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Pwyllgor Diwylliant, y Gymraeg a Chyfathrebu

Culture, Welsh Language and Communications Committee

12/07/2018

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Bethan Sayed AM Cadeirydd y Pwyllgor
Committee Chair
Jenny Rathbone AM
Mick Antoniw AM
Neil Hamilton AM
Suzy Davies AM

Y rhai eraill a oedd yn bresennol

Others in Attendance

Adam Price AM Aelod o'r Pwyllgor Cyfrifon Cyhoeddus
Member of the Public Accounts Committee
Euryn Ogwen Williams Cadeirydd, Adolygiad Annibynnol o S4C
Chair, S4C Independent Review
Joedi Langley Pennaeth y Sector Creadigol, Llywodraeth Cymru
Head of Creative Sector, Welsh Government
Mick McGuire Cyfarwyddwr Busnes a'r Rhanbarthau, Llywodraeth Cymru
Director, Business and Regions, Welsh Government
Yr Arglwydd / Lord Elis-Thomas AM Y Gweinidog Diwylliant, Twristiaeth a Chwaraeon
Minister for Culture, Tourism and Sport

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Adam Vaughan Ail Glerc
Second Clerk
Robin Wilkinson Ymchwilydd
Researcher
Steve George Clerc
Clerk

Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.

The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.

Dechreuodd y cyfarfod am 09:32.

The meeting began at 09:32.

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

Diolch, a chroeso i'r Pwyllgor Diwylliant, y Gymraeg a Chyfathrebu. Eitem 1 ar yr agenda: cyflwyniad, ymddiheuriadau, dirprwyon a datgan buddiannau. A oes gan unrhyw Aelod rywbeth i'w ddatgan y bore yma?

Ymddiheuriadau: cafwyd ymddiheuriadau gan Siân Gwenllian, ond efallai y bydd hi yma yn y sesiwn breifat i drafod y flaenraglen waith. Bydd Adam Price yn mynychu'r cyfarfod am y sesiwn ar Pinewood yn ei rôl fel aelod o'r Pwyllgor Cyfrifon Cyhoeddus o dan Reol Sefydlog 17.49, ond nid ydym yn disgwyl unrhyw ddirprwyon.

Thank you, and welcome to the Culture, Welsh Language and Communications Committee. Item 1 on the agenda: introductions, apologies, substitutions and declarations of interest. Does any Member have anything to declare this morning?

Apologies: we have received apologies from Siân Gwenllian, but perhaps she will be here for the private session to discuss the forward work programme. Adam Price will attend the meeting for the session on Pinewood in his role as a member of the Public Accounts Committee in accordance with Standing Order 17.49, but we're not expecting any other substitutes.

2. Ymchwiliad byr i 'Creu S4C ar gyfer y dyfodol: Adolygiad annibynnol' gan Euryn Ogwen Williams: sesiwn dystiolaeth 1
2. Short inquiry into ‘Building an S4C for the future: An independent review' by Euryn Ogwen Williams: evidence session 1

Symud ymlaen at eitem 2: ymchwiliad byr i 'Creu S4C ar gyfer y dyfodol: Adolygiad annibynnol' gan Euryn Ogwen Williams a sesiwn dystiolaeth 1. Croeso i Euryn Ogwen Williams, cadeirydd adolygiad annibynnol o S4C. Os yw'n iawn, byddwn ni’n gofyn cwestiynau ar sail themâu gwahanol yn ymwneud â’r adroddiad, ac felly byddwn yn mynd yn syth mewn i gwestiynau.

Fy nghwestiwn cyntaf i yw: jest o ran y cylch gwaith newydd sydd yn cael ei grybwyll yn yr adroddiad, a’r hyn mae’r Adran dros Ddigidol, Diwylliant, y Cyfryngau a Chwaraeon wedi cytuno iddo nawr, a ydych yn credu y bydd hwnnw'n trawsnewid y ffordd y mae S4C yn gallu gweithredu? Hynny yw, y cyfyngiadau digidol oedd arnyn nhw o’r blaen.

Moving on to item 2: short inquiry into 'Building an S4C for the future: An independent review' by Euryn Ogwen Williams. This is evidence session 1. Welcome to Euryn Ogwen Williams, chair of the S4C independent review. If it's all right, we'll ask questions on the basis of different themes relating to the report, so we'll go straight into questions.

My first question is: just in terms of the proposed new remit, which is mentioned in the report, and what the Department for Digital, Culture, Media and Sport has now agreed on, do you think this will transform the way that S4C can operate? That is, the digital restrictions that they had before.

Rwy’n gobeithio ei fod o, ac rwy’n credu bod ymateb S4C iddo fo yn dangos ei fod o wedi eu rhyddhau nhw gryn dipyn. Achos mi oedd yr hen drefn, sydd wedi bod yna am gymaint o flynyddoedd, dipyn yn anaddas ar gyfer yr oes ddigidol. Felly, rwy’n hyderus bod hwn yn rhoi cyfle newydd i ddelio â sefyllfa hollol newydd—sefyllfa ddigidol.

I very much hope so, and I think that S4C's response to it demonstrates that it has released them from some shackles, because the old system that had been in place for so many years was not appropriate for the digital age. So, I am confident that this gives S4C a new opportunity to deal with an entirely new landscape— mainly the digital landscape.

Ond jest i ofyn yn ôl at hynny: pan wnaeth S4C adroddiad, fe wnaethon nhw ofyn am arian ychwanegol yn benodol ar gyfer digidol, ond, yn amlwg, nid oedd yr adroddiad yma’n ymdrin ag unrhyw arian ychwanegol. A fyddan nhw’n gallu gwneud y pethau ychwanegol digidol yma os na fydd eu cyllideb nhw’n ehangu i gyd-fynd â’u gofynion nhw?

But just to ask on the back of that: when S4C produced a report, they asked for additional funding specifically for digital, and, clearly, this report didn't deal with any additional funding. Will they be able to do these additional digital things if their budget does not expand with the required aspects?

09:35

Wel, wrth gwrs, nid oedd maint yr arian yn rhan o’r cylch gorchwyl, felly nid oedd yn rhywbeth yr oeddwn i’n gallu’i ystyried. Ond yn ddiddorol iawn, yr wythnos diwethaf yn San Steffan, roedd y Pwyllgor Dethol ar Faterion Cymreig yn ystyried yr adroddiad, a’r trydydd tyst yno oedd y Gweinidog, Margot James. Mi soniodd hi’n weddol benodol am gronfa sydd yn bod, sydd wedi’i sefydlu gan DCMS, ar gyfer projectau sydd yn ymwneud â iaith leiafrifol, plant a’r pethau sydd ddim yn cael eu hariannu’n ddigon da, ac awgrymodd, yn sicr, fod S4C a nhw’n cael trafodaeth yn barod—ac mae honno’n gronfa fawr, mae’n gronfa o £60 miliwn. Felly, dyna beth roeddwn i’n ei ragweld—unwaith mae projectau'n dod, mae S4C mewn sefyllfa gref i hawlio'i rhan o'r arian yna. Mae yna ddigon o gronfeydd ar gael, erbyn hyn, lle maen nhw'n gallu mynd iddyn nhw.

Well, of course, the size of the budget wasn't part of the remit and it wasn't something, therefore, that I could consider. But it was very interesting that, last week at Westminster, the Welsh Affairs Select Committee were considering the report, and the third witness there was the Minister, Margot James. She spoke quite specifically about a fund that had been established by DCMS for projects related to minority languages, children and those things that aren't currently sufficiently funded, and she certainly suggested that S4C and the department were already having some negotiations, and that's a large fund of some £60 million. So, that's what I'd anticipated was that, once projects were brought forward, S4C would be in a strong position to claim from that fund. There are plenty of funds available now, which they can bid for.

Fe gawn ni fwy o gwestiynau ar hynny i lawr y lein, os yw hynny'n iawn, ond y cwestiwn arall ar ddigidol gen i yw: mae yna gynnig o greu hwb digidol mewnol—mae S4C wedi byw a gweithio gyda’r sector annibynnol—ydy hynny’n mynd i fod yn rhyw fath o fygythiad i’r sector annibynnol, gan fod yr hwb digidol yma’n mynd i fod yn un mewnol o fewn S4C?

We'll have more questions on that further on, if that's okay, but another question I had on digital was: there is a proposal to create an in-house digital hub—S4C has lived and worked with the independent sector—is that going to be something that's some sort of threat to the independent sector, because this digital hub is going to be an in-house one within S4C?

Ni ddylai e fod, achos roedd hwn yn rhywbeth roedd yn rhaid i fi, yn arbennig, ei ystyried lot, achos roeddwn i yna ar y cychwyn pan oeddem ni'n sefydlu S4C, yn erbyn gwrthwynebiad mawr gan yr hen ddarlledwyr, fel darlledwr nad oedd yn cynhyrchu pethau eu hunain. Ond rwy’n credu bod digidol yn wahanol a bod Cymru’n wahanol a bod y Gymraeg yn wahanol. Ac yn yr achos yma, mae eisiau’r hwb, mae eisiau clwstwr cryf sydd yn delio efo pethau digidol yn y Gymraeg, ac S4C ydy’r lle iawn i arwain ar hynny.

It shouldn't be, because this was something that I had to give a great deal of consideration to, because I was there at the outset when we established S4C, in the face of great opposition from the established broadcasters, as a broadcaster that didn't produce their own content. But I think digital is different and I think Wales is different and the Welsh language is different. And in this case, I think you need that hub, that strong cluster that can deal with digital matters through the medium of Welsh, and S4C is the right place to lead on that.

Ond pam yn fewnol? A ydy hynny, efallai, yn symbol i'r gymuned annibynnol nad yw'r sgiliau, efallai, yna?

But why in-house? Isn't that a symbol for the independent sector that the skills aren't there?

Na, dim o gwbl. Mae yna waith aruthrol i'w wneud. Nid wyf yn rhagweld—. Ni fyddai rhai'n cofio, ar y cychwyn, roedd yna elfennau yn ddarpariaeth adnoddau, yn arbennig, ddaru S4C ei wynebu yn 1981, lle nad oedd yna ddigon o adnoddau. Fe fuddsoddodd S4C, yr adeg honno, mewn adnoddau canolog er mwyn sicrhau bod pethau’n digwydd, ac unwaith roedd pethau’n digwydd, gadawyd iddynt fynd allan. Mae’n ddigon posib, efo’r hwb yma, mai dyna fydd yn digwydd, ond rhywbeth i’r dyfodol ydy hynny. O leiaf rydym yn gwybod ei fod o’n mynd i gychwyn a bod S4C yn rhoi egni y tu ôl iddo fo.

Not at all, no. There is a huge amount of work to do. I don't foresee—. Some won't recall that, at the outset, there were elements in the provision of resources, particularly, that S4C faced back in 1981, where there weren't sufficient resources available. S4C, at that point, invested in central resources in order to ensure that things could happen, and once those things started to happen, it was allowed to go out. It's quite possible that, with this in-house hub, that's the kind of model that they will follow, but that is something for the future. At least we know now that it'll be established and that S4C is driving it forward.

Jest ynglŷn â gwaith y bartneriaeth yr iaith Gymraeg, yn y gorffennol rydym ni wedi clywed pobl sydd yn ymwneud ag S4C yn dweud, ‘Wel, mae S4C yn sianel Gymraeg, ond nid yw hi yna i fod yn rhan o ryw fath o waith addysgiadol ar gyfer y Llywodraeth.’ Yn sicr, yn ôl yr adroddiad yma, mae hynny angen ei newid, efallai, yn sgil y targed o 1 filiwn o siaradwyr. Beth yw’r gwaith sydd wrth law nawr i weithio gyda’r sector yn hynny o beth?

Just on the proposed Welsh language partnership, in the past we've heard people who are with S4C saying that S4C is a Welsh-language channel, but that it's not there to be part of some sort of educational arm of the Government. Certainly, according to this report, that needs to change, perhaps, as a result of the target of 1 million Welsh speakers. What is the work that is ongoing now to work with the sector in that regard?

Roeddwn i'n un o'r bobl a fyddai wedi dweud, flynyddoedd yn ôl, mai job S4C ydy i fod yn sianel deledu. Nid wyf i'n credu bod hynny'n bosib bellach, achos mae’r iaith ac S4C mor ynghlwm efo'i gilydd—mae llwyddiant y ddau’n ynghlwm wrth ei gilydd. Felly, beth sydd angen ydy sylweddoli mai rhan o'r genhadaeth ydy S4C i hyrwyddo’r iaith Gymraeg—rhan bwysig ofnadwy, y rhan sydd yn mynd â’r iaith i lefydd na fyddai hi’n mynd fel arfer. Felly, dyna ydy’r her i S4C a’r pethau eraill sydd ynghlwm â’r iaith—dod at ei gilydd a phartneru, ac nid jest partneru megis, 'Rydych chi'n gwneud job dda ac rydym ni'n gwneud job dda', ond partneriaeth gyfreithiol, gadarn a chryf a fydd yn dal dros gyfnod, efallai, o 10 mlynedd—ei fod o'n gytundeb i nodau arbennig, cyllid wedi'i glustnodi ar ei chyfer a phethau felly.

I was one of the people who would have said, years ago, that it's the job of S4C to be a television channel. I don't think that's possible any longer, because the Welsh language and S4C are so closely interrelated, and there is a great deal of synergy between the success of one and the other. So, what we need to realise is that S4C is part of the mission to promote the Welsh language—a very important part, a part that would take the language to places that it wouldn't usually go. So, that's the challenge for S4C and for other Welsh-language partners—it's to come together and to create partnerships, not just to get together and say, 'Well, you're doing a good job, and we're doing a good job', but creating robust legal partnerships that will be in place over a period of, let's say, 10 years—that there are particular goals in place, with funding allocated for them and such things.

09:40

Felly, a ydych chi'n credu y dylai S4C gael targedau gan Lywodraeth Cymru ynglŷn â sut maen nhw'n ehangu a hybu'r Gymraeg? Sut fydd hyn yn edrych mewn gweithrediad bob dydd?

So, do you think that S4C should have targets from the Welsh Government in terms of how they expand or promote the Welsh language? How would this look in everyday work?

Rydw i'n credu nad ydy o'n gweithio yn uniongyrchol trwy Lywodraeth Cymru, ond mae gan Lywodraeth Cymru eu hasiantaethau y maen nhw yn rhoi targedau iddyn nhw. Rôl S4C yw creu'r partneriaethau cadarn yma hefo'r cyrff yna a rhannu'r genhadaeth, nid gweithio i Lywodraeth Cymru—mae hynny'n rhywbeth anodd ofnadwy i gorff darlledu, ac yn beth drwg. Rydw i'n credu yn sylfaenol y dylai unrhyw gorff sy'n darlledu fod yn annibynnol ar wleidyddiaeth.

I think it should work not directly through the Welsh Government, but the Welsh Government does have its agencies that are provided with targets. It’s S4C’s role to create these robust partnerships with those organisations and to share that mission and to work towards the same mission, not work for the Welsh Government—that would be something very difficult for a broadcasting organisation, and it would be a negative, fundamentally. Any broadcaster should be independent of politics.

Ond byddwn i wedi meddwl bod S4C wedi bod yn gweithio gyda rhai o'r mudiadau yma o'r blaen. Beth sydd yn newydd am y cysyniad yma sydd yn wahanol i beth maen nhw wedi bod yn gwneud am y 30 blynedd diwethaf?

But I would have thought that S4C would have been working with some of these organisations before. So, what's different about this concept that's different to what they've been doing for the last 30 years?

Gwir. [Chwerthin.] Yr hyn sy'n wahanol, mae'n debyg, yw bod disgwyliad iddyn nhw yn hyn, os ydy hyn yn cael ei ddilyn, ac rydw i'n eithaf hyderus bod S4C wedi dechrau ar y gwaith yma'n barod—bod y partneriaethau nid yn rhywbeth llac lle maen nhw'n gwneud y pethau neis, ond yn rhywbeth gwirioneddol galed. Efallai rhannu data, rhannu digwyddiadau, ond gwneud pethau nid ar hap a damwain a mympwy, ond bod yna dargedau—eu bod nhw'n rhannu targedau gyda'r gwahanol asiantaethau. Nid ydy hynny wedi bod yn digwydd. Er enghraifft, cymerwch Eisteddfod yr Urdd a'r Eisteddfod Genedlaethol—wrth gwrs, mae'r ddwy Eisteddfod ar S4C, ond mae un yn gleient i'r llall. Nid dyna ydy partneriaeth. Mae partneriaeth yn golygu bod yn rhaid iddyn nhw fynd ar ôl rhannu'r un nod, rhannu'r un bwriad.

Well, yes, there's some truth in that. [Laughter.] But what's different, I suppose, is that if this recommendation is driven through, and I'm quite confident that S4C has started on that work, the partnerships shouldn't be loose partnerships where they concentrate on the easy wins, but that they are very, very focused. Perhaps they would share data, they would have joint events, but they should be working not in an ad hoc manner, but they should be working to share targets as agencies. That hasn't been the case in the past. For example, if you take the Urdd Eisteddfod and the National Eisteddfod—of course, both of those are broadcast on S4C, but one is a client of the other. Now, that's not what a partnership is. A partnership means that they should be sharing the same objectives and sharing the same aims.

Diolch am hynny. Rydym ni'n symud ymlaen yn awr at ddiogelu S4C ar gyfer y dyfodol. Mick Antoniw.

Thank you for that. We move on now to guaranteeing an S4C for the future. Mick Antoniw.

You've nailed your colours to the mast very much on the future funding of S4C through the licence fee, but, of course, the licence fee and the figures there will be significantly less than the funding at the moment. I wonder if you could expand a bit about why you think that would, nevertheless, give you more security than under the present system.

I don't see that the figures would be less under that system. What I had to wrestle with, going through this, listening to what people were saying and using my own experience, was that, essentially, stability is the essential for the production sector, particularly at a time of disruption by digital, that that stability—. S4C is part of the UK ecosystem and should, therefore, benefit from it. My idea was that instead of being funded—a small amount, 10 per cent of its income—direct from Government, that if everything went into the licence fee—which is not the BBC licence fee, it is the licence fee—they would negotiate then with the Secretary of State, as the BBC does, but separately, for what is adequate for its funding in the future from 2022 onwards. The licence fee is tied to inflation, so there is absolutely no reason that S4C should not ask for that, which it couldn't do under the present arrangement.

So, the key, really, would be the starting point, but presumably some sort of formula, almost like a Barnett-time style arrangement, that basically says, 'This is it', because how do you—? I suppose the initial concern is that, firstly, if you don't start off satisfactorily, you're forever struggling, and it's how confident we are that that would be achieved.

09:45

History says that—having said that, it's only happened once to date. But in 1991, S4C moved from commercial funding—it came out of the commercial system—into direct funding from Government. The basis on which that funding was decided was the funding at the end of that period, and then it was inflation-proofed on top of that. I don't anticipate that this will be any different. I think the Minister, from my understanding, to the Welsh Affairs Committee made it clear that it wasn't the intention for S4C to lose out by this. Although it would have to, obviously, put its plans forward—it is still public money—it would be based on what it has now. It could be better, depending on what is presented.

Because it is within an environment where there has been a downward level of funding over the past few years in real terms, isn't it?

It is. I think that perhaps S4C has been too willing to use this lack of funding as a lever when in fact there are funds around that can be accessed—it's just they don’t come from the same place. Now, that is not a stable system, but if you get the stability into an area where there is total involvement of the audience, which is the licence fee, because the viewers and listeners do become part of the equation then, I think that stability is then guaranteed, but that hopefully will allow S4C, then, also to be bidding for other funds.

That takes us on to perhaps my final question, which is really about the commercialisation, the commercial opportunities that there are, and of course many of these are unpredictable. We've seen great successes within media where commercial opportunities have been seized. How do you think S4C could establish itself as really benefitting from a strong commercial operation?

It has been successful in the past. I think the level at which it operates is not Netflix. We need to be careful not to paint too rosy a picture. But there are opportunities, particularly in digital, particularly in Wales, particularly in the minority language. I think it has that unique position in the market that nobody can compete with, really. It has that particular aim on which it concentrates, and all those things bring opportunities, because throughout the world there are small communities who don't speak the majority language in that community. There are things in digital—digital is a global disruptor. So, there are opportunities there, and I'm pleased—you'll hear this next week from S4C—that they've come up with a plan, a commercial plan and a restructure, that really looks as though they're going for it. Because the fund that's been created over the years, which is worth about £20 million, is not enormous in the big world of digital. But it is a factor, particularly if you match it with other funds. They certainly have taken this on board and created a new commercial plan.

So, the commercial plan would be something that would be of interest to us, clearly.

I think it would be of interest, because I think the commercial plan does impact right across the production sector in Wales. It's not just about S4C. S4C does have that unique—. It is the only broadcaster in Wales that can invest specifically for Wales and for the Welsh language in terms of commercial investment—not to deride what ITV are doing or what Channel 4 are doing. It's not their main job, as it were.

09:50

Jest cyn imi ddod â Suzy i mewn, roeddwn i jest eisiau gofyn un cwestiwn ychwanegol ynglŷn â'r cysyniad yma o'r arian yn mynd drwy'r ffi drwydded. Gwnaethoch chi ddod lan â’r cysyniad yma cyn i Margot James ddweud bod y gyllideb yn mynd i fod yn gyson, os bydd yr arian yn mynd drwy’r ffi drwydded. Felly, pam oeddech chi’n credu mor gryf fod y ffi drwydded yn mynd i fod yn ddigonol ar gyfer y broses yma? Gallai fod nad ydyn nhw’n rhoi arian digonol i mewn i’r ffi drwydded. Mae'n rhaid bod yna rhyw fath o resymeg mwy na—. Rwy’n deall y strwythur a pham yr ydych chi wedi dweud hynny, ond roedd yn risg, onid oedd e, efallai na fyddai'r arian o DCMS sydd yno fel ffrwd wahanol ddim yn mynd drwy’r ffi drwydded. 

Just before I bring Suzy in, I wanted to ask an additional question on this concept of money going through the licence fee. You came up with this before Margot James said that the budget was going to be consistent, if the funding goes through the licence fee. So, why did you feel so strongly that the licence fee was going to be sufficient for this process? It could be that they don't provide sufficient funding through the licence fee. There must be some sort of logic beyond—. I understand the structure and why you've said that, but it was a risk, wasn't it, that the funding from the DCMS that's there as a different stream would not go through the licence fee.

Mi oedd yna elfen o risg ynddo fo, ond nid oedd yn risg fawr achos roedd y swm yn fychan mewn cymhariaeth â'r arian a oedd yn dod yn barod. Felly, pan godais i hwn, roeddwn i wedi—. Yn amlwg, roeddwn i’n cael trafodaeth â’r Ysgrifennydd Gwladol ar y pryd—rhyw dri Ysgrifennydd Gwladol yn ôl erbyn hyn. 

There was an element of risk to it, but it wasn't a huge risk because the amount of money was small in comparison with the funds that were already provided. So, when I raised this, I had already—. Clearly, I was having discussions with the Secretary of State at that time—some three Secretaries of State back by now.

Un newydd eto. Ond, roeddwn i wedi trafod gyda hi sut y byddai hi'n ymateb, ac roedd hi'n amlwg na fyddai yna ddim gwrthwynebiad mawr ganddi hi ar ran y Llywodraeth i fynd i'r cyfeiriad yma. A hi a roddodd y calondid imi fynd ymlaen gyda'r syniad, rwy'n credu—ei bod hi'n pwysleisio trwy'r amser nad ffi drwydded y BBC oedd hon, ond ffi drwydded lle mae'r Ysgrifennydd Gwladol yn dal i benderfynu. Felly, os oeddwn i'n sefydlu'r egwyddorion i benderfynu beth oedd yr arian digonol i S4C, unwaith yr oedd yr egwyddorion yna, roedd o'n ei gwneud yn haws wedyn bod S4C yn cael ei harian o un lle, ac yn defnyddio'r arian masnachol ar gyfer datblygu projectau eraill. 

There will be a new one again, now, yes. But, I had discussed with her what her response would be, and it was clear that there would be no major opposition from her on behalf of the Government to move in this direction. It was she who gave me the encouragement to proceed with this concept, because she was constantly emphasising that this wasn't the BBC's licence fee, but that it was a licence fee where the Secretary of State still made the decisions. So, if we established those principles in terms of what sufficient funding for S4C would look like, once those principles were in place, it made it easier for S4C to be funded from one place and to use their commercial funds to develop other projects.

Ond byddwn i'n dweud bod yn dal angen gwneud y gwaith hynny, achos os nad ydych chi wedi ei wneud e, mae'n dal angen inni gael y drafodaeth ynglŷn â beth sydd yn ddigonol.

But I would say that there's still a need to do this work, because if you haven't done it, there is still a need for us to have that discussion on what is sufficient.

Yn hollol, yn hollol. Nid oeddwn i mewn sefyllfa i'w roi i lawr, oherwydd nad oedd o yn y cylch gorchwyl, ond yn sicr mae'r drafodaeth yna'n hynod o bwysig i chi fel pwyllgor, byddwn i'n tybio. Mae'n ymddangos bod y Gweinidog wedi dweud mai ar waetha'r CSR y bydd beth sydd yno'n bresennol yn parhau tan 2022. Ond byddwn i'n ystyried ei fod o'n rhywbeth y mae'n rhaid bod yn ofalus ohono fo reit drwodd. Mae S4C, rwy'n credu, yn glir am y cyfrifoldeb sydd ganddyn nhw hefyd. 

Yes, exactly. I wasn't in a position to lay down what that figure should be, because it wasn't in the remit, but that discussion is very important for you, I would say, as a committee. It appears that the Minister has said that, despite the CSR, what is currently there will remain in place until 2022. But I would have thought that it's something that needs to be watched all the way through. And S4C, I think, is quite clear about their responsibility in that area too. 

Can I just develop that point before I turn to my own questions? Obviously, there's statutory protection for sufficient funding for S4C at the moment, as you've indicated. Obviously, that law is a few years old now. Do you think it's drafted in a way that safely encompasses the new powers that S4C are going to have as a result of this?

I think so. I'm sorry to be—.

No, no, no, genuinely—it talks about sufficient funding for its purposes. Well, its purposes are going to change.

I think one of the problems is that Government has said clearly that it's going to enact on these requirements, but it's not a good time to enact any laws.

They're are a bit busy with other things. It's just that slight worry that although the commitment is there, there's a change of Government—you know, it's those little things that really need to be battened down so that it happens. The will is there; I have no doubt about that at all. But the actual practicality of putting it through, you know, if there is a change of Government—. I don't think a change of personnel affects it at all; it's part and parcel of the policy of the department now. But I think it's worth keeping an eye on that. 

09:55

Do you think S4C has got any space at the moment to start working towards things like a unitary board before any legislation comes in?

Yes, they've agreed to that. In fact, it was confirmed in the Welsh Affairs Committee session that they are definitely expecting that to happen. You'll be able to ask them next week—Huw did indicate that they were looking at September. There are new members about to come on and those new members have been informed that they will be part of a unitary board and that in September the switch will happen. So, they'll call it a shadow board until the legislation, but it would be very unfortunate if, just because it wasn't done, you had problems later on, because the basis of S4C's worry over the years really has been the problem of being ultra vires. Any public body has got that problem. How far can they push it? An agreement with civil servants is great, but you really do need somebody to commit to it on the floor of the House, so, when that commitment comes, S4C can relax and go ahead on something that they're very comfortable with.

I think that's helpful. I've just got this outlying concern that a shadow board, in your terms, might allow S4C to enter into some contracts when actually the law that empowers all of that isn't quite in place yet because of other things, as you've said—it sounds like there might be a bit of blind eye thing, which is okay. 

I just wanted to ask why—because this committee also agreed that you needed a unitary authority, particularly when you're in partnership with agencies or departments within the Welsh Government, because obviously we have a role then in scrutiny—and I was wondering why you didn't quite go as far as saying, 'We could do with a charter here', which at some point could embody an element of formal joint responsibility for scrutiny of S4C, which doesn't go as far as devolving it completely, she winked.

I think it's a conversation and debate to be had. My problem with the issue in doing the report—. I had three months to deliver the report.

The remit really didn't take me in that direction anyway, but I found it quite distracting. What I was afraid of was that that kind of discussion would be quite distracting for S4C. Do they know where they are? So, in 10 years, there may well be another report because we'll be coming to the end of the licence fee cycle, so that might be a particular thing that needs to be considered. A lot of work needs to be done, which hasn't been done, to work out how—. There is very clear accountability at the moment to Parliament. S4C understand that. There is a relationship between the department and Welsh Government, and S4C understand that. So, they can go ahead and they know how to operate in that. Actually changing that does need a lot of time to get around it.

Okay, thank you. Just one final question. Because there is now a change of governance structure and we're in a position where there's not going to be direct grant, if you like, from the UK Government, do you foresee any changes to the audit process for finance in particular, because you mentioned that, particularly with the commercial arm, there are new opportunities in here as well as potential risks? Is there likely to be a new strand or formula for how financial audit is done?

Yes. I think bringing in the NAO is quite important here, because the NAO do the BBC and so they understand the problem of independence of broadcasters. S4C needs a friend in court, in that sense, and as auditors they will be able to look at S4C's needs, just as much as they look at the BBC's needs when the reports go back to Government. So, I'm comfortable that the NAO can look at the whole picture, and it will certainly understand it. But, it can also be a friend in court for S4C during this very difficult adjustment period to the digital.

10:00

Well, as it happens, I agree. We have a strong role for the Wales Audit Office in the audit of the finances for this Commission, for example. It's been a huge help, so I think you're right. 

It just is that extra strength, really.

Good morning. You've made it quite clear that you think that it's possible for S4C to generate the funds required from having a different approach—having a more commercial approach. What are the commercial constraints on S4C? Would you say that it was akin to an ITV company before 1991? Leaving aside the reach, you know, which is—

Yes. I don't think it is. The financial constraints are very much in the public domain. It cannot become so big that it becomes a problem for ITV, for example. ITV Wales made a strong point during the review that they wouldn't want S4C as a competitor to them in the advertising and that sort of thing.

You can see that causing a problem. But there aren't any real constraints. I'm hoping that the new structure, where you actually bring in the commercial arm right into the centre, so that the commercial arm is actually part of this unitary board—. It's led by the chief executive, so it's accountable. He's the accounting officer. So, all the accountability is there and, other than that public prudence, I think the constraints are minimal. It is a public body that has a commercial arm, but with a very definite focus on that commercial arm—that it's about benefiting the core mission, and not buying lottery tickets.

I think that, while programmes in the Welsh language are the core mission, and it must be creating content in the Welsh language, its main job is as the distributor of that content. That's where the commercial element becomes important—that it is able to create the applications, the platforms where it is able to benefit from—

Okay, so, do you think it would make commercial sense, for example, to be able to extend the reach of the programmes as far as the whole of the UK.

Absolutely, yes. Yes, that is all part of it, really.

Okay, so, are you aware of any calculations as to the size of the revenue that could be generated by that? Clearly, it depends on what programmes you are offering and how much audience you can attract. 

No. I mean, in the digital world, I think it would be very—. I'm certainly not qualified to do it.

But I think anybody would be taking a big risk in predicting in the digital environment.

Okay. But, obviously, the conundrum for the new unitary board is that the DCMS have made it clear that they are not going to give any funds after 2022, and you're arguing that the station ought to be able to survive with the licence fee and the commercial funds it can generate. 

No. It's more complex than that. Sorry. 

I've understood where you are coming from now, sorry. The idea is—. You've got this public service, which is funded—not as much as it could be, but you know that, in the media world, it is a piece of string and it can be any length. But at least there is stability. So, producers working on the basis of that public service know for definite that they can prepare, they can plan, three, four or five years ahead, probably, on what the kind of level is going to be. You've then got a commercial fund that can be used in different ways. It can be used to match fund with commercial partners. It can be used with the data—collection of data is important for S4C—that the audience want. It can be developed in any way. But you also, at the moment, because it's a digital environment, have digital funds set up by Government—by the Welsh Government as well, but certainly by the UK Government—that are accessible to S4C, if only they put a bid in with a plan attached. The one contestable fund, which I'm—

10:05

Yes, all right, yes. So, you're not saying, 'We're moving everything to the BBC'. You've actually still got a number of funds, except that one of them is stable, the other is risky, and the other one you had to work hard to get but you're not—you've got a chance of getting it, you know. So, it's—. I think that's the way S4C has always operated, to be quite honest.

Okay, but it was clear from when this committee did an inquiry earlier, which I wasn't involved in, that everyone was saying S4C is insufficiently funded. One of the evidences of that is the fact that it's 57 per cent repeats, which is clearly unacceptable, I would have thought. So, how are they going to generate enough funds to not have to rely on this strategy?

One of the awful things about doing a report is I didn't have to answer that question, and it is a difficult conundrum. I think the answer lies—. With digital, quite often, it's not the answers, it's the questions you ask, and the question needs to be asked about the service whether and for how long does the traditional service, which mirrors the BBC and ITV, rather than digital channels—how long does that have to go? Particularly when children are not accessing the programmes through television—the programmes are being accessed on iPads and phones. So, somewhere in the next 10 years, the tipping point will be reached. In America, it seems to have already been reached, and there will be that tipping point when the traditional linear schedule becomes subsidiary to—. As long as the content is being created, actually putting it in order, becomes—it becomes the individual's—. Hardly anybody now would sit for a whole night and watch any channel, so S4C isn't on its own.

Okay. Do you think they will be able to do this without falling foul of Ofcom?

Yes. There is no problem with Ofcom. I did consider the idea that it should be a licence, that S4C should apply for an Ofcom licence, but, having talked to Ofcom, I don't think that would help. That's yet another distraction, if you like. Since S4C is accountable to Parliament anyway, it doesn't have to have the licence, it does its own thing, and it does mean that they can adjust it. And Ofcom is well ahead of the game on this one. I think they understand very well, and they have all the figures that show what the trend is.

Well, my questions have been touched upon by Mick Antoniw and by Jenny already. My first question relates to the sentence in your report where you say that S4C should be using its scale and resources to explore all potential commercial revenues, and seek to maximise commercial revenue. I understand the points you've been making this morning, that we're moving away from linear broadcasting. Obviously, people will be able to pick and choose from a multiplicity of programmes via the internet, and the linear programme running schedule already looks like it's part of the dinosaur age. We have the fundamental problem for S4C that its principal purpose in life is to generate Welsh-language broadcasting and to distribute it, as you rightly emphasised earlier on, but the number of people who can understand Welsh worldwide is relatively small, and that clearly restricts its capacity to turn to commercial advantage the content that it produces. So, apart from the fact that we know that, in recent times, resistance to subtitled content has dramatically diminished and successful programmes in Danish et cetera have been marketed worldwide, so there's no reason why Welsh shouldn't join Danish and other languages in the same way, could you expand a little more—without wishing to trespass upon the evidence that S4C will undoubtedly give us about their new grand plan, which you mentioned earlier on—? How you feel S4C should be maximising its commercial revenue? Could you expand a bit more on what you've said already this morning?

10:10

I think you've touched on it there, really. Five years ago, there was a resistance—maybe five to 10 years ago, there was huge resistance to subtitling. People would have been thinking, 'Who wants to watch a Welsh-language programme with subtitles?' But as soon as the big beasts start doing it— and you realise that the huge problem for Netflix and Amazon is high-quality content. So, producing high-quality content opens up the market because you go to Netflix and automatically the stuff is subtitled. So, you've got a potential market there if you can come up with the idea and the quality.

The commercial fund does allow you to partner with people that you might not think of partnering with to up the scale and to leverage more investment. These are all wild suggestions for S4C to do, but I think it creates the possibilities for them, with the unitary board that this committee suggested anyway, to be able to enter that market. But what is essential then—. There is an interesting link then because it ties in with Welsh Government and how all of that works. The subtitling needs to be not somebody sitting down at a machine and translating. That has to happen automatically. You need voice recognition. The process of creating voice recognition in Welsh, which is probably the most important at the moment, has stalled a bit for different reasons. Google and Microsoft have been heavily involved in the words, as it were, so Google Translate is getting better and better, thanks to the Record of this organisation as well. But voice recognition is still something that—we're not in there. Now, S4C is in partnership with somebody who is doing voice recognition—a commercial company—with the Welsh Government's Welsh language plan, and they recognise—. It was one of the things that the Welsh Government, the Welsh language unit, recognised as one of the big challenges. But S4C, in the middle of that, actually can make it happen, and that opens new commercial avenues by making—. Because that subtitling has got to be on voice recognition.

That's fascinating. That's the first we've heard of that in this committee, so I think that potentially takes us to a new level here in this, which is excellent news. And I suppose that's what you were referring to where, earlier on in the same part of your report, you say: 

'Digital content is an area which is ripe for commercial investment.'

This is the essence of it as far as S4C is concerned. So, are they putting significant money into this area in partnership with Google or other internet giants, or what is happening there?

You'll have to ask them that, I think. [Laughter.]

10:15

Ask them. Right, thank you. Very good. Okay. [Laughter.]

Well, can I move on, then, to ask for your views on the potential of other sources of funding for S4C and, in particular, the UK Government's proposed public service broadcasting fund? How significant do you think this can be for S4C?

I think it's highly, highly significant. The fund has come out of the licence fee, oddly enough. When a Secretary of State—I think it was Jeremy Hunt—decided that BBC should pay for everything, including S4C, he decided that it should also pay for broadband. Its commitment to broadband finished with £60 million left in the kitty, and that was under the control of the Department for Culture, Media and Sport. So, they decided that they would repurpose it into a contestable fund for things that aren't in the main stream, if you like. They specify minority language, children, the arts, and, very specifically, outside London. So, nations and regions become a factor. So, all of a sudden, this fund becomes quite attractive, because probably the only organisation in the UK that fits in with that is S4C; but it's even better than that, in a sense, because Government want independent producers to access this fund. Teledwyr Annibynnol Cymru had been very quick off the mark, and they've already had meetings with Ministers about accessing it, with S4C's support. So, when the Minister talked about it, I didn't realise that; when she talked about it in evidence last week, I thought, 'This is great; things are moving'. But there are also pure digital funds tied in with universities that come into the game as well now, I think. So, where S4C is developing stuff, S4C's unique position means that academia can develop and access purpose and information, which would develop applications and things that are significant. So, I think S4C does become a player. So, that's the background to the scale, really. It's not that it's big; it's almost because it's small that it's able to play a part in that market.

Yes. Well, the children's market's always seemed to me to be an important opportunity for S4C because, obviously, developed language skills in the early years are not as significant as later, and, in addition to the obvious potential for promoting the Welsh language as early as possible in a child's development, there is the possibility that those programmes can be sold more widely, even to those who are not going to end up speaking Welsh as an everyday thing.

And for the last—. Cyw was celebrating its tenth birthday recently. That has not only captured the imagination in Wales, but has also really made an impact all over the place because, for a while, it was about the only public service channel for small children. So, they have a reputation. They don't need to build up. It's all there for starting a business, if you like.

Rwy'n cofio SuperTed. Rwy'n cofio SuperTed pan oeddwn i'n tyfu lan. [Chwerthin.]

I remember SuperTed when I was growing up. [Laughter.]

O, ie.

Oh, yes.

Mae gen i gwestiwn clou i ddod â'r sesiwn yma i ben. Yn amlwg, roeddech chi'n gwneud y gwaith yma fel rhan o Lywodraeth San Steffan, ond rydych chi yma yn eich enw eich hun hefyd. Roeddwn i eisiau gofyn y cwestiwn, efallai, i ofyn beth yw'ch barn chi ynglŷn â datganoli darlledu, yn bersonol. Yn amlwg, nid oedd hwn yn rhan o'r remit, ond a oes gennych chi farn? A ydych chi'n credu mai yn San Steffan y dylai'r pŵer yma eistedd?

I have a question to bring this session to an end. Clearly, you were undertaking this work as part of the Westminster Government, but you are here as yourself as well. I wanted to ask a question. What are your views on the devolution of broadcasting? Clearly, this wasn't part of the remit, but do you have a view on this? Do you think that this power should sit in Westminster?

O, mae hwn—

Oh, this is—

10:20

Roedd rhaid i fi gymryd y cyfle. [Chwerthin.]

I had to take that opportunity. [Laughter.]

Yn hollol, ac rwy'n deall yn llwyr. Mae yna ben a chalon yn hwn. Rwyf yn credu, os ydy darlledu yn cael ei ddatganoli, bod yna gymaint o waith caled sydd angen ei wneud. Mae'r datganiadau rwy'n eu clywed—er bod fy nghalon i'n dweud, 'O, ie, mae cenedl angen ei darlledu ei hun', maen nhw mor wag mewn ffordd, achos mae agosatrwydd gwleidyddion a darlledu yn broblem enfawr, ac ni fyddai rhywun eisiau gweld S4C mewn sefyllfa wahanol, achos darlledwyr o bob rhan o'r byd y mae pobl Cymru yn mynd i fod yn eu gwylio. Maen nhw'n mynd i wylio gymaint o Netflix ag y maen nhw o S4C. Felly, nid yw rhywun eisiau creu sefyllfa lle mae S4C dan anfantais oherwydd ei fod e'n cael ei gadw yn dynn. Ar y llaw arall, mae'r cyfraniad y gall S4C ei wneud i Gymru yn enfawr, oherwydd mae e wedi gwneud cyfraniad mawr i ddarlledu yn y Deyrnas Unedig, ac mae e'n rhan o'r ecosystem yna. Ac felly, os ydy e'n gallu gwneud hynny i'r Deyrnas Unedig, gall wneud hynny yng Nghymru hefyd. Ond mae'n rhaid i unrhyw gytundeb datganoli gymryd i ystyriaeth bod hynny'n colli'r dylanwad Prydeinig yna yn y Deyrnas Unedig. 

Yes, and I understand entirely why you did so. But there's a matter for the head and the heart here. I do believe that if broadcasting is devolved, there is so much hard work that would need to be done. The statements I hear—although my heart says, 'Of course, yes, a nation needs to control its own broadcasting', they are vacant statements in a way, because the proximity of politicians and broadcasting is a huge problem, and one wouldn't want to see S4C in a different position, because the people of Wales will be watching broadcasters from all parts of the world. They will watch as much Netflix as they watch S4C. So, you don't want to create a situation where S4C is disadvantaged because it is kept on a tight rein. On the other hand, the contribution that S4C could make to Wales is huge, because it's made a huge contribution to broadcasting throughout the UK, and is it is part of that ecosystem. And, so, if it can do that for the UK, then it can do the same in Wales too. But any devolution has to take into account that it loses that UK-wide influence.

Pam? Achos mae yna wledydd Ewropeaidd sy'n ddylanwadol iawn, fel sydd wedi cael ei grybwyll. Pam fyddan nhw'n gorfod colli'r dylanwad hwnnw?

Why? Because there are European countries who are still influential, as has been mentioned. Why would they have to lose that influence?

Mae'n rhaid iddyn nhw fod yn—. Mi fyddan nhw'n sicr yn colli ryw gymaint ohono fo, achos maen nhw'n dod allan o'r ecosystem arbennig yna. Ni fyddan nhw'n gallu cael yr un bartneriaeth. Bydd hi'n wahanol. Y cyfan rwy'n ei ddweud, rwy'n credu, yw bod lot o waith. Rydych chi eisiau adroddiad, efallai—nid fy mod i'n cynnig—ond rwy'n credu bod eisiau mynd iddo fo yn llawer dyfnach. 

A gaf i jest ddweud un gair? Mae hanes yn eithaf diddorol. Yn 1978, fe sefydlwyd yr autonomous regions yn Sbaen, ac mi ddaeth Catalunya ac Euskadi i mewn. Yn 1979, fe wrthodwyd datganoli yng Nghymru, ac fe ddaeth S4C. Yn 1982, rwy'n cofio bois Catalunya ac Euskadi yn dod atom ni i S4C i weld sut oedd creu darlledwyr newydd. Ac rwy'n credu yn y fan honno mae'r hanes. Rydym ni wedi dod o rywle gwahanol, felly mae'r meddwl sydd ei angen i sôn am ddatganoli yn wahanol. Nid yw'n debyg i Catalunya ac Euskadi. Mae ganddyn nhw eu hanes eu hunain. 

They have to be—. They would certainly lose some of that influence, because they would be coming out of that particular ecosystem. They couldn't have the same partnership. It would be different. So, all I'm saying, I think, is that there is a great deal of work. You may want a report on this—not that I'm offering that—but I do think it needs to be delved into far more deeply. 

Could I just say one other thing? History is quite interesting. In 1978, the autonomous regions were established in Spain, and Catalunya and Euskadi came into being. In 1979, devolution was rejected in Wales, and S4C came into being. And in 1982, I remember the guys from Catalunya and Euskadi coming to us in S4C to see how you could create new broadcasters. I think that's where the history is. We've come from a different place, so the thinking that we need in terms of devolution is different. It's not the same as Catalunya or Euskadi. They have their own history. 

Grêt. Diolch yn fawr iawn am y sylwadau yna, a diolch am ddod mewn atom. Fel rydych chi wedi dweud, byddwn ni'n cael S4C i mewn i ofyn iddyn nhw am sut maen nhw'n mynd i weithredu hwn, ond maen siŵr y byddwn ni'n dod yn ôl at y pwnc cyfathrebu, ac, efallai, datganoli—nid wyf yn siŵr—yn y dyfodol. Diolch yn fawr iawn. 

Great. Thank you very much for those comments, and thank you for attending. As you said, we will be hearing from S4C to ask them how they're going to implement this, but I'm sure we'll come back to the issue of communication and, perhaps, devolution—I'm not sure—in the future. Thank you very much. 

Diolch yn fawr. 

Thank you very much. 

Rydym ni'n mynd i gael seibiant o bum munud. Diolch yn fawr iawn. 

We're now going to have a short break of five minutes. Thank you very much. 

Gohiriwyd y cyfarfod rhwng 10:23 a 10:31.

The meeting adjourned between 10:23 and 10:31.

10:30
4. Perthynas Llywodraeth Cymru â Pinewood: sesiwn dystiolaeth 2
4. The Welsh Government’s relationship with Pinewood: evidence session 2

Diolch a chroeso i eitem 4, perthynas Llywodraeth Cymru â Pinewood, sesiwn dystiolaeth 2. Rydym ar ddeall bod y Gweinidog nawr ond yn gallu mynychu'r cyfarfod o 10:30 i 11:30, felly ar ôl ymgynghori gydag Aelodau, rydw i wedi penderfynu, fel Cadeirydd, cymryd eitem 4 ar yr agenda—perthynas Llywodraeth Cymru â Pinewood—cyn eitem 3 o ran cynyrchiadau ffilm a theledu mawr yng Nghymru. Felly, symudwn yn syth at gwestiynau. Croeso i'r tystion, sef Dafydd Elis-Thomas, Aelod Cynulliad a'r Gweinidog Diwylliant, Twristiaeth a Chwaraeon, Mick McGuire, cyfarwyddwr busnes a'r rhanbarthau, a Joedi Langley—a allwch chi ddweud beth yw eich teitl chi? Nid oes gennym ni'r teitl yma.

Thank you and welcome to item 4, the Welsh Government’s relationship with Pinewood, evidence session 2. We understand that the Minister can only attend the meeting from 10:30 until 11:30, so, following consultation with Members, I've decided, as Chair, to take item 4 on the agenda—the relationship of Welsh Government with Pinewood—before item 3 in terms of film and major television production in Wales. So, we'll move straight into questions. I welcome the witnesses, Dafydd Elis-Thomas, Assembly Member and Minister for Culture, Tourism and Sport, Mick McGuire, director of business and regions, and Joedi Langley—could you say what your title is? We don't have your title here.

I am head of the creative industry sector.

A gaf fi ofyn un cwestiwn, Gadeirydd? Nid wyf yn glir iawn—. Roeddwn i wedi paratoi, ar gyfer y cyfarfod diwethaf, i gyflwyno cynllun Cymru Greadigol i'r pwyllgor yma yn gyntaf cyn ei gyflwyno i'r Cynulliad. Rydw i wedi cyflwyno papur, fel tystiolaeth atodol ar gyfer y cyfarfod hwn, dan y teitl 'Cymru Greadigol'; rwy'n gobeithio eich bod chi wedi ei dderbyn o. Fe garwn i ar ryw bwynt, os yn bosib, gyflwyno hwnnw, neu ni fyddaf wedi'i gyflwyno fo'n ffurfiol cyn yr haf, ac rwyf eisiau gweithredu i benodi ar gyfer y swyddi fydd yn angenrheidiol cyn hynny. Felly, fe garwn i gyfle i drafod hynny, os yn bosib. 

May I ask one question, Chair? I'm not entirely clear—. I had prepared, for the last meeting, to introduce the Creative Wales programme to this committee before taking it to the Assembly. I have presented a paper, as supplementary evidence for this committee, under the title 'Creative Wales'; I hope you've received that. I would like at some point, if possible, to present that to you, or I won't have formally presented it before the summer, and I do want to appoint to the necessary posts before then. So, I would like an opportunity to discuss that, if possible.

Fel y gwnes i ddweud ar y cychwyn, rydym yn mynd i gymryd cwestiynau ar Pinewood, ond yn sicr byddwn yn cymryd cwestiynau yn syth ar ôl hynny ar Cymru Greadigol. Fe wnaethom ni gael mwy o frîff gan yr archwilydd cenedlaethol ac fe wnaethom ni ofyn i chi fel Llywodraeth i gael cwestiynau hefyd ar Pinewood, felly dyna pam rydym ni eisiau gwneud y ddau beth yma heddiw.

As I said at the beginning, we're going to take questions on Pinewood, but certainly we will be asking questions straight afterwards on Creative Wales. We had more of a brief from the auditor general and we asked you as a Government to take questions on Pinewood, so that is why we want to cover the two issues here today.

Ie, rwy'n hapus i wneud hynny, ond wrth gwrs, sôn am y cefndir hanesyddol—cyn fy amser i—y mae Pinewood, ac felly byddaf yn ddibynnol ar y swyddogion a oedd yn weithredol ar y pryd. Ond rwyf yn awyddus i gydweithio gyda'r pwyllgor, yn enwedig pan rydw i'n datblygu polisi newydd. Rwy'n meddwl bod Cymru Greadigol a beth sydd gyda ni i'w gyhoeddi, fel un o ymrwymiadau polisi y Llywodraeth Lafur cyn yr etholiad, a'r ffaith ein bod ni'n gweithredu ar hwnnw, o ddiddordeb i'r pwyllgor ac mi garwn i wneud yn siŵr ein bod ni'n cael amser—ni chawsom ni ddim yr wythnos diwethaf—i drafod hynny hefyd, os yn bosib.

Yes, I'm happy to do that, but you're talking about the historical context before my time in terms of Pinewood, so I will be reliant on the officials who were in place at that time. But I am eager to work with the committee, particularly as I'm developing new policy. I do think that Creative Wales and what we have to put forward, as one of the Labour Government's commitments prior to the election, and the fact that we are taking action there, is of interest to the committee, and I would like to ensure that we do have the time that we didn't have last week to discuss that too, if possible.

Yn sicr, a dyna'r hyn rydym ni eisiau ei sicrhau yn rhan o'r sesiwn yma.

Certainly, and that's what we want to ensure as part of this session.

Po gyntaf y byddwn yn cychwyn y cwestiynau, y cyflymaf y byddwn ni'n dod at Cymru Greadigol. Mae'r cwestiynau gyntaf gen i ynglŷn â pherthynas Llywodraeth Cymru â Pinewood. Gan gydnabod nad oeddech chi yna, mae yna nifer o Aelodau'r Cynulliad wedi gofyn cwestiynau naill ai yn y Senedd neu ar ffurf ysgrifenedig ynglŷn â'r cytundeb gwasanaethau rheoli rhwng Llywodraeth Cymru a Pinewood. O gofio i Pinewood ei hun fod yn fodlon i'r archwilydd cyffredinol ddisgrifio'r trefniadau hynny'n llawn yn ei adroddiad cyhoeddedig, gyda dim ond un ffigwr wedi ei olygu, a ydych yn gallu esbonio pam ei fod wedi bod yn weddol anodd i ni fel Aelodau'r Cynulliad gael gafael ar wybodaeth? Pe na byddai adroddiad yr archwilydd cenedlaethol wedi digwydd, byddem, er enghraifft, yn mynd i adroddiad ar ffilm heb gyfran sylweddol o wybodaeth ar yr hyn a oedd wedi digwydd rhwng Pinewood a'r Llywodraeth—

The soon we start the questions, the quicker we'll get to Creative Wales. The first questions are from me regarding the Welsh Government's relationship with Pinewood. I acknowledge that you weren't here, but a number of AMs have asked questions, either in the Senedd or in written form, about the management services agreement between the Welsh Government and Pinewood. Given that Pinewood themselves were content that the auditor general should describe those arrangements in full in his published report, with only a single figure redacted, can you explain why it's been quite difficult for us as Assembly Members to obtain information? If the auditor general's report hadn't have happened, for example, we would be looking at a report on film without a significant proportion of information on what had happened between Pinewood and the Government—

Beth sy'n digwydd ydy, bob tro rydw i'n cael cais, sydd naill ai yn gais gan bwyllgor, wrth gwrs, neu'n gais rhyddid gwybodaeth gan Aelod Cynulliad neu o ble bynnag, fe fyddaf i’n sicrhau, neu mae'r swyddogion yn sicrhau, ein bod ni’n ymgynghori gyda’r cwmni neu’r asiantaeth neu bwy bynnag sydd wedi rhoi’r wybodaeth i ni ar y sail ei bod yn fasnachol gyfrinachol, ac i ofyn a yw'n iawn ei datgelu. Ac yn y drafodaeth gyntaf gawsom ni gyda Pinewood, nid oedden nhwn'n fodlon i’r wybodaeth yr oeddech chi’n ei cheisio gael ei datgelu, ac felly fe’i gwnaethom ni hi’n glir na fyddem ni’n gallu datgelu hynny heb ganiatâd y cwmni ymhellach. Ond ar ôl yr ymchwiliad gyda’r archwiliwr cyffredinol, fe benderfynodd yr archwiliwr—ac fe wnaeth Pinewood gytuno—ddatgelu rhagor o wybodaeth, ac felly mae’r wybodaeth yna wedi bod yn gyhoeddus ers hynny. Mi fyddech chi wedi gallu cael honno oddi wrthym ni yn ogystal ag oddi wrth yr archwiliwr cyffredinol, unwaith yr oeddem ni wedi cael caniatâd Pinewood i’r wybodaeth honno gael ei rhannu. Nid oes gennyf i ddim diddordeb o gwbl mewn celu gwybodaeth oddi wrth bwyllgor y Cynulliad; byddai hynny’n rhyfedd iawn i rywun sydd wedi bod yn gadeirydd pwyllgor yn y lle yma, yn troi’n Weinidog ac yn penderfynu peidio â rhannu gwybodaeth gyda phwyllgor.

What happens is that every time I receive a request, which is either a request from a committee or a freedom of information request from an Assembly Member or from wherever else it may come, I will ensure, and officials will ensure, that we consult the company or the agency or whoever has provided the information to us on the basis that it is commercially confidential, and to ask whether it is right for us to reveal that information. And in that initial discussion that we had with Pinewood, they weren't content for the information that you sought to be divulged, so we made it clear that we wouldn't be able to divulge that information without the consent of the company. But, after the auditor general's report, the auditor general decided—and Pinewood agreed—to divulge further information as part of that report, and that has been in the public domain since then. You could have accessed that information from us as well as from the auditor general, once we'd had Pinewood's consent for that information to be revealed. I have no interest at all in hiding information from an Assembly committee. It would be very strange for someone who has been a committee Chair in this place and has become a Minister to decide not to share information with a committee.

10:35

Nid oeddwn i jest yn sôn am y pwyllgor; roeddwn i'n sôn am Aelodau Cynulliad yn y pwyllgor yma sydd wedi ceisio gofyn cwestiynau'n flaenorol. Felly, rydych chi’n dweud nad oeddech chi wedi cael caniatâd Pinewood ar y pryd i allu rhyddhau’r wybodaeth honno, a dim ond ar ôl i’r archwilydd cenedlaethol ymwneud â’r sefyllfa yr oedd y caniatâd wedi dod gerbron.

I wasn't just talking about the committee; I was talking about Assembly Members in this committee who have tried to ask questions previously. So, you're saying that you didn't have Pinewood's permission at the time to be able to release that information, and it was only after the auditor general became involved in the situation that permission was given.

Ar gyfer y wybodaeth ychwanegol, ie—y wybodaeth gyfan a ofynnwyd amdani. Nid oes dim modd, yn fy marn i—ac mi ofynnaf i Mick ymhelaethu—inni allu cydweithio gyda chwmnïau masnachol—ac yn y maes yma, wrth gwrs, mae’r rhan fwyaf o’r cydweithio hynny gyda chwmnïau masnachol—dim ond ar yr amodau bod eu diffiniad nhw o beth sydd yn fasnachol gyfrinachol yn cael ei dderbyn gyda ni, ac nad ydym ni’n gallu datgelu beth sydd wedi cael ei rannu at bwrpas datblygu polisi ac, o bosibl, rhoi cefnogaeth ariannol. Mae’n anodd iawn wedyn os ydy faint o gefnogaeth ariannol sy’n cael ei rhoi gan y Llywodraeth mewn pecyn i gwmni masnachol—os ydy’r datgeliad gan y Llywodraeth o’n gwariant ni yn gallu arwain pobl i wneud syms eithaf syml i weld faint yw’r cyfraniad sy’n dod o’r ochr fasnachol. Mae hwn yn gwestiwn anodd yn gystadleuol pan rydym ni’n delio â mwy nag un cwmni. Felly, dyna ydy’r sefyllfa yr ydym ni ynddi hi. Rydym ni wedi glynu at yr egwyddor yna, ac nid wyf yn meddwl bod unrhyw ffordd arall o weithredu, a dweud y gwir, pan mae yna bartneriaeth breifat-cyhoeddus yn y fantol. 

For the additional information, yes—it was all of the information that was requested. It isn't possible, in my view—and I will ask Mick to expand on this—for us to work with commercial companies—and in this area, of course, most of the collaboration is with commercial companies—unless their definition of what is commercially confidential is accepted by us, and that we are unable to divulge what has been shared for the purposes of policy development and, possibly, for financial reasons. It's very difficult if the scale of financial support provided by Government to a commercial company—if the Government's declarations on our spending can lead people to do some simple sums to see what contribution is made from the commercial side. In terms of competition, that is difficult when we're dealing with more than one company. So, that's the situation we're in. We have adhered to the principle, and I don't think there's any other way of operating, if truth be told, when there is a public-private partnership at stake.

Mick, have you got anything more on that?

Only to say that I explained at the previous committee meeting that I had met both chief executives. There was a change in Pinewood—the chief executives changed—and both chief executives confirmed that they didn't want the information to be released, and we acted upon that. If Pinewood have changed their mind, and if they tell us that they are happy for the information to be released, the information would be released.

Just an ancillary question, not specific to the management agreement, actually. But can you understand our concerns as a committee that when we're told yet again that commercial confidentiality is an issue, it comes within a context that predates you, to be fair, Minister, where everything seems to be covered by commercial confidentiality, including questions to Government about how they calculated benefit and which bit of the budget the support came from? This goes back to the days of Edwina Hart's control over the department. So, that's the question I'm asking you, really: whether you can understand why we're reluctant just to accept, 'It's commercially confidential, end of story.'

How else can you operate, except that you take at face value the definition of 'commercial' and 'confidential'?

Don't try and invite me to comment on anything that Mrs Hart may have done. 

Okay. I'm happy to leave it there, in that case, Minister. Thank you. Diolch.

Jest yn fras, cwestiwn arall sydd gen i. Gwnaethom ni gyffwrdd ag e yn y sesiwn ddiwethaf, ond rydym ni angen gofyn cwestiwn ychwanegol ynglŷn â chyflwr y to. Roedd hwnnw wedi costio bron i £1 miliwn i’w atgyweirio, wedi’i nodi yn y prisiad annibynnol. A oedd unrhyw gyfathrebu dilynol rhwng Llywodraeth Cymru a’r syrfëwr ar y pwynt hwn, ac a yw Llywodraeth Cymru wedi ceisio cael ad-daliad ariannol ganddynt?

Just briefly, I have another question. We did touch on it in the last session, but we need to ask an additional question on the state of the roof. That had cost almost £1 million to fix, and was not identified in the independent valuation. Was there any subsequent communication between the Welsh Government and the surveyor on this point, and has the Welsh Government sought financial compensation from them?

Yes. We had a valuation carried out before we acquired. The valuation said that the roof would be subject to routine maintenance but that it didn't have any major defect and valued the building on that basis. Contractually, our surveyors don't believe that there is any legal liability on the valuer. It wasn't a structural survey; it was a valuation. So, for there to be damages to sue, we'd have to prove that the value was significantly less than the value we paid for it as a result of the roof. The roof did leak. Pinewood, as our tenant, was insisting that it not leak at any stage in the future, and therefore officials decided not just to repair but to actually reinforce and improve the quality of the roof to extend its life, and that's why it cost more than a simple repair.

10:40

Okay. So, because it was a sort of general survey, it didn't go into the minutiae detail initially.

Yes, it was a valuation, not a building survey.

Are you actually saying that you bought a building on the basis of a valuation survey without having a full building survey done?

The Wales Audit Office report says that Welsh Government officials anticipated that, once renovated, the farmhouse could become a valuable asset. I'm struggling to understand how, given that, obviously, it used to be a very valuable asset, but it's now in the middle of an industrial area rather than a residential area. Did you ever consider not purchasing it, given that you were trying to set up a film studio?

Yes, it wasn't critical to the operation of the studio, from our perspective. The vendor was only prepared to sell both assets at the same time. But perhaps, more importantly, at the time, Pinewood anticipated that they could make value of that property. So, Pinewood had said, 'Oh, there's an opportunity for us to consider using the house, either as a prop for future productions, and/or to house crew and/or actors who are working on site.' So, Pinewood felt that the flexibility of the property might be of help to their business plan, but there was no immediate plan to use it.

But there were no discussions on who would pay for the renovation.

Well, that would then be: is it a tenant's improvement, or is it a landlord's improvement? If Pinewood had wanted us to invest money in renovating that, we would have expected them to pay a commercial price to us through an increased rent.

Okay, but obviously, you will have been aware that you were acquiring a grade II listed farmhouse—

—and that obviously requires you to renovate the building; and at that point you thought it was a third of a million pounds.

At the time, and as far as we're aware, there is no requirement to make good that building, but it is possible that a local authority could require us to do that at some stage in the future.

Okay. So, at the moment, you have this asset that is deteriorating.

Can I just explain that? The actual listing of the building does not impose—. Obviously it imposes a certain legal requirement on the owner, but it would be up to a local authority—a local planning authority—acting under the heritage and listed buildings legislation to issue notice on the relevant authority, and we're not aware that there was any such notice—

There aren't any at the moment, but could it be a potential liability in the future?

Well, that's a matter for the local planning authority. I won't purport to intervene in that.

Is £360,000 still the estimated renovation cost, as far as you're aware?

It was an estimate made at the time. We haven't updated it.

Okay. So, your current plans for the farmhouse are what?

Until a tenant on the site wants to use that facility, we would leave it as it is. If, at some point, there became a requirement for us to make good, we would have to look at the options available to either sell it separately or include it as part of an increased asset available to the tenant.

Do you think, Minister, that in any way conflicts with your role as the Minister for culture to obviously preserve historic buildings?

No, because in my utility as Minister for heritage, I am entirely subject to legislation in that whole area of listing and heritage conservation. Any relations that I have in regard to listed buildings, and in regard to the condition of those buildings, or any development next to any monument, would be conveyed to me by Cadw inspectors, who are acting in their independent capacity as heritage inspectors, in the same way as if they were planning inspectors. It's the analogous situation. Therefore, if I receive from Cadw, and from a Cadw inspector, a specific statement where I am asked to take action in relation to a building, that is something that I would respond to very positively and very seriously, because it's an independent role that I have under the heritage legislation.

10:45

So, potentially, there could be two drivers of requiring the Welsh Government to renovate this property—the local authority and Cadw.

Well, the local authority would serve a notice if they wished to do so. I have not had any notices from Cadw in relation to that building. It would normally be the impact of development adjacent to something that was a listed building or a monument, and the effect of that on the monument would be the main concern in terms of heritage legislation. But that's a very specific area, and that is where Cadw's advice has to be supreme.

Neil Hamilton.

Can we just revert to the question of the roof repair? One million pounds is quite a significant amount of money to pay to repair a building. When your valuer looked at it, presumably he paid a site visit.

And there was nothing obvious that needed doing to the roof.

I haven't got a copy of the report in front of me, but I understand from my building colleagues that he pointed out that the roof would need normal maintenance from time to time. Roofs do leak—it's an old roof, roofs do leak—and we decided it would be pertinent not to continually replace the roof, but to improve the quality so that you would improve the longevity. Effectively, £1 million was spent to add value to our asset by increasing the longevity of the roof.

So, if you hadn't wanted to improve the quality of the roof—

A running repair could have worked.

—what sort of figure would we have been talking about? Sorry?

A running repair could have worked. I don't know. I can get back to you with an answer on that if you want.

Because, obviously, if it was a relatively small sum in comparison with what was actually spent, I can understand the rationale of just accepting the valuer's figure, but if it was going to be a substantial figure, I don't understand how he could have produced the valuation that he did in the knowledge that a substantial sum of money would need to be spent on repair.

So, I agree with your point. I can't answer your question specifically, but I'm happy to come back, if you want me to, with an answer to that.

That would be great, thank you. We would appreciate that. Mick Antoniw.

Just very quickly on that, clearly the valuer was wrong. Clearly it was a mistake to rely on that valuation and, with hindsight, presumably you'll be thinking to yourselves, 'We should have had a structural assessment of that.' Has any lesson been learnt in terms of future situations like this?

I'm not sure I agree with your assumption, but it's fine that we may—

Not materially. I don't believe—

I believe—this is a fine point of law, but I believe, had the valuer missed a defect in the property that materially affected the valuation, then we would have had a right of action against that valuer. I do not believe—it's not my assessment, it's the assessment of the surveyors who work for us. But they do not believe that the running repairs on the roof materially affected the valuation and, therefore, there were no damages pursued.

No, you've missed the point. I'm not criticising the valuer, the valuer is doing what he's asked to do. The point is that, with a property of this consequence, the two things you want to do—. One, you want to know the value of it, but you also want to know that it is structurally sound. So, the problem isn't with the valuer, the problem is all you've done is get a valuation and it turns out the valuation's giving you what it is, but, with hindsight, it was probably a mistake not to have a structural assessment.

That's a view. It's not the view our surveyors took. Our surveyors themselves are surveyors. They're able to look at a property, they're able to do their own analysis. They didn't think, at the time, that they needed an independent building survey.

Hoffwn i droi at fater arall sydd yn gynwysedig yn y cytundeb terfynu, sef cyfeiriad at waith atgyweirio roedd Pinewood wedi ei gyflawni a oedd gwerth £800,000. A oes yna sicrwydd gennym ni fod y gwaith hwnnw wedi cael ei gyflawni?

I'd like to turn to another issue that is included in the termination agreement, which is a reference to repair work that Pinewood had completed that was worth £800,000. Do we have any assurances that that work has been completed?

10:50

Wel, pam a sut? Hynny yw, sut ydym ni yn y sefyllfa yna? Nag oedd hynny yn y cyngor gweinidogol?

Well, why and how? How are we in this situation? Wasn't that in the ministerial advice?

Nid oeddwn i'n Weinidog ar y pryd, felly mae'n rhaid imi ddibynnu ar y swyddogion i ateb hynny.

I wasn't a Minister at that time, so I have to rely on officials to respond to that.

Mick, could you—on the £800,000?

What we're talking about here is tenants' improvements. So, Pinewood told us in a business plan that they intended to add tenants' improvements to the building to make it more effective for them as a studio. In particular, they developed a suite of offices, which currently occupies 17 small microbusinesses in the supply chain who service the industry, but specifically the proximity to Pinewood facilitates their ability to service Pinewood, and that employs 34 people. They did that work, and I don't believe it cost £800,000, but they have provided some evidence that it cost a significant portion of that amount but not the full amount.

Mick, if I could just sort of intervene there, why is it then that the ministerial advice that was provided at the time of the recommendation to terminate the existing contracts, stated that they had completed works equivalent to £800,000? You're telling me now that that isn't the case: you have some evidence, you don't think it's £800,000, or you're certainly not sure. Why did the ministerial advice say unequivocally that they had completed those works?

Because that was their stated intention, and they had told us that that was their intention to do.

But why didn't you say that in the ministerial advice?

I haven't got the actual words in front of me. So—

Well, I believe it's quoted in the auditor general's report.

Okay. You're not wordsmithing, and I'm sorry I haven't got it in front of me. Do you know what page and what number?

Well, maybe the officials can help us out here, but—

Or I can come back to you on it.

I have the auditor general's report. If you can give me the reference, we'll chase it up now.

But it was your ministerial advice. You obviously don't recall putting that figure in. Can I—

A time thing, which might be helpful, is that at the time of the advice to the Minister, the work wouldn't have been done because the recommendation was for Pinewood to be granted a tenancy—a long lease—on the property, and therefore it couldn't have done any tenants' improvements at the time of that advice. However, they would and could have given us a commitment to doing it.

Yes. So, I think the page in the auditor general's report is page 35, and it's paragraph 3.10. So, it's there very, very clearly, and I would respectfully suggest that, seeing as this was going to be one of the main issues for the committee, you should really have familiarised yourselves with the information that the auditor general referred to. Can I—

I'm sorry. I will not accept criticism of the evidence presented to the committee by my officials. If you wish to complain about me, you're quite welcome to do so at any other time, but not in committee when officials are responding to your questions.

Well, we're trying to understand, Dafydd, why we're in a situation where—. You look at a whole—. This is a litany of errors. The ministerial advice provided to the Minister, we've just been told, was incorrect. That's not an acceptable situation. Indeed, if we delve a little bit further into the auditor general's report, Pinewood actually are contesting the statement that's contained in the ministerial advice that, actually, the original heads of terms specifically set out that Pinewood would make a contribution of £800,000, because it says that it's an either/or. Either

'Pinewood would make a contribution of £800,000 or Pinewood would complete the fit out works and Welsh Government would contribute £1.8 million...They went on to say that the Agreement to Lease makes no reference to the £800,000'.

If we just go back, I do believe—. This doesn't date what time they're referencing. Advice given to the Minister about a Pinewood agreement, a collaboration agreement, and a long lease on a property, could not pre-date tenants' improvements. So, let there be no doubt about that: the tenant doesn't have access to the building and could not have spent money improving the quality of a building before they had taken access to it and signed the lease to get access to it. So, in terms of what I said, I stand by that and hold to it. So, I'm happy to go back and talk to the auditor general about what they meant and what timeline was applied to their comment.

And then, separately, in terms of a heads of terms, Pinewood committed to us that they intended to improve the building once they became a tenant. They would spend money improving the building, and, in particular, they wanted to develop this suite of offices that they can, and did, develop to house the 17 sub-tenants or licensees, who sit underneath it and employ people there. Now, all I would simply say is that it is not normal for that heads of terms and tenants' improvements to feature as part of a lease. Tenants' improvements—it's normal for a lease to require a landlord, or a tenant, sorry, to make good the property at the end of the lease and hand it back in at least as good condition as it was at the outset. And, if a tenant does improvements to a building that the landlord decides have not added value and wants them removed, it is appropriate for the landlord to require the tenant to remove the tenants' improvements. 

10:55

So, I come back and say these are tenants' improvements and would not normally feature in a lease.

Can I just ask a few other things in terms of the Pinewood situation, which the auditor general points out? Paragraph 1.24 refers to the lease not being signed until October 2016, although the agreement for lease was signed on July 2014, and Pinewood occupied the site in early 2015. It seems a little bit strange to me as to why there was this huge delay in that. The VAT being omitted—after the collaboration agreement was signed, officials recognised that VAT had been omitted from the original sponsorship agreement, so you had to increase the annual sponsorship by £87,000. Finally, you acquired the site before signing the collaboration agreement. Now, just in normal business process, this does not paint a very, very rosy picture, does it? If you take them altogether, with some of the things that we've already talked about, there's a lack of attention to detail here, at the very least.

I can answer, Minister, if you'd like.

You have two situations here. You wait until the detail—. So, we had a high-level agreement, we had terms, conditions at a high level agreed, and you are right that there were minor issues that had yet to be signed and agreed before the document could be completed. So, in principle, we had an agreement; in practice, there were points of detail that were yet to be clarified. You have a choice; you either then say, 'Well, let's press on and take advantage of the opportunity to grow the business and the industry on the basis of our relationship', or you delay everything for the detail to be completed. And, on balance, we decided to press on, and, subsequently, the detail was signed and completed to our satisfaction.

Can I just turn to another issue that has been raised in earlier sessions, which is about conflict of interest? In the earlier session, Mick, you said that conflict of interest was covered in the original agreement, but that does seem to be at odds with what the auditor general has said—that it

'was either not identified or considered immaterial by Welsh Government officials at the time of the February 2014 submission to the Minister'.

And we know that it was later identified by officials, of course, in evidence that we have before us at a later date. But the auditor general suggests that the conflict of interest issue was not identified as a major issue in that original agreement. So, could you explain the discrepancy there?

Yes. The heads of terms that were agreed, that were considered by both the media investment panel and the sector panel advisers to Ministers, were considered to allow a worthwhile relationship to develop between both Pinewood and Welsh Government.

In reality, in delivery, both the sector panel and the media investment panel concluded that Pinewood were behaving in a way that they felt might be contrary to the agreement and was creating a conflict of interest. That's why they advised to the Minister that we should look at the agreement and—we discussed this last time—whether there was action to enforce or whether we should consider re-cutting the agreement, effectively entering into a new agreement. In particular, their concerns were that Pinewood was saying that they were separately contracted to use London contractors for things like scaffolding and lighting, whereas clearly it was intended in our original collaboration remit that this work should come to the Welsh supply chain where there was capacity for the Welsh supply chain to supply it.

It was that conflict of interest that was the reason for Welsh Government first going to the original chief executive of Pinewood, Ivan Dunleavy, and saying, 'We're not happy with the way this is running; we would like to renegotiate the agreement.' Subsequently, the new chief executive of Pinewood, Paul Golding, came to us and said they would also like to renegotiate the agreement because they were changing their business model.

11:00

Yn eich tystiolaeth, rŷch chi'n dweud fod cost flynyddol cytundeb nawdd Pinewood yn sylweddol uwch na gwerth y trefniadau nawdd eraill roedd Llywodraeth Cymru wedi ymrwymo iddyn nhw. Hynny yw, jest o wneud y symiau, o ychwanegu’r ffigur TAW, rŷm ni'n sôn am ffigur o dros £0.5 miliwn y flwyddyn o nawdd i Pinewood, lle roedden nhw'n talu—wel, roedden nhw i fod, yn ôl y cytundeb gwreiddiol, talu rhent o £1.6 miliwn dros gyfnod o bum mlynedd. Felly, roedd mwy na £2.5 miliwn o arian yn mynd atyn nhw, ac wedyn yr arian rhent a oedd fod i ddod ni ddigwyddodd. Sut ar y ddaear oedd hynny'n cynrychioli unrhyw beth yn agos at werth am arian?

In your evidence, you say that the annual cost of the sponsorship agreement with Pinewood was significantly more than the value of the other sponsorship arrangements the Welsh Government had entered into. Just doing the sums, adding the VAT figure, we are talking about a figure of over £0.5 million a year of sponsorship for Pinewood, where they were paying—well, they were supposed to, according to the original agreement, pay rent of £1.6 million over a period of five years. So, more than £2.5 million of money was going to them, and then the money from the rent that was supposed to come didn't happen. How on earth did that represent anything close to the value for money?

Fedraf i ddim ateb hynny, fel rydw i wedi dweud sawl gwaith yn y trafodaethau yma. A dweud y gwir, mae gen i fwy o ddiddordeb mewn trafod beth sy'n digwydd yn Pinewood heddiw, oherwydd rydw i'n meddwl ei bod hi'n bwysig iawn ein bod ni nid yn unig yn deall beth sydd wedi digwydd yn y gorffennol a beth oedd o bosibl yn amhriodol, ond mae'n bwysig iawn i ni drafod hefyd os yw’r adeilad presennol o ddefnydd presennol i'r diwydiant yng Nghymru, ac rydw i'n credu ei fod o.

I can't answer that, as I've said many times during these discussions. To be honest, I am more interested in discussing what's happening in Pinewood today, because I think it's very important that we not only understand what's happened in the past and what may have been inappropriate, but it's also important for us to discuss too whether the current building is of use to the industry in Wales, and I do think that it is. 

Rydw i'n cymryd eich barn chi, ond ar ddiwedd y dydd mae gan y pwyllgor yr hawl i ofyn cwestiynau am yr hyn oedd wedi digwydd yn y gorffennol, a hefyd yr hyn sydd yn digwydd nawr. Felly, plîs, byddwn i'n gofyn i chi barchu'r ffaith ein bod ni'n gallu gofyn y cwestiynau yma heddiw.

I am listening to your views, but at the end of the day the committee has the right to ask questions about what had happened in the past, and also what is happening now. So, please, I will ask you to respect our ability to ask these questions today.

Wrth gwrs, fe allwch chi ofyn beth liciwch chi, ond mae'n 11:03 ac fe fyddwch chi'n cwyno yn y funud nad ydw i'n aros mwy nag awr.

Of course, you can ask what you like, but it's 11:03 and you'll be complaining in a minute that I can't stay for more than an hour.

Dafydd, nid ni wnaeth dorri'r amser. Fe wnaethom ni ofyn i chi ddod mewn am gyfnod o amser i drafod y ddau bwnc. Chi, fel Gweinidog, sydd wedi torri'r amser chi'n gallu dod mewn i roi tystiolaeth i ni. Felly, gyda phob parch, mae rhwydd hynt i ni—

Dafydd, it wasn't us that cut the time. We asked you to come in for a period of time to discuss both issues. You, as a Minister, have cut the time you have to give us evidence. So, with all due respect, we have every right—

Fe fues i yma am awr a chwarter yr wythnos diwethaf, a wnaethoch chi ddim cyrraedd y pwynt yr adeg honno. Mae Mick yn fodlon ateb y cwestiwn, felly fe wnaf alw arno—

I was here for an hour and a quarter last week, and you didn't reach these points at that time either. Mick is happy to answer the question, so I will hand over to him—

Dafydd, fel rhywun oedd wedi traethu yn hir iawn pan oedd y lle yma ddim yn bodoli am y diffyg democrataidd yng Nghymru, nid yw'n dderbyniol i chi jest anwybyddu cwestiwn achos nad chi oedd y Gweinidog ar y pryd.

Dafydd, as somebody who spoke at great length when this place didn't exist about the lack of democracy in Wales, it's not acceptable for you just to ignore a question because you weren't the Minister at the time.

Ar ddiwedd y dydd—. Wedyn, pan rŷm ni'n gofyn cwestiwn felly i'r swyddogion, rydych chi'n cwyno ein bod ni'n collfarnu'r swyddogion. Mae'n rhaid i rywun gymryd cyfrifoldeb am hyn, Dafydd. Mae hyn yn hollol warthus.

At the end of the day—. When we're asking a question to the officials, you complain that we're criticising the officials. Somebody has to take responsibility for this, Dafydd. This is terrible.

Rydw i'n cymryd cyfrifoldeb llawn am bopeth ddigwyddodd ers i mi gael fy mhenodi'n Weinidog, ac rydw i hefyd yn cymryd cyfrifoldeb llawn am ddeall unrhyw bethau a aeth o'i le cyn hynny. Dyna ydy diben y sesiwn yma, cyn belled ag ydw i yn y cwestiwn.

I take full responsibility for everything that's happened since I've been appointed Minister, and I also take full responsibility for understanding anything that may have gone wrong before then. That's the purpose of this session here, as far as I'm concerned.

A ydych chi'n awgrymu felly y dylai'r Ysgrifennydd Cabinet ddod i ateb rhai o'r cwestiynau yma—

Do you suggest therefore that the Cabinet Secretary should answer some of these questions—

Mae'r Ysgrifennydd Cabinet wedi bod yma.

The Cabinet Secretary has been here.

—ac mai fe oedd yn gyfrifol?

—and that he is responsible?

Mae'r Ysgrifennydd Cabinet wedi bod yma yr wythnos diwethaf, neu'r wythnos cyn diwethaf. Ond mae Mick yn mynd i ateb—yn fodlon ateb y cwestiwn.

The Cabinet Secretary was here last week, or the week before last. But Mick is going to answer the question that you raised.

Yes. It's a value-for-money question. So, the question is: is the fee that has been paid to Pinewood value for money for Welsh Government? I would assess it based on the benefits that Pinewood have brought to Wales against the cost of the agreement, and we are here, and there's plenty of evidence in the papers that were provided to this committee showing the success and the growth that has happened within the industry. And I do believe that Pinewood's name and Pinewood's global reach and Pinewood's willingness to promote Wales globally as a centre for high-end film and TV production has played a very significant role in the success of the industry. So, I believe that it has been value for money.

11:05

Do you believe that some of the negative publicity around, I think, and agreement—? I think it's fair to say that there are serious concerns about the wisdom of some of the decisions that were made. Has that had a negative impact as well, which has to be set aside some of the positive—

Well, let me just try and answer that question, because I can only answer it with evidence. That's hearsay, I can't comment on hearsay.

So, the evidence that I can provide—I spent last week at Bad Wolf with Natasha Hale. Natasha Hale has a studio that is jammed full of productions and a pipeline that will keep it busy for the next three or four years, totalling in excess of £300 million. Now, she is saying that the reputation that Wales now has is such that United States of America production houses are coming to her and saying, 'We see some great stuff being produced in Wales. We do most of our productions in America, but, when we have to do productions in the United Kingdom, we think we'd like to come to your studio in Wales', and—

But that's nothing to do with Pinewood. You could've done that—

You could have done that without actually going down this cul de sac.

I accept that you don't believe it's anything to do with Pinewood. That's not my view. I can only answer honestly to your question. I believe that Pinewood were instrumental in creating that pipeline. Natasha Hale said that the industry is a victim of its own success. We now have more productions coming than we have facilities to house them, and our supply chain is challenged, because it needs to grow more quickly to meet the demand, to meet the production houses. Now, for me, that's a hugely successful economic outcome and I believe that Pinewood's role in that was material.

I have to move on, sorry, Adam. 

Diolch yn fawr iawn. Mick, yn fras.

Thank you very much. Mick, briefly.

Just on this, in the pre and the current situation, how important is the reputational identity of Pinewood with Wales to the whole strategy?

Well, the key issue is the reputation of Wales as a location for film making. I must say, in the eight months I've been in this job, I only get very, very positive responses, wherever I go, because the amount of coverage of the landscape of Wales, of the drama played out against that landscape, and the interest, as we've just described, in the pipeline in further productions here, is immense.

So, the reputational value of Pinewood is an asset to Wales's reputation; they're things that go hand in hand, are they?

What is important to us is trying to develop the capacity, and colleagues will tell you that both the Dragon facility further west and further into Swansea, as well as the Bad Wolf capacity and Pinewood—there is not sufficient capacity for us to accept substantial further investment. This is a serious issue for us. So, rather than—well, it's not for me to suggest; I won't go down that route again. But there are certain issues that the committee might be interested in pursuing in terms of the potential of the industry, as well as the unfortunate history of parts of it. But that is the nature of the beast, I have to say.

Thank you. I'm going to restrict my questions, because we're a bit short on time, but I think I have to express my concern that the lease that was signed on this did not include a schedule of works. It'd be quite right to say that a normal lease agreement would just be a case of returning the building in the condition you found it, but when you're buying a building and then leasing it out for a specific purpose, the very least you do is attach a schedule of works to make sure that the purpose for which you're buying the thing in the first place is actually met.

I want to turn now to value for money. The media investment budget plan estimated a leverage of public funding to spend of 1:3. It was 1:1, I think, at last calculation. Is that still correct? Has it improved, or—?

Do you want me to answer that?

It's at 1.4:1 at the moment, and we anticipate that that that will rise to 1.9:1 when the additional £7 million comes in. So, I think we said last time that spend has been around £20 million. It's projected to be £27 million, so when that £7 million comes back in it will be 1.9:1 However, if you factor in the recoupments—the £4.2 million, which we had back in the door—actually, that takes it over 2:1. So, we are on that projection to 3:1.

11:10

Well, that's comforting to know, but Pinewood, of course, estimated it at 1:6. There's a big disparity there. Were they just being overambitious and unevidenced in their forecast?

Do you want me to answer that? I think the original business plan, we recognised quite early on, was going to be difficult to achieve. There were changes in the marketplace that meant that it was much more difficult to offer the offering that we had on the table. So, there were a lot more people offering tax credit lending, for example. So, the original business plan said that the £30 million would have been spent within the first two years, or most of it, and it wasn't, obviously, because we're nowhere near that at the moment. But one of the main reasons was the changes in the marketplace, so, more lenders offering some of the things that we originally set out to do in the original business plan. So, that obviously had a knock-on effect—the less money out of the door, the less money you're going to get back in.

I just wonder, Joedi, if it might help if you tell them how the leverage changes—so, if you ignore the fund, how leverage changes in public support for film productions over time, since this sector was created, and what it's moved from to.

So, originally—with grant funding in particular, it's difficult to assess the commercial funding in the same way—

I don't really want to know about grant funding. I take your evidence on that; it's how it works where you've got an investment pot, if you like. I think you answered—it's fine.

What you were referring to was the grant funding in particular.

Because, Wales Screen Fund—I don't have questions on that. Bearing in mind that circumstances change and everyone was, perhaps, a little overambitious, at what point did you think that it was worth asking Pinewood if they would take a cut in what they were getting out of this to reflect the changing conditions? We're always asked with austerity, 'How are you cutting your cloth accordingly?' How was Pinewood asked to cut its cloth accordingly when you realised that the area in which you were operating wasn't as lucrative as you thought?

That's a timing piece. We did sit down with Pinewood and renegotiate a new agreement.

They don't seem to have been taking any less as a result of that renegotiated agreement, on the figures we have available. In fact, they've had more for looking after Pinewood studios.

Under the original agreement, Mick, they weren't being paid to deliver the media investment budget.

But they were getting consequentials from it in terms of post-production and scaffolding, to use the—

Lighting and post-production were the main things, but we weren't paying them directly for their services on the media investment budget. Any fees they were taking were from the production budget itself.

But the arrangement with Pinewood is that they got a studio in this as well. The two came together. You've repeated it a few times that the agreement had to cover both, so was there no—? You didn't deal with them separately, presumably. Did you ask them to take a cut in their sponsorship budget, for example, just to help with this?

Well, they were still doing all of the activities relating to the sponsorship work, and we have kept records that evidence the number of productions that have come into Wales as a result of Pinewood support. So, it's difficult to—. Our enquiries have increased over the last five years. I think we have to attribute some of that to Pinewood and Pinewood's brand here, and we have kept records of it. But it's difficult to attribute directly some of the stuff that didn't go through the media investment budget, or didn't go into the studio through Pinewood. But I think it's fair to attribute some of it to them, definitely.

We're running out of time. Can you ask the question about the Isle of Man, and then we have to—

Obviously, part of the enthusiasm for coming into this arrangement in the first place was the situation with the Isle of Man, and we'd like some detail on what due diligence was done on that, because, in 2010, the Public Accounts Committee equivalent in the Tynwald said that things weren't working particularly well with the media investment budget they had at the time. It was okay—they didn't hate it, but they didn't really have any evidence to see how it was working between 2007 and 2009 into 2010, and they were going to do another piece of work on the back of that. As of last month, that £20 million investment, which included Pinewood and another body, to be fair—they are not direct comparators—. They'd managed, through the equivalent of an MIB, £12 million of the £20 million that they'd spent. They'd written off £6 million, and £1million—they still didn't know whether it was coming in or not. It was still to come in. So, basically, a third of the fund—or a third of the investment—was written off. So, when you're saying, 'We don't know yet how our MIB is going to do', if you take their figures for a much older project, if you like, it's not looking that healthy, particularly as we haven't even managed to spend our £30 million. So, what due diligence was done then?

11:15

So, on the Pinewood agreement with the Isle of Man, my understanding was that that started in October 2012. We entered into our agreement with Pinewood in 2014. So, the whole of their business plan was based on their private experiences in investing their own money in production, but also on the Isle of Man fund.

Yes. However, it was too early to tell what the success of that fund was going to be. But, I do think it's fair to say that we had no reason at that stage to doubt Pinewood's experience, abilities in this field. This is what they do. That was their experience, and we had no reason to doubt that.

Okay. I really have to end it here. We will have more questions on this, but we need to discuss with the Public Accounts Committee whether they take on work and such, but thank you for giving us evidence in that regard.

3. Cynyrchiadau ffilm a theledu mawr yng Nghymru: sesiwn dystiolaeth 16
3. Film and major television production in Wales: evidence session 16

Rŷm ni'n symud yn syth at gwestiynau ynglŷn â chraffu cyffredinol, ynglŷn â'r ymchwiliad i ffilm a theledu. Bydd y Gweinidog yn falch i glywed bod fy nghwestiwn cyntaf i yn cynnwys gofyn ynglŷn â Cymru Greadigol a'r hyn sydd ynghlwm â hynny. A allwch chi esbonio inni yn gymwys beth yw Cymru Greadigol? Hefyd, ai nhw fydd yn rheoli'r gyllideb newydd ar gyfer ffilm yng Nghymru, a sut, felly, y bydd hynny'n edrych?  

We move on straight away to questions on general scrutiny regarding film and major television production in Wales. The Minister will be pleased to hear that my first question includes Creative Wales and what is associated with that. Can you explain to us what exactly Creative Wales is? Also, will they be managing the new budget for film in Wales and how, therefore, will that look?

'Ie' yw'r ateb i'r cwestiwn yna. Mae Cymru Greadigol yn ymrwymiad, fel y dywedais i'n gynharach—ac rwy'n ddiolchgar am y cyfle yma am ryw 10 munud i drafod y mater yma—a wnaed cyn yr etholiad diwethaf gan Lafur Cymru. Roedd o'n rhan o'r drafodaeth ar ôl yr etholiad ynglŷn â gweithredu, ac mae'n dda gen i ddweud ein bod ni bellach mewn sefyllfa i weithredu. Y penderfyniad yr ydym ni wedi'i gymryd yw y bydd Cymru Greadigol yn gorff a fydd yn gweithredu o fewn y Llywodraeth. Fydd o ddim yn gorff allanol, hyd braich. Nid wyf i'n credu ei bod hi'n amserol nac yn briodol i greu rhagor o gyrff hyd braich. Nid wyf, ychwaith, eisiau ymyrraeth mewn unrhyw ffordd yng ngweithgaredd ardderchog cyngor y celfyddydau ym maes y celfyddydau, gan gynnwys celfyddyd ffilm. Ond, rydw i'n credu y bydd creu corff newydd, Cymru Greadigol, o fewn y Llywodraeth yn rhoi cyfle inni gysoni beth sy'n digwydd ar hyn o bryd, yn ogystal â gweithredu mewn meysydd ehangach.

Y bwriad ydy y bydd gan Cymru Greadigol fwrdd. Bydd cadeirydd yn cael ei recriwtio yn fuan drwy'r dull arferol o wneud penodiadau cyhoeddus. Hefyd, bydd yna brif weithredwr i'r bwrdd. Mae nifer yr aelodau eto i'w benderfynu, ond, gan mai corff fydd hwn o fewn y Llywodraeth, nid ydym ni'n rhagweld y bydd o'n fwy nag wyth aelod ar y mwyaf. Ond, mi fydd yna gymysgedd o aelodau sydd yn gyfarwyddwyr gweithredol a chyfarwyddwyr anweithredol allanol. Rydw i wedi bod yn siarad o fewn y sector gyda nifer o bobl ynglŷn â'r dull yma o weithredu ac rydw i'n sicr y bydd yna ymateb adeiladol pan fyddwn ni'n hysbysebu am y cadeirydd a'r prif weithredwr ac aelodau'r bwrdd.  

'Yes' is the answer to that question. Creative Wales is a commitment, as I said earlier—and I'm grateful for this opportunity to have some 10 minutes to discuss this issue—made prior to the last election by Welsh Labour. It was part of discussions, post election, on action to be taken, and I'm now pleased to say that we are in a position to take action in this area. The decision we've taken is that Creative Wales will be a body working within Government. It won't be an arm's-length, external organisation. I don't think it's timely or appropriate to create more arm's-length bodies, and neither do I want to intervene in any way in the excellent work of the arts council in the arts, including film. But, I do believe that creating the new body, Creative Wales, within Government will give us an opportunity to rationalise what's currently happening, as well as to take action in broader areas.

The intention is that Creative Wales will have a board. There will be a chair recruited soon, through the usual processes of making public appointments, and the board will have a chief executive. The number of board members is yet to be determined, but, as this will be an organisation within Government, we don't anticipate that it will be larger than eight members at most. But, there will be a mix of members who are non-executive and executive directors. I have been speaking to many people in the sector on this modus operandi and I'm sure there will be a constructive response when we do advertise for a chair, chief executive and board members.  

A allaf i ofyn pam, yn benodol, rydych chi wedi penderfynu gwneud hyn o fewn y Llywodraeth? Rŷm ni wedi clywed eich barn chi ynglŷn â phanel cyfryngau annibynnol, er enghraifft. Nid ydych chi, fel arfer, yn ffan o greu byrddau mewnol newydd. Mae Ffilm Cymru wedi dweud wrtha i—ac maen nhw wedi ceisio cysylltu â chi, rwy'n credu—fod ganddyn nhw yr arbenigedd er mwyn gallu ymwneud â chyllideb debyg i'r hyn yr oedd Pinewood yn ymgymryd â hi. Beth yw prif bwrpas creu rhywbeth yn fewnol, o feddwl bod rhai pobl wedi dweud nad yw'r arbenigedd, efallai, yn y tîm yn fewnol?

May I ask why, specifically, you have decided to do this within Government? We've heard your view on the independent creative industries panel. You are not usually a fan of creating new internal boards. Ffilm Cymru have told me—and they have tried to get in touch with you—that they have the expertise in order to deal with a similar budget to that with which Pinewood was dealing. What is the main purpose of creating something internally, given that some people have said that, perhaps, the expertise isn't in the team internally?

11:20

Wel, holl bwynt creu'r corff yma ydy y bydd o'n gorff nid annhebyg i beth sydd gyda ni'n barod o fewn yr adran. Ac mi fedraf i ddweud yn sicr fod y drefn yna'n gweithio. Mae Croeso Cymru'n cael ei gydnabod yn rhyngwladol, ac yn arbennig o fewn y Deyrnas Unedig, fel un o'r asiantaethau, o fewn Llywodraeth, ond yn gweithredu yn allanol ac yn gweithredu gyda'r diwydiant—yn un o'r asiantaethau gorau ym maes twristiaeth. Mae CADW yn ddigwestiwn yn asiantaeth gadwraeth sy'n effeithlon ac yn effeithiol, sydd yn gallu cyfuno'r cyfrifoldeb statudol dros ddiogelu henebion yn ogystal â gwaith creadigol o agor yr henebion yna ar gyfer y cyhoedd. Mae'r refeniw sylweddol, y cyllid sylweddol a ddaeth i mewn i Cadw yn ystod y blynyddoedd diwethaf yn enghraifft o ba mor effeithiol y mae'r corff yma wedi bod. A drwy weld o brofiad yn yr wyth mis diwethaf, fel mae'r cyrff yma o fewn yr adran rwy'n gyfrifol amdani yn gweithredu, rydw i wedi penderfynu chwilio am fodel tebyg, gyfatebol, o dan yr enw Cymru Greadigol.

Rydw i'n credu bod yna awydd yn y sector i weld hyn yn digwydd. Mi fydd yna bartneriaeth gref rhwng y sector a Cymru Greadigol drwy'r gweithgaredd fydd Cymru Greadigol yn ei wneud. Ac nid jest mater o gomisiynu gwaith fydd hynny. Mi fydd gweithgareddau presennol yr adran yn ymestyn drwy gyfrwng Cymru Greadigol i ddatblygiad gadwyn gyflenwi, i wella'r rhwydweithiau o gyngor arbenigol i'r diwydiant, i sicrhau bod yna lwybrau ar gyfer datblygiad talent, ac yn arbennig i gydweithio gyda'r Gweinidog sgiliau. Mae trafodaethau wedi cychwyn gyda Skillset Creadigol ac eraill ynglŷn â sut y gallwn ni gydweithio, yn cydnabod ble mae gwendidau wrth sicrhau llif o bobl sy'n abl i fynd i weithio i'r diwydiant. Ac mae hynny'n golygu trafodaeth ddifrifol iawn, rydw i'n credu, hefyd efo'r sector addysg bellach ac addysg uwch yng Nghymru, lle nad yw'r cyrsiau sy'n cael eu paratoi na'r myfyrwyr sydd ar gael, meddai'r cwmnïau wrthyf i, yn addas i'r hyn y maen nhw ei angen. Felly, mae yna waith mawr fel hyn i'w wneud gyda Cymru Greadigol.

Well, the whole point of creating this body is that it will be not dissimilar to what we already have within the department. And I can say with certainty that that works. Visit Wales is recognised internationally, and particularly within the UK, as one of the agencies within Government, but also working externally and with the industry—as one of the best agencies in tourism. Cadw, without question, is an agency that is efficient and effective and can combine statutory responsibilities for safeguarding monuments as well as undertaking creative work in terms of making those monuments accessible to the public. And the significant revenue that came into Cadw over the last few years is an example of just how effective this body has been. And having seen from experience over the past eight months how these organisations within the department that I'm responsible for operate, I have decided to seek a similar model, a corresponding model, under the name of Creative Wales.

I do believe that there is a desire within the sector to see this happening. There will be a strong partnership between the sector and Creative Wales through the activities undertaken by Creative Wales. And that won't just be a matter of commissioning work. The current activities of the department will be extended through Creative Wales to the development of a supply chain, to improve networks of expert support and advice to the industry, to ensure that there are pathways for the development of talent and, also, to work with the Minister for skills. Discussions have started with Creative Skillset and others to see how we can collaborate, to identify where the weaknesses lie in terms of securing a sufficient flow of people who have the ability to work in this industry. And I think that requires a very serious debate with the further and higher education sectors in Wales, where the courses prepared or the students available, according to the companies at least, in terms of what they tell me, aren't appropriate for their needs. So, there is a great deal of work to be done in this regard through Creative Wales.

A fyddwch chi'n cael gwared ar y panel sector diwydiannu creadigol? Neu beth fydd statws hwnnw?

Will you disband the creative industries sector panel? Or what will the status of that be?

Na, nid wyf i'n cael gwared ar ddim byd. Mi fydd y ddau banel yna—y panel sector a'r panel buddsoddiad cyfryngau—. Mi fydd y gweithgaredd yna'n trosglwyddo'n uniongyrchol i Cymru Greadigol.

No, I'm not scrapping anything. Those two panels—the sector panel and the media investment panel—. All that activity will transfer directly to Creative Wales.

A beth fydd y gyllideb, wedyn?

And what would the budget be, then?

Nid yw honno wedi'i phenderfynu eto oherwydd mae'n rhaid i mi gael trafodaethau mewnol i sicrhau hynny. Ond mae'n glir i mi fod y gyllideb yn mynd i fod yn llawer iawn mwy rhesymol o ran gwariant na phe byddem ni'n creu corff tu fas i'r Llywodraeth.

That hasn't yet been decided because I need to have some internal discussions on that issue. But it is clear to me that the budget will be far more reasonable in terms of expenditure than if we were to create a body outwith Government.

Nid dyna'r cwestiwn roeddwn i'n ei ofyn. Nid oes angen creu corff newydd, ond oni fyddai corff sy'n barod yn gweithredu yn y maes yma, er enghraifft Ffilm Cymru, wedi gallu gwneud y gwaith yma?

That wasn't the question I was asking. There isn't a need to create a new body, but wouldn't a body that already exists in this field, for example Fflim Cymru, have been able to do this work?

Na, mae Ffilm Cymru yn gwbl wahanol. Mae Ffilm Cymru ynglŷn â gweithgaredd ffilm. Mae Cymru Greadigol yn mynd i fod yn gallu gweithio ar draws yr holl sector creadigol. Rŵan, rydw i eisiau gofyn i chi, os cewch chi gyfle, cyn i chi ysgrifennu'ch adroddiad, i ddarllen cyfrol ddiweddaraf Darren Henley—fel y gwyddoch chi, prif weithredwr Cyngor Celfyddydau Lloegr. Mae o wedi ysgrifennu cyfrol ardderchog ar greadigrwydd. Mae wedi landio fel anrheg oddi wrtho fo ar fy nesg yn amserol iawn. Ac mi rydw i wedi dod â fy llyfr pinc gyda fi heddiw er mwyn gwneud yn glir i chi bod y syniad o greu cyrff sydd efo maes gweithgaredd sy'n cael ei alw'n greadigol yn gwbl amserol a dyma pam rydw i'n awyddus iawn i symud gyda hyn yn gyflym. A diolch am y cyfle i gyhoeddi hynny yn swyddogol yn y pwyllgor yma heddiw.

Ffilm Cymru is entirely different. Ffilm Cymu is entirely involved in film. Creative Wales will be able to operate across the whole creative sector. Now, I'd like to ask you, if you have an opportunity, before you write your report, to read the latest publication from Darren Henley, the chief executive of Arts Council England. He's written this excellent book on creativity. It landed as a gift from him on my desk, in a very timely manner. So, I've brought my pink book with me today in order to make it clear to you that the idea of creating bodies that have a remit that is described as 'creative' is very timely indeed, and that's why I'm eager to make swift progress on this. And thank you for the opportunity to announce that officially at the committee today.

One of the trends—. This has been an education for me, in terms of the actual diversity of all the skills and experiences, and so on, that we have within Wales. One of the things that jumped out at me, of course, is that we don't have any body that really has any significant input from the people who actually work on the ground in the industry. And I'm just wondering whether now—. For example, you'll be familiar with BECTU, now with Prospect, and Equity, and, of course, those teachers unions as well within this. To what extent will there be the opportunity for that engagement within these structures, because it seems to me it's always been the voice that's been missing. The people who—. If you want to know what's happening in an industry you go to the ground level and you ask the workers what's happening, and you have to obviously judge that subsequently. But how will this be different? Will there be an opportunity for that level of input? Will there be, for example, a union rep on the board?

11:25

Membership of the board will be procured openly by the public procurement procedures, and I would be very surprised if I was not provided with a list that included active members of the relevant trade unions who are, of course, the key figures in cultural production alongside the major investors. So, we would expect a partnership on the board and partnership among the production staff themselves. 

And to the Chair's earlier point about Ffilm Cymru, their experience and professionalism is well appreciated and understood. They could well be invited to apply to join the board to share that with the creative—.

And on the education side, because one of the things as well that's come through is in terms of the skills issue—you have differing views as to whether you import as opposed to the generation of the local skills base, and of course the engagement with the colleges seem to me to be fundamental to this, and the development of that. I'm wondering how you see that being a significant part of the whole package.

Certainly, and I think that we need to make—I would expect Creative Wales to make very direct approaches to all the providers of relevant courses, and getting a better fit between the more academic teaching that goes on and the skills needs and the employability of the students. 

The other thing I should have added—very remiss of me, as a former board member of the British Film Institute—is that we will be working very closely with the British Film Institute, where Ffilm Cymru, obviously, is part of that whole strategic relationship. But I'm also looking forward to an approach to Creative Wales that will be specifically aligned to the word 'creativity'. I have looked at—and this is why I've taken a bit more time over this than I would have done had I not observed what's happened in Scotland. I don't want to make any comment, clearly, on what has happened in Scotland, but the attempt to create an institution that took in the arts council has not been successful because, clearly, they're reconsidering that in Scotland. So, having made it quite clear that I expect the arts council and its clients to continue, and it will be funded in the same way, in the development of Creative Wales there will be room for partnership across the board and certainly the provision of creative skills generally for the economy will be the main driver.

Yes, but just quickly, though, I'd like to know what you're going to be expecting from the chair of Creative Wales, because what I'm picking up is they're going to be responsible for advising you on strategy, because obviously that's where the knowledge is, and they're also going to be directing planning and implementation—so up and down the chain, if I can put it like that. Where's the challenge to Government in this set-up?

Well, the challenge to Government is that we are creating within Government a body that will be inviting and appointing into Government people of substantial commercial and other experience in the sector to actually administer the budgets that I've been referring to—the investment budgets. We've got £15 million or whatever there, and there are other budgets. I won't give you a figure now because we haven't actually written a business plan. This is the first launch, if you like, for this new policy. But I'm certain that there are people out there in the industry who would be very, very willing to join the board of something called Creative Wales. 

Yes, and who would take Government on if they thought their hopes weren't being realised, effectively. 

Well, we are not in the business of being taken on. We are in the business of promoting this thing to happen. This is why we're opening the doors. 

No, I know—that's my question on challenge. Okay, it'll be up to us to challenge, then. Okay, that's fine.

Just on skills, obviously we know that Screen Alliance Wales, which is this not-for-profit institution that Natasha Hale is involved in—we heard really good evidence from them saying how they would like to take things forward. How do you see that fitting in with Creative Wales? Because obviously you're not going to be looking for duplication here at all.

No, we won't be looking for duplication. I'm very pleased with what I've seen that's developed out of what is a private sector initiative. Obviously, in the way I've described the body Creative Wales will be a public-private partnership in its essence. So, unless we have participation from existing suppliers in whatever field that impinges on it, then I think that we will have failed in what we'd be trying to do. So, the invitation is to people across the sector to seize the opportunity of a closer partnership with Government. 

11:30

Okay. Well, bearing in mind that one of the reasons we're asking these questions is that there are gaps in the skill mix that we have at the moment. Forgive me if I'm wrong in this, but I see Creative Wales is partly about setting strategy to get those skills, and also implementing ways of, as you say, creating these public-private partnerships, or whatever it is. If we don't have the skills, we haven't quite got the people, apart from Bad Wolf—that's the only one I can think of—to, I don't know, create the level that will go out looking for those skills or creating those skills themselves. I know there are colleges, but, presumably, you're looking for something—. This is what I'm coming to: it's not just about FE and HE this, is it? We're looking everywhere for these skills to emerge. How do you foresee Creative Wales setting the strategy for that, and then helping to implement it?

Well, I would anticipate that at least one, if not more, of the members of the board would have specific responsibility for the liaison between the businesses, the industry, the skills Minister, my colleague Baroness Eluned Morgan, and the other aspects of Government, in terms of the Cabinet Secretary for Education, and HE and FE. Creative Wales will take an overall view of the provision, but will also report continually on the way implementation takes place, and I think it's key that we have this mix. There are too many times in Government where I've seen bodies being set up to assess what's going on in a field, and then leaving it—I've been part of some of these exercises myself—with no implementation. Creative Wales will do much more than that. Joedi. 

Do you want me to just add to that?

I think the intention is that we will have people on the ground doing exactly that. So, we will have people on the ground helping to map, working with people like Screen Alliance Wales, mapping the provision, working out where the gaps are, and then working really closely with the colleges—the FE colleges and the HE colleges—and also, where we haven't got people delivering what we need to deliver, helping to put structures in place to do that as well. You will know that one of the main ways of learning in film and tv in particular is on the job, and it's very difficult to have apprenticeships because the productions don't often run long enough for them to do that. So, it's looking at different structures for things like that, and how we can better improve that and get more people upskilled in the industry, so that it will absolutely focus on that. 

Well, I'm pleased to hear that, because if this is focused entirely through our education institutions, then we're missing huge tricks here. Bearing in mind that this is going to be almost cross-Government from what you're saying, taking in the skills sector as well, when in, I don't know, three or four years' time, we want to scrutinise somebody to find out where these building blocks are, who are we going to ask? Is it going to be you?

I was rather hoping we'll need answers before the end of this Assembly, Minister. 

Are we going to have a separate fund for Welsh productions, because that's been one of the core things we've heard from many of the production companies? Is that something you intend to do as part of this? Because if it's just going to be unreachable, then that's not going to change anything for people.

We are interested in increasing the amount of film and media activity made in Wales. We don't have definitions of Welshness. I'm a big fan of the noir activities that are now on our screens from Snowdonia, because it pictures the real life of those of us who live in those hills very much. I'm finding it very enjoyable. I love the fact, obviously, that other productions—Keeping Faith particularly—are now worldwide. It is a great time to be creative in Wales, and the intention of this body is to ride, if I can use a surfing metaphor, that great wave. 

Rydyn ni wedi sôn am y cwestiynau ar Ffilm Cymru, ond rwyf i jest eisiau rhoi cyfle i Neil Hamilton ofyn y cwestiwn ar y sector sgiliau Prydeinig, os yw hynny’n iawn, cyn inni orffen.

We've covered the questions on Ffilm Cymru, but I just wanted to give Neil Hamilton the opportunity to ask a question on the British skills sector before we finish.

11:35

The UK Government has a creative industries sector deal. I haven't seen anything come out of the Welsh Government in response to that as yet, specifically. So, can you say whether you're going to take part in that?

Yes, of course. We will be in discussion, and we will be working in partnership with whatever is produced. With any deal at the UK level, and getting directly involved, obviously, in other deals within the creative industry, as you will understand—.

Perhaps, Minister, I can just confirm that we have an application currently pending for a creative cluster in south Wales, and we've been shortlisted from 52 cities applying for it to 12, and UK Government intend to appoint eight cities. So, we are down to 12, of which eight will get appointed, and Welsh Government supported the universities of south Wales in making that bid, together with the BBC in Wales.

In the semi-final, sadly. [Laughter.] We are still in the semi-final.

Just to add to that, we have our feet at the table at the Creative Industries Council as well, who you will now have been heavily involved in sector deals. So, we're there, we have a voice, we have been involved in it, but at different levels, because there are lots of strands to it, basically.

So, this is very much work in progress. Do you know what the timescale is for UK Government to make a decision on that?

We believe it will happen by the end of this month, but sometimes these things get delayed.