National Assembly for Wales

Well, the context is incredibly difficult. You have the service pressures that we set out regularly: that's both about the pressure on beds, the number of people who are in different parts of our care system with COVID, and the pressure that's producing and the impact that's having on non-COVID care. You'll have heard that we're at over 150 per cent of our critical care capacity. That has very real consequences for non-COVID areas because we've had to surge into non-COVID capacity, and has real consequences for our staff as well. So, the pandemic itself is far from over and that will definitely carry into the year ahead.

You'll have noticed, I'm sure, from our figures on system pressure, that the fastest rising group we have at this point is actually the recovering patients in acute beds. That's part of our challenge across the whole system, so not just the health part of it, but across health and social care, because, actually, we'll need to be able to move those people out of the acute bed part of the system when we're able to do so, when it's the right time to do so, and so the pressures we're seeing within social care are very real for us, both at the back door of the NHS, but also the front door as well, in primary care. So, we have this really big challenge of the system potentially overheating and us getting to exactly what I've always been most fearful of, the situation we saw in Italy and Spain in the first wave, where they really were overwhelmed, and that has very real financial consequences, and a consequence for how we run the system now, but also for next year's budget, very real consequences too.

We can't give you a neat and entirely accurate prediction of all of those choices, because it depends on the course of the pandemic for some extent of it, but we also know that, as well as the cost of running COVID care, we also have the costs in human and financial terms of delaying non-COVID care as well. So, over this next year, I hope we'll be looking to the serious business of financial recovery and healthcare recovery, and that will mean looking to turn on new activity at the same time that we'll still be dealing with the consequences for our staff of all they've done within the pandemic, and it will materially have affected our ability to generate efficiency savings. Because we've funded the NHS over the period of austerity at a greater rate than other parts of public services, so real-term cuts, as we all know, have meant difficult choices, but the Nuffield report that we've had, building on the Health Foundation report, said that the NHS in Wales can be sustainable if there's real-terms growth and there's a 1 per cent year-on-year efficiency. Frankly, during the pandemic, we haven't been able to do that. So, those are, if you like, what I see as the big blocks of the challenges that we'll face at the end of this financial year and moving into the next year, and I'm afraid that uncertainty is a very real feature of what we're all going to have to live with.

If we're in a position where we're able to ease off direct COVID-related expenditure, there's an opportunity to switch some of that, but, of course, all these different things depend on timing. So, for example, we may have completed a vaccination programme, and the cost of that may end, or it may well be the case that we're looking to undertake a further vaccination programme, because we're not certain about the longevity of the protection the vaccine provides.

We have had a very good experience in running a highly effective contact tracing service here in Wales, much more successful than the service in England, and yet we know that whilst that's not the current headline everyone is looking at now, we also know that, as we come out of a level 4 lockdown, as we look to unlock more freedoms, our contact tracing service will be a greater focus of attention again, and we put more money into the budget because we recognised we couldn't have a position where all of the contracts for staff would end at the end of March. So, we know we're going to have to have a contact tracing service going into the summer, and quite probably beyond as well. So, there are those things about the course of the pandemic that we can't predict, but we know there are costs that go alongside them.

I think the other challenge about money and how we'll be able to spend money is, as we're looking to recover, in normal times, we'd have bought activity as well as looking to generate activity within the NHS. So, waiting lists initiatives within the NHS cost money, but they're done within the NHS. If we're sending people to Emersons Green or into the system in England, then there's a cost to pay for that as well. Actually, none of us would be able to securely or sanely predict that there'll be lots of free capacity in the system in England, whether that's within the NHS sector in England or indeed in the private sector in England as well. So, actually, there'll be a big challenge on capacity, so we won't be able to buy extra performance in the way that we might have done, say, a year and a half ago. So, there will be some real challenges about the money we have and how we can spend it, together with what we want to do in terms of performance.

And, of course, like I said, the point about staff can't be forgotten, because whilst we have already invested in staff significantly in this term and will continue to do so, actually, part of our challenge is that the staff we have now will at some point need some kind of a break, and some of those staff will find their NHS careers are shortened by the experience they've had in caring for us through the pandemic. So, we face this real challenge where we know the costs are going to increase again through this year, we know the challenge will be great, and we're doing that quite probably with a more significant need to care for our staff and to invest in the future.

Yes, certainly. I think what the Minister has already said illustrates how closely bound up health and social care are, because the health service is dependent on an active social care service so that we're able to move freely between the two systems. And, of course, this has been a huge experience for the social care system, particularly for the care homes, during this period. And there's been huge pressure, as we all know, on the staff, and the emotional strain on the staff as well has been absolutely enormous. We have been able to help the social care system to continue to survive, and we have been able to, via the hardship fund that we have put into local government, avoid any homes actually closing because of COVID reasons, which I think is actually quite an achievement, because that does mean that people who depend on their home continuing are not disrupted, and we know how awful it is if elderly people have to actually move. So, by helping to fund the voids that inevitably have been created in care homes, we've been able to keep them running, but it has been difficult and the staff are very—it is precarious, keeping the care homes running, and I think we're aware of that the whole time.

I think it's difficult to give an exact figure, because, as I said, some of this is still going to be demand-led. We added more into the contact tracing service, for example, because there was a greater need coming in. There were the predictions we'd had about the level of need they were able to cope with, when actually we needed to invest further and we needed to deal with the fact that they weren't able to recruit at a certain point because the contracts could only go up to the funding interval at the end of March. But we know that we'll almost certainly need to spend more in the next year on the vaccination programme and on contact tracing.

We almost certainly know we'll need to do more on testing as well. Testing isn't going to go away, and in particular when you think about the pilot we're running with South Wales Police, which all police forces have bought into and they're all interested in, so that's a non-devolved service, but we may well introduce something on the testing around that as well, and any of the return to education, whether it's university, further education college or school. So, actually, there's quite a lot for testing to do as well as the symptomatic testing programme. And I also think that testing will be a more significant issue if we're able to return to international travel again. I think not just the rules that we've introduced, but I think you'll find pretty similar rules will end up being introduced in other parts of the world as well. So, that will have consequences too. 

We'll need to continue to supply PPE for a significant period of time. Those are additional baseline costs, and there's always a need to review what's appropriate, not just within health and social care, but others, and essentially, people would be looking to us to procure for other parts of the public service if that happened, in exactly the same way that at the start of this, the NHS ended up procuring and supplying the social care sector, because social care supply lines collapsed under the weight of the international pressure and tightening that we've described many times before. And again, it's a real success story; we should all take some pride that NHS procurement through NHS shared services has done such a fantastic job to do that. But that will mean that those things will need to be addressed, as well as needing to find resource to try and address the backlog, so we may be able to run some NHS waiting list initiatives, but again, that will be at an extra cost, and then we'll need to revise again—not in this year, but in future years again—our staff investment.

And of course, across capital, we'll have a number of choices to make as well. So, the pandemic has had a huge human cost, and yet it's driven by necessity a range of systems change that we probably would have wanted to see happen. So, the broad reform package in 'A Healthier Wales' is still—I think it's being 'revalidated' is the phrase that keeps on being used, and I think that's a fair expression, and within that, we've got investment priorities we may or may not come to later on, so we may actually be able to use money to advance reform for a purpose, and not just reform for necessity. So, not every single aspect of the pandemic means that the health and care service will be in a worse shape, but actually, the demand and the pressure we're under is more significant, so the challenges and the impetus of the reform will be even greater.

Thank you, Chair, and thank you, Minister, Deputy Minister and officials for coming along and giving evidence this morning. Can I ask, Minister, how the budget will manage the deficits that health boards invariably have in their financial years? We've got a projected deficit, I think, this year, 2021, of cumulatively about £90.4 million. This includes £25 million overspend of Hywel Dda and £40 million in Swansea bay and Betsi. Could you say how from the centre you manage this within the budget?

There are a couple of different things. So, we've made choices to support Betsi Cadwaladr. You'll recall that from the statements that I've made previously, and that means there's a different opportunity for that organisation to move on, building on the progress that they've made and the advice that I've received through the tripartite process. When you look at the broader picture, this goes back a bit to some of the conversations I was having with Rhun ap Iorwerth initially. Financial sustainability has been built on and achieved on the back of a deliberate choice to prioritise health service funding through the period of austerity, but that comes on the back of real-terms growth and 1 per cent efficiencies, and it has been impossible for our NHS to deliver those whole 1 per cent efficiencies through the pandemic, so we have a system that is not able to generate those efficiency savings in the same way, and at the same time, there's more demand coming into the system and the understandable need to service the increased healthcare demands through the pandemic.

So, we deliberately try to budget for an idea of those health boards that may overspend, and that's what we've done through this year. It's why we've been able to balance the MEG, and in particular, thinking about since Alan's time as the soft and gentle finance director here, we've actually seen improvement made in the financial discipline of all of our organisations when you think about where we are now compared to where we were a few years ago. So, the NHS is in better shape to manage this, even with the extraordinary demands that have come in, and in the next year, we'll need to make some provision for potential overspends, but we've also—as the committee's aware—looked again at the allocation formula, so growth spending is now allocated on an updated basis. And if you want to go through more detail on that, I'm sure Alan will be very happy to take you through what they're looking at in terms of the budgeting process to make sure we can understand what we're likely to do, how we've managed things this year and what that means for the year ahead. Alan.

I wouldn't mind trying to understand the firmness, if you like, in dealing with health boards that do continually overspend. I appreciate with the pandemic that cost pressures are enormous, but other sectors of the public sector very often look at the health service as constantly asking for additional resource and getting that additional resource, and little or no sanction when the budgets do run wild. Now, that might be an unfair perception, but it's a very real perception. I think you might identify with that in your constituency role as well, Minister. So, are we able to try and get a feel from Alan as to what discipline is put on the health boards so that they can't feel that they can just spend and the tab will be picked up irrespective of whatever the budget outcome position will be at the end of the financial year?

Alan, do you want to describe some of the measures you've taken, including the work of the finance delivery unit? Because I don't think many Members will understand that's there, or indeed the fact that it's been recognised in UK-wide awards for the work that it's already done.

Alan is quiet, and yet I know he's not a quiet person.

Can you hear me now?

Yes, that's better. Well done.

Apologies. I'll deal with pre COVID and also where we are with COVID in terms of, I guess, financial sustainability and discipline. I think, generally, the approach has been to join up across the system, from Welsh Government right the way down to GP clusters and to patient level, the way we allocate resources, to make sure that they're allocated to the right place, the way those resources are utilised to make sure that we are getting the most from the spend and that we're managing variability across the system, and more importantly—and perhaps some of the more substantial developments of late—it's been about measurement of outcomes, outcomes that matter to patients, and to make sure that the way we're allocating and using resources is driving the best outcomes using a more internationally validated outcome measurement. And we've applied that discipline to each and every board and we, as the Minister said, through the finance delivery unit have developed all of our measurement around that.

Pre COVID, we went into this financial year with a clear expectation about the work that we were doing between the finance delivery unit and KPMG, that, for Hywel Dda and Swansea particularly, the resources that we allocated, their opportunity to improve the utilisation of those resources and to improve outcomes, meant that those two boards would have moved, as Cardiff did, into a break-even position, and that was our clear plan and expectation. Unfortunately, COVID arrived, we had to change quite quickly our approach to financial sustainability, and we had to take a slightly different approach to governance and a whole raft of additional governance was put in place to try and make sure that we had a clear line of sight on the spend outside of COVID and a clear line of sight on the spend on COVID, and how we would fund that, and what progress we could make across all aspects of things like efficiency savings, but more importantly, what resources were not being utilised for things like elective care and diagnostics because of COVID.

When we had a look at, I guess, the additional monitoring that we put in and the emphasis that we put on forecasting, the first quarter was very much about getting alongside the health boards and working closely with them, almost on a daily and weekly beat. I meet the finance directors of all LHBs and trusts every week, and I have done since the beginning of the financial year, and what that allowed us to do is to quite quickly shift to being really clear what the position was on normal business and what the position was in terms of all the additional costs of COVID. That allowed us, during the summer months, to move from more actively tracking some of these positions to allocating funding and plans being developed to deliver a financially stable position, including COVID. Where we ended up was the current forecasts are that all organisations will break even other than Hywel Dda and Swansea bay, and they will overspend by their starting plan deficits that they had been describing before the actions that we would have put in place to drive those additional deficits down. So, that will leave us in an end-of-year position of a £49 million overspend in two organisations, and we will obviously use that then to see what progress we can make into the future.

Just picking up on the question, because obviously, there is then the impact of how do we go into the new financial year, just to say we've been tracking savings over four broad categories. One is what we would call technical efficiency, which is your normal cost improvements on procurement medicines, and actually a lot of those savings have continued to be progressed through the pandemic. The area that has been most impacted is some of the work that we've been doing on operational efficiency and productivity and some of the clinical variability, and that, quite rightly, given the pandemic, has been put on hold, and we'll have to have a look at the impact of that into the new financial year. But the last area that we've continued actively, actually, is the work around population health and outcome improvements. So, we worked with the national clinical leads for diabetes, respiratory, cardiovascular, lymphoedema, and we have been working to continue to spread new pathways based on improved outcomes and based on evidence in most of the major disease areas that we have been able to do, whilst recognising that a lot of clinicians would be fully occupied at times with the pandemic. So, actually, two elements of the four approaches to savings have continued mostly through this financial year, and we are building that work into the new financial year.

Andrew, before I come back to you, I've got David Rees indicating he wants a supplementary at that point. David Rees.

Thank you, Chair, and good morning, everyone. You just highlighted the possible savings and the fourth point you identified is new pathways and other approaches to development. Now, clearly, I chair the cross-party group on cancer and we've looked at the cancer delivery plan, for example, and there are many other delivery plans that are due for renewal this coming year. Are you therefore looking at the delivery plans to ensure that financing is able to not just improve outcomes but meet some of those delivery plans as well, because the cancer one, there is definitely a requirement for more staff, more resources and capital for diagnostics?  So, how does that impact upon your consideration of the financial agenda when looking at those delivery plans?  

Andrew Goodall.

Perhaps if I could respond to the Member's question and draw in perhaps a couple of broader areas. Really important to recognise that when we focus on financial discipline and financial planning that we're also drawing on the change of approach that we introduced with our planning cycles in Wales. Whilst we need to recognise that the planning cycle has had to adjust, clearly, in the context of the pandemic, it is absolutely right that we need to be driving financial judgments for the future from a service planning perspective, from judgments around the workforce, the pathways and the experiences for patients that we want. So, absolutely, in terms of any refresh or how we have to reset those plans for the future, we do want to make sure that we can convert those. 

In the past, we've had to manage budgets, and Alan and I have been working in the NHS for many years where we have to make financial judgments sometimes in the absence of some of that data, but even on areas like workforce planning has materially improved over recent years to give us a greater ability to anticipate how we want to put in more training places, for example, to see the pipeline of the workforce coming through. But I'd really want to emphasise the planning aspect, including those individual sub-specialty delivery plans that you're describing. 

In terms of our general approach on discipline, and as the Minister has outlined, there has been a change around the financial discipline and the resilience of the NHS over recent years. Even though we've adjusted our approach for the pandemic to have some understanding of the pressures and how financial demand can come through very speedily, it's not removed the basics that we'd expect. There is still an accountable officer arrangement in place between myself and all of the individual chief executives; they need to account for their own individual performance.

But in respect of the deficit management approach, we have judged that in working with individual organisations and having an understanding of why their particular financial pressures are there to ensure that there is progress on finances, but making sure that we do not allow for detriment in the quality or patient outcome terms. And that sometimes means that with these organisations and being alongside them, we are having to take a more progressive approach, because what I wouldn't want to happen is we simply focus on the number itself and then overnight there is an impact on services that becomes very visible.

And in blunt terms, the way in which we're operating the NHS is driven by the beds that we have available, the services that we have available and the staff that we have available. Whilst, of course, there are many other areas, you would be making decisions that affect any of those three areas. Communities and, no doubt, Members would have concerns and worries if the wrong kind of judgments were being made but actually have that very visible impact on services. So, that's why we're monitoring very carefully, we're tracking things through, we're sharing experiences, because we do want it to be about sustainable choices that improve outcomes and improve services for the population. 

Excellent. Back to Andrew. 

[Inaudible.]—answers. Just on the budget outcome situation for the health boards, seeing as I've asked about this year's deficits, and I appreciate it's a bit like, 'How long is a piece of string?', given the current conditions we are facing and, obviously, going into the next financial year, but what are the predictions for the budget positions of the health boards at the end of financial year 2021-22? 

Well, we have yet to have the plans in at this stage and, again, you'll be aware, as will other Members on the committee, that we get plans from the health service for the year ahead, the update to those with a three-year plan, and for those on a one-year plan, they're scrutinised by officials. We're not expecting to have those plans in yet, and again, in the circumstances we're in, they'll be scrutinised by officials here. Both Dr Goodall and Alan Brace and their teams will be looking through what's come in, both in terms of the financial side of it and also the service plan and delivery side as well, because the money is there for a purpose, as we've just gone through, and we're looking to make sure that we can still see evidence of the reform for the purpose that we're looking for. So, I couldn't give you a hard and fast, 'Here is what we're looking to resolve now and what we're looking to hold back now to try to cover any potential deficits', because that will in large part depend on those plans when they come in. But, as is the usual matter of things, once those plans have come in and are scrutinised, I would then expect to make a written statement, at the very least, confirming what the position is. That's been the normal way we've done things every year and we still want to do that now, and to have that same discipline about the end of one financial year going into another, so there is still a requirement to plan, and that then affects the detail of the financial plans that we have here in the Government.

Would it be fair to say, though, given the evidence you and Alan have talked about, and in particular the evidence Alan gave about progress pre COVID in the financial well-being of our health boards, that we would expect, and you would expect, to see a minority of health board submitting plans that would indicate a deficit position, rather than at the moment where we have a clear majority of health boards? I think four out of seven health boards are in some form of raised intervention or escalation status.

Yes, I expect that the majority of our health boards will submit plans for financial balance, and of course you'll recall that we've made provision in north Wales to assist them to do so. There's the progress we've described in other parts of our service as well. So, yes, I expect that you'll see that again we've been open in setting out those health boards that have met their financial duties, those that have a deficit, and what's being done about them. You can expect that same level of transparency, moving forward.

On the budget line that's set aside £360 million for the delivery—the uplift—of core NHS services, what would you expect the priorities to be attached to that budget line, because, obviously, what we don't want is that money just going into the system and it's business as usual?

Well, there's always a danger that you describe 'business as usual' in a way that is pejorative rather than understand that 'business as usual' is still providing an amazing service that we all rely upon. Part of what 'business as usual' is is to provide for pay awards as well, because the greatest element of the budgets here is our staff—the most valuable resource. We have yet to have the recommendations back from the pay review process, so we're needing to make some sort of provision. That will be the biggest element of that, and I'm sure that many of us would want to be in a position to give a generous pay rise to staff across health and social care. We'll need to deal with the reality of what the independent review process provides us. That will obviously take a significant amount. I think, as I say, there's a danger if we just put to one side staff pay as being 'business as usual' and of no real value, when actually it's of tremendous value to keep our staff not just being well rewarded but the motivation and the value that comes with that as well.

We will also have some specific issues, for example on new technologies and precision medicines. Again, more and more, we're seeing the value of that in a whole range of treatment areas. We'll also have an investment in the future of the workforce. I expect we'll need to make provision for that. There's also more money going into health protection. I think we've already announced that there will be a sum of about £10 million going to health protection, which is really important. And again, before the COVID pandemic took off, we'd already had a review of health protection services and recognised the need to invest in them. But, also, I'll be looking to make sure there's money to help promote our agenda within primary care, and that will be about how we use both revenue and capital, because I'm interested in the work we've already done this term on some newer primary care resources in capital and bringing different services together and how that's helping to improve not just the premises but the range of different services that can be provided. So, I think there's more on that agenda, and Mountain Ash is a good example, I think, of where older facilities are being replaced by better ones, but we're actually getting different services to work together because we have the opportunity to reshape the estate as well. As ever, within the capital side of the budget, there will always be more demand than we're able to meet. But on the revenue side, £360 million for staff costs, precision medicine, health protection, our agenda in primary care—I think they're obvious categories that we'd want to see some of that growth funding used for. Sorry, I should also say mental health funding as well. We're going to continue our commitment to continue to increase mental health funding, but I'm sure you'll have an opportunity to talk to my colleague Eluned Morgan about that.

I'm sure we will. One thing that we've had is a very comprehensive briefing paper from Cancer Research UK that talks about imaging, for example, and the need to increase investment in imaging services for screening and for diagnostic provision within the cancer field of the NHS in Wales. You would expect that to be a key component of that £360 million priority area, I would assume, would you?

Well, that depends on whether we're talking capital or revenue. The £360 million is revenue and it's about whether the increase we're talking about is in some of the capital resources. But obviously, in revenue terms, when we're talking about investing in the future of the workforce, then that very much is part of it. So, if you think about the diagnostic academy that we've created, well, that's a capital cost, but it allows us to improve our training offer and that, then, has revenue consequences that are good things for us, because we want to both train and then retain people here in Wales as well. So, it is a mix of the two, but we have consistently invested in the imaging part of our service over a number of years, and I'm sure that Dr Goodall can provide you with examples that we already have done, but more dealing with what the future is likely to look like.

Just on the Nuffield efficiency target of 1 per cent, because you have touched on that in responding to Rhun in the first part of the question and you touched on it in your opening to my good self, I understand that it's still the commitment of the Government to deliver that 1 per cent efficiency saving, despite, obviously, the pressures of COVID. How are you going to balance that particular commitment for a 1 per cent efficiency and the additional pressures of COVID, and in particular the backlog of waiting times?

We don't expect to deliver a 1 per cent efficiency this year, and I don't think we'll achieve 1 per cent efficiency next year, because of the reality of going into the first part of the financial year for next year. But the longer term plan for the NHS is still to achieve efficiencies each year, as well as growth funding. And we'll then need to look at what we'll need to do to actually expand outwards to deliver against the backlog in treatment that we all know exists there. So, I think it would be a wholly unrealistic and unfair expectation to say that the NHS must have achieved a 1 per cent efficiency saving within this year—that's a wholly otherworldly view. That isn't the expectation of the Government for this financial year and I wouldn't want to give any kind of misleading boost to that idea that we've got this wildly unrealistic expectation on efficiencies during the middle of a pandemic.

So, is it therefore the case that the Government have dropped that commitment on efficiencies because [Inaudible.] says that the budget retains—I'm reading from the briefing note, now—its commitment to the Nuffield and Health Foundation's sustainability model of a 1 per cent efficiency, but that's not the case? 

No, and I think that's misdescribing what I'm trying to say; I'm trying to explain that, during the pandemic, you can't expect the service to deliver the 1 per cent efficiency savings. We're talking about our funding model moving forward. We expect the health service to be able to return delivering efficiency savings, because that's the basis of the Nuffield foundation recommendation on how to deliver sustainability. I don't think it's actually complex, and I wouldn't want words to be put into my mouth that are not true about our expectations for the future of the service.

That's fine. Fair enough. I'm not trying to put words in your mouth; I think it is ambitious to try and achieve that in the middle of a pandemic, to be honest with you, but it's our job to try and scrutinise this and to try and find out whether it still remains a commitment or not.

Could you touch on the Townsend formula for allocating NHS funding and give us an update on how that's been done, please?

We've already introduced the revised formula, and, again, you'll have had a direct briefing from Alan Brace and his officials, and I know that Dr Goodall has also been involved with the committee as well in providing information on the new formula for growth funding, and we're already delivering growth funding in accordance with that new revised formula. And I think it's important that we're able to look again at the way we deliver funding, because there'll be Members on this committee who are involved in the review around Townsend and the ability to shift resources according to need around the system. This is never easy. The theory is always more straightforward than delivering that against the practical reality of how organisations receive budgets and are used to dealing with those means. But we're already applying it and it'll be applied again within the way that we allocate the growth funding this year as well.

Okay. Thank you, Minister, Thank you, chairman.

Diolch, Cadeirydd. Minister, this morning, you've already referenced the workforce on quite a few occasions and the importance of that workforce. Particularly during the COVID-19 pandemic, we have seen—

David has frozen on my screen.

And mine. Let's give him a bit of time to unfreeze. I think we could come back to David, and in the meantime we'll go on to Lynne Neagle and social care funding, specifically, while we get systems sorted out. Lynne Neagle.

Thanks, Chair. Good morning, everyone. Can I ask about the social care workforce grant? The Government has announced that it's being increased to £50 million in 2021-22. What is the purpose of the £50 million grant and how will it be allocated? And what outcomes can be demonstrated from last year's £40 million grant? Julie, you're muted.

Thank you very much, and thank you very much for that question. Yes, the £50 million workforce and sustainable social services grant is there to facilitate the delivery of our 'A Healthier Wales' priority, and it's to enable local authorities to deliver the core social services—that is for children and adults—and it will address, as we all know, the current workforce pressures, support the sustainability of the social care workforce, and support sustainable social services. So, it is to help with that core delivery, and I think we're all aware of the huge pressures that social services have been under during the pandemic. So, I think it's absolutely right that there is a further uplift to this grant for 2021-22. So, we've been able to give an additional £10 million there. And the grant has previously been distributed using the notional personal social services sector shares from the unhypothecated local government settlement funding formula, and that's how we would anticipate doing it again.

And then to go on to the part of your question about what evidence have we got of what it's actually being used for, we haven't had the final reports in for 2020-21, but, to use the examples for 2019-20, it was used to support salary uplifts within social care, because I think one of the issues we're all aware of is the low pay of the social care workforce. So, it's been used for that. It's been used to support residential placements for older people's services. It has supported out-of-hours services. It has supported domiciliary care uplifts. And another particular thing is moving learning-disabled people into supported-living accommodation. Those are just a few examples of what it was used for in that previous year. And, actually, what authorities have asked is they have asked for flexibility, because they want to respond to local conditions and local needs, so we have been flexible about how it would actually be used.

But now we're looking forward to this next year, and we will be looking again at the strategic use of it to support the workforce. So, one of the important things is that we have now developed the social care forum, which is looking to deliver on terms and conditions for the social care workforce, and, in view of that, I think that we will be discussing the criteria for the use of that additional money with the local authorities for the next year.

Okay. Thank you. You touched in your answer to Rhun earlier on the private social care sector. Is there anything you want to add in terms of what this draft budget delivers for the private social care sector, given we know how fragile it now is as a result of the pandemic?

Yes, well, we've already said how fragile it is and, just to illustrate how closely social care is working with healthcare, in situations where there has been a shortage of social care staff, health and local authority staff have all come in and helped out in individual residential care homes. So, there are real illustrations of how we are working together.

But, obviously, one of the big issues is the wages of the social care workforce, and, from April, the national living wage, which is obviously the statutory minimum wage, will be £8.91, which is an increase, but the real living wage is £9.50. And so the grant can be used by authorities to help support private social care providers with managing these and other workforce pressures, because I'm sure it's the desire of all of us being involved in the public sector that those wages should be improved.

We have been trying also to professionalise the workforce through Social Care Wales's WeCare Wales recruitment and retention campaign, and we're having a newly established jobs portal. So, some of the extra money that's going to Social Care Wales will be able to be used to further support the workforce. And, again, we've got the social care forum, which is going to be working there to try to improve positions. Because one thing that I think has happened during this pandemic is that the role of the social care sector has become much more visible, because I think it has been invisible for many, many years. And we know it's mainly women working in it, mainly on very low pay, and I think now is the opportunity for us to look at what we can do to improve that sector when it is so high in the public's knowledge, really. So, there are a lot of things that I think we can do.

Thank you. In this year—this financial year—there have been significant additional sums allocated in the supplementary budgets for social care. Is it your intention that we'll see the same in this coming year, and are there funds earmarked for that purpose?

Well, obviously, we'll have to see exactly how much will come to social care, but I would anticipate we would get some more. During this financial year, we've been able to help social care in many ways, obviously through the £40 million that was given initially to the local authorities, and the additional £22 million since then. And it's been very, very important for social care. Also we've been able to give the additional money to help with the very important issue, which I know you've championed, about visiting to care homes, and we've been able to give money to have the pods set up, which enable the care homes to lease, at the expense of the Government, for six months, pods, which is a very, very positive way of moving forward in extending the space of care homes. So, there have been things like that—very definite things that we've able to do with that additional money, and we would—you know, I anticipate that we may have further allocations, but, obviously, we can't say at the moment.

Albert. Mr Heaney indicated earlier—let me let you in, Albert, for old times' sake.

Thank you. Thank you, Chair; thank you, committee. It was just really in relation to the providers. I think the Minister covering—. The hardship fund has been particularly helpful. Despite much pressure on our care services, whether they be care homes or domiciliary care, the hardship fund's been particularly helpful in achieving financial resilience and supporting the sector through. I think that that, therefore, lends itself to look, then, back at some of the funding that we're distributing now to local government. This year's financial settlement through the revenue support grant was better than in previous years of austerity, and, indeed, the funding for the RSG this year is in the region of £176 million. So, again, there are substantial funds that are available to be utilised, and this is both by the providers, but the wider service provision. And then, just coming in on the back of what the Minister was saying about the pods, despite real pressure, some notable successes as well—69 pods were actually delivered before the Christmas break to enable some visits to take place in, obviously, a very difficult pandemic situation. Thank you, Chair.

Great. Lynne.

Thank you, and I do really welcome the investment in the pods. It's so important to see that work progressed. Just moving on, then, to talk about carers, the Welsh Local Government Association has raised particular concern with this committee about pressure on carers, and you'll know that this is an issue of great concern generally to the committee. What's the budget going to do to enable carers to access urgent help and support when they need it, particularly in view of the ongoing waves of the pandemic that we are in the throes of?

[Inaudible.]—carers, and I share the concern. It is a matter of enormous concern, the difficulties that carers have had to go through in this particular period. I've met many groups of carers during that time, and it has been heartbreaking to listen, really, to how difficult it has been, so I absolutely share that, and we are doing what we can to try to alleviate that, to do what we can. In some cases, it's been particularly difficult, because some carers are so keen to protect their loved ones that they've actually not taken some of the help that was previously available to them, because of the fear of infection. So, I'd really like to pay tribute, and I can't say enough about how much they do.

Albert already has referred to the help that comes through the rate support grant, and, obviously, that is intended to reach carers, and they should have their bit from that in terms of the services that the local authorities are providing, because we don't want carers' specific grants to be seen as the only money that we put in, because it's the rate support grant that provides, obviously, the bulk of the services.

So, our funding—specific funding—does concentrate on providing some additionality to those statutory services, and so we are providing £2.6 million over three years to Carers Wales, the All Wales Forum of Parents and Carers, Carers Trust Wales and Age Cymru, and all that is via our third sector sustainable social services grant. We are coming into the second year of that grant, so that grant will continue for three years, and we are very dependent on them in terms of reaching out to the carers, being closely in touch with the carers, and indicating to us what are those issues that matter so much to carers. It's really as a result of talking to them and talking to carers that we have brought in this £1 million carers support fund, which is actually going to be increased—the actual money going to be available is going up beyond the £1 million. The Carers Trust is administrating that for us, and they're administrating it at a local level, so that the help that we give is going direct to the carers in as simple a way as possible, because many of the carers said that they were struggling for small things—well, not small things, I know, but things that didn't necessarily cost a huge amount of money; they needed, perhaps, help with electronic goods, white goods, fuel, paying for the heating, and even food, in some cases. So, we've been giving out that fund—the Carers Trust have been administrating it—and it's up to about £300 to each carer who applies, and it's done on a geographical basis. That came as a direct result of talking and thinking, 'What can we do, something that's quick and easy and direct, to actually help?' So, that's an example of one of the things.

Obviously, there is other money that we're giving as well, the £1 million annual carers funding to local health boards to work with the local carers partnership, and we really feel that we need to look for more that we can do for carers, and we are exploring the possibility of whether we can get some more funding for respite. 

Thank you. And those initiatives that you've just mentioned, will they include support for young carers, then, as well, because we know that they are under very particular pressure and their mental health is really suffering as a result?

Yes, I've met with groups of young carers as well, and so I know the strain that there is on young carers and, obviously, they can—they should be able to access support through the social services teams in the local authorities, where the rate support grant goes in. And those services have continued to be available, although they've had to shift them online, and other forms of support have been given by the local authorities. So, that support has continued, and it's mainly via the third sector providers and sometimes by the local authorities' own staff. So, that continues to be available, and, obviously, the additional funds that I've announced are available to young carers as well.

But we do know that there are particular issues related to young carers, and that's why we have continued with rolling out the young carers' ID cards. And I was very pleased to support Ceredigion's launch in November of the first young carers' ID card. And now, by the end of March, 14 additional local authorities are planning to launch their cards. And we have put in £236,000 to work in co-production with the local authorities and in order to ensure that all local authorities have a card that will be a national ID card. Now, the reason that we did that, of course, was because that's what young carers said they wanted, because they felt that they didn't want to endlessly be explaining to somebody in school, for example, the sometimes painful background of the reason that they are a carer. And then, of course, there's been the whole issue of getting medicine and other places where they need to be recognised. So, yes, that is going ahead, and that is specific for young carers and that's what they wanted. But obviously the local authorities are continuing as much as they can in the present circumstances with the support for young carers. 

Okay. Thank you. The budget narrative says that closer integration of health and social care remains at the centre of the vision in 'A Healthier Wales'. How is that reflected in the budget, and do you think there's any more that could be done?

We've continued to support regional partnership boards as key delivery vehicles to take forward our integration for health and social care, and we've increased and are channelling more resources through the RPBs to promote the importance of an integrated approach, because in 'A Healthier Wales', that was absolutely the key thing: get health and social services closer together. And as we've already discussed this morning, they are much closer together, but there is still a way to go. But we are using and intend to use the RPBs as the vehicle to do that. And the transformation fund and the integrated care fund have been extended for another 12 months in recognition of the impact of the COVID pandemic on the health and social care system. So, those funds will actually be ending in March 2022. And so this next year will be a transitional year for projects and programmes supported by the transformation fund. So, really, we need to use the next year to scope out what we will be doing in the future. And you may have seen that we have just published a White Paper for consultation about the future of social care—only part of the jigsaw of what we need, but this White Paper is proposing for consultation a strengthening of the RPBs to give them many more tools to drive the integration process forward. So, we are continuing to do that. 

I think it's worth reflecting, Lynne, that the decision to move the transformation fund on for another year is a direct consequence of the pandemic. When I made that choice, it was a very clear-sighted choice; we could either look to end those transformation fund and ICF projects within the pandemic, with all the damage I think that would have done, or to carry them on to understand that broader system reform. It's also worth reflecting that, not in terms of money, but in practical working, there has been—. In the first month or two of the pandemic, I think it's fair to say that there was some fraying in some of the challenges, particularly around very practical things like PPE delivery, about whether plans were being shared; you know, it was a very, very difficult period of time for everyone with a leadership role across health and social care. But actually, as a result of the work that was done, I think that now, if you went and spoke to health and local government organisations together, they'd actually say that they think their partnership working practically has made a significant move forward in every part of the country, because of the requirements of the pandemic and the way it's forced people to change the way they work.

Okay. Thank you. Finally from me, then: obviously, we've had numerous reviews, commissions, ministerial groups et cetera looking at the reform of social care funding; when do you expect to be able to make an announcement on that?

I don't think we're going to get a settlement on the future of social care funding within the rest of this term, and it would be unrealistic to expect that in the next few months we'll get that. But I do think it's something that will feature in manifestos at the Senedd elections at the start of May. And, more than that, you'll have seen—because we provided a briefing to this committee and the other committee that takes a particular interest in this area to demonstrate some of the work that has been done, but again, the pandemic interrupted the work that we were doing—that we were due to try to have a national conversation from the end of spring through summer to try to have some sort of consensus about the challenges that we face, and that hasn't happened. It would have been odd if we'd tried to have a national conversation around the future of social care funding whilst at the height of the first wave.

So, that work has been paused in the sense of the public part of the conversation, but work has continued within the Government about looking at the real parameters of what we've got. I'm hoping we can publish something to set out some more detail from what the committee's had already about the range of information and research we've done, so that people can consider what they want to offer people in Wales at the election, but also within the system for people to think about the informed thinking of the Government here. But I hope that we can return to this properly in the first part of the next term. If there's going to be a new settlement, we need to agree it in the first part of the next term, and there's a real risk that otherwise we'll end up kicking the can further down the road.

It's a matter of fact, not opinion, that the UK Government not moving on this is a problem, because of the direct link between tax and benefits, and what we're able to do here as well. But I hope that once we get through the election, we'll have a consensus within the Senedd across parties that there is a real commitment to do something practical, and the work we've done within the Government this term will certainly inform that.

Okay. Thank you. Thank you, Chair.

Diolch, Gadeirydd. Sorry my internet dropped out last time, as is happening on more occasions at the moment. Minister, just a quick question on workforce. You've mentioned the workforce an awful lot this morning, and I fully appreciate the commitment and dedication of our workforce, both in healthcare and social care. I suppose the pandemic has highlighted some of the challenges facing the workforce and the health service at this point in time. How are you balancing the need to meet those pressures? The question here we have is: we know there are now shortages of workforce in particular areas, and ITU is a clear example of where there's a really serious challenge, but how are you balancing to meet the needs of the workforce pressures now, whilst also looking at, perhaps, new ways of working and new ways of developing roles?

Actually, I think that many of our staff now expect their careers to be flexible. You'll recall, because your wife's worked in the service, that there are some people that will have a career path that takes them into a particular area and that is their career, but even within that career there are variations. So, a sonographer can work in a slightly different setting and area. There is a wide variety of aspects to a career in nursing. And Dr Lloyd is a general practitioner; there are many people who are general practitioners who work in different aspects as well. You'll find general practitioners who only work within primary care, you'll find general practitioners in urgent care settings within hospitals as well, and people move between different parts through their career. So, there's always been some flexibility, although there are people who are much more single-minded and single-sighted.

What we've done is we've deliberately—. I've made this choice to always maximise the opportunity to train new members of staff. With the recommendations that have come, there is a range of options and I've chosen the maximum realistic option to do so, because I recognise that it matters to have a workforce that is constantly being replenished. It matters to keep the current workforce we have, because the future of the NHS is already with us in large part, as I keep on saying, because the workforce that we will have in 10 years' time is already substantially here, but we need to keep on replenishing that workforce. It matters for people who are here already, and it's also then about looking at how those people are trained. They're trained for the world of work they're going to go into and that's a world that is changing. Not every person who goes into the NHS was trained through, if you like, typical undergraduate and other higher education courses. There are many people who go in with life experience—midwifery being a really good example. And, again, on midwifery, we have a really good story to tell of the fact that we've increased midwife training by over 70 per cent within the last five years. So, we're looking at that and we're then having to see what will the workforce of the future need to do. 

We have worked with the Faculty of Intensive Care Medicine—you mentioned critical care. We're looking at expanding our critical care resources. It isn't the beds; it's the staff that is the big issue. That's partly about training. That's the new trainees who are coming in. It's also about experienced staff who are already in the service who may be looking to change their career path, so that's a different aspect on training. Sometimes, we only think about training and education for the workforce as the initial training to get people through the door to being a registered healthcare professional, but it isn't that simple. The other challenge we will have is the reality of our changed relationship with Europe. Now, we recruit for the NHS, and always have done, from around the world. You'll see people who are only in this country because the NHS has gone out and recruited them and they're now part of the story of Wales and the rest of the UK—not just the typical stories of doctors and nurses, but across all of our professions. It's something that I think makes us really proud of our NHS, because it is the whole world coming to Britain to deliver a national health service that not just we're proud of, but the rest of the world takes some pride in and looks at as well. So, we'll continue to recruit outside Europe, as we have done, but European recruitment will undoubtedly be more difficult. 

The challenges that are set for us in terms of the UK immigration system will be a feature for health and social care as well. We've said this many times in committee before, but even with some movement on salary caps, the idea that there is unskilled work to be done in health and social care, I think, is offensive. It is self-defeating, so it will prevent us from recruiting people who are providing an incredibly valuable service that we, again, have understood and have much greater understanding and value of because of the pandemic. So, the European aspect is something that, for all of the predictions, we're now going to be very much living with in this next period of time. And I don't think you could objectively say that that recruitment has been made easier—it hasn't, and we'll have to live with that difficulty. So, recruiting and retaining staff may be not just more difficult, but practically, more expensive.

I'm assuming, therefore, that you've allocated elements of your budget to address those additional costs you're anticipating, both in recruitment, but also—. As you say, you train people and they transfer into intensive care, for example, but there will be gaps then left where they've come from, so you have to look for replacements for them as well. So, I'm assuming that your budget allocations and budget projections are including the additional costs that you anticipate as a consequence of increasing the workforce.

On workforce training, I've announced the training package that we've got. So, I've announced what we're training in terms of next year. It will then mean that, in the next year, we'll need to think again about the next set of workforce training decisions as well. So, we'll get advice from HEIW and the wider system about what's required, and there'll then be a choice for whoever is the health Minister is to make about what to do. But it's the case that, just as you can't surge critical care capacity without affecting the rest of the service, you can't provide more critical care beds without doing something about your workforce, and that's why, with the stream of additional nursing places that we've created and have invested in, there's a real financial cost to doing it. So, it costs money to train staff—well, that is part of what we'll need to carry on doing, otherwise, we'll cut off our supply, and I've already talked earlier about the reality that we will have challenges in supporting and retaining our workforce because of what our staff have gone through on our behalf through the pandemic.

And this is all in the context of everything else that we want to do and the progress we've made on increasing doctor training—because again, at the start of my time in the Cabinet role, we still had some concerns about some of our fill rates on speciality training for medics and about where we were at that point in time on general practice. And so, what we've done, to be frank, working with the profession, with the service, has made a real difference. And we're now in a position where, on general practice recruitment for training, we're in a much better position than we were at the start of the year. Maintaining that position requires effort and continued partnership, but it also requires money as well. So, there are real choices that we've made within the last few years that we have to maintain if we want to maintain the current progress we've made, but actually, we probably need to continue to invest more in our workforce. 

Okay. And a final point on the budget in relation to the workforce. I fully support the nurses' call for an increase in their pay, particularly as it has highlighted that concern. There's also the question of the social care staff and the pay for social care staff. Now, all of those increases will have an impact upon your budget, clearly. Are you predicting increases in wages in your budget, even if it's not coming from central, but you as a Welsh Government decide to increase funding? Because you've done it in the past—you've made sure that the living wage is paid for all NHS staff. Are you looking at the increases that might occur by looking at returning these rewards to the people who deserve the rewards, both in health and social care?

We're having to look at scenario planning for what we budget for in terms of an overall increase, and then if we wanted to go further, what that might mean. The reality is that, from the trade union side, they're really clear that they want us to commit to the pay review body process and then to meet the requirements of the pay review bodies. We've been through this at some cost over a number of years, where there's some unhappiness where pay review body recommendations were not then implemented, so there's very consistent demand from the trade union side to honestly engage in the pay review body process, and then to meet the requirements of it.

Now, some of that is then the context set by the UK Treasury. If they're going to set out a pay restraint policy and indicate they're not going to fund pay above a certain level, that provides a very real practical problem for us, because that is reflected in the budget allocations we get. So, it's part of the reason why we can all expect not just nurses, but health, social care and local government organisations and their staff representatives—. And I say 'organisations', because if you were talking to the leader of the Local Government Association in England, then the Conservative councillor who leads local government in England would want to see more money come in for staff resources and to provide a different settlement on pay. So, it isn't a narrow political point; there's a broad public service point here about whether we're going to reward people and maintain people in jobs who have been essential to caring for us in every part of the UK or not. And if that isn't a decision that is a policy choice made by the UK Treasury, we'll have incredibly difficult choices and we could find ourselves in a position where we're reliving austerity. I hope that isn't the choice that's made, but all of those choices have direct, practical consequences for what the Welsh Government then does.

Okay. I move on to a quick point on COVID-19 funding. You've already mentioned, I think, that you've increased the funding for test, trace and protect, and you anticipate that to go on. You also anticipate the vaccination programme to go on, which is an additional cost as a consequence of that. Are there any other specific areas, including perhaps laboratory workers—one of the big concerns is on testing and the labs and being able to get responses back in time—are there any other areas that you identified for COVID-19 responses for which you may need to find additional funding or there's consequential funding coming into it?

Yes, we've recognised that, on lab capacity, we may well want to do more. I think I touched on that in an earlier answer. We'll need to think about the pace of digital investment and progress as well. Again, it's one of the things that's changed in the pandemic—the significant move to more online consultation or telephone consultation. Sometimes we forget that the phone—. It may be old technology, in terms of the modern world, but, actually, it's still highly effective for lots of people; there's a lot of access to it. That's important, both for the professionals delivering the service, but also for the public as well, because there are changing expectations about what people are able to do.

Interestingly, I had a very constructive meeting with the Royal College of General Practitioners this week, and they indicated, from their position, that they recognise and wanted to retain significant parts of what's changed in the way that the service has been delivered in primary care for the longer term future. That's not to replace the relationships between health and care professionals and workers and patients, but it's about recognising that there are different ways to maintain that relationship with a team across primary care and how actually technology can help to deliver that that makes a difference to people. But there will still be times when they need to physically be in the same place as the person they're caring for and assisting, and so it's not about wholesale replacing that and turning into a wholly remote service, but there's going to be a significant difference. So, Attend Anywhere has seen over 100,000 consultations take place, and we've managed to roll that out across the country in a matter of just a few months. That would have taken years previously—to have a roll-out of that sort of technology. So, there's a range of different areas that we'll need to retain for the future. The changing models are not all driven by, 'This is an awful thing we've had to do'—there's a lot we can be positive about. I think that's what we'll need to take advantage of and to take hold of—the progress that has been made that is positive—and then to think about how we use that to deal with the undoubtedly more significant challenges we'll face moving forward.

Thank you for that. Can I move on to transforming services? You and the Deputy Minister have already mentioned the transformation fund and the integrated care fund, in that you've extended that for another year. Now, the Welsh audit office review of the integrated care fund and a mid-point review of the transformation fund have both expressed concerns that there seemed to be a lack of a strategic approach to both, and that perhaps there's little sign of any successful projects being mainstreamed. How are you, in this extended period now, going to ensure that, actually, those projects that are successful will be mainstreamed and so ensure the outcomes actually are there for patients?

Well, this goes back a bit into the conversation I was having with Lynne Neagle earlier about the fact that we've moved the transformation fund forward into another year because of the reality of the pandemic. And, as the Deputy Minister explained, the next year is a transitional year, and that is very much about understanding the evaluation of what's worked, and then seeing that being progressively applied. So, the communities of practice that we're developing—with about £9 million of the £50 million rolling forward being for those communities of practice to make sure that we not just identifying, but then moving across and scaling up, what works. And, again, to be fair, that was something that the Royal College of General Practitioners mentioned yesterday, and I think they're completely right. They were talking about urgent care in particular, and about how they wanted to learn from successful models within Wales.

And it's a part of our constant challenge: you can always identify where good practice exists; the challenge sometimes comes when you say, 'This is what good practice looks like, why doesn't it take place here?' and you then have a whole list of explanations about why you couldn't possibly do that here. Now, that isn't just an issue in the health service; you'll find that not just within public services, but you'll find that within business too, if you run a large organisation and you try to say that there is a way of doing things that one office manages and another doesn't. So, there's something that is there about the difficult business of change, but we have managed to do more of that, and the challenge will be to continue to generate—not just here in the Government—the expectation and the policy demand to see that happen. And not just within a leadership level within the large organisations we have, but actually at a local level, where people need to work with each other to look at, 'There is better than is just down the road, and we could do that, and how could we do even better', rather than constantly looking to redefine yourself in a way that says, 'Actually, what we do is fine when you think about it, and we don't need to improve.' And that can be done in a very positive way, because that's about staff taking ownership and taking control of the service they have, and want to deliver a better service with and for people. 

Dr Goodall has indicated.

I think the evaluations show that the services with impact that make a difference can be introduced. I think one of the dangers in the approach that we're trying to establish is we're not just trying to increase another set of core services and uplift general budgets, we're trying to use the transformation fund, and the purpose of these initiatives and programmes is to demonstrate the alternative service example, the alternative pathway, to make sure that this is about transformation. So, I think that extra time—certainly on the transformation fund—through to March 2022 will allow us to keep maintaining that. But we have always said that this was time-limited funding to pump-prime the system, to have confidence in the alternatives and to allow that transformation to free up some of the existing resources, and I think that's where we need to continue to focus our attention, even during these very difficult months ahead of us.

And just out of curiosity, how much of the transformation fund has been allocated to date?

In terms of whole amount, I can just check—I can come back to you in terms of the whole amount that's been allocated. Are you talking about the whole period of time, as opposed to this year? Because, within the £50 million we've allocated, there's about £41 million that's gone to RPBs for them to carry on and complete and resolve their current work that they have not been able to do because of the pandemic, and there's about £9 million going into the communities of practice. That's how the £50 million's been allocated.

Dr Goodall.

Yes, the full £100 million has been allocated at this stage, but what we just needed to do was we had to have a pragmatic consideration, given the timing of some of the roll-out. So, around £11 million was redirected to the COVID response, and I think that was just being pragmatic about the fact that these services were genuinely making a difference to the COVID response as well, and we just needed to validate that as well. But the full £100 million allocation has been provided, and then of course we're extending the funding in the budget year ahead.

Okay, and you mentioned the regional partnership boards, and I think the Deputy Minister mentioned that she also stressed the importance of the RPBs as well. What evaluation are you doing? Because one of the questions, obviously, has been pooled funding. I know there was a big question on pooled funding at the very beginning. What progress is being made on pooled funding to ensure that they are able to deliver the services you expect them to deliver, and are you ensuring that there are—? Are they undertaking their own independent evaluations, and when do you expect those in? Because I think one is next year—an in-term one this year and a final one next year. So, are you looking—? Is that the type of the timescales you're looking at?

I wonder if the Deputy Minister and Albert want to deal with this question. In particular, the challenges of pooled funding are being led from the Deputy Minister's side of the portfolio, and Albert's had a lot of work in this area as well.

Mr Heaney.

Thank you very much. Is my sound coming through, Chair?

It is.

Brilliant, excellent. One of the important pieces of work that we did was we commissioned a piece of work through KPMG to go out and work effectively with all of the regional partnerships, so both they and we as a Government could have a clear sense of progress. They have reported back, as the committee will be aware. They recognise the scale and complexity of the agenda around pooled budgets, and noted very much that pooled budgets were in place across all of the regional partnership boards, but they were more developed in some areas as opposed to others. The Deputy Minister met with all of the regional partnership boards, went through this in detail with the chairs, there was a total commitment to the progression and development of those budgets, and, in terms of response to the Deputy Minister, she's now awaiting back in, by the beginning of March, a formal response from the regional partnership boards setting out how they will address the nine recommendations set out within the report.

I think alongside that work the Minister has now published a White Paper that will seek to consider the option of strengthening the regional partnership boards, especially in relation to funding as well, and then, alongside the work that the Minister set out about extending the funding for a further year for both the transformation fund and ICF, we have extensive work planned to work with regional partnership boards to explore future arrangements and bring those back then to the new administration post the election in May or whatever date eventually the election is held. Thank you, Chair.

Thank you, Mr Heaney. David.

I think Julie wanted to give an answer. Julie, did you want to say something?

Thank you. Thank you very much, yes. Yes. Well, Albert has now more or less covered what I was going to say in terms of the work that I've been doing with the RPBs to try to address some of these issues and the KPMG report. So, we are very much aware of those issues that you've raised, and the KPMG report did highlight the difficulties that have been encountered in terms of pooled budgets. But we do intend—as Albert said, we've got a timetable, and we're working towards that. We've also commissioned an evaluation of the ICF, for example, between 2016 and 2020 to understand what impact that has had on system change. So, we are really very aware of—. I think it's been difficult, obviously. The RPBs—health and social services, social care and all the different organisations coming together has been difficult, but I do think that the pandemic has really brought them much more closely together, and that now is an ideal opportunity to move forward, as we're proposing in the White Paper just published.

Okay, then. Looking at the budget aspect at this point in time—and you've highlighted that KPMG has indicated that there is a variance and there are challenges, shall we say, still to be faced, particularly strategic thinking—you're awaiting the mid reviews, basically, from March—evaluations—coming in. What thinking or what strategy do you have as far as the budget is concerned if you do not feel comfortable that those provide you with the confidence that the RPBs will deliver on their targets, and how will you therefore manage the budgets as a consequence of that?

At this stage, we can't anticipate what will actually happen. So—

I appreciate you can't anticipate, but you can prepare for all scenarios. So, are you preparing for all scenarios, in a sense, including what ones—[Inaudible.]—something?

What we're doing is planning, by the White Paper, for a strengthening of the RPBs, because we don't think they've got the tools at the moment in order to carry out some of the work that we want them to do. So, obviously, that will be for the next Government to decide, after the consultation, whether the new Government will want to implement those changes that are proposed in the White Paper consultation, but they do give much more strength to the RPBs, and so we have to look at the targets that we're setting alongside those changes that we're proposing. So, at this stage, we anticipate that—we think progress has been made, and the KPMG report recognised that it was very soon, really, to make any judgment. And so we think that there is an opportunity there to take these things forward.

Mr Heaney indicated. 

Thank you, Chair, and thank you very much for your question. Supporting what the Minister has said, I think it's really important to clarify for committee that the integrated care fund aspect of the funding is very detailed, has monitoring in place, takes very much into account the bringing together those services and has some great examples of 'stay at home' that has helped us in terms of maintaining flow through our health and care system. So, in relation to ICF, we can see real success of partnership working and streamlining. Of course, that is Welsh Government funding that goes through the regional partnership board. 

The other part of it that the report spoke about was the pooled funding, and of course that was a specific requirement of our legislation, for partners to pool funding—not just pool funding, but to really plan together, to commission together, to understand population need, and then to take that forward into what then comes together as a mutual arrangement across partners. And that is the area where I think we're looking at how we can develop further, and that links very nicely into what the Minister was saying around the thinking in the proposals set out for consultation in the White Paper. Thank you, Chair. 

Okay. David. 

Yes, okay, I'll leave it there. I still have some questions as to—. The White Paper, as the Deputy Minister mentioned, is for a future Government, effectively, and we are talking about a budget for next year, which is something he's looked at as to what happens in 2021-22. But I think the Minister has indicated that they are looking very carefully at it, so I'll leave it at this point and we may come back to it in a future meeting.

Very wise, David. Moving on to the last section of questions, hugely anticipated, Jayne Bryant. 

Thank you, Chair. Good morning. Minister, you've already mentioned this morning primary care, and we know that the pandemic has put additional pressures on primary care. The budget sets out the need for funding the contact first model and the pilot 214/4 urgent primary care centres. What is the timescale for decisions on those, and are there any other areas of potential additional primary care investment?

Okay. On the contact first model, I think, of the six health boards that have district general hospitals, they will all have started within this financial year. I think that by the end of February they'll all have started. And there's an evaluation, because Cardiff and Vale were the first health board area in Wales to start. And, again, not just a meeting with the Royal College of General Practitioners but more generally, there is an appreciation that this is both working to appropriately divert people away from emergency departments where it's not necessary, and that's particularly important during the pandemic, where you don't want people unnecessarily in emergency departments if at all possible, but also that it's an appropriate model for normal business anyway, and the initial feedback shows high levels of satisfaction.

We've had some initial feedback from Cardiff and Vale, and that shows that there aren't quality or safety concerns. That's, I think, the first important thing to say. This isn't a system that is somehow a bargain basement service that reduces quality and safety. That's really, really important; that's a very important finding that I hope gives reassurance to Members and, indeed, the wider public. But also about a third of patients have then been directed away from looking to come to an emergency department. Two thirds have then been booked into a local minor injuries unit or with a scheduled attendance at an emergency department. And the fact that you can schedule appointments is really important, both for the convenience of the person who is concerned, but also for the busy department itself as well, to manage to smooth demand out through the day. And from only, I think, about 650 surveys, about 87 per cent would be happy to use the service again, and about the same percentage were happy with the time it took to answer the call and the position of people who were happy with the response from the clinician they saw. And I think four out of five people were seen within an hour of the appointment given. So that, I think, is really important and it's good news that it's delivering a service that meets the needs of the person in need, delivering a service in a way that manages demand for the health service in a way that is appropriate, and ultimately we'll then have people going to the right point where they need their care advice and treatment. So, I think good news for everyone, and you can see the reasons why other health boards have wanted to accelerate their own roll-out of a similar system.

When I put some money into that initially, we hadn't made a specific allocation for the future year because we wanted to see all of the evaluations, but this, I think, is something that we're going to build in—unless there is a big surprise in the evaluation—into our standard model of business. Well, then you think about what that means from a reporting point of view as well, because we traditionally report people who turn up at a department, however they get there, and we may need to think about what we do to report the need coming into urgent care with all the people calling, because actually, it's a much wider block. We'll be comparing apples and pears in the future if we try to compare emergency department times, say, in September next year with September two years previous; the system will have been really different, so there'll need to be some work, not just with stats colleagues in the Government, but I think we'll need to—I say 'we', I may not be in Government or in this role in the future—there'll be a need, I think, for the Government to engage with the parliamentary side to run through what that looks like and why, so there is some public confidence in that if we're going to change what we're reporting on and the parameters of it. But, that's on the basis of there being a positive service change that we're likely to see become standard business over the next year. And you see similar models actually rolling out in other parts of the UK as well, so there's learning not just to take from Wales, but to look at what's happening in England, Scotland and Northern Ireland, because a similar approach has been taken. It comes from international evidence from Denmark and other parts of Europe as well, where this has been successful and is a standard part of their way of operating as well.

That's really positive, Minister. Just following on from that, though, are there any other areas of potential additional primary care investment?

I think we're going to want to see more take place again around the broader transformative approach, because we'll still want to get back to the way to the way that clusters can work together and the previous choices that I've made in a previous budget round was to talk about putting more money into clusters for them to use for innovation and service delivery.

And again, we'll have lots to learn from the pandemic. If you think about the vaccination plans that we have, we're able to scale up our vaccination delivery because primary care is coming on board. Now there's general practice, we'll see community pharmacy come on board and that'll be a mix of people delivering in their own premises, but also people agreeing to use a different premises that is appropriate. So, there's something there about the point I was making earlier about the estate helping you to deliver services in a different way and often a better way. There's also something about improving the way that those local services work together, so it's not just GP clusters, they're primary care clusters, and actually the way they're used to plan and deliver the service, I think, will continue to be important.

So, if it's me, then I'd want to look at the detail of how we can make future choices to invest in primary care making more of its own choices, as well as the investment choices I'd like to be able to make in a new generation of primary care facilities, because I really do think that will improve the quality of care that you and I receive as members of the public, and also the people that we represent, and I think that's really important. So, you can expect there to be more development, but also, if you think about the broader picture of what the parliamentary review told us and 'A Healthier Wales' tell us, there's this move to have a smaller number of specialist centres for hospital care that can only take place in a hospital, and the Grange University Hospital is a good example of that. The mission of the other hospitals in the Gwent system has changed, as there is a high specialist centre on the Grange, but some other activities then move out, so Ysbyty Ystrad Fawr has got plans to become a specialist breast cancer care centre, and then you look at other areas, there'll be more things then taking place in primary care too. So, there's both a concentration in some specialist centres at the hospital end and then a pushing out of more services into primary care. And you'll see that, I think, in the reform process we want to carry on with not just the general practitioners' contract for reform, but also in the way that pharmacy and optometry and dentistry work, because actually change in the contract—and in previous sessions we've talked about changing the dentistry contract—to have a different model of delivering the contract will allow us to invest in a different way and a better service. So, all of those things, I think, have extra impetus for the future and that will see more treatments, more access taking place within local primary care, and I think that's a good thing for staff and a good thing for the public.

Thank you, Minister. The draft budget shows an additional £25 million for prevention and digital programmes, together with £10 million for the new NHS Wales digital body. Are you confident that that's sufficient to achieve the transformation in out-of-hospital services that's seen as part of tackling the treatment backlog?

In itself, that isn't going to resolve every part of our system, but this is about what we're doing and what we're investing in deliberately to continue the transformation process, but not just through the next year, but through the whole of the next term there need to be continued choices about how digital transformation and improvement will enable service change and improvement. There's a long-held ambition to have e-prescribing, and there's a whole range of things we'll want to do in the future, but what we're doing is we're investing in a new organisation that will be fit for purpose to help drive that delivery and transformation.

It is a significant change, and the concern that was raised about governance was one thing, but it was more than just a governance issue—it was about being able to draw a line on a map about who has oversight. It's actually about how we enable an organisation to deliver in this space and to be a proper, recognised and valued part of our system. It's building on the work that the NHS Wales Informatics Service has done, the new body, because I wouldn't want anyone to have the impression that we think that NWIS has not played its part within NHS Wales. Again, the Welsh immunisation system was created from scratch by staff at NWIS. I think they have really stepped up and helped to deliver for Wales throughout the course of the pandemic. It's about how we build upon that as opposed to how we smash it all down and start from ground zero.

Dr Goodall.

The budget process inevitably means that we categorise and allow ourselves to demonstrate the direction of travel in a number of areas, and we have over the last two or three years very materially increased our very visible investment on digital. The discussion that I'm having with the NHS more broadly, though, is that digital will be an enabler of transformation, and what we need to ensure happens is, as part of budgets generally, as part of core services, certainly in respect of any transformation that local organisations want to do, they shouldn't just be looking to draw down the central pot; they should be investing in digital because it's a way of improving outcomes and improving core services. So, obviously we will track the national fund and how we are applying it and working it through, but I would just like to say that the conversation I'm having with the system in general terms is that they should be investing in digital because it's a way of making change happen.

Thank you for that. Jayne.

Thank you, Chair. So, 'A Healthier Wales' has stressed the need for a greater focus on prevention. How does this draft budget deliver the shift?

Well, it's a continued shift in the way that we make not just choices within our allocations, but it's also about how health boards respond to the plans we set for them. The planning framework is really important in the expectation and the requirement for that shift to take place. What we do in terms of contract reform is partly about enabling, but it is also partly about directing. So, if we want more services to take place in community pharmacy, for the sake of argument, then as well as having a contract that's fit for purpose, we also then need to see the balance between what we have in the planning framework and then if we're just going to give direction about services that need to take place, so that the shift is a combination of all of those factors. It isn't just about saying, 'This is money that is allocated for a shift of services'; it is also about the directive we give in to the system. So, the review that we're doing on mental health funding and what the ring fence looks like, that will be important to give an indication of that. Then you think about, 'Well, how is that service then to be delivered?' That's again about the planning and the policy framework of it, which isn't necessarily neatly always carried out in budgetary choices, but you will see budgetary choices made in the detail of the budget about what we're going to do in terms of making choices around primary care, and about directing that shift of services that needs to take place.

In so much of this, it goes back to the comments that Alan Brace was making earlier about the value that we generate from healthcare, because actually we can treat people in a certain way that doesn’t generate the same value. It's an odd thing that Wales is recognised internationally as having a good story to tell on this, and being able to mark a deliberate shift in what we're doing. That isn't always recognised within Wales, I don't think, but there is a reason why Alan Brace has been asked to talk about what the Welsh system is doing with other healthcare systems in the rest of Europe, and it's because of the work that we're doing. I think if the committee want to hear more about this it would be really interesting, I think, for you to hear from Sally Lewis on the work she's doing—again, someone who isn't a Government employee, but is actually really generating a real sense of not just interest, but actually a willingness to deliberately change the system so that it will be better for our staff to work in as well as better for the public.

Alan Brace.

Thanks, Chair. Just to pick up on the Minister's theme, we were approached a couple of months ago by the World Economic Forum to be one of five international exemplars on the work of value-based healthcare, and we're hoping next week to hear whether we've been successful in that. We will have been the only healthcare system; the others are more around disease categories in Denmark and Holland, so we'll be the only system that will be asked to be an exemplar and lead some of that work. And that does take us very much into the prevention work.

Just in terms of the overall question on the budget, we know from our work with the Organisation for Economic Co-operation and Development that the UK would spend—and Wales would broadly be the same—about 5.2 per cent of our budget on preventative activity as measured by the OECD. And it's a difficult one because it's really difficult to get a universal methodology that says, 'This is prevention and this is how you measure preventative spend'. The rest of the OECD, most other countries are below 3 per cent. The highest is about 4 per cent, other than the UK and, interestingly, Canada.

So, we know what we spend but when you look within Wales, then, our real problem is that when we use our definitions of prevention and primary prevention, secondary prevention et cetera, we're spending too much on the secondary prevention and we need to make the shifts into primary prevention. So, the work we're doing on value-based healthcare in areas like lung cancer, diabetes, respiratory is actually demonstrating that we probably have an opportunity to shift the bulk of our existing investment. We often talk about the incremental investment that we make through the budget process, but we also need to have a look at the investment that we're currently making. And we know, when we look at some of these areas, that there is more work that can be done to make some of those shifts.

We deliberately constructed the new formula to be—. The building blocks are actually the 22 local authorities that we aggregate up to local health board level, but we also disaggregate down to clusters. We did that deliberately because, at the moment, we're using hospital and community services. We're about to add mental health. And then, the next plan will be to look at primary care so that we've got most of our services that are measuring the needs in the population as objectively as we can, and then having a look at all levels of the system: are we allocating resources adequately to meet those needs?

When we look at the way we've constructed it at the cluster level and at a local authority level, obviously, that takes you then into the broader determinants of health. When you have a look at where we need to shift resources to improve the health status of some aspects of our population, it's not going to be done by the health service on its own, and we deliberately constructed the formula so that the health service can engage with confidence, objectivity and measurement in the debate around how we address some of those broader determinants of health. And, then, we will obviously measure the impact of that through the formula on an ongoing basis, and what we'd want to see are two things, really: an improvement in the health status but, clearly, we'd want to see resources starting to shift in a very different way to how perhaps they've been deployed historically.

Thank you for that. Jayne. 

Thank you. The pandemic has really emphasised the impact on health inequality, so how does the budget invest to improve health over the longer term, targeted at those most disadvantaged? 

I think the first point is that we'll continue to invest in our Building a Healthier Wales programme, and that's really important because that isn't just a health service-led process—it's actually chaired by Councillor Huw David, the leader of Bridgend County Borough Council—and it works across the health and social care field. That's looking at how we deliver the shift within the resources we have already. We're also looking to reinvest in the 'A Healthier Wales' programme, so, in a range of the active offers and the way we're looking to try to generate some behaviour change, that is part of Eluned Morgan's policy-led work.

But it's really important to always say than when we're looking at healthcare inequalities, the health service and social care have a role to play, definitely, in what we do, in the way that we can drive demand and put people inappropriately into the system—and the points about value matter greatly—as well as how people are treated, frankly. But, actually, to address healthcare inequalities—and we regularly come back to this—most of those drivers are outside of the healthcare system. And so, this is about what we're able to do to improve the broader ways in which our constituents live their lives. Their economic success and happiness makes a huge difference to their general well-being, and it absolutely matters to healthcare inequalities because everyone on this committee will know that if you drew a map of Wales where healthcare inequalities exist, and you then overlaid that with a map of where our least well-off communities live, you'd find a very neat and uncomfortably accurate equation between those two different maps. 

So, it's still about the challenges and the inequalities that exist within our country and how they drive inequalities in outcomes in healthcare terms, but also if you look at education and other things as well. All of those things matter together, so it's in our interest, in healthcare terms, for us to have good outcomes and effective outcomes in education. It's in our interest to have an important sense of well-being and emotional well-being for children and young people as well as adults. It's hugely important that we actually do something about levelling up the agenda on the economic success of our communities as well, because that's when we'll start to see a significant shift in healthcare inequalities as well.

But the NHS and social care need to play our part as well in the way that we then generate and deliver services, and not forgetting that the NHS is the biggest employer in the country. So, Dai Rees's earlier point about rewarding our staff isn't just a point about value. Actually, as the biggest employer in the country, it's important that we have good terms and conditions not just to keep our staff, but they make a big difference in terms of the economic future of communities as well. So, really important points for us, and that is one of the things that we are definitely thinking about in terms of our conversation about how we pay for social care and what it would mean for people who work in social care and how they then use the income that they have, because most social care workers don't hide their money or have a secret bank account in the Seychelles. These are people who spend their money locally as well. So, there's a lot for us to think about in the way we make choices on the delivery side and what that then means in the broader inequalities questions.

Thank you. Just finally from me, about the EU transition, the draft budget includes some allocations designed to ensure continued supplies of critical goods, such as medical supplies. What planning has the budgetary process undertaken to identify any potential additional risks or costs?

Well, I think some of the specific things are about seeing through the planning that's already been done. So, for example, I signed off about our participation in UK-wide arrangements for medical supplies around critical care. So, we're taking part in those and looking to ensure that we safeguard those supplies. The bigger risks, though, aren't in the way that that money is spent in those, if you like, specific examples. The bigger risks are, if there is an interruption in trade, what that means in terms of goods coming in, and lots of those are medical devices, appliances and other goods that we need for our service. We saw the issues about flying PPE in where PPE was held in different countries, and the infamous RAF plane that was apparently full of PPE and stuck in Turkey. Well, actually, part of our challenge is whether we will see those as more regular features in our relationship and trading with our nearest neighbours in continental Europe and the Republic of Ireland.

So, they're the bigger challenges, and we won't really know all of the costs of those until we're months into the new relationships. So, those challenges themselves, I'm afraid, are things that— some of which—will need to play out, but we've prepared as well as we can do, and the fact we've had to go up the 'no deal' Brexit hill so many times means that there has been a high state of preparedness for the realities of a change, and if we need alternative ways to deliver goods into the country that are critical for health and social care supply, they'll almost certainly come at greater cost. So, whether that's flying in radioisotopes as opposed to having them come in in the way they currently do or we've been used to them coming in, or whether it's even about the plan if there was a challenge on vaccine supply of the Pfizer vaccine—the plan was to be able to fly those goods in—well, that would come at an increased cost. So, we may be able to avoid some of the potential difficulties in interrupting supply, but if we're going to do that, then there's likely to be a financial price to pay, and you can expect that to be passed on through all parts of the healthcare system within the UK.

So, it's still a picture of uncertainty rather than me being able to say, 'I've got a neat pocket of money that will smooth out and avoid all the challenges in our changed relationship with Europe.' That would not be an honest way to look at all of these matters. But I think we've set out in lots of detail in documents we've published across the Government the work that's been done. I should really pay tribute to stakeholders across health and social care for the way they've engaged with us—pharmaceutical companies, who aren't always well regarded but actually have made big differences in scientific research and vaccine production. They've also taken their own steps to safeguard supply into the UK by securing alternative ports of entry. They're not entirely reliant on the narrow straits between Dover and Calais in the way that they were in the vulnerability we had in previous 'no deal' Brexit challenges, as opposed to the relationship we currently have now with the deal that has been agreed. So, there's still a lot more for us to work through and I'm afraid the practical experience could well be bumpy for all of us, including people who work within our health and care system.

Thank you, Minister.