National Assembly for Wales

Diolch, Cadeirydd. Well, the short answer to that is 'yes.' I actually don't see the freedom for the Commission to do what's best in terms of fulfilling its strategic aims and accountability to be mutually exclusive concepts, really. The only way we can move on as a Commission in a way that's best for Members and for Wales actually—because part of our remit, of course, is to champion the Senedd as it is now with the people of Wales—is if we have the trust of the people of Wales and the trust of Members. And it's our accountability process that helps us create that trust. Now, we've been before you several times and explained our governance processes—the three lines of defence. Well, actually, we've got four, maybe even five lines of defence. So, in terms of our audit and assurance, externally and internally, we will be sound. Audit Wales always gives us a clean bill of health on that.

But that, then, gives us the platform on which to make decisions to fulfil the strategic aims. So, in terms of balance, if we had to put it in those terms, I think we're pretty much okay on that. From your point of view, I suppose, as the Finance Committee, I'm hoping it helps that we're able, when we put budgets forward, to not just give you the plans for a given year, but the likely or projected forward look for the next two years. And, of course, that's only possible because of the reasons I've just given you in my opening comments.

Well, of course, it is a matter for the sixth Senedd, as you say. And, as ever, from this committee, we are always pleased to hear good ideas, so whatever your equivalent or successor committee is next time, I hope that they will continue to do the good work that this committee's been doing.

It seems to work okay for us. We're usually first out of the traps in putting together at least a draft budget, which is something that some other related bodies don't have the opportunity to do. I think that's quite useful, and, of course—I'm doing this with my MS hat on now—we get the opportunity to scrutinise not only through your committee, but through the main Senedd, the budget itself, and that's so important. Again, I say that as an MS, rather than a Commissioner, in those terms. So, on timings, we manage to get everything together by 1 October, even though, realistically, that's halfway through the financial year, so I hope that there's some credit for being able to do that, but the processes are in place to allow us to do that, so, at the moment, no, it seems to be fine.

Thank you. How useful have you found that the committee's statement of principles for directly funded budgets has been in preparing your annual estimates? I know that there are difficulties. People always want to spend more money than they're likely to get, so you have to make difficult decisions, but, having the clarity early, does that help?

Oh, inevitably. I appreciate that it's a statement of principles, isn't it, which means that we take it into account in a very high-level way; we don't go down into granularity with statements of principles. But, of course, it's been extremely useful, and I hope it gives some confidence to the committee to say that, in effect, they're the kind of principles that we've been following anyway. We perhaps just had not articulated them in quite the same way as you have in the statement of principles. Being mindful of long-term funding and likely challenges—and let's face it, these next five years will be difficult on that front—. Pressures facing the public sector as a whole are always part of what we think about. I suppose it may not always look like this from the outside, but just rushing to ask for more money is not what we do. We always operate on the basis of value for money, of course, and efficiency, and so those principles are important.

We can't apply them to everything, though. I'm sure the committee understands, for example, that that part of our Commission budget that is basically in the hands of the remuneration board—we can't exercise the principles on their behalf. They have to do that themselves. We have a slightly different way of, perhaps, agreeing our staff pay, for example. That's done on a three-year basis, I think, at the moment, so we can't necessarily mess around with that in between years. So, there are a few bits and pieces that we don't have direct control of, but those parts of the budget that we do have direct control of, these principles are applied to them, and I hope that gives you some reassurance.

Okay. Thank you for that. Committee scrutiny and inquiries—have they helped in driving efficiency, improvement and performance? And what I've found quite often in other organisations—and I wouldn't understand why this would be different—the fact that you have to come here and answer questions actually concentrates the mind on what you are doing, and preparing to answer the questions quite often gets you to do things far more efficiently and is probably of far more benefit than the questions we ask.

Well, you are one of our lines of defence, Mike, in terms of risk management—seriously, this is a really important committee from that point of view, and, if you just think back over these last few years, the influence you've had over how we changed our processes, actually, within the Commission—. The obvious one, I suppose, is the distinct feature that, when we present our budget, we're making it very clear that the remuneration board element of the budget is totally separate from our operational budget. Actually, I hope it's highlighted for Members as well that we have a comparatively small operational budget as compared to the overall figure. That's important, because that's what you need to scrutinise us on, really, isn't it, the non-cash elements. And what the remuneration board does is not something we can be answerable to you about. 

But there have been a few other things. I'm just going to have a quick look to remind myself here—. Ah, the most recent one I can remember is that Mark Reckless raised the funding of the standards commissioner's office, for example. That's the one that springs to mind because it was the most recent. But, talking about a cap on staff costs and things, this has all come through the Finance Committee. And while there may have been elements of this that we as Commissioners and certainly the Commission will have been thinking of, if it's raised by Finance Committee as well, that's a really strong steer that it needs to be a focus of activity for us, isn't it?

Okay. Diolch yn fawr. Well, speaking of Mark Reckless, we come to Mark next. 

Good morning, and thanks for joining us. How might the Commission in the sixth Senedd seek to prioritise and fund potential projects with costs that are not manageable within the overall funding provided in previous budgets?

Well, this is the end of the fifth Senedd, isn't it, and it's been an important question for us as well. I'm afraid I'm going to have to say, in some part, Mark, that this is going to be a matter for the sixth Senedd and not for me to answer. But there are certain things that perhaps we can talk about, and the first is the point that I've just made. Because of the way that we present the budget, it's become very transparent about quite how much discretionary spending the Commission has in any given year. So, for example, in this year, in a budget in excess of well over £50 million, we've only got £1 million that's not already accounted for in advance. Managing long-term spending when you're talking about discretionary spend that small is quite difficult. However, because of the internal processes of the Commission, there are certain bits of spend that you can plan both within year and between years, and we've managed to do that with the project fund, as you have seen, with our 10-year rolling plan for the estate and three-year rolling plan for ICT. But for the very big ticket items—. And I suppose the one that the next Senedd is really going to have to think about would be something like the windows—the costs related to that are not something you can manage within year, and actually would be pretty tricky to manage across a whole Senedd unless particular focus was given to that and that alone. So, this is where this committee again comes in very useful because it can help us with long-term management ideas when the figures that we're talking about are pretty high. Again, I just go back to the point that we don't just reach for, 'Let's go and get extra money'; we try to make internal savings if we possibly can to manage in-year and inter-year spending. But, for the huge ticket items, really, we have to come to you, I think. 

Can you provide an update on the windows replacement scheme reports, which I think were due to be received in December, and perhaps give us just a summary of the options and likely costs? Will the overall budget have to rise to pay for it?

This was brought to Commission very recently, so I'm able to report back to you now. But, as I said before, this is a really good example of something that we're going to need—if we put this off any longer, we're going to end up with windows that are unsafe, as well as the current position that they're not particularly green-friendly, if you like. But we've had a very—. Excuse me, I'll have to look at my papers for the actual figures, but we've given two options here about the way we could proceed with this, which is done through a study that we've mentioned to the committee before. So, either we can try and deliver this in the course of a year, where the cost would be £4,443,012 plus VAT—so, about £4.5 million, basically, plus VAT—or it could be done in a phased approach—and this demonstrates why, actually, a phased approach sometimes isn't cost effective—over virtually the life of the next Senedd, where the cost would be £4,662,746 plus VAT. So, you can see why that would be difficult to manage with an as-usual budget. Obviously, this is a matter for the next Senedd. It'll be up to them, and they will of course be following the procurement strategy and the processes. 

Okay. And just one more from me, a quick one, on I think a smaller scale: how much is the Commission now spending on making the estate a more hospitable environment for flora and fauna?

Can I just give you a little bit of steer on this? I can't give you too much, because it hasn't come to the Commissioners yet, but there's a new carbon neutral strategy about to be—well, hopefully—agreed by the Commission later in the month, and that will include quite a lot of detail on this about reducing our carbon output. I don't know if you want any more detail on that at this stage, or whether you'd be okay to hang on to the next scrutiny session, when we'll be able to give you more details.

I will thank you and defer to the Chair for an answer on that.

Okay. Well, if it's a decision that hasn't been made yet, then, clearly, it's a case of maybe updating us as soon as that decision is made, but, obviously, I suppose, in terms of scrutiny, it'll be in the next Senedd, probably, on a practical level, because we only have a few weeks left of this Senedd. But Alun Davies wanted to come in as well on an earlier point, I think.

Yes. Thank you, Chair. I'm interested in how a particular issue can illuminate a wider issue of wider principle, and I probably spend more time discussing the windows in Tŷ Hywel than I have discussing the windows of my own house and the need to replace the windows here as well, because, if I don't replace the windows, there's water getting in, which means then I have to do a far larger job later on in a few years if I don't do that. But I don't regard replacing the windows in the same way as I regard planning a summer holiday. I regard it in the same way as I do servicing my boiler and various other things that need to be done in order to maintain the integrity of the house, the asset. And I'm wondering to what extent is it a good use of our time as a Finance Committee to be crawling all over the detail of a procurement that is not one that has any political element to it in terms of choice or in terms of strategic approach or in terms of whether it's right or not, because maintenance of an asset is absolutely essential, and that's why we have excellent and first-class public servants such as Mrs Morgan and Mrs Antoniazzi in front of us this morning to manage that on behalf of the institution and the organisation. And to what extent—and this is a question to you, Suzy—to what extent is there really a requirement for such detailed political accountability in terms of managing an asset? For me, the accountability would be there if they didn't do that and we incurred additional costs later on because the decisions that should have been taken in order to manage the institution weren't taken. That's where the accountability should take it, and I think sometimes we get into the detail of these things to an extent that is far beyond our ability, and we miss out on the big picture. I certainly don't want to spend the sixth Senedd, if I'm lucky enough to be elected, discussing the window arrangements of every public building in the country.

Am I brave enough to say what a refreshing question? The first thing to point out here is: look, this Commission is not scared of scrutiny; however detailed, however granular you want to get, you're welcome to do that, and the question of whether the Finance Committee should do that is a matter for Finance Committee. There's nothing to hide, and there's nowhere to hide, for that matter, either, because of the way that our governance arrangements work. I suppose I would say that the Commission budget accounts for 0.035 per cent of the Welsh block grant, which is a very small amount compared to the what the Government has as a whole, but, again, we haven't being trying to hide it. Taking these big decisions—you know, £4 million is a lot of money as far as the outside world is concerned, however important it is for us to have a safe building and an efficient building to work in, and it's also worth bearing in mind that the chief executive, as accounting officer, only has the power to commit to spending up to £1 million without the say-so of the Commissioners. And of course, once the Commissioners get involved, you, as a Senedd, are entitled to scrutinise us as Commissioners. You may have a view that maybe £1 million is too low a cut-off point, but I guess that'll be something for the next Senedd as well.

Manon wishes to come in as well.

I was just going to say that I think it is actually higher than £1 million. It was put up—

Sorry, I'm out of date—[Inaudible.]

It doesn't affect the principle of the argument, and we appreciate the confidence, Alun. We take it as our duty to investigate the options properly and to lay them in front of the Commission so that they can take timely decisions. We do have an absolute duty to maintain the fabric of the building under the terms of the current lease. You may get on to this later—a bigger question will be how we take that lease forward. We're coming up to the 10-year mark. It will be running out in 2032, and what use we make of the estate generally. These are very interesting questions, and they're tied up with the way that we will be working and the lessons that we'll learn from this pandemic period. We look forward to having that discussion with the next Commission and being scrutinised by the successor Finance Committee as well, no doubt.

Okay, thank you. Well, that takes us nicely on to Rhianon Passmore.

Thank you very much, Chair. That is the No. 1 question, but I would disagree, if I may, with my colleague Alun Davies that there is scope for us to do this, at this amount of money. It does actually tie in with the future of the building, and I think it's absolutely right that we are looking at this issue, because the public will expect us to look at this issue, at this amount of cost.

So, moving on, then, to the wider question that has just been posed in regard to whether the pandemic has changed your view both on the need for that additional mooted office space to what is already available in Tŷ Hywel, and, obviously, in regard to the amount of money in terms of what is proposed for the window replacement, are you actually satisfied that the building is actually fit for purpose for the future if the maintenance of that building is so heavy?

For me, I don't think we can say that the building is dangerous in any way, but the usefulness of this conversation is to highlight how important it is to keep the building maintained, and that's why we have a 10-year rolling programme of maintenance for the building, and that's why, for a building of its years, it's in pretty good condition, because resources have been managed in a way that has allowed us to keep that up.

Whether we need a new building, a different building, additional buildings—that's going to be a question, of course, for the next Senedd. I don't feel I'm in a position to answer that at this time, because I don't know whether we'll have more Members, for example, in the next five years or next 10 years. I suppose what I can say is that, because of the experience we've been through in this last year, Rhianon, is that it's become apparent that more people are willing to spend at least some time working from home, and that will have an impact on how space is used. We've already seen it to a certain extent, haven't we, and I imagine that the next Commission will be taking that into account in making any decisions about the building.

Thank you. And then, in regard to the COVID pandemic impact on the value of Tŷ Hywel, and the costs of office rental or purchase in future years, you’ve sort of answered that, but I don't know whether Manon's got anything to add to it. How will this impact on the plans, because as you stated, we're in a very unprecedented position in terms of forward planning? More people are flexi working and will continue to do so. Is there any further comment in that regard?

I'm happy to elaborate a little. The terms of the lease mean that we have rent reviews every so often. The next one is due in April 2022. If the market rate has gone up then, the rent might go up. I'm afraid the terms of the current lease don't allow for the rent to go down, so that is going to be a matter for a longer term negotiation, and you will understand that this is a commercial negotiation, and so I won't be drawn on the detail of that now. But there will be a conversation taking place, and we're happy to talk in private with the committee, or indeed with your successor committee, in due course about that.

But just to return to the point you made about more flexible use of Tŷ Hywel and indeed the Senedd, I think we've kept in touch closely with staff throughout the crisis, and we've measured how the new ways of working have impacted on their physical and mental well-being. We've committed this year to publishing the results of our staff survey, and that is imminent now. There's a paper going to the Commission next week to discuss it, and then thereafter we will send the results to you. But we're very encouraged; we've had an extremely good overall score and an extremely good engagement rate as well emerging from that. We have a lot of people who are interested in hybrid working, partly from home and partly from the office. Now, that doesn't mean that we will equip people to have a full working station at home and give them a dedicated working space in the office as well, so it is going to mean a different kind of cost basis and we're still exploring that. But it also does mean that we'll be able to use the space in Tŷ Hywel in a rather more flexible way, and we are using the renovations that need to happen between this Senedd and the next to pilot some of those new office layouts during the next few months. 

Thank you very much. 

Yes. We're not too far away from the end of the financial year now and, of course, we've already committed to give you a solid and full explanation of where we've been on extra expenditure and savings at the end of the financial year. But we've got a pretty good idea which direction that's going in at the moment. So, we can say that—. This is as of January, I think, but the pandemic had cost the Commission an additional £750,000 in various ways, and I can give you a little bit of detail on that. But there have been savings as well. We've—[Inaudible.]—by £1.2 million. So, overall, the Commission has managed to save some money on this. I wouldn't like the Finance Committee to run away with the idea that that could be done year in, year out, because what we're learning from this—. Some money will need to be spent in ongoing changes, such as those that Manon was mentioning earlier. So, if we are genuinely going to be moving to, for example, a system where people can work more frequently from home, we can't have people just sitting at their kitchen tables indefinitely. That doesn't mean, as Manon says, everyone gets a brand new office at home, but there is something in-between that will inevitably mean that we have costs for the Commission.

I hope all of us agree that the IT response to this pandemic has been astounding. The ability to do a hybrid Plenary, for example, has been amazing, but there are still things to learn from that if this is going to be a more consistent and permanent arrangement. So, we can't pretend that any additional cost is over for good. The type of things we've been able to spend money on in order to get us through the pandemic have been—. I'm just quickly looking here. So, it's been £125,000 from the project fund—remember we only had £1 million in that to start with—for ICT. There's been about £100,000 spent on related estates expenditure. The tech development for the hybrid Plenary itself was £56,000.

And you may have noticed if you've been in the building, which I managed to do the other day, that the security system that was signed off a while ago but had to be delayed because the budget was so tight, we've managed to bring that forward again. These are the screens that we've got at the entrance to Tŷ Hywel and, yes, I think it must be at the Senedd as well, although I haven't seen that. And they've been brought forward not just for security purposes, but they're helpful for COVID as well because they put panels up between people, which prevent the spread of COVID.

But the way we've done engagement—. I hope Members will have seen that the online engagement has been pretty phenomenal as well, at short notice. But that has resulted in some savings for us, as engagement hasn't cost us as much as it normally would. But when we get back to something nearer normal, engagement is that one area of activity where Members have told us to up our game. And so, savings we've seen this year may not be savings as we go forward. 

And, of course, we'll provide the committee with a full breakdown, as you've requested in your report on our budget, on all of the financial implications of COVID—the savings and the additional costs. We'll write to you at the end of the financial year. 

Yes, of course. 

Just briefly, I would say that legacy reports are in the process of being drawn up. Committee legacy reports will be a little bit different, obviously—very COVID-related, as we know from our own committee, Siân—but as far as the Commission is concerned, all the huge amount of things that I have learnt over the last five years will be embodied in the legacy report. One of the things I would say is that the new Commissioners, and particularly if they haven't been Commissioners before, have got a lot to learn very, very quickly, and I think that changes to the induction processes for Commissioners is something that I would certainly like to see. We've had some reassurance that that will be happening, to help us learn how to scrutinise the Commission, because even though as Members we all have skills in scrutinising all kinds of witnesses, the relationship with the Commission is an important one. It needs to rely on us. The Commissioners need to be a critical friend, but ultimately, with quite high-spend decisions, the responsibility lies with them, and I think that induction course is going to be critical and it's just a shame I won't be able to get to see it myself, really. 

I don't know if Manon wants to add to that at all.

Again, because the Commission hasn't signed off this specific plan yet, I'm going to leave it to Manon to give you the detail we think might be safe to put out there at the moment—that's not going to be too controversial, if I can put it that way. Not that there's any controversy in this; it's just a question of detail being disclosed to the committee before it's disclosed to Commissioners. That's all that is. 

It's a 10-year plan and the Commission is used to working to 10-year plans, as it does with its estate management at the moment. So, the process of looking that far ahead is not new to the Commission. In the short term, the first piece of this is from now to 2023, and it involves the kinds of things we've already been talking about—it's looking at how people work and whether people will drive into work as much as they used to. It's all details like that. But beyond that, there are quite structural changes that we need to consider. For example, there's a local Cardiff heating district in the process of being developed, and the question for the next Senedd is does the Commission include the Senedd in that, for example. I feel like I'm waffling a little bit here, because I'm a bit nervous about disclosing—. Manon, would you like to take this bit on? Because you would know more about the long term on this than perhaps I would.

Can I just add something to that? One of the things that I think is important to get across to the Finance Committee is that a lot of this plan is going to be driven by the building users themselves, so there's going to be a lot of conversation, not just with Members, but members of Commission staff as well. The aims of any plan of this nature are critical, of course, because they are part of reducing carbon and getting a carbon-neutral position, but it's got to work for the people who use the building as well. I hope that the sixth Senedd will take that on board as well.

Bore da. Good morning. As you've mentioned many times, we're about to have an election and a new sixth Assembly, or Senedd, with an influx of new Members—and a return of some existing Members—with experience of new ways of working. How do you think the Commission can capture different, more efficient ways of working, more environmentally friendly ways of working, utilising the opportunity presented by that new cohort of Members?

That work is already in progress really, Mark, because, of course, the Commission has had to respond to the pandemic. I think they call them pulse surveys—there are frequent, and I mean frequent, surveys of Commission staff about how they feel about the way that they're working at the moment, the pressures on them and how they're coping with the pandemic and so forth. Manon, I think it was, mentioned earlier on that we've had an overall staff survey very recently that's given some very, very promising results about satisfaction at the moment and how staff members themselves are helping design our way forward. It's the point that I was just making earlier that if we have a way of working that doesn't actually suit our staff, then it's going to fail, isn't it? Poor mental health will go up, productivity will fall and we'll have absences that will be greater than we would like. One of the things we have noticed during this pandemic is that staff absence rates have dropped, so there's a lesson for us in that. Manon, I don't know whether you want to talk any further about the way that working practices could change. I'm not sure whether I'm answering what you're asking there, Mark. Are you talking more from the staff side or from the Members' point of view?

I think it's the extent to which—well, firstly, where the responsibility lies for this, and the extent to which the Commission or whoever you might suggest should or could engage with the new influx of Members to establish how they would like to be working, because they might have fresh, new ideas, but also to engage early to design with them new ways of working that meet shared goals.

It's co-production, isn't it, Mark, in a nutshell. I suppose one of the things to say is that new Members always get an induction programme, as you'll remember yourself, and that's an ideal point at which an early steer could be taken from Members about how they might want to work. I think what I might say, though, before I bring Manon in, is that new Members may not have any idea what the current position is like. You need to know an organisation before you can respond to it, really. You may have ideas that are great or you may have ideas that are impossible. I don't know, Manon—is it at induction point that we're likely to be able to start those conversations?

We'll certainly be starting it immediately, but we will also be surveying Members and their staff, as we will then continue to do periodically during the life of the Senedd. I hope that Members will engage with that survey so that we can have some meaningful data to shape our thinking. We are entirely directed by the Commission. In terms of my responsibilities, I derive my authority from being delegated it by the Commission. The Commission is there to set the long-term strategy on behalf of all of the Members, so it all comes back to the Members in the end.

It might be worth bringing in as well—. I don't know how familiar the Finance Committee is with this, but we also have an advisory body to the Commission, called the Remuneration Engagement and Workforce Advisory Committee, which, once upon a time, used to be dealing with senior staff pay and so forth, but now deals with staffing issues—human resources, basically. So, we have external advisers who are independent of the Commission who also help us with this engagement with staff. Engagement with Members is a slightly different route, but that route of information gathering has also improved, because we've had external help on good ideas, basically.

I should add that we also, of course, take account of the feedback provided by the Business Committee and by the Chairs' committee so that we're ultimately doing our job of serving the Senedd business side.

Okay. Thank you.

Oh, Rhianon—very briefly, then, and then Suzy.

Thank you very much, Chair. I know we did explore this issue earlier, and it's really for reassurance. We rightly are scrutinising high-value project planning, and I don't see that as micromanagement or prescriptive—it is that transparency of scrutiny. So, I suppose my real question is: from the Commission, are we getting the documentation in a timely manner in order to be able to carry out our function?

Well, you're better placed to answer that question than us. Is there something we can do more quickly? I answered questions at the beginning about the annual timetable that the Commission follows, and pointed out that, actually, we produce our information more quickly than perhaps other parts of the public sector—in draft, it gets voted on, and we get a final budget. If you think that could be improved, then obviously we always pay very, very close attention to the Finance Committee.

I would add that we've taken comfort from comments that the committee has made before now about the timeliness and thoroughness of operation. I'm very satisfied with the level of transparency and accountability that we've provided during the last year, and I hope the committee agrees.

Thank you very much.

Yes. Just before we finish, Cadeirydd, I just wanted to correct the record. When I referred to the figure of £1 million earlier on, it's actually £5 million. I just wanted to get that in now, rather than retrospectively.