Assembly term, but we want them to be high-quality starts as well. So, there are some industry sectors where, if all you have is a level 2 outcome—retail is one, customer care is another—then your chances of getting a job that is anything above the minimum wage is slight. But if we can, again, push towards level 3 in any of these sectors, then your chances are better. There are exceptions to that rule. For example, a level 2 plastering qualification or apprenticeship will enable you to have a decent job, probably, for life. So, it's not a hard and fast rule, but, again, it's similar to what we were referring to earlier, where we are nudging people, perhaps through level 2, towards level 3. But on occasions, we are constricting the funding that we make available for where we see no progression hope. </p>
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George, Russell
<p>Thank you. At the rate we're going, we're not going to get through all our subject areas by the end of the session. </p>
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Ken Skates
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Skates, Ken
<p>I beg your pardon; sorry. </p>
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Russell George
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George, Russell
<p>No, not at all. We appreciate your detailed answers, but just bear that in mind—any Member who's got a set area of questions that they want to cover, which we need to do by 10:45. And can I ask, Ministers, are you happy if Members interrupt you if they don't feel you're getting quite to the point? Thank you. Jack Sargeant. </p>
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Jack Sargeant
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Sargeant, Jack
<p>Thank you, Chair. Last week, we received evidence from the Federation of Small Business, and they and others have expressed concerns about the closing down of the UK Commission for Employment and Skills and the reduction in funding of the sector skills council. And they believe that has had a detrimental impact on the skills infrastructure within Wales. Can you—both Ministers, really—tell us what impact these developments have had on the Welsh skills policy?</p>
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Ken Skates
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Skates, Ken
<p>Sure. We were ahead of the curve to a great extent in terms of moving away from the sector approach to a regional approach, and so, whilst the withdrawal of funding for the sector skills councils may well have had an impact in other parts of the UK, the impact hasn't been so great in Wales because we were already moving to regional skills partnership provision, and to the new regional economic development model. In terms of the responsibilities that were with UKCES, they're now largely with UK Government. So, the employer skills survey is now a responsibility that is discharged by the UK Government, and that now also has within it what was the employer perspectives survey. So, the two surveys have kind of been brought together and merged, and the UK Government has taken direct control over them. We're on the steering group for the employer skills survey, and I think in terms of some of the other work that was undertaken by UKCES, the UK Government's already commissioned, for example, a new series of Working Futures projections that are going to cover the next decade or so. </p>
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Jack Sargeant
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Sargeant, Jack
<p>Do you have anything to add?</p>
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Kirsty Williams
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Williams, Kirsty
<p>I would agree, and only add that I think that those changes make the roles and responsibilities of the RSPs even more important, and therefore, it's even more important that we get this policy right.</p>
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Jack Sargeant
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Sargeant, Jack
<p>The Minister has covered my second question, actually, within that answer. So, just moving on to the Minister for Education, we've heard and seen evidence that suggests that the current skills infrastructure isn't responsive enough, and it can't refresh qualifications quickly enough, particularly in relation to apprenticeships and so on. To what extent is the Welsh Government addressing this? City & Guilds have said that a seven-year lead time for the replacement of frameworks, particularly the apprenticeship frameworks, is too long and too slow to maintain their relevance, and I can certainly see where they're coming from—starting off with a five-year apprenticeship myself, at the end of the apprenticeship programme, some of the skills we learnt in year 1 clearly weren't relevant to year 5 and going into industry. So, have you got a strategy to change that and be more responsive?</p>
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Kirsty Williams
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Williams, Kirsty
<p>Well, I certainly take your point. We are in a fast-paced, fast-changing technological world, and trying to ensure that the skills that we're imparting to people keep up with that and are reflected in specs and qualifications is challenging. One of the issues that we talk about a lot from a constituency perspective is the relevance of agricultural education, given that the sector, and the technology in that sector, is changing all the time. But, Huw, you could explain the process.</p>
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Morris, Huw
<p>So, what's happened now is that we've agreed a timetable for the review of qualifications, either as free standing or as components and frameworks, with Qualifications Wales. A number of sectors have already completed that process. They tend to be those that have been identified either in the employability plan or the economic action plan as priorities—so, the health and social care and construction work has been ongoing, and engineering and IT. There's a plan over the next few years to cover the whole range of different qualifications, and we have teams working within Welsh Government and in arm's-length bodies who are focusing on 24 clusters of skills areas for apprenticeships to ensure that those frameworks are up to date. Some of that work has been held back a little bit by the reduction in the availability of expertise. Sector skills councils have gone out for business. Many of the people who we would have looked to to advise have gone, so we've built our own system in Wales, through the Wales apprenticeship advisory board, working with Qualifications Wales on that plan.</p>
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Jack Sargeant
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Sargeant, Jack
<p>In that board, is the industry heavily involved within it?</p>
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Huw Morris
Morris, Huw
<p>Both Confederation of British Industry and FSB are on that board and advise us on what our priorities need to be.</p>
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Ken Skates
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Skates, Ken
<p>It's not an exclusive challenge for the apprenticeship programme either. It's worth taking a look at the National Software Academy. It's been designed largely to address the sort of problem that Jack Sargeant has identified, which is that, traditionally, at the end of a three-year degree, some of the skills that you've learnt in year 1 are actually redundant. So, what the NSA has been tasked with doing is actually making sure that individuals emerge after two years fully equipped with relevant skills.</p>
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Jack Sargeant
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Sargeant, Jack
<p>Thank you, Chair.</p>
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George, Russell
<p>Joyce Watson.</p>
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Joyce Watson
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Watson, Joyce
<p>Thank you. One of the things that is fairly evident is there are key skills everybody needs. And if you have the key skills, then it's easier to adapt and change fairly rapidly and more easily to the needs of society at large, I suppose. So, in terms of that grounding, because I think that's where we're going to unlock all of this, how prepared do you think we will be?</p>
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Kirsty Williams
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Williams, Kirsty
<p>I guess, in some ways, that brings us back to the decision to reform the national curriculum. And as I said, the curriculum, which is a purpose-led curriculum, which demonstrates the kind of individuals we would want our compulsory school leavers to be, is crucial to that. So, it's about knowledge, but it is also about acquiring skills and acquiring the personal attributes. Clearly, we're in the feedback phase of that curriculum development at the moment. We will be having detailed conversations with employers about how they feel, whether we've got it right, whether what we're proposing is the right thing to do. So, whilst a lot of the consultation is with practitioners at the moment, we're also trying to engage the sector. So, this gentleman here chairs one of our partnership boards, and he's out there proactively talking to colleagues and getting engaged with them to say, 'Look, the curriculum is changing; this is your opportunity. We've been saying for a long time the skills that people leave school with aren't the right skills for us. Well, this is our opportunity now to be able to feed into a process.' So, that's a really important part of the curriculum development, and as you said, recognising that we're educating children for jobs that probably haven't been invented yet. We can't even begin to imagine what roles they might have. But to be flexible, to be creative, to have the numeracy, the literacy, the oracy skills. To be able to work as part of a team, to be able to be resilient, to be able to think outside the box. Those attributes as individuals that allow you to move from career to career, from job to job, are exactly the kinds of attributes and the skills and knowledge that everybody will need. Sorry, Andrew—</p>
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Ken Skates
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Skates, Ken
<p>Sorry, I was just—</p>
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Andrew Clark
Clark, Andrew
<p>No, go on.</p>
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Ken Skates
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Skates, Ken
<p>I was just going to say that the point that Joyce Watson makes justifies why I think we're right to insist that numeracy and literacy are pursued up to level 2. In addition to people who will be learning through the new curriculum, we've also established Working Wales as well to make sure that there's a tailored approach for people who are of working age who face multiple barriers and multiple challenges, which can include some of the softer skills, can include life skills, and can include health and emotional health challenges that need to be overcome. And so, we're not leaving anybody behind. We could design a new curriculum alongside the Working Wales support system and advisory system—we're ensuring that all people of all ages can get the right support and can develop the right skills to ensure that they can get into work and stay in work.</p>
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Kirsty Williams
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Williams, Kirsty
<p>And, of course, the cross-cutting theme is not just restricted to literacy and numeracy; the first part of the new curriculum that is already being rolled out in schools, ahead of statutory take-up, is digital competency. So, we recognise that everybody will need to be literate, numerate and to have digital competency skills.</p>
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Russell George
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George, Russell
<p>Can I just bring Andrew Clark in?</p>
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Andrew Clark
Clark, Andrew
<p>Very briefly, again, it also exists in the adult learning community, where the focus, again, is on literacy, it's on numeracy, it's on digital literacy and, for those who need it, English for speakers of other languages, so that we're not forgetting the adult cohort in this press for the key skills that you're referring to.</p>
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Joyce Watson
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Watson, Joyce
<p>Yes, and if we took that back to parental advice: if the parents have particular needs and they, therefore, cannot advise their children on their career choices—if they have their own difficulties with numeracy and literacy anyway—it's recognising that. But I need to move on because I'm going to be told off in a minute. [<em>Laughter</em>.]</p>
<p>So, we've had evidence—some positive, some confused and some, perhaps, negative—about where the RSPs currently fit into the existing system of advice, and economic regeneration. So, there does seem to be a somewhat mixed picture. So, how do we—how do you, sorry, as a Government intend to take action on that advice?</p>
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Ken Skates
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Skates, Ken
<p>And I'd accept that the picture needs clarifying and that's our firm intention. Regional economic development is ongoing and the structures that are being designed are still being considered, and we're still putting in place new structures as well, for example the regional teams that will work for the chief regional officer. And so I do accept that, if you like, the governance structure, accountability, and the entire landscape needs to be crystallised. That said, for the time being, I'm content that the RSPs are informing city and growth deal considerations, whilst also informing, rightly, our policy teams and our CROs and the regional development teams.</p>
<p>But, ultimately, I'd like to get to—and I'm already on record saying this—a position where we could consolidate and unify local government economic development with Welsh Government on a regional footprint, and city and growth deals could be potentially a work stream of those units. That would, in turn, I think, simplify the process of ensuring that the RSPs are able to inform more considerations on the economic front, whilst at the same time informing the providers of skills to ensure that both the economic development unit and the providers are working to the same ends.</p>
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Joyce Watson
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Watson, Joyce
<p>Particularly, we've heard, quoting you, about the city deals—and the example is the growth deal for north Wales, where you have recognised that there's a need to revisit the guidance et cetera. So, that's obviously been the pilot. So, how quickly do you think—if this is where we're going, and speed is of the essence—how quickly are we going to implement the changes that you have recognised yourself?</p>
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Skates, Ken
<p>Well, I'm going to be carefully considering the recommendations of this committee alongside the recommendations of the SQW review. We'd like to move at speed with implementing any recommendations. I do recognise that there will be implications—potentially, revenue implications—for us, but as my evidence paper states, I believe that we do need to consider additional resource for RSPs, if we are to expect them to undertake a greater range of responsibilities.</p>
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Joyce Watson
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Watson, Joyce
<p>Okay.</p>
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Russell George
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George, Russell
<p>Bethan Sayed.</p>
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Sayed, Bethan
<p>At the beginning you made a plea based on trying to appease the Conservatives, I think, on not getting rid of regional skills partnerships, but I’m trying to understand exactly what the impact they have is and what success will look like in relation to each regional skills partnership. I ask because we heard from a lot of people who either didn’t know what the regional skills partnerships did—a very fundamental point—they didn’t know what the added value was, or they said there was conflicting evidence on some of the RSPs, whereby business interest may override the interests of the wider economic landscape. What exactly will you want to achieve from these reviews in terms of the impact and the successes of the RSPs if you’re going to expand them into the future?</p>
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Skates, Ken
<p>The employability plan has targets and measures that can be applied. Then there are the individual regional skills plans, which identify the actions that need to be undertaken to improve the skills base in priority areas across the regions. And I do accept that there is a degree of a lack of understanding across Wales, I think it’s fair to say, in many businesses, of what the RSPs do—the purpose—but that’s largely because they are new.</p>
<p>In terms of added value, I think it’s important to make a point that, through RSPs, we wish to end any duplication of skills provision across the regions. We wish to ensure that there is a greater degree of alignment in what the economy and what training providers require and deliver. But I’ll bring Huw in specifically on, if you like, the impact that needs to be evidenced. Huw.</p>
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Morris, Huw
<p>Just to echo some of the points the Minister’s already mentioned, the employability plan comes with an annual report on progress against national targets for growth in a range of measures, including the number of people with a qualification, what’s happening in terms of productivity, and wage levels and so forth, as a consequence of that. We would like to work with the regional skills partnerships to develop measures along those same lines on a regional footprint.</p>
<p>The reason that we’ve gone along this line, rather than adopt a market-based approach or a laissez-faire approach, was that we feel it’s a way of ensuring that the supply is there and is constantly building to meet future needs and isn't jeopardised by the vagaries of the marketplace.</p>
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Bethan Sayed
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Sayed, Bethan
<p>But in lots of—. I mean, I’m only going by what people have told us. In lots of areas, the data simply hasn’t been consistent, or they're using different types of data collection. We were told by further education colleges, for example, that EMSI was something that they use, which wasn’t then used by the regional skills partnerships. How effective is this process going to be if people are analysing data in different ways?</p>
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Huw Morris
Morris, Huw
<p>So, if I could just say two quick technical things. So, the first is that we only produced the first annual report on the employability plan last September. Those will be the standardised measures. It’s taken a little while to get to those.</p>
<p>And the second point is that EMSI, I think from memory, is used by nine of the 12 colleges, and we are in the process of going to a contracting to see if we can purchase that system or a system like it, not just for the colleges, but also for the careers advisory service and other actors who help advise learners and employers and colleges and universities about what should be provided.</p>
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<p>So, when the Welsh Language Commissioner says that the Welsh language data is not up-to-date or is inconsistent, that won’t happen in future, because everybody will have the same data tools to be able to analyse with, or—?</p>
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Morris, Huw
<p>That’s our aspiration.</p>
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Bethan Sayed
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<p>Right, okay. And in relation to the city deals that Joyce mentioned, just quickly, obviously, we heard that there was some crossover or, sometimes, the same demands weren’t put on the city deals as were put on the regional skills partnerships. Will there be an expectation that the city deal partnerships would take over some of this work? Unless, of course, you give them enough money to do it themselves. You’ve given—I think it’s 12 new tasks for the RSPs to take up. Is that realistic? And would you expect, perhaps, the city deals to do some of that work as well?</p>
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Skates, Ken
<p>I’d expect the city deals to utilise the RSPs fully, and I wouldn't wish for the city deals' governance structures to lead to duplication of any work concerning—</p>
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<p>But would you expect them to give them the funding to do that? Or would it be additional to what they're already doing?</p>
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Skates, Ken
<p>If they wish to see RSPs undertake additional work over and above what we have identified, then I think it would be sensible for the city and growth deal committees to pay for that work. But in terms of the additional responsibilities that Welsh Government has identified, I've always said I am giving very serious consideration to the financial resources available to RSPs.</p>
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Sayed, Bethan
<p>My final question is with regard to gender issues. We've heard from many people here that gender needs to be included on a much wider perspective. I guess it comes back to some of the conversations I've had with further education as well, because they've said to me—I know it's a question that's going to come up later if there's time—if you're going to perhaps get fewer people to do hairdressing, for example, in the short term that may lead to fewer women doing those courses, until you get to the point where women will be doing engineering courses. Therefore, there will be a skew in the level of women taking part in some of these courses across Wales. So, it's about how we can level that playing field, really.</p>
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Skates, Ken
<p>I think we need to—[<em>Interruption</em>.] Sorry, go ahead.</p>
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Kirsty Williams
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Williams, Kirsty
<p>I think with regard to gender, the Government is working with Chwarae Teg, following their report on the gender equality review, and working alongside them to address these issues. I think we need to go further than gender; we need to look at issues around disability, we need to look at other minority groups within our communities and how they are faring in terms of their ability to acquire skills and then whether those skills, then, are adequately and properly rewarded in the workplace. I think if you look at issues around a disabled individual with a degree and their earning potential, it's something that we all would want to be concerned about. So, it is about gender absolutely, but we also need to get better data and better understanding across a number of groups of individuals.</p>
<p>With regard to the language, it is an important part for me that the RSP does consider Welsh language skills and their relevance in the economy. I think one of the challenges that we have got is demonstrating to young people that, for lots and lots of reasons—especially those people who are not growing up in a Welsh-speaking household—actually the Welsh language is a really marketable skill to be able to have, and there is a dearth of those skills in some parts of our economy.</p>
<p>So, for instance, Cardiff and Vale College is working very closely with a cohort of students that they get at 16 who have undertaken all their education through the medium of Welsh, so they have great skills, and looking to ensure that just because they go, then, to Cardiff and Vale, there are opportunities to continue to utilise those skills in particular courses where those skills are an advantage. So, for instance, health and social care. We know that we need more people with Welsh language skills being able to provide those services. And childcare. So, it's really important, and that's one of the reasons why we've extended the role of the <em>coleg</em> to include further education, because we've recognised that Welsh-medium provision in FE is not where we would want it to be. We want to be able to do more of that and be able to, for instance, in some of our colleges, maintain those skills. So, perhaps children and young people are taking some courses in English, but maybe they do their Welsh bac <em>yn Gymraeg</em>. I think making sure that Welsh language skills are factored into the RSP planning will be an important part to be able to meet the demands that we will have in sectors for those skills, and demonstrate to parents and young people that this is something really valuable. </p>
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Sayed, Bethan
<p>And, then, I think that's why the data is important, because the Welsh Language Commissioner was concerned about that, and if we want to make the system work, then that needs to be there. </p>
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Williams, Kirsty
<p>That's why, as I said, we have the aspiration of making sure that everybody's working off the same set of data. As always, lack of data is something that bedevils. I can't think I've ever read a committee report in this place over the last 20 years that didn't talk about the paucity of data that is available. That's why we want people working off the same system. </p>
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Morris, Huw
<p>Can I add one quick point? We've been in conversation with a major train manufacturer that's moving a lot of its facilities to Wales and has headquarters in the Basque region—we were with them yesterday. They were expressing some surprise at the very low number of women engineers that are available to them in comparison with the region of Spain that they come from, and they talked quite a lot about how that had been a vehicle for economic growth in that part of the world. </p>
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George, Russell
<p>I've got a supplementary—. Are you finished, Bethan? </p>
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Sayed, Bethan
<p>Yes. </p>
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Russell George
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George, Russell
<p>A supplementary from Joyce Watson, then if you come on to your subject area straight after. Joyce Watson. </p>
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Joyce Watson
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Watson, Joyce
<p>Yes. I just want to ask: talking about data, cross-referencing data, will you be cross-referencing the poverty data with the skills data, because there's very clear evidence now, particularly for the disabled, for the groups you talked about—disabled, for females—about the impact that they, as particular groups, are suffering in poverty as a consequence of benefit changes elsewhere? So, if those groups are left behind, within the skills and the opportunity, then clearly they need to have a particular focus. They're already being left behind. We can't risk leaving them further behind by not recognising their need. </p>
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Ken Skates
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Skates, Ken
<p>So, in mainstreaming gender issues to the work of RSPs, and indeed other groups with protected characteristics, we would then expect data relevant to those groups to be utilised, examined and then used to inform the outcomes of the RSPs. </p>
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Joyce Watson
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Watson, Joyce
<p>And another interesting fact, if I can, Chair? </p>
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Russell George
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George, Russell
<p>Just—well, very briefly, because we've run out of time. </p>
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Joyce Watson
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Watson, Joyce
<p>It is very relevant. There are—. It is recognised, when we talk about high-end skills, particularly in engineering—anything to do with numeracy—that, while some people might have deficits because they're on a spectrum, they have a huge advantage by being on that spectrum in being able to excel at maths and science and technology. </p>
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Russell George
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George, Russell
<p>Do you want to come on to your set of questions, Joyce? </p>
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Joyce Watson
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Watson, Joyce
<p>I didn't know I had another set. </p>
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George, Russell
<p>No. Okay. </p>
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Joyce Watson
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Watson, Joyce
<p>I—. Oh—. Yes. So, We've had evidence about the ability and capacity of RSPB—RSPs; sorry, I keep doing that—[<em>Laughter.</em>]—to engage particularly with SMEs. How do you see, going forward, you addressing those concerns? </p>
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Ken Skates
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Skates, Ken
<p>I think we need to recognise that RSPs, whilst the resource has been quite considerable—£0.5 million—it's probably not been enough to ensure that thorough engagement takes place with businesses of all types and sizes. Equally, though, there's a role for more representative groups to ensure that they engage with the RSPs and contribute towards the work that is undertaken by them, but I would accept, moving forward, we need to ensure that employer engagement is more thorough. </p>
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Watson, Joyce
<p>Okay. I actually did talk, last week, to a group, the Federation of Master Builders, about this, and, whilst some groups like those are recognised in that, maybe there's a job to be done about other representative bodies being invited around the table. One suggestion they had was that maybe there could be a round-table discussion on a regional basis so that it's easier for the smaller bodies that are representative of those smaller industries to access the help, the information and the knowledge they need to help people in those communities. </p>
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Skates, Ken
<p>Perhaps, Chair, I could refer Members to—it's very early on in the north Wales RSP report, the plan—a diagram demonstrating membership of the RSP, and membership there kind of mirrors what Joyce Watson has said should be rolled out as standard practice. I think it'd be very useful to take a look at that model. </p>
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Ken Skates
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Skates, Ken
<p>Okay. You're offering to provide us with that. </p>
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Ken Skates
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Skates, Ken
<p>We'll send you it, yes. </p>
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Russell George
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George, Russell
<p>I'm grateful. Do you have any further questions, Joyce? </p>
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Watson, Joyce
<p>Only that they do actually make up the larger proportion of businesses in Wales and the cluster group structure seemed to be very important to them. So, it's just a reinforcing, really, that if we recognise cluster groups we need to go out to them. </p>
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Skates, Ken
<p>Yes, and, of course, that's what's operating in north Wales with the model that I've referenced. So, we'll send you through the detail of, if you like, the round table that's been constructed to ensure that there is good intelligence being drawn from businesses of all sizes and across all sectors. But I would say again that engagement does need to be more thorough than it is today.</p>
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Joyce Watson
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Watson, Joyce
<p>Okay, that's fine.</p>
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Russell George
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George, Russell
<p>Thank you. If I can ask the Minister, Ken Skates, one RSP in its employment and skills plan explained that 511 enterprises had responded to its survey in that particular year, and that represented 0.5 per cent of small and medium-sized enterprises and 6 per cent of large employers in that RSP region. So, you know, the point here is that, of course, that's a very small sample size with evidence that perhaps is not so representative. So, to what extent do you think that there's a danger that the data analysis capabilities of RSPs are undermined by what they can deliver?</p>
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Ken Skates
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Skates, Ken
<p>So, they couldn't and they shouldn't base their plans on just that sort of data. They should also utilise the employer skills survey, they should utilise labour market intelligence, which is produced on a regular basis. They should sense-check any surveys that they conduct themselves with the available data that is provided by UK Government and by Welsh Government. </p>
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George, Russell
<p>Are they doing that?</p>
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Skates, Ken
<p>My understanding is, yes, they are. I see no evidence that they're not doing it, that's for sure. In terms of the plans that are produced, it does appear that surveys are being sense-checked correctly.</p>
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George, Russell
<p>And in—</p>
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Skates, Ken
<p>Sorry. Rachel.</p>
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Dr Rachel Garside-Jones
Garside-Jones, Dr Rachel
<p>Yes, we do. And, as you alluded to earlier, Minister, the UK Government leads now on the employer skills survey and the employer perspective survey and working futures. So, they're all data that's made available to each of the RSPs consistently by UK Government. So, the aim then is for them to do local surveys, as you said, to sense-check, contextualise, get their local employer views. But, really, their data should be based on those wider surveys that, obviously, have got a far larger survey size.</p>
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Skates, Ken
<p>And, in the future, with the new regional model for economic development we've adopted in Welsh Government, there's the opportunity to utilise intelligence from the regional teams as well, led by CROs. And, in addition, there's the potential to utilise intelligence and data, if possible, from Business Wales, because, of course, the reach that Business Wales has across the country is very considerable indeed.</p>
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<p>And perhaps if I could ask the Minister for Education: in terms of that data being available—that's the data that FE are working on, in terms of their planning as well—are you content with that happening, in terms of the information that the RSPs are providing to FE colleges?</p>
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Kirsty Williams
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Williams, Kirsty
<p>I think it's fair to say that the ability to align recommendations and data from the regional skills partnerships and how that influences, then, delivery in the FE sector is continually evolving, especially as the RSPs embed and their profile rises.</p>
<p>Now, as of last year, we have begun a pilot in FE to try and better align the both and it's still early days. So, what we do is that the RSPs, of course, publish their strategic plans and then we ask them to populate that. That data is then shared with the further education colleges to respond to that, to try and get that alignment. And then we are developing a closer monitoring system to see whether that data and the plans from the RSPs are actually influencing delivery in FE. It's not an easy thing to do, because you can't turn things on and off. Sometimes it's going to take a little bit of time to bed in. It could be better, but I think our intent was demonstrated by the introduction of the pilot last year, and we continue to look to refine that in the light of the experience. </p>
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George, Russell
<p>So, in the long term, do you think that approach will meet your ambitions for FE?</p>
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Kirsty Williams
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Williams, Kirsty
<p>Yes, and I think it's really important to recognise that RSPs should have an influence not just in FE but, actually, should be looking at higher level skills. So, actually, what are our universities delivering? What is the method of that delivery? So, I think there's a role there. I think, once we've got confidence that this process is working and, potentially, with post-compulsory education and training reforms, we could look then to see what influence it could have on other parts of our curriculum and our learning continuum. But I think it's early days at the moment and I think Andrew could give you a picture of how successful it's been to date.</p>
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Andrew Clark
Clark, Andrew
<p>For the academic year 2018-19, so the one that's just coming to an end now, we agreed what we call provision plans with each of the further education colleges, which were based to some extent on the regional skills partnership recommendations, and then we got to about two thirds of the way through the year and we looked at the data we have as to how close was actual provision to what we had agreed with them at the beginning of the day, and, in monetary terms, we put out about £300 million a year and about £15 million of that was not precisely aligned, but the remaining £285 million was. So, that's not bad for the first pilot year.</p>
<p>For 2019-20, the one that's coming, we're going to add some teeth to that and then we're going to say that, 'We're agreeing a plan with you that's aligned to the RSP outcomes. If you don't stick to it and don't talk to us during the year to explain what the problem is, then we will reclaim money from you and redistribute it to those that do'. And that will put a much harder edge on the whole of the process. So, we've tested it in the current year and then we'll be going live next year, and then we'll really see whether it works or not, I suppose. </p>
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<p>Yes. Is there anything that you think could be an unintended consequence of that approach?</p>
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Clark, Andrew
<p>It's the sad part of every policy official, I think, the law of unintended consequences. There is a 'get out of jail free' card built into the system, that, if we've agreed something that the RSP has recommended and we fully agree with and they really can't deliver it, then they can come back to us and say, 'I know we said we'd do that six months ago, but we can't do it because of x, y and z', then we will adjust the figures accordingly. So, I'm hoping that that will take account of the law of unintended consequences. </p>
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Williams, Kirsty
<p>And I think we also have to recognise within the confines of a financial window, because sometimes it's difficult to know how far in the future we know about our financial security, looking to do a three-year regional plan moving to—. Because we recognise that, for institutions, it can be difficult to realign your provision.</p>
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George, Russell
<p>Okay, thank you.</p>
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Huw Morris
Morris, Huw
<p>Can I just add one quick thing, which is that we have a range of incentives to encourage colleges, apprenticeship providers and universities to move in that direction? Because one of the constraints that might prevent them is not having the skilled staff or the equipment to do those things. So, the strategic development fund, the sector skills priority fund and more recently some of the financial incentives and postgraduate qualifications and degree apprenticeships are designed to encourage providers to move into the spaces that employers say that they want people in.</p>
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Williams, Kirsty
<p>And, for instance, again—. Understandably, a lot of the discussion this morning has been around FE level. In terms of higher level skills, our Sêr Cymru programme, which is looking to bring some of the best and the brightest into our higher education sector to be able to provide that, is a really good example, and that has been taken up by the Westminster Government. So, I think it's important that we look at how we can incentivise this at all levels of the skills spectrum, because we want to move people from level 1 on to level 2 and we want to move level 2 on to level 3, but we want to continue, where we can, to really bring in the best and the brightest to lead in our HE institutions and to be able to be there to provide tuition and support for businesses and those sectors too.</p>
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George, Russell
<p>Okay. Thank you. We'll go on until 10:50, if that's all right with Ministers. So, we've got one last set of questions and I think Bethan—</p>
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Hefin David
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David, Hefin
<p>Can I just come in?</p>
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George, Russell
<p>—wants to come in. Okay. So, Hefin.</p>
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Hefin David
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David, Hefin
<p>Just on the SMEs question—I may have missed it. Did you accept that SMEs take their training from private providers, for which RSPs are not responsible?</p>
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Skates, Ken
<p>So, they often also don't carry out certified training and we only know then—particularly with regard to uncertified training, we only know what we were informed of, and so it's important that organisations like the FSB do engage very thoroughly with the RSPs so that there is full awareness of what sort of training is being undertaken both independently but outside—</p>
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Hefin David
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David, Hefin
<p>But their argument was the majority of SMEs take their training from private providers.</p>
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Skates, Ken
<p>I'm not sure whether the majority do.</p>
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Andrew Clark
Clark, Andrew
<p>I'm not sure what you mean by 'take their training from'.</p>
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David, Hefin
<p>'Most SMEs who train their workforce meet their training requirements from private companies' was what the FSB told us. </p>
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Andrew Clark
Clark, Andrew
<p>There is a large private market for adult training in the United Kingdom, that is true.</p>
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Hefin David
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David, Hefin
<p>From which most SMEs gather their training requirements, according to the FSB, which goes beyond—</p>
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Andrew Clark
Clark, Andrew
<p>I don't have that data, but I've no reason to disbelieve it. </p>
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Hefin David
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David, Hefin
<p>So, it means that RSPs would find it difficult to access small firms' training provision.</p>
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Ken Skates
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Skates, Ken
<p>To be aware of it. That's why it's important that, as I said earlier, there is more thorough employer engagement and that organisations, not just businesses individually, but organisations that represent certain sectors—for example, the FSB—engage directly with the RSPs. </p>
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David, Hefin
<p>So, would the role of RSPs be to persuade SMEs to take their training provision from different places—from FE and apprenticeships?</p>
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Skates, Ken
<p>The RSPs are there to inform the training provision that is out there in terms of further education institutions and Government-funded provision. </p>
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Hefin David
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David, Hefin
<p>So, there needs to be a culture change amongst small firms in how they do their training.</p>
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Skates, Ken
<p>There needs to be a culture change, but this has been a challenge for 20 years now. We've said too few businesses are actually investing in the skills of the workforce, and so the culture change is bigger than just where they take the provision from—it's that they should be taking provision full stop. </p>
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Andrew Clark
Clark, Andrew
<p>We wouldn't discourage them from spending their own resource on a training need that they've identified for their own business—</p>
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Hefin David
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David, Hefin
<p>Which is outwith the responsibility of a regional skills partnership. </p>
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Andrew Clark
Clark, Andrew
<p>Correct. </p>
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David, Hefin
<p>And you accept that.</p>
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Andrew Clark
Clark, Andrew
<p>Yes.</p>
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David, Hefin
<p>Okay. That's fine. I think if you accept the argument, then you can't be criticised for it, really. </p>
<p>You stated in the paper that Welsh Government submitted that the RSP planning model is developing a more strategic approach. In the past, the current model has been very much microplanning, down to the course design level. </p>
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Skates, Ken
<p>Yes.</p>
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David, Hefin
<p>So, does that mean it hasn't worked?</p>
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Andrew Clark
Clark, Andrew
<p>Do you want me to have a go, because this is getting a bit technical?</p>
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David, Hefin
<p>Try to keep it as broad as possible. </p>
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Andrew Clark
Clark, Andrew
<p>Okay. We did start off by saying, 'Let's plan down to, I don't know, level 3 mechanical engineering course from—'</p>
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Kirsty Williams
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Williams, Kirsty
<p>Very granular.</p>
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Andrew Clark
Clark, Andrew
<p>Yes, very, very fine. And that hasn't been as successful as it might have been. So, we're moving now towards what we call sector subject areas, of which there are 14, and then the level within a sector subject area. So, what we're looking for, perhaps, is a 10 per cent increase in construction level 3, rather than adding 50 places to bricklaying level 3.</p>
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Hefin David
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David, Hefin
<p>So, why didn't you do that in the first place? It seems fairly obvious. </p>
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Andrew Clark
Clark, Andrew
<p>It's one of those things with the benefit of hindsight, I think.</p>
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Skates, Ken
<p>We've tested and learned. </p>
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Hefin David
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David, Hefin
<p>Okay. So you just accept it didn't work. </p>
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Clark, Andrew
<p>Yes.</p>
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David, Hefin
<p>Okay. Fair enough. That's fine. </p>
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Kirsty Williams
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Williams, Kirsty
<p>And we're making changes accordingly, in the light of that experience—that very, very granular approach that was taken, it was clearly not appropriate and moving to the situation we have now, which is, as you said, those 14 areas and the various levels within those 14 areas gives us a better shot at getting that alignment. </p>
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David, Hefin
<p>Okay. And the new contract framework requires RSPs to produce a three-year plan and annual reports, so is it now appropriate that the report is multi-annual?</p>
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Skates, Ken
<p>Annual reports, I think, are appropriate. Multi-annual remits make sense as well. Multi-annual funding would certainly be desirable, and I'd wish to move to that as soon as we possibly could. </p>
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Hefin David
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David, Hefin
<p>Okay. So the funding settlement will now be multi-annual. </p>
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Skates, Ken
<p>Well, once we're able to. At the moment, we're not able to because of the timings in the comprehensive spending review, but it's our aim to move to multi-annual funding. </p>
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David, Hefin
<p>Okay.</p>
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<p>I don't want to keep Ministers too—I know the Minister, Kirsty Williams, has to go. </p>
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Williams, Kirsty
<p>No, it's not me who has got to go. Don't blame me. [<em>Laughter</em>.]</p>
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Russell George
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George, Russell
<p>Okay. Right. Bethan Sayed—a very quick question, just to finish with. Thank you.</p>
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Bethan Sayed
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Sayed, Bethan
<p>It's just with regard to the skills and the provision plans, which are helpful to understand more what you're doing. In conversations we've had with FE colleges, the rationale, really, has been about making very detailed recommendations on FE provision, as opposed to allowing FE colleges to look at what they deem to be their priorities. You mentioned HE and you mentioned schools as well: is there a risk that these bodies, which have their own autonomy and their own priorities, will see this as something that they shouldn't be told by Government to do? So, how do you come about to a discussion where, yes, the skills for the economy and what's needed there is important, but also for the FE colleges to be masters of their own destiny and to provide the courses where the demand is from their students?</p>
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Clark, Andrew
<p>Can I try, Minister?</p>
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Kirsty Williams
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Williams, Kirsty
<p>Yes.</p>
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Clark, Andrew
<p>It's a dialogue. So, the FEIs know what they deliver. We've all got the RSP report in front of us. The RSP report will probably seek to influence perhaps 10, 15 per cent of the overall provision. So, then, we will go and talk to each college and say, 'This is what the RSP is saying; does this attune with your knowledge of your area? If so, great', and they'll start to move their provision that way. 'If not, why not?' And then we will come to an agreement with each college as to what provision they're going to put on in the forthcoming week. </p>
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Bethan Sayed
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Sayed, Bethan
<p>But you've said you may remove funding from them if they don't align a certain way. So—</p>
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Clark, Andrew
<p>They will have agreed with us, and if they then don't deliver, they're breaking their agreement with the Welsh Government. And at that point, it becomes financial. </p>
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Kirsty Williams
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Williams, Kirsty
<p>So, the dialogue happens. There's an understanding about what we're commissioning, what they're going to deliver, and if they don't deliver against the agreed programme that we have discussed together, that's when you would look, potentially, to claw back money. But that's not to claw back money out and above. And I think it is important to recognise the size of this agreement and the overall picture, and, of course, we do have a moral endeavour, don't we, to ensure that the courses that people are undertaking are actually going to be worth it for them, whether that be at FE level, whether that's a HE level? We want those people—. There is an intrinsic value in learning anything, of course there is, but in the end, what is really crucial for these individuals is that we give them the skills that are going to allow them to be economically active and successful and reach their aspirations. And so, we have got to, when we're spending public money, find a way of providing those opportunities in the bigger picture of, as I say, the intrinsic value of learning in itself. </p>
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Bethan Sayed
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Sayed, Bethan
<p>All I'm concerned about is whether this is a conversation based on equality of a partnership here, because you're saying you have the conversations first, but is it a position where some FE colleges will say, 'Well, actually, I don't want to be part of that conversation because I know that what I'm doing is best, so, therefore, I don't believe that these provision plans are applicable to me', and so they'll then be able to reject any form of contract or plan with you as a Government?</p>
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Andrew Clark
Clark, Andrew
<p>They'll have to be able to demonstrate why they disagree. We have an evidence base to say route A; if they're saying route B, on what evidence are they basing route B? And that might be valid. We've had instances, for example, where we've suggested curtailing a particular bit of provision, and they've come back at us and said, 'Absolutely not; everybody who's ever been on that course has got a good job.' And then we will accept that. So, it is a dialogue, it's not an imposition. </p>
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Bethan Sayed
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Sayed, Bethan
<p>Okay. Yes, that's what I'm trying to understand, because some of the language around it seems, from visiting colleges, imposition based. But if what you're saying is that it's not, that you're having these ongoing conversations, then that's very different indeed. </p>
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Andrew Clark
Clark, Andrew
<p>And then also the conversation during the academic year, if it's not going the way we thought it would be going—that's also open for dialogue. </p>
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Sayed, Bethan
<p>Okay. </p>
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George, Russell
<p>Can I thank Ministers and officials for your time this morning? I'm grateful for the offer of a technical briefing, which perhaps officials can arrange, perhaps for the next couple of weeks. Can I also ask, in that briefing, can you also provide an example of a regional funding and planning template? It would be useful to see that. Is there any issue with being able to supply that in the technical briefing?</p>
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Clark, Andrew
<p>No. </p>
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Kirsty Williams
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Williams, Kirsty
<p>No. </p>
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Russell George
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George, Russell
<p>No. Then, we'd be very grateful for that.</p>
<p>We'll come back into public session at 11.20 a.m., and the Minister for Economy and Transport is going to be back with us. So, thank you. </p>
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<p>Motion:</p>
<p>that the committee resolves to exclude the public from item 5 of the meeting in accordance with Standing Order 17.42(vi).</p>
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<p>Motion moved.</p>
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George, Russell
<p>In the meantime, item 4: can I propose, under Standing Order 17.42, to resolve to exclude the public from this next item, and we'll be back in public session at 11.20 a.m.? Are Members happy and content with that? Thank you. </p>
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<p>Motion agreed.</p>
<p>The public part of the meeting ended at 10:54.</p>
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<p>The committee reconvened in public at 11:23.</p>
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George, Russell
<p>Welcome back to the Economy, Infrastructure and Skills Committee. I move to item 6 and I'm pleased to have the Minister for Economy and Transport back to committee. This is the third session in a row, I think, which is a record for committee, that the Minister has attended. This is on a different subject—this is in regard to our piece of work on electric vehicle charging in Wales. So, thank you to the Minister for attending this morning. I wonder, do you have any opening comments in regard to—?</p>
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Ken Skates
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Minister for Economy and Transport
Skates, Ken
<p>I'm delighted to be here with you. I think this is a really exciting area of work. It complements activity in other areas of the economy and transport department, with the new rail franchise, where we're going to see a huge reduction in carbon emissions, the economic action plan, with the design of the calls to action and the economic contract, again with decarbonisation right at the heart of what we're trying to achieve, and, of course, the development at pace of new power trains and new power storage systems within the automotive sector, and how we're actually supporting that part of the economy. So, I think it's a very timely and it's a very exciting piece of work that you've embarked on. </p>
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George, Russell
<p>Do you think you have an accurate overview of the current state of infrastructure at present in Wales?</p>
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Skates, Ken
<p>Yes. In terms of knowing where and what types of chargers, for example, are in place, when we know that there are 671 publicly accessible charging points. We also have a very clear target that's captured within 'Prosperity for All: A Low Carbon Wales', the plan, that we will at least meet the demand that will be generated by 60 per cent of cars and vans being electric by 2030. I have to question, though, whether, in light of the declaration of a climate emergency, we need now to set more stretching targets, particularly with regard to the ending of purely petrol and diesel engines by 2040. I think it's perhaps going to be worth our while—and I'd take the committee's view on this—consulting on whether we should bring that date forward, and of course, we'd need to work very closely with the automotive sector in this regard.</p>
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George, Russell
<p>You mentioned that there are 671 charging points. With what type was that that you mentioned?</p>
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Skates, Ken
<p>With what, sorry?</p>
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George, Russell
<p>You mentioned that there are 671 charging points.</p>
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Skates, Ken
<p>Publicly accessible charging points for electric cars, yes.</p>
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George, Russell
<p>Publicly accessible charging points. Is that your data, because from what I understand, the Government is often working off third-party data, and sometimes—</p>
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Ken Skates
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Skates, Ken
<p>That's third party.</p>
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George, Russell
<p>I'm just questioning whether that is complete data.</p>
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Ken Skates
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Skates, Ken
<p>We believe it's complete data. Simon, there's no reason to believe that it's not fully up to date. I think that data is from Zap-Map.</p>
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George, Russell
<p>That's all right. My point is you're referring to and using your information based on third-party information, rather than your own information.</p>
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Jones, Simon
<p>Clearly, this is an evolving marketplace and 'publicly accessible' can be operated by all sorts of third-party providers. The state doesn't have control over all of these sites, so we rely on third parties to inform our view of what's in the market. Now, whether it's exactly 671 or a number around that, I suspect it's going to be in that ballpark.</p>
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<p>Okay. We've taken an unusual step in this inquiry where we've published a draft report, because this is an ongoing and very fast-moving bit of technology. We've had further feedback in terms of our further consultation and one person has said that we're a charging desert and that this is negatively impacting on the tourism industry in particular. Is that something that—? Well, how do you respond to that?</p>
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<p>I wouldn't describe Wales as a desert insofar as charging points are concerned. I've not seen evidence to suggest that it's impacting on the tourism sector, either. The main arteries are relatively well served—the A55 and the M4 in particular. It's the gap in between that needs to be addressed, and that's where we're prioritising £2 million. If there is any evidence that any particular sectors are being damaged, I'd be very keen to see that, but I've not been presented with any evidence to suggest that the tourism sector is being adversely impacted.</p>
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<p>In terms of evidence, if you look at the Zap-Map across Wales and England, you can see where the coverage is and you can certainly see that Wales is poorly served, particularly when you look at the map, you can see quite a bit in north Wales and south Wales, and in the middle, it absolutely does look like a desert. So, perhaps that's what they're referring to.</p>
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<p>It may well be, but I've not seen any quantitative or qualitative evidence to suggest that the tourism sector is being harmed by that.</p>
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George, Russell
<p>Okay.</p>
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Dewi Rowlands
Rowlands, Dewi
<p>The £2 million investment we are now making is obviously going to look at our strategic network across Wales, so it will pick up on the areas that you've just described. And I think this is a UK challenge as well. The Committee on Climate Change have indicated that you will need to increase the number of rapid chargers by two and a half times and the fast chargers tenfold if we're going to hit our 2030 target. So, this is a challenge for us all across the UK.</p>
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<p>And the technology changes so rapidly. There are many people who will tell you that Welsh Government should've spent a huge sum of money several years ago on charging infrastructure. To which I would say, 'Well, first of all, is there long-term market failure that would justify that? And, secondly, is the sort of infrastructure that's being introduced, or was introduced several years ago, relevant given the advances in technology and relevant to tomorrow, given the huge strides that are being made in terms of battery capacity and distance that can be travelled with electric vehicles and the efficiency of them?' My position would be, my argument is, that we should adopt the same sort of approach to EV charging points that we adopted when we designed the new rail franchise, and this similar approach, concession approach that we adopted for that, and also the approach that we took for the intervention through the broadband scheme, rather than intervene immediately where we know there will not be market failure in the coming months and years.</p>
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George, Russell
<p>And I think there's some discussion around Zap-Map, but that is a third-party bit of information rather than Government information, and Zap-Map often has details on, for example, charging points at cottages for holiday homes, for example, which aren't publicly accessible. So, do you think that there is a need to have some kind of Government information service that is perhaps independent and perhaps potentially could be more accurate as well?</p>
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<p>So there could be a role for Transport for Wales in this area, and as my evidence paper highlighted, we've put within the remit letter for Transport for Wales the task to test the market, offer land and station premises to the market, and to bring forward in the interests of the taxpayer the best options for EV charging points on the rail infrastructure that already exists. We could adopt this approach far more widely, speaking with the private sector, for example, with supermarkets—so there's already been a declaration by a number of supermarkets about what they want to do. The next step will be in testing the market and potentially offering up what we have in the public sector, but getting the private sector to actually invest in the infrastructure.</p>
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<p>Okay. Thank you. Vikki Howells. </p>
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Vikki Howells
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Howells, Vikki
<p>Thank you, Chair. In your paper to committee, Minister, you set out your intention to develop a Wales charging infrastructure strategy. What's the timescale for the development of that strategy, and do you intend to publish a public consultation to inform your development of the strategy too?</p>
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<p>The strategy will be published in 2020. It will inform the broader and wider Wales transport strategy as well, so we're looking at whether we can roll both consultations together, and I think it would make good sense to do that if we can time it correctly. </p>
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Howells, Vikki
<p>Okay, thank you. And both your paper and the low carbon delivery plan suggest that the Welsh Government's view is that business and industry will drive much of the roll-out of charging infrastructure, but can you clarify for us how you view the role of Welsh Government in the EV infrastructure development in Wales in that respect?</p>
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<p>Sure. I'm going to ask Simon to give the vision on this. He can do it far more succinctly than I can.</p>
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George, Russell
<p>Thank you.</p>
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Simon Jones
Jones, Simon
<p>So, I guess we've had discussions with the EV industry about how we might take this forward and move from the situation where we've got 600 or so charging points to a place where we've got ubiquitous access to rapid charging points, which I think is the vision that we have. The industry is telling us that, actually, there's lots and lots of investment money that's sitting around waiting to be spent on building charging networks. The job for the public sector is enabling that money to be spent in the best way, and I suppose there's a logic to that.</p>
<p>If you think about the stakeholders who've got an interest in this, there are the power companies—they want to sell energy to motorists; there are the oil companies, whose business model is going to change over the next 20 years—they're going to need to find a niche for themselves; and there are the vehicle manufacturers themselves who want to be able to access a long-term revenue stream for this. So these are huge organisations with incredibly deep pockets and the finance industry are allied around them and want to work with them. What they're telling us that they need from the public sector is not our money, because our money is going to be trivial, frankly, in comparison to the depth of the pockets of those types of organisations that I was just talking about; what they need from us is support in finding suitable locations.</p>
<p>One of the challenges at this early stage of the EV roll-out market is not the capital cost of building a charging point, which might be several tens of thousands of pounds; it's the operational cost of owning that over the life of the charger. We see exactly the same issue, actually, in the mobile broadband space, where it's not the capex cost of putting up a telephone mast that's the problem; it's the opex cost of owning it. So, costs like land rent and business rates, they're the things that determine whether these things are successful or not. So, the thing they've asked for us to work with them on is identifying parcels of land that they can put these sites on, and perhaps agree some kind of profit share deal on the land. So, initially, when these things may have low patronage, they're not having to pay out a huge amount of rent, but later on, the rent deal looks a lot better. And I think that's something that we are equipped to be able to do.</p>
<p>The other thing that they're telling us is, even a rapid charger takes about 20 minutes to charge up a vehicle. So the people who are potentially going to be using these things are going to want to have something to do for the 20 minutes while they're waiting around for their vehicle to charge up. So, whether that's the local library, or a newsagent, or a railway station—something that can occupy people's time while their vehicle's charging up. And, again, in the public sector, we've got lots of such sites. The Minister's talked about the railway station assets. We've now got control over 250 railway stations in Wales. So, the proposal is that we make all of those sites available as a package to the market. We're talking with others in city deals and in the regions as well about them making other public land available.</p>
<p>So, the proposition would be that we go to the market with a series of sites, maybe several thousand sites that we take to the market and say, 'We would be prepared to do a deal with a provider for access to these sites with a deal that we can agree on rent over time on these sites. Who can give us the best proposition for Wales? Who can give us the best financial return? Who can give us the best coverage? Who is prepared to go furthest into the rural areas? Who's prepared to offer us the best customer support and the most reliable network?' In exactly the same way that we did with the railway franchise, where we set out at the outset, 'These are the things that we want to achieve, this is what we've got to offer, what can the market do for us?'</p>
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<p>And then in turn, we would also have a role, potentially, in standardising the service that exists. So, for example, the payment systems and mechanisms. We could utilise a trusted brand as well, for example, Transport for Wales, as the face for the charging infrastructure.</p>
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Vikki Howells
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Howells, Vikki
<p>And would you have a role to play in standardising the type of charger as well? Because my concern is around the lack of rapid chargers and the interface then between public and private. We've talked about the fact that rapid chargers take around 20 minutes. Is it any coincidence then that supermarkets, for example, are still predominantly installing the fast chargers that take over an hour to charge, rather than rapid chargers? Is it because they have a vested interest in wanting those drivers to spend longer in their shops and spend more money? When I speak to stakeholders, people who actually drive EVs, their No. 1 gripe is the fact that the private sector is still building the wrong type of charger. How can we get around that?</p>
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Skates, Ken
<p>Yes. Whilst it might be in the interests of supermarkets to install a certain type of charger, of course, we've got the interests of the people to serve. And the proposal that Simon has outlined will enable us to test the market and to ensure that we get the best outcomes, just as we did for the rail franchise as well. </p>
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George, Russell
<p>Do you have any further questions, Vikki?</p>
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Vikki Howells
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Howells, Vikki
<p>Yes, just briefly, what discussions have you had, Minister, with the UK Government in respect of the different responsibilities between the Welsh Government and the UK Government in this area?</p>
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Skates, Ken
<p>Yes, you're right, because a great many responsibilities are not in our hands. Principally, we have no control over what comes out of the exhaust of a vehicle, and therefore we have to work very closely with UK Government, principally with the Office for Low Emission Vehicles, and we have to ensure in turn that stakeholders and businesses are also engaged with programmes and projects and funding systems that have been put in place by the UK Government, particularly, for example, the incentive for electric vehicles, which currently stands at, what, £3,500. We've been quite clear that that needs to remain in place until the cost of electric vehicles falls to a point of parity with those vehicles that are still run through an internal combustion engine.</p>
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George, Russell
<p>Bethan, you wanted to come in. </p>
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Sayed, Bethan
<p>I just wanted to ask about the strategy. You mentioned that it was going to be out next year, but, initially, you said maybe you need to reconsider the targets because of the climate emergency. So, why is the strategy going to come out next year, when people are asking now about developments in this area and we need to move faster in order for us to see those developments?</p>
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Skates, Ken
<p>You're absolutely right, and we are pressing ahead with short-term interventions, so that's absolutely vital—for example, the £2 million provision through the budget deal with Plaid Cymru— and that's why we're also making available resource through local transport fund grants. A number of councils, for example, in the south-west of Wales, have been successful in drawing down more than £0.5 million of LTF investment for charging infrastructure. So, whilst the strategy will deal with the major vision, the long-term vision, that's not stopping us from intervening in the short term, where we can, and in a way that we know will work for the long term. </p>
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George, Russell
<p>Jack Sargeant. </p>
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Jack Sargeant
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Sargeant, Jack
<p>Thank you, Chair. You mentioned, Minister, right at the start, quite heavily, Transport for Wales, the rail franchise offering—it's proposed to offer the rail stations as charging points and so on. And then you moved on just recently to Transport for Wales being a trusted brand and maybe the face of that. So, could you tell us and enlighten us on what you envisage the role for Transport for Wales to be in either the development and/or the oversight of charging infrastructure?</p>
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Skates, Ken
<p>Sure. It's already built into their remit letter, what we expect them to do in the short term in terms of getting the market to invest in the charging infrastructure, with the best interests of the taxpayer, the user, in mind. Transport for Wales is our delivery body. Transport for Wales also has expertise contained within it that can assist in terms of highlighting trends and new technologies. So, their role will also be, if you like, in part, in shaping our response to the challenge. Simon. </p>
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Simon Jones
Jones, Simon
<p>I think the other key thing that they'll bring to this is their procurement expertise, so the team that delivered the franchise, where we set out our outcomes on three or four pages at the outset and then that turned into a contract that's delivered significant benefits for Wales, we want to use that exact same approach, where we succinctly set out the outcomes that we want to achieve and then go and engage with the market to try and achieve the best possible outcome for Wales. So, I think it's about reapplying the skills that we developed through the franchise, and, before that, through Superfast broadband, and applying that into this space as well. </p>
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Jack Sargeant
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Sargeant, Jack
<p>So, it seems that you're quite content with the expertise you've got within TfW. Do you think you've got enough expertise within Welsh Government on its own, and local authorities, to deliver effective—</p>
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Skates, Ken
<p>Yes. Collaboration is the key. The establishment of joint transport authorities is designed to bring together professionals as well—that will be of great benefit in terms of assessing what we need to do on electrical vehicle charging. And, of course, we're working with the market as well and UK Government, making sure—. And, for that matter, universities are involved in the mix as well. So, we're trying to draw on expertise wherever and whenever possible. </p>
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Rowlands, Dewi
<p>And, if I could continue with that kind of model, it's one that we're developing in north Wales, as you're probably well aware. One of their priorities in their growth deal there is the regional transport decarbonisation project, and that will be running in tandem as well with the smart access to energy priority, which they're pushing forward with. And that brings authorities together. We've got Scottish Power on board as well, and they're bringing money to the table. We are funding the studies, and so, grouping together in collaboration, I think you will then have a good balance of skills and expertise and we can obviously grow that expertise as we go around on this journey with our local authorities. </p>
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Skates, Ken
<p>We can provide a note on the growth deal project if that's of any help. </p>
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George, Russell
<p>Thank you; appreciate it. </p>
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Simon Jones
Jones, Simon
<p>Can I just add to the expertise point? I keep harking back to the rail franchise. I suppose, at the outset of that, our expertise was relatively limited, which was why we set up Transport for Wales, to be able to bring in the expertise to allow us to be able to develop in a way that we hadn't before. And I suspect we'll be on a similar path when it comes to electric vehicle charging. There are lots of stakeholders that can help us with this, but we need to grow and develop our own expertise in exactly the same way as we've managed to with the railway.</p>
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Jack Sargeant
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Sargeant, Jack
<p>The DEG have suggested Wales should set up a not-for-profit private company to work with local authorities and the Welsh Government to facilitate a fair roll-out. What's your view on that, or would you see that as being TfW?</p>
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Ken Skates
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Skates, Ken
<p>Yes, that is TfW and, in addition, Community Energy Wales also proposed something very similar as well.</p>
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Jack Sargeant
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Sargeant, Jack
<p>Okay. Thank you, Chair.</p>
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Russell George
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George, Russell
<p>And you've mentioned a couple of times the Transport for Wales remit letter. Is the current remit letter publicly available?</p>
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Simon Jones
Jones, Simon
<p>It's been finalised. I'm not sure whether we've published it yet, but it's imminent, I think.</p>
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George, Russell
<p>Okay.</p>
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Skates, Ken
<p>We'll send that on as soon—and I promise we will send it on as soon—as it is availalbe.</p>
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Russell George
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George, Russell
<p>Thank you. And Dai Rowlands mentioned Scottish Power. What conversations have you had with the distribution network and the commercial grid?</p>
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Skates, Ken
<p>Yes, we're in talks with the grid and with the two network operators—[<em>Inaudible</em>.]—</p>
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George, Russell
<p>Scottish and Western.</p>
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Skates, Ken
<p>—taking place with them. Yes.</p>
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Simon Jones
Jones, Simon
<p>So, the grid are promoting a proposal with HM Treasury at the moment for a network, across the UK, of, I think they're calling it, ultra-fast charging points. So, instead of taking 20 minutes to charge your vehicle up, it's a handful of minutes—a couple of minutes—to fully charge your vehicle. But these things are enormously expensive. So, that conversation, I understand, is being held at UK level, but clearly they want to get stakeholders around the UK—</p>
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George, Russell
<p>Are you aware of where the gaps are in terms of—?</p>
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Skates, Ken
<p>Well, we've begun work on the energy atlas as well, looking at, if you like, the entire landscape and trying to view what the transport, energy and heat, for example, needs are of Wales. So, that work's already under way.</p>
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George, Russell
<p>Okay. Bethan Sayed.</p>
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Jack Sargeant
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Sargeant, Jack
<p>Chair, just one question, before we move on, before I forget: you mentioned, Minister, the standardising of payments, of methods, and so on. Are TfW looking at that now with integrating smart ticketing with trains and so on? Would that be—linking the whole system?</p>
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Skates, Ken
<p>It could be the entire link, yes. We talked about integration of tickets for transport, but it could be integrated as well with charging.</p>
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Simon Jones
Jones, Simon
<p>So, essentially, it's part of the rail franchise. We bought a back-office payment system, initially to be used on the trains for paying for train journeys, but we're talking about how that can be rolled out on to buses, to car parks, and there's no reason why it can't be used for other things as well.</p>
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Jack Sargeant
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Sargeant, Jack
<p>Thank you. Sorry.</p>
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George, Russell
<p>No, I had a question on that myself, which makes it timely to come in on that, but one of the issues that people are saying is a barrier is the complications of different subscription services and signing up, so it's relevant not just for Transport for Wales integration but the wider payment systems that are available. Have you got any views on that?</p>
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Skates, Ken
<p>Yes. This is all part of what we want to achieve through similar processes to that which we followed for the franchise agreement. Standardised payment systems will offer up a huge amount of opportunity for the market to come in and invest, but, in return, we'll have certain expectations, and one expectation we would have is to standardise the payments system and the charging system.</p>
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George, Russell
<p>But have you had any conversations with the charging point operators? That's what I was particularly thinking about.</p>
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Simon Jones
Jones, Simon
<p>So, I guess that will be part of the dialogue process that will take place as we work up this concession process, because that kind of customer interaction is going to be central to picking the best partner. So, it will be one of the things that we'll be measuring in—you know, how we choose who our partner is.</p>
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Russell George
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George, Russell
<p>Okay, thank you. Bethan Sayed.</p>
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Bethan Sayed
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Sayed, Bethan
<p>Sorry to go back to Jack's question, but, for the record, I just want to confirm: you said that we don't need to establish a different not-for-profit company because Transport for Wales will be doing this work in terms of vehicle-charging infrastructure. Because what I understood was that Transport for Wales would have an interest in this and that they were going to be looking into it, but I didn't hear that they were actually going to be doing that work themselves in terms of the charging infrastructure—am I wrong in that or—? I just want confirmation of exactly what they're going to be doing.</p>
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Simon Jones
Jones, Simon
<p>Shall I take that?</p>
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Skates, Ken
<p>Yes.</p>
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Simon Jones
Jones, Simon
<p>So, Transport for Wales will run a concession contract for us and they will appoint a partner to build, with their own finance, a charging network across Wales, certainly initially on our land, but potentially on other parts of public sector land as well. That infrastructure will be owned and operated by the private sector partner, but it will carry the TfW brand on it, in exactly the same way as the franchise would. So, we've got a deal with a private joint venture company, KeolisAmey, but the trains are branded Transport for Wales. KeolisAmey are responsible for employing the staff and making sure the trains are safe and reliable, but the outside projection of that is Transport for Wales, and it's that same model that we're trying to apply in the charging space. </p>
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Bethan Sayed
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Sayed, Bethan
<p>Although that is a new model, are you confident that this will work in the electric vehicle sector? Because, at the moment, for me, I haven't seen any development from Transport for Wales to know what's happening, and what the successes are, so that we can assess their efficiency and effectiveness. Are you confident that you can evolve into the EV area in the same way with the same kind of developments for the future?</p>
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Simon Jones
Jones, Simon
<p>Shall I take that? So, I think we are confident, because we had the same questions asked of us at the outset of the rail franchise, which is, arguably, a significantly bigger exercise than this. I think we've learnt a lot of lessons through what we did, but the principles will be the same—we'll be going to the market, seeking a partner, and using the professionalism of that partner, challenge through a competitive process to identify the right partner, and making sure that we've got a watertight contract to allow them to be able to go and build out a network.</p>
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Ken Skates
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Skates, Ken
<p>I think this will be much easier than the rail franchise, because you basically have a lot of inanimate objects—the charging points—that are far easier to manage. TfW won't be in the business of building, if you like, the petrol stations of the twenty-first-century, but they will be utilising the expertise within the marketplace and making sure that the market pays for the development of these charging systems.</p>
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Bethan Sayed
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Sayed, Bethan
<p>Okay. And a question on that £2 million. You've already said where that's going to be spent, and I'm sure many people will be pleased to know that it will be spent on the additional rapid-charging hubs, but have you consulted with people on the spend of that £2 million? Is this what people want? And is there more money in the budget for other developments? Because the question I'm asked as a local Member is, 'Well, the £2 million is all very well and good, but we need more than that in order to see real development here Wales, whatever the private sector does'.</p>
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Ken Skates
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Skates, Ken
<p>Well, there may well need to be more money allocated to this, and I've already identified the £0.5 million plus that's being used from the local transport fund as well by local authorities to install charging points. </p>
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Bethan Sayed
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Sayed, Bethan
<p>When will you know? Will it be the strategy that will determine that, or—? </p>
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Skates, Ken
<p>It's likely to be in part through the testing that TfW are going to do. That will help inform us what the appetite in the market is, and the degree to which there is market failure, because we still can't fully appreciate the full degree of market failure. The strategy will inform it as well. But, in the meantime, if local authorities wish to come forward with proposals for charging points, then, certainly, we'd be able to consider them through the local transport fund. </p>
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Rowlands, Dewi
<p>When we are developing the next transport strategy for Wales, that will set the framework in place for the policy for the next 20 years, and it's very important that we map out how we achieve our targets of decarbonisation right across Wales. When we do consult, as the Minister mentioned, we will try to keep what we need to do on this agenda as well. It's a consistent thing, because it's a key part of the policy development for the future. And, in that consultation, we will ask the public and our partners also how challenging we need to be in Wales, how challenging we will be and intend to be in Wales. And that in itself will set out some sort of information and an approach as to how much budget we will need. So, at the end of the day, it's up to us to be as challenging as we want to be in Wales. But what's important, and one of the visions that will be in this new strategy, will be the importance of integrating transport in Wales, and the role of Transport for Wales in that success is essential and very key to that.</p>
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Bethan Sayed
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Sayed, Bethan
<p>Okay. Just in terms of the Welsh Government's fleet, what are you doing to convert those to being electric vehicles? And then, just an additional question on EV car clubs: what are the developments in that area?</p>
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Ken Skates
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Skates, Ken
<p>So, on the car clubs front, that's actually an action within the 'A Low Carbon Wales' plan, to promote more clubs. And in terms of the Welsh Government fleet, we're committed to replacing it for ultra-low emission vehicles by 2025—cars and vans—and by 2030 for larger lorries. </p>
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Bethan Sayed
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Sayed, Bethan
<p>So that's what you mean about trying to get the targets done earlier. That would be included in that.</p>
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Ken Skates
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Skates, Ken
<p>The other target is the UK target of 2040—production of no more cars with purely an internal combustion engine. Given the pace of change and given the urgency, I personally believe the UK as a whole should be looking at reaching that sooner, and possibly 2035 would be far more ambitious, but not unreasonable.</p>
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George, Russell
<p>Hefin David. </p>
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Hefin David
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David, Hefin
<p>'Planning Policy Wales' already makes recommendations for EV charging infrastructure on non-residential developments. Why doesn't planning policy provide revised guidance for charging on residential developments in the future?</p>
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Ken Skates
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Skates, Ken
<p>I'd need to refer this to the planning Minister. My understanding, though, is that building regulations are being changed. But I would need to check. Sorry, Chair—I'd need to check with regard to planning policy what the position is. Simon, are you aware? </p>
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Simon Jones
Jones, Simon
<p>I'm not aware, no. </p>
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Hefin David
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David, Hefin
<p>Okay. Could you get that information, perhaps?</p>
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Skates, Ken
<p>Sure. Absolutely, yes.</p>
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Hefin David
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David, Hefin
<p>With regard to changing technologies, how are you engaging with universities and industry on the development of changing technologies?</p>
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Ken Skates
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Skates, Ken
<p>There is a huge amount of work and engagement that's taking place, and has been taking place, it has to be said, for some time. So we have engagement with the sector through the WAF, the Welsh Automotive Forum. We also engage with UK Government principally, as I said earlier, through OLEV. A number of universities on a UK footing are involved very heavily in this area of work—for example Imperial College London, and Cardiff University as well. So, there is a huge amount of work that is taking place. What we can't yet fully ascertain is how the pace of change in technology will influence user behaviours, and therefore what we need to assess is how we can drive the transition to ultra-low emission vehicles faster by utilising public space and public property to ensure that we get the most rapid chargers available into those places that people are most likely to use. That in turn is more likely to drive cultural and behavioural change in a positive way, and potentially, in doing so, it has the possibility of accelerating the pathway towards the utilisation of electric vehicles and hybrid vehicles. </p>
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George, Russell
<p>Joyce Watson.</p>
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Watson, Joyce
<p>I just want to, Chair, explore whether you have any figures on the uptake of the European Union grant that's available, and who might have taken it or not taken it, and whether, when the answer is we haven't taken it, we're going to look at and evaluate the reasons why, so that we can move forward, because there'll be some good reasons, I'm sure, that will come to light. If you don't have those answers now—</p>
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Skates, Ken
<p>I can see if we can provide a note on figures. We'd need to liaise with UK Government on this. I can see if we can do that. </p>
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Watson, Joyce
<p>Because I think that's where the learning would be. </p>
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Skates, Ken
<p>Yes, and I know that we've been successful—bus operators have been very successful recently in drawing down funding for zero-emission buses. So, we are making good progress now, but I'd need to check with UK Government as to what the exact figures are for Wales in terms of drawing down those grants for cars and vans. </p>
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Joyce Watson
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Watson, Joyce
<p>I don't know whether—we've been told, we've had evidence from DEG, that we shouldn't waste time pursuing a market-led policy approach to rural EV infrastructure. That's the evidence we've had. I'd like your views on those comments, but also on how you're going to build the infrastructure in the rural areas.</p>
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Ken Skates
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Skates, Ken
<p>Well, the strategy will reflect the needs of all parts of Wales, rural and urban, but I would strongly disagree with whoever has suggested that we shouldn't take a market-led approach to this, because the alternative would be for the taxpayer to pay for quite expensive infrastructure—as I said earlier, the petrol stations of the twenty-first-century—which might, if you choose the wrong technology, become redundant quite soon. My view is that it makes far more sense in terms of utilising the public purse effectively to ensure that, where the market can and is willing to invest, it does so and that the taxpayer doesn't foot the bill instead.</p>
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Simon Jones
Jones, Simon
<p>And the model that we've described about the concession approach—we can incentivise that concession approach or we can award more points for better coverage in rural areas. So, there are things that we can do to flex the way that the concession will work to make sure that we do get coverage across rural areas. That's the advantage of taking a national approach to this rather than looking at individual chargers. I think we would be looking at it as a portfolio of a charging network across all of Wales.</p>
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Joyce Watson
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Watson, Joyce
<p>And when we are looking at that national approach, there are strains within the national grid, and some of those are actually in the most rural areas of Wales. So, when we're looking at perhaps trying to see how the system is going to cope because of those strains, are we taking a wider look at how we're going to support—and this is one part of new emerging technology—in making sure that those communities can benefit, really, from the emerging technologies being linked also to the improvement on the network?</p>
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Skates, Ken
<p>Two things on that: absolutely; the work on the energy atlas, of course, will provide us with detailed intelligence on where there are going to be strains on the existing network but also where there are opportunities through renewables. And this brings me onto the second point, which is that it would be, I think, irresponsible for us to provide electric charging points that are, in turn, powered by systems and processes that damage the environment. So, where and whenever possible, we should be utilising renewable energy at a local source, and that could have, in turn, spin-off benefits for the communities that they're based in.</p>
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Watson, Joyce
<p>Absolutely—and the new technologies, going back to the earlier questions that I had. But it is, really, for me, about joining it all up and getting people around the table who can help. And I have to do a plug here, don't I, for mid Wales, since I represent it. But a lot of the expertise and learning actually resides in mid Wales. The very early pioneers are there. So, I hope that, in your discussions, we're going to talk with those pioneers—and they still are pioneers—in trying to resolve this and move it forward.</p>
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Skates, Ken
<p>Yes. And some great pioneers in other areas as well—for example, hydrogen, with Riversimple in mid Wales making great strides with that technology. So, I'd agree entirely with you that there are some great experts in mid Wales who we are working with and will continue to work with. There are many experts elsewhere in Wales as well. I mentioned earlier Cardiff University, and they are engaged at the moment in a live demonstrator project, which I think is further down the coast than Pembrokeshire I believe, in the Bridgend area.</p>
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Joyce Watson
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Watson, Joyce
<p>Yes. Of course, we've answered partly some of the questions about discussions that you're already having with the providers now and will begin to—but, you know, they can be a little bit thin on the ground in rural areas. We don't have major supermarkets, but we do have public buildings, which you've mentioned. So, when we are moving forward, even things like twenty-first century schools—we are investing heavily in those buildings and other buildings. Are we going to start trying to think about linking up that public expenditure to the new emerging—?</p>
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Skates, Ken
<p>Exactly. Yes. And not just schools, but hospitals, local authority buildings, tourist attractions that we operate or we're responsible for, for example Cadw attractions. Supermarkets—if we put them to one side for one moment. Within rural Wales, particularly within mid Wales, there are huge opportunities to use public property and public land, and as Simon's already said, we can skew the procurement system in favour of intervening within those areas where the market would otherwise perhaps struggle. But then, if we look at supermarkets, well, there has already been a declaration by a number of supermarkets of their intention with regard to installation of electric charging points. We're also engaged with Zouk Capital, who are the fund managers for the UK Government—a £400 million fund. So, they're able to give us an indication of what sort of market appetite there is across the UK. So, we're trying to draw on as many bases of intelligence as possible to inform not just the work today, but the wider strategy that's going to take us forward over the next two decades.</p>
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Joyce Watson
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Watson, Joyce
<p>If I can just, moving forward—. And again, I'm going back to rural areas. We've got cash-strapped local authorities at the moment, but they have buildings that could actually be used in this way and they could make some money to sustain those services that people want. I was going to suggest something like Welshpool library, for example—ideal location. You could make some money to keep that library open, let's say; it's just an example.</p>
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Skates, Ken
<p>And this is why I think those who say that Welsh Government should just rush in and intervene right now, ignore the market, just get it done, get it over with, are perhaps lacking in creativity and too willing to squander precious public money. So, take a step back, assess what works best in the long term for the taxpayer and then make sure that, wherever possible, it's the private sector that pays and invests but with the interests of the public right at the heart.</p>
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Russell George
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George, Russell
<p>Okay. Hefin David. Sorry—Dewi.</p>
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Dewi Rowlands
Rowlands, Dewi
<p>When we met Transport Scotland about a week ago, that was the kind of model they were explaining to us, in that they're squeezing as much as they can out of the public asset, where you have schools with the infrastructure, which then, outside school hours, opens up for the rest of the community to use. So, that is—</p>
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Ken Skates
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Skates, Ken
<p>And that's the very ethos of twenty-first century schools—a community-focused school.</p>
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Russell George
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George, Russell
<p>Okay. If I could bring Hefin in.</p>
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Hefin David
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David, Hefin
<p>Rhun ap Iorwerth has just tweeted that the EVs are here, and he's got a load of electric vehicles just outside the Senedd building right now because he's got an event.</p>
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Skates, Ken
<p>I hope he drives one.</p>
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Hefin David
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David, Hefin
<p>Are you going to the event, where you can find out, which he's got today? </p>
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Skates, Ken
<p>Yes. </p>
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Hefin David
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David, Hefin
<p>He also did a report, interestingly, just to follow on from that last comment about what's happening in Scotland—he talked in his report about ChargePlace Scotland. Have you seen the report, Minister?</p>
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Ken Skates
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Skates, Ken
<p>I've not personally seen it. Simon, have you?</p>
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George, Russell
<p>I think it's launched today.</p>
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Hefin David
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David, Hefin
<p>Okay, so there's not been much chance.</p>
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Skates, Ken
<p>Is this part of the debate this afternoon that he's going to be presenting?</p>
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George, Russell
<p>It will probably be, yes.</p>
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Hefin David
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David, Hefin
<p>You'll be aware he went to Scotland to speak to Scottish Government officials—</p>
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Skates, Ken
<p>Yes, as ours do. </p>
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David, Hefin
<p>—and what happened. So, what are you aware of that is good about the Scottish approach?</p>
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Skates, Ken
<p>Scotland intervened early. There's obviously the question to be asked: was the intervention necessary? However, the intervention was successful, and as Dewi's already highlighted, there are lessons that we can, and will, learn from Scotland. We're already engaged very closely with Transport for Scotland in making sure that, as we develop a system that we think is suitable for Wales and that minimises the taxpayer's investment and instead introduces a greater degree of investment from the private sector—we think the Scottish model will be able to offer some good lessons.</p>
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David, Hefin
<p>So, we're likely to see ChargePlace Wales in the same form as ChargePlace Scotland?</p>
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<p>I think probably Transport for Wales as a brand is—</p>
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David, Hefin
<p>You'd prefer to keep to that brand.</p>
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<p>Yes.</p>
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David, Hefin
<p>Okay. They've also talked about the role of the Energy Saving Trust, and in Scotland, motorists can apply to the Energy Saving Trust for 100 per cent funding to install a home charge point.</p>
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<p>Yes, and I think we're working with the Energy Saving Trust along the same lines, I believe.</p>
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Jones, Simon
<p>Yes. We offer grants. The broadband situation was a similar thing. So, those conversations are ongoing.</p>
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David, Hefin
<p>Okay. So, there's a similar link in Wales as there is in Scotland.</p>
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<p>Yes. The Energy Saving Trust works with all of the nations.</p>
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<p>Can you just detail what grants are available? Don't go into too much detail about each one, but give us the headlines.</p>
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Jones, Simon
<p>From us, at the moment, there aren't any direct grants related to this, but the UK Government offers a series of grants through the Office for Low Emission Vehicles.</p>
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<p>And what are you doing to encourage people to take up those grants?</p>
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<p>We operate road shows, particularly with fleet operators and with local authorities. I think the next one is at the end of June. We highlight, whenever and wherever, to our stakeholders the opportunities that UK Government grants could offer. And I know that the UK Government, as well, is keen to make sure that it promotes its grant schemes in Wales as it does across the rest of the UK. I think it would perhaps be helpful for the committee if we do try to get the figures for Wales, which may, in turn, lead you to make a certain recommendation.</p>
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<p>That would be very helpful. I would appreciate that bit of information. Bethan Sayed, do you want to come in?</p>
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<p>I just wanted to pick up on the comment you made about the fact that you had lessons to learn from Scotland, as they intervened early, but earlier on you said that you didn't intervene early because you might put the wrong or the less developed points in—</p>
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<p>That's exactly the lessons that we need to learn, yes.</p>
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<p>—but, in Scotland, they seem to have more people driving the cars, they seem to have a more established infrastructure. So, at what point do you think intervention is—? Despite what you're saying about the market, at what point do you think the Welsh Government needs to be more interventionist to catch up with what's happening in Scotland in particular?</p>
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<p>Well, the question might be: how many of those facilities that the taxpayer paid for in Scotland would today have been paid for by the private sector? And, also, who will foot the bill for upgrading the charging systems? Will it be the taxpayer, or will the private sector step in? My view is that there is kind of an ethical issue to attach to this. Thus far, the vast majority of people in Wales haven't been able to afford an electric or hybrid car; they're just too expensive, particularly pure electric cars. Should you therefore use the money of taxpayers who can't afford a car of that type to install the infrastructure that the private sector will install? And so there is an ethical question there, a moral question, that we all need to consider.</p>
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Sayed, Bethan
<p>But also, the question we haven't addressed, and which I didn't think you addressed in the response to us in our report, is the issue around deprivation. You know, if you're living in a middle-class area, you can afford the charging points, but on the residential question of if you're living in a terrace, you can't do so. So, if there was an infrastructure investment from Welsh Government alongside the investment to perhaps give a grant to those in certain areas, based on the index of multiple deprivation, then that would allow for it not to just be something that the middle classes of Wales benefit from.</p>
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<p>But even then I think there is still the point that electric vehicles are, for a huge number of people, just too expensive to afford. And so, even if you were to grant all of the money that's required to install a charging point, it's highly unlikely that people in the most deprived communities could then all afford electric vehicles. You know, what's the cost of the cheapest Tesla at the moment—about £50,000? It's a considerable sum of money. So, for me, personally, I think there is still the argument that, wherever possible, the private sector should invest rather than us, as the Government using taxpayers' money, intervene unnecessarily.</p>
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Jones, Simon
<p>There's a parallel here with the work that we did in the broadband space, where we intervened when the market had failed. So, the private sector rolled out superfast broadband to the cities and some of the towns and then stopped when it got to about 45 per cent of premises covered, and then we stepped in and we've taken that to 95 per cent, or whatever. We're not even at that stage at the moment where the market has got going to be into failure. So, diving in with a kind of interventionist approach where we're saying the market has failed when it hasn't really got started is a tricky one for us, because we end up potentially spending money—. In the broadband example, we could've been spending a whole load of money in rolling superfast broadband out to the centre of Cardiff, where people have now got choices between Virgin and Openreach to provide the broadband. So, there's a question, I think, about whether it's sensible for us to use public money in places where, eventually, the market will provide.</p>
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Skates, Ken
<p>And—sorry, Dewi.</p>
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Rowlands, Dewi
<p>We are taking a two-pronged approach, because, going back to funding, the Minister will be announcing this week, hopefully, the allocation of grants to local authorities across Wales, and there, hopefully, will be good news about how we can support the introduction of new infrastructure. But we need to make sure—and this is where our charging strategy comes in—we need to be basing our investment on sound evidence, and that's around demand, it's around the catchment, the uptake, it's about making sure that the user is comfortable in buying an electric vehicle, and, obviously, then you've got the indirect issues around affordability and so on. So, I think it has to be approached in two ways, and we are currently doing that.</p>
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<p>I think Bethan raises an important point about the geography—the built environment of Wales as well. About a third of properties in Wales don't have off-street parking, and so the technological solution for terraced houses, for example, will have to be or may have to be very different to the solution for private properties where there is off-street parking. It may well be that induction charging is more suitable now. If it is, we'd need to assess whether there's market failure there and what the cost of induction charging would be and whether the market itself and alone would be willing to invest in it.</p>
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<p>Can I just ask you some very quick questions to finish, on timing? You said your strategy will be published next year, during 2020. How soon after you publish that strategy do you expect to be in a position to go through the tendering and commissioning process to install infrastructure?</p>
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Skates, Ken
<p>Well, TfW are commencing work now on the process concerning railway stations and land that is owned by us—rail stations. In terms of the wider picture or some time frames we operate to on broadband—.</p>
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Simon Jones
Jones, Simon
<p>So, I think the two will run in parallel. The strategy and the Wales transport strategy and the concession will run in parallel, so—</p>
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George, Russell
<p>So, if work is already under way via Transport for Wales—which is good, and that's welcome—but then the strategy is yet to be developed, that sounds a bit disjointed.</p>
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Jones, Simon
<p>But I guess you'd rightly be criticising us if we said, 'We're not going to do anything, we're going to wait for the strategy to be completed in 18 months' time or however long it takes.' So, I think there's a need for action and we can recalibrate that approach in the light of the strategy later on.</p>
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<p>Okay. So, once your strategy is made publicly—. You've completed your strategy, it's available—how long after that do you envisage the infrastructure, the commissioning for the tendering process to take place?</p>
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Jones, Simon
<p>Transport for Wales have been remitted this year to begin that concession process. Now, it's not going to be a click of your fingers and we're seeing chargers all over Wales. Because we want to get into a dialogue in order to be able to get the best possible solution, that's likely to take 12 or more months to be able to run through and get a contract signed. I think what we'd need to be able to do is to get some advice from TfW to be able to give you a clearer picture of what that timetable might be. I'd be reluctant to actually nail our colours to the mast now.</p>
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<p>That's absolutely fine. I understand that, but it would be useful if you could make some enquiries with Transport for Wales and get back to us on that, and I think we'd be keen to know timings in terms of the infrastructure, the strategy and how that links in with the work that is already going on, and how long after the strategy is published we expect to see the commissioning and tendering processes take place, and how long that's then expected to take place. So, I'd be grateful for that.</p>
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Rowlands, Dewi
<p>And the timings will obviously have to deliver the commitments we made in the low-carbon plan, so those are the drivers, really, in terms of timing and roll-out of infrastructure.</p>
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<p>Sure, okay. Thank you. Can I thank the Minister and his officials, and also can I thank Rhun ap Iorwerth as well for his piece of work in regard to his experience in Scotland and for submitting that to the inquiry in advance? I understand that'll be published during his lunchtime event now, so I hope that as many Members as possible can attend that event as well, and, again, there's some further discussion this afternoon in the Chamber, as well. But, thank you, Minister and officials.</p>
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<p>Motion:</p>
<p>that the committee resolves to exclude the public from item 8 in accordance with Standing Order 17.42(vi).</p>
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<p>Motion moved.</p>
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George, Russell
<p>That brings us to item 7. Under Standing Order 17.42, can I resolve to exclude members of the public from item 8? Members are content. Thank you.</p>
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<p>Motion agreed.</p>
<p>The public part of the meeting ended at 12:20.</p>