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Y Pwyllgor Cyfrifon Cyhoeddus

Public Accounts Committee

20/05/2019

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Darren Millar AM Yn dirprwyo ar ran Mohammad Asghar
Substitute for Mohammad Asghar
Nick Ramsay AM Cadeirydd y Pwyllgor
Committee Chair
Vikki Howells AM

Y rhai eraill a oedd yn bresennol

Others in Attendance

Adrian Crompton Archwilydd Cyffredinol Cymru
Auditor General for Wales
Andrew Slade Cyfarwyddwr Cyffredinol, Grŵp yr Economi, Sgiliau a Chyfoeth Naturiol, Llywodraeth Cymru
Director General, Economy, Skills and Natural Resources Group, Welsh Government
Matthew Mortlock Swyddfa Archwilio Cymru
Wales Audit Office
Sheena Hague Dirprwy Gyfarwyddwr, Rheoli'r Rhwydwaith, Llywodraeth Cymru
Deputy Director, Network Management, Welsh Government
Simon Jones Cyfarwyddwr, Seilwaith yr Economi, Llywodraeth Cymru
Director, Economic Infrastructure, Welsh Government

Swyddogion Cynulliad Cenedlaethol Cymru a oedd yn bresennol

National Assembly for Wales Officials in Attendance

Elin Sutton Dirprwy Glerc
Deputy Clerk
Fay Bowen 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 13:41.

The meeting began at 13:41.

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

I welcome Members to this afternoon's meeting of the Public Accounts Committee. As usual, headsets are available for translation and for sound amplification. Please turn off any phones. In an emergency, follow the ushers. We've received a number of apologies today, from Adam Price, Jenny Rathbone and also from Mohammad Asghar and Rhianon Passmore. Can I welcome Darren Millar to the committee? Thanks for agreeing to sub for Mohammad Asghar. Can I also thank Neil Hamilton for his work on this committee over the last months and years since the start of this Assembly? He's left the committee. 

2. Papurau i'w nodi
2. Papers to note

Okay. Before I move on to our witnesses—and welcome, thanks for being with us today—we have a couple of papers to note. First of all, expenditure on agency staff by NHS Wales. Although the Auditor General for Wales's report doesn't make any specific recommendations, it identifies a number of challenges to improve on the management of agency staffing expenditure. Welsh Government responded to my letter of 28 March in which I requested that the committee would therefore welcome a response on the auditor general's findings and its plans for addressing those.

The auditor general has identified some concerns about the content of the Welsh Government's response in terms of agency staff and increases in spending in 2018-19. Auditor general, did you or anyone from your team want to comment?

Hopefully self-explanatory, Chair, but it's a very full response from the Welsh Government, but my team has done a little further analysis of some of the data that were included. A crucial fact that Members will note, I'm sure, is that expenditure on agency and locum staffing has increased again in the most recent year. I'm sure that's something you'll want to pick up with Dr Goodall and his team when you see them later in the term.

Happy for us to note that and for us to pick that up with Andrew Goodall when we see him? Okay.

Secondly, a couple of letters from the Royal College of Physicians and the British Medical Association, following the evidence session with the Royal National Institute for the Blind on 1 April. I wrote to a number of stakeholders seeking their views on the findings of the auditor general's report. As I said, we got responses from the Royal College of Physicians and the BMA. We need to note those letters. Did you have any comments on those? No. Happy to note those letters? Good. Okay.

3. Cynllun Llywodraeth Cymru i gynnig tocynnau bws rhatach i bobl ifanc – FyNgherdynTeithio: Sesiwn dystiolaeth gyda Llywodraeth Cymru
3. The Welsh Government’s youth discounted bus fare scheme – MyTravelPass: Evidence session with the Welsh Government

Item 3, and the Welsh Government's youth discounted bus fare scheme, MyTravelPass, and our evidence session with the Welsh Government. Can I welcome our witnesses to today's meeting? Thanks for being with us. Would you like to, as usual, give your name and position for the Record of Proceedings?

I'm Andrew Slade, director general for economy, skills and natural resources, and on my left—

Sheena Hague, deputy director, network management in transport.

Simon Jones, director of economic infrastructure.

Good. Thanks for being with us. We've got a number of questions for you. I'll kick off with the first couple. What lessons do you take from the circumstances surrounding the announcement about the launch of the scheme for the initial pilot period and the subsequent negotiations with the bus industry?

Well, I think, Chair, the main lesson is one that we've drawn and implemented, which is, once we had data upon which to change the nature of the scheme to one that's demand driven, we moved as soon as we could to that new arrangement. As you say, this was a pilot scheme. We were trying to secure the co-operation of 80 independent bus operators across the whole of Wales in order to provide the new scheme arrangements, across 22 local authorities, with no powers to compel people to join us in that endeavour. There was no comparator scheme on which we could draw to make estimates, and therefore the extent of uptake was not forseeable, and the longevity of the scheme was not known. It was a pilot for 19 months.

The overall level of public funding was initially set to include discounted travel for 16 and 17-year-olds for work or study purposes. In the event, the arrangements that we brokered with the industry within the funding envelope set were for provision for 16 to 18-year-olds for all types of journey, as well as the associated administration and management and marketing costs. So I suppose, as I say, the key lesson learned was that once we got the data to provide a different basis for the scheme going forward, as soon as we could move onto that new arrangement, we did so. We learned a lot in the process around ticketing and around arrangements for the management of a new cohort of people using concessionary fares. It helped inform our thinking in respect of what we're trying to do through our public transport White Paper in respect of where we go next, including with the evolution of Transport for Wales. I think the other thing that we would say here is that, in assessing how well we did with the scheme and what it's provided, we need to look at the whole life of the scheme, and a changing and evolving scheme. So, if we think of the pilot as testing proof of concept and getting the thing set up, it's what happens thereafter, and I also think it's important that we look at the whole costs to the public purse going into the bus sector as a whole, because I think if you look at things in the round, we've got a good set of arrangements on which to move forward from. 

13:45

So was part of the problem here that, at the outset, you didn't really have the appropriate data, the appropriate analysis, to make those decisions? I know that you've said that you've modified the funding afterwards, but is that an unusual situation, to start off without actually having the full facts about the data—

It's a relatively unusual situation to find yourself in, where you don't have data upon which to base the set-up of the scheme. As I say, there was no comparator anywhere else. We looked across the rest of the UK, other parts of Europe, and if you're trying to do the whole nation thing that we were trying to do, as I say, across 80 companies, that's a different proposition from any of the other schemes that operate out there. We were trying to run a pilot that would help us generate the data and prove the concept, and see whether it was something that was worth pursuing into the future. 

It might be worth adding that the lesson learnt from that data point, which is a key one, has been applied into the draft White Paper, so there's a specific provision about sharing data in future, in order to allow us to be able to make informed decisions in future. 

Is it fair to say that, during this process, for whatever reason, the industry ended up with the upper hand over the Welsh Government?

I don't think that's quite right. I think it's fair to say, Chair, that if you've got information out there in the public domain about your funding envelope for negotiations, that adds some challenges to the process. I think the fact that we were able to secure a wider suite of outcomes from the money than was originally set out is important in this context, and as I say, it was a pilot exercise that has informed what we do in future. As soon as we're in a position to say we've now generated the data, the information about uptake and so on that's needed, we use that to devise the revised operation of the scheme.

Our own internal data on concessionary fares would not necessarily have been a great guide to what happens with a youth pass. For older and disabled passengers, those who are eligible get free travel. That wasn't what we were talking about here; it was a discounted rate. 

And the scheme is voluntary, remains voluntary, but you've said that the CPT welcomed its introduction. Why would an operator have chosen not to participate, given the expectation that the scheme would boost bus travel?

I think there was a degree of risk to all parties here. The bus sector operates on very tight margins. The sector had grown up delivering against a set of policy objectives that included concessionary fares for older and disabled passengers, so there was some targeting of demographics associated with the respective bus companies, all of whom, with a couple of municipal exceptions, are private sector bus operators. There were costs associated with the scheme, there was no guarantee as to what was going to happen after the pilot had finished. Some of the companies were operating their own commercial arrangements and weren't, probably, necessarily all that enthusiastic about getting engaged, and therefore it was quite a departure from where we'd been to get to the new set of arrangements. And it wasn't a complete foregone conclusion that they would fall into line and want to work with the scheme arrangements. 

13:50

Even that it meant, potentially, paying for discounts that the operators were already offering. 

Well, again, various of the operators had their own commercial arrangements. We couldn't compel them to stop using those any more than we could compel them to come into the new arrangement. There may have been a little bit of double-counting in some areas, but I think, overall, to provide a truly national scheme that could operate anywhere, with people getting discounts on every operator, was a different proposition again. 

Can I just add to that? The policy context, I suppose, to help answer that question is that successive Governments have talked about the need to create a fully integrated public transport network, so a fragmented approach where young people have potentially got to have multiple passes to travel around an area is the opposite to, I guess, achieving that policy dimension. So, a national scheme would move us in that direction, I think. And, as Andrew said, expecting bus companies who've got no certainty about whether the scheme would continue to endure to cancel their existing arrangements was probably a step too far at that early stage. 

Okay. The core assumptions about uptake included in the ministerial advice in March 2015—it appeared to have been designed simply to indicate the possible level of uptake necessary to exhaust the scheme budget if the payments had reflected actual use. Going back to my earlier question, would you have expected to see clearer evidence of some supporting sensitivity analysis?

Possibly. I think it's a bit hard for me to put myself back several years into the shoes of the advising officer, but I think, fundamentally, we were operating with an envelope of public money. The industry had been very clear from the get-go that that was the amount of money that they wanted to see built into the new arrangements. That, as you hinted at earlier, was already out there in the public domain. Would sensitivity analysis have changed things, had we done a detailed amount of work? Probably not, in view of the negotiations and the position of the industry. It might have given us a slightly different take on the number of passenger journeys, but at that point in proceedings, we had no other basis on which to make assessments about likely uptake or reach of the scheme, including the number of journeys that young people would take under the fares offered. 

Just to underline Andrew's point, it was a pretty binary position we found ourselves in. It was, essentially, an offer from the bus companies to engage with them, and it was going to cost the amount that it was going to cost, or have no scheme. So, as Andrew said, we could have spent a lot of time doing sensitivity analysis, but that wouldn't have affected—

That's why I wondered whether they had the upper hand throughout the whole process. On that basis, you were basically listening to their data and there was nothing else available. 

I think if we—and Sheena might want to come in in a moment—were just saying the original scheme for 16 and 17-year-olds for a particular type of journey, then it would have been as you've described, Chair: 'Here's a pot of money, and this is what Ministers have agreed through a political agreement as part of the budget settlement, and that's what we will deliver.' In the end, we ended up delivering quite a bit more than that, and it's proved a very important and valuable platform for the future development of the scheme. 

To elaborate on that latter point, although the operators—. Sitting with 80 of them and trying to negotiate this through so that we have a national product for Wales, so that anybody with a youth card could get onto any bus and could have any trip, is quite a big task to undertake. Nobody else has undertaken that. But I think the good faith in that and doing that scheme has now led us to take it to a demand-led scheme at the first opportunity. And then the second thing we've been able to do is to actually, then, extend the age range to 19, 20 and 21. So, we are asking the operators to work with us. It's also, as Simon's mentioned before, a policy aspiration of ours; it's part of the consultation. This is the way we would like to go forward and work with all of the bus operators in Wales. As you're probably aware, it's a de-regulated market and we have very little control over it. So, actually, to get a product that is nationally based with the operators that is voluntary is actually quite good. There are pockets in England and Scotland, where they've got regional tickets, but this is the first time we've ever done this in Wales. So, I think it's a kind of—. As Andrew said before, it's this whole life cost, if you like. This is the initiative we set out to do, and, to be fair to CPT and the local authorities, they've all worked with us as we've evolved this scheme over the past three or four years.  

13:55

Just to amplify a bit of what Sheena said there, the mandatory concessionary fares scheme that Andrew talked about that we introduced in 2002 had a legislative footing. So, there was a cost and a time duration to get that off the ground. That wasn't the position we were in with this one, so we had to take other approaches to be able to deliver this. So, this isn't based in statute; actually, it's quite a big achievement to get 80 different companies to work together to deliver a single national product, which has been a platform to allow us to be able to grow and extend that eligibility.  

Just two final questions from me before I bring in other Members. The whole issue of ministerial advice: do you think that, within that advice to the Minister, the compensation arrangements weren't—well, didn't quite match the advice that was given, and that they weren't underpinned by the financial advice that was originally given? And, secondly, the Permanent Secretary noted when we had our discussion of the Welsh Government's accounts in the autumn of 2018 that there was a whole ongoing look into the issue of advice from different departments. Have you been participating in that process, and are there things that you would do differently now to what happened when this scheme was being run out? 

In response to those, and I'll bring colleagues in in a moment, do I think that the advice should have been updated to Ministers? Yes, I do. I think once we had set out a particular basis on which the arrangements were going to run and then they changed, we should have updated Ministers. I think there's quite an interesting question about the degree to which Ministers needed to be and should have been involved in the detail at the get-go. Ordinarily, I would expect Ministers to set  the strategic objective and the strategic outcome that we were looking for, the amount of money that they wish to see put towards that, to understand if there are any major implementation risks, and thereafter to expect, quite rightly, officials to get on and devise a scheme that was compliant and met the objectives and provided as good a value for money as was possible within the parameters of the scheme set. But, to your specific point—should we have updated Ministers and brought them up to speed—I think that's right; we would accept that.  

Shan, our Permanent Secretary, I think mentioned to you part of the suite of training available to senior civil servants across the Welsh Government. There's a number of things in play here. There's mandatory finance training for all staff, including at senior levels. There were refresher courses offered through the autumn, which I think is what you're referring to there. Then in addition, across my group—and other parts of the Welsh Government are doing something similar—we've run accounting officer-level courses, basically to give all members of my senior civil service within the group, actually, not that cut-down a version of the accounting officer training, but a version of it, so that people understand fully the responsibilities placed upon me as accounting officer, and therefore that come down through the system. And I think, with possibly one exception, all members of my SCS have been through that training. We work very closely with Wales Audit Office colleagues, who help us provide that course material, and it's been very valuable, and we're going to carry on with that not just for senior civil servants, but running that out across the group as a whole at more junior levels within the organisation.

WAO produce a summary of what they've found in the course of their audit and value for money work with us over the preceding 12 months, and as a matter of course we circulate that widely. And, indeed, we sent Mike Usher from WAO's assessment from the last end-of-year assessment out to all team leaders and above within my group, which is about 400 people.

So, there's a lot going on here to disseminate lessons learned. There are a number of lessons, as I picked up right at the very beginning in your initial question, Chair, along with some of these other points, quite detailed points, about how we provide advice to Ministers. And, more generally, we're having a look as an official cadre at the advice to Ministers process at the moment, including what we should expect by way of sign-off at senior civil service level, and what areas are covered off. So, there's a range of work going on to address the points that you've just described.    

You've made a real pig's ear of these figures, haven't you? I mean, I'm just looking at them, and I cannot believe that you presented to Ministers sums of over £9 million, given the take-up that was already being experienced, for the financial year 2016-17. Why on earth did those figures appear in the budgets that you presented to Ministers?

14:00

That was part of the original agreement and was widely known, and we were in the first year of the scheme—in fact, we hadn't even gone through a full first year, had we? We were in the first few months of the scheme by the point we got to 2016-17. So, I'm not sure that we—

Did it not ring alarm bells for you that the cost per beneficiary in that year would end up costing you more than the cost per beneficiary in the existing concessionary fare scheme, even though you're only offering a third off fares for those who are eligible for these passes? Did Ministers not ask those questions, by the way, either? Did Ministers ask those questions?

The ministerial advice went up—. So, the first ministerial advice went in March 2015, which is the question that the Chair posed a minute ago, which was about how the calculation was done. As it was, the negotiation with the industry came after that, and that's where the update of the MA should have gone before the scheme was launched in September 2015. But, when the scheme was launched in September 2015, that was for a 19-month period. That was with the industry. So, to actually go back to the industry—and to cover your point, which is about the 2016-17 financial year—and to say, 'Oh, by the way, we've changed the mechanism that we've agreed with you', I would suspect that we would not have a MyTravelPass for that year. So, the agreement with the industry was, for the 19-month period, 'This is the formula base.' And so what we did at the first opportunity was, in September 2016, actually talk to the industry and get it onto demand-led as soon as we possibly could, and that took us up to March 2017.

But, in the meantime, you wasted many millions of pounds of taxpayers' money because of the way that the scheme had been announced beforehand, and there was no challenge back to you on the potential costs or—.

No, we delivered a scheme that we'd brokered with the industry against a funding package to deliver a suite of benefits over 19 months. And then, as Sheena said, the moment we had the opportunity to take the data that had been agreed and move to a different footing, we did so.

And, just to get this clear, Ministers didn't at any time ask questions around, 'Why is this so expensive given the number of beneficiaries that are likely to benefit from it in the financial year?'

I don't know what discussions would have gone on in meetings, but—

No, I don't think those discussions were had with the Ministers. The previous Minister—. There was a previous Minister that signed off the 2015 advice, and then there was a new Minister, a new transport Minister, that signed off the 2016 advice. But the formula was set for the 80 operators across Wales for the 19-month period, and therefore there wasn't a change, and it wasn't based on the data of the usage, which is what we first hoped. We managed to get to that agreement in September 2016, which was the first opportunity to get out of that formal first agreement with the operators. The operators obviously have their own products. In that case, just when we were in 2016, we had not indicated to them how long this scheme would be, so they had their own products and it would be quite a risk for them to just turn off their products and then start with this product. So, it's quite a tricky thing, but what we have done is, as I said, at the first opportunity, September 2016, we turned it to a demand-led system. So, that's based on the number of tickets that are sold. The other thing that we've done with the industry, at the first opportunity, is extend the scheme so it also benefits 19, 20 and 21-year-olds, and that was launched in February. So, when you start to track through all the timescales, this scheme is evolving.

I'm aware of that. I'm aware that the scheme's evolving, I'm aware of the changes that have been made to the scheme, but what I'm trying to establish is: was any advice given to Ministers at the start to say, 'We think you've made a mistake here in setting the budget before a compensation package has been agreed'? Was there any advice at all from you as officials to say, 'We're in a bit of a pickle here, Minister, because you've undermined our negotiating position as a result of disclosing what the total budget is for the pilot period'? Did that advice go to Ministers at all?

As a matter of fact, I don't think the submission said, 'We think that we are in a difficult negotiating position', to answer your second point.

Okay, but that's what you're implying, because you're implying that all of this is because of the greedy bus operators. I've heard your answers so far this morning about the different commercial operators. So, tell me, what did you say to the Ministers?

We had a pot of funding available, set out in the budget, which Ministers agreed as part of the budget settlement for 2015-16 and through, which was to drive a 19-month, as it turned out, pilot to introduce a concessionary fare scheme for young people. Originally, the plan was for 16 to 17-year-olds against a particular type of journey. We've got to a point where in fact it was 16 to 18 for every type of journey, along with a number of other costs, and that was the agreement reached, which we delivered for Ministers. 

But at no point did you flag up these concerns, which retrospectively you seem to have, about the fact that a budget had been set prior to those negotiations with the bus operators taking place.

14:05

The challenge upon the civil service function was to deliver a programme, a scheme, to deliver on ministerial objectives. We had no prior data upon which to set that. In fact, the only way you could have driven the data would be to run the pilot. So, in a sense, we would be saying, 'We don't know what the data is, we don't know how much money we're going to need, and we can't actually broker this with anybody without the powers to do so unless we run a pilot programme.' So, it all gets a bit circular at that point.

I get that. What I don't understand is that once you realised that the—. Because the impression you try and create is that these operators had you over a barrel because the amount of finance available for the scheme was already out in the public domain. But that's not true, is it? The reason that that amount was in the budget was because of the dreadful figures that you'd provided to Ministers, wasn't it?

No. I don't think any—

No, there's no bearing between those two things at all. As soon as we came out of the pilot phase and we had data upon which to drive an evidence-based scheme based on demand we introduced those arrangements. 

So, why did you compile figures that suggested a cost per beneficiary of in excess—for a third of a discount on bus travel—of completely free bus travel for over-60s?

We provided a set of data not—as I acknowledged to the Chair earlier on—with high levels of sensitivity analysis around it, which says that, if we end up with 80 per cent uptake of this scheme from young people making a couple of journeys a week, these are the sorts of figures that we're talking about. But that's against an envelope that was set and had been negotiated as part of a voluntary agreement with these 80 companies.

But you were content to provide Ministers with advice that suggested that the cost of this scheme, which was a limited scheme for a third off bus fares for 16 and 17-year-olds, up to the age of 18 eventually, for all of them—. You felt that it was appropriate to provide advice that meant that the cost per beneficiary was in excess—for a third off—of the cost per beneficiary of the existing concessionary fare scheme, where everyone goes travel free, anywhere. 

But that is back-casting based on the data that we subsequently had, which then informed the first opportunity that we had to put the scheme onto a demand-driven footing.

I'm pleased that it's moved to a demand-driven footing. I notice in the figures that have been provided that a good proportion of the cash under the demand-driven system is actually ending up in north Wales—around £600,000 of the cash, which in total is not far north of £700,000, is being given to compensate individuals. Obviously, for my region, that's extremely exciting, but, for mid Wales, they're getting just over £6,000 in the last figures that are recorded in the report—it's pretty depressing, isn't it? Why is it so different from one region to the next? 

I'm not sure I know the answer to that. Sheena, can you assist?

Yes. I think it's just marketing, how do we get about by getting the message out to people that 16, 17, 18-year-olds—. It could be that, if they're more rural areas, they already travel by car. But this is the thing that we want to try and get people to change, from car to bus. There could be a whole host of reasons. So, I think all—. What we can do is look at that data, and then what we can do with our marketing plans is try and target those areas. We certainly are trying to look with Traveline at the moment to go into schools and colleges and to try and tell people this is what's on offer. The other issue could be as well, in rural areas, there may not be as many bus services as there are in urban areas, so that could be an issue. 

I know, I know. There are all sorts of reasons. The main aim for us, though, is to increase the number of uptake and the number of applications from young people, and, obviously, this is why we've changed the age cohort as well, up to 21.

I get that, but you're currently spending—. Your forecast, in terms of the way you distributed the cash with the bus operators at the start, gave north Wales roughly 25 per cent of the £9 million-odd in 2016/17 that was available, yet you're spending 75 per cent of your current allocation in north Wales. It gave just under half to south-east Wales in the allocation under the formula that you came up with, yet you're spending just £83,000 in that region, less than 10 per cent. The figures are miles out, aren't they? They're absolutely all over the place.

Are you talking about the formula-based, or are you talking about demand-led?

I'm looking at the—. Right. Okay, your formula-based figures allocated 25 per cent to north Wales. The actual amount that you're spending in north Wales, under the demand-led scheme, is 75 per cent of your budget.

So, where were you getting those figures from, basically?

14:10

On the formula-based, it's based on the mileage and the number of concessionary fares or the uptake of bus usage at that time in that area. That was the data that we had at that time.

Just to amplify Sheena's point there, we had no base data for this, so we had to use the sources of information that we had, as imperfect as they may have proved to be in the short term, and those sources were the way that we allocate the bus services support grant, which is based on miles travelled by buses, and the uptake of a completely different product, pointed at a completely different demographic. Now, that was the best that we could do, because we didn't have access to the data, and at the first opportunity, as has been said, we were able to change that. But we had no other data to base this on at the outset.

I mean, it does raise questions about your current formula allocation, doesn't it, for bus services in Wales, surely, given the scale of the take-up in north Wales in terms of the compensation? Has it caused you to think about reviewing your transport formula for bus services?

It feeds into the White Paper consultation and where we go next with bus service provision across the whole of Wales.

It's a fair point. The deregulated market has led to some behaviours that we perhaps wouldn't envisage in a different kind of world. Our aim, or the aim of what's in the White Paper, is for the funders of bus services—so, that's the Government and local authorities—to be able to be recognised in terms of how bus services are planned and delivered, more in proportion to the amount of financial contribution they make to those services. At the moment, money goes over and the operators, essentially, use that to support their businesses. I think what Ministers are trying to achieve is to be able to make sure that there is a broader suite of policy objectives delivered on the back of any funding that goes into the industry.

Can I just ask around this issue? I've talked about the disparity between different regions. You've talked about take-up clearly being low in some areas and work that you're doing. When did you start planning that work, in terms of regionalisation of the way that you plan to promote uptake?

That will be part of a marketing plan—

No, no. We need to look at—. This is the whole point of the—. The pilot they're moving on is to try and see what data we have and how we can improve it for the future. So, since the first part of the pilot, which was on the amount that was declared at the beginning—the £14.75 million—and then we've gone to demand-led, we're now looking at that data from the demand-led, from April 2017, to see what we can do to change things.

How long is going to take you to look at that? I mean, this financial year ended in March of last year, and we're over 12 months on now. I mean, for goodness' sake.

There's an awful lot that's happened in the past two years. We also did a consultation with youth as well, to find out what young people want. So, we had to go out and do the consultation—

That was November 2017. I think the final responses came through in June 2018, and that information then led to the extension for 2019-20 and 2021 that the Minister announced in February. So, there are lots of parallel pieces of work that we're looking at to try and increase the product and the uptake of the product, but it does take time. We also asked CPT as well—the Confederation of Passenger Transport. They also had a go at the marketing in 2017-18 as well. So, we're all working together to try and get a better uptake—

—but I agree with you. Pardon?

Well, you've got the timeline in the back of the Wales audit report. I think there's an awful lot of work that's been happening, which is beyond all of the concessionary fares, it's beyond the White Paper that has been released. There's an awful lot of work that's happened in bus over the past two to three years, and for one real, simple reason: we want to improve the bus industry within Wales. But it is a deregulated business. It's been like this for 30 years—

I know, but it's a really important point. We don't have control like we do over rail. We don't have control like we do over our roads system. So, we have to, now, try and engineer a much better system for bus transport. Ideally, what we want is really good sustainable habits for young people to start now, and this is our attempt, if you like, of trying to get that going while these other big pieces of work are under way.

But none of the deregulation of the bus industry prevents you from promoting this in those regions of Wales where the take-up is appallingly low.

No, no, and that's why we keep saying about how we negotiated with over 80 operators to get this as a national product. We didn't have any statute to be able to go out and say, 'You will do this', as we did, obviously, with concessionary fares. So, that's what we've done over the past two or three years. 

14:15

But there's nothing stopping you promoting this, is there? 

No, there isn't, and we've got a marketing—

Right. So, why don't you get on and promote it? [Laughter.]

Well, hopefully this will, today.

Well, there is a marketing plan in place, isn't there, for this year and year after?

Yes. There is a marketing plan, and you're more than welcome—

And I think the other thing is we're going to go out to survey young people in the next few months, aren't we—

In the summer.

—and try and get a suite of data, not just about the application process, but also about passenger miles travelled and the types of journeys to add to what we've got and the evolution of the scheme. 

And I think they're really useful because we did—. Transport Focus helped us with the TrawsCymru services, which are the long-distance, national bus services across Wales. We did a survey there, and the survey we wanted to find out was the free weekend travel that we implemented, and what we found was that we had an uptake, an uplift, an increase of patronage of 68 per cent on the weekends. We also questioned the people on the buses, 'Would you use a bus in the week, not just when it's free on the weekend?', and about 62 per cent said, 'Yes', and this is exactly what we want. We want to try and change the mindset of people. And all these products that we're putting out there are trying to get us to that position, rather than waiting and saying, 'Well, look, we'll just wait for some legislation to come along'. So, they're tricky conversations; they're across a huge number stakeholders—80 operators, 22 local authorities—and this is where we've got to.

You've made reference, obviously, to the bus operators. I mean, it's pretty clear to anybody who can use an abacus or a calculator that the operators were massively overcompensated for the first 18 months of the scheme in terms of the actual number of journeys that would have been made by individuals. Do you accept that now?

No, I don't think so.

I go back to the point we made earlier on about a pilot agreement for a pilot phase with the industry to deliver a voluntary co-operation and collaboration arrangement against, as it turned out, through negotiation, an enhanced suite of outcomes compared with that which had originally been trailed. If we'd done the pilot and just stopped there, that would have been one thing. We've used the data, as Sheena says, immediately to put a demand-led scheme in place to ensure that we've got a sound footing—the points that you and the Chair were making earlier on about the basis for the scheme to operate—and that was the agreement that we reached. 

Well, we know the agreement you reached, but did it reflect the actual cost of the implementation of the arrangement, I think, is a fair question that is in the forefront of many people's minds, particularly taxpayers across Wales, who, of course, have had to foot the bill for this.

If you look across—and we're not in a position to do that yet—the whole life of running a scheme like this and you also look at the total amount of public money—

Well, we've got the life of the pilot project itself, haven't we?

Yes. So, I'm talking about everything that you need to go from a pilot into a scheme that operates into the future. I don't think that we could say people were overcompensated in that context. 

That's just your opinion, though, isn't it? I mean, what evidence have you got to say that they weren't overcompensated?

So, it's worth understanding some of the context to the settlement that the bus industry has had historically. So, up until about 2013, the predecessors to the bus services support grant amounted to about £33 million a year. At that point, that grant settlement was reduced to the £25 million that it remains at to this day. So, if you look at it in that context, actually, the compensation that the operators were receiving was effectively going back to approximately the levels that they'd been enjoying up until 2013. 

But you're making a different argument now. You're saying that this is compensating them back to the previous levels. Of course, they weren't doing this previously, were they? This was supposed to be ring-fenced money for this purpose. Isn't that what this is about?

Sure, but I think the point I'm trying to make—unsuccessfully—is that the context was that that's how much money they were receiving, so going back to the point about negotiations, actually, that would have been informing, no doubt, the thinking of the operators when we were talking to them because that's how much money they used to receive in the past . 

Okay. Can I ask you a different question, then? Do you think it was value for money for the 18-month pilot period in terms of the amount that was invested by the Welsh Government? 

If you think that it's—

Again, it goes back to my point about timescales, doesn't it?

Given that you're now paying £1 million a year for this scheme, do you think that having paid £15 million over 18 months was good value for money for the taxpayer?

You don't know the uptake at the outset of the introduction of the scheme. You've got to get all of these different parties involved in the process. It's not clear how many passenger journeys are going to be undertaken by young people if they have the pass. It's not been done on a whole-nation basis anywhere else before. If you then say, 'Well, we've now got lots of demand-led data that show this incremental growth', then, in comparison, what we've now got is less expensive and, therefore, better value for money overall than just that initial pilot period. If you take the pilot period as part of the demonstration of concept and the driving of the scheme as a whole, then I don't think you can make that judgment, certainly not yet.

14:20

Is this the normal way that the Welsh Government would proceed in other areas too? With the benefit of hindsight, if you were back then with your knowledge now, would you have made the same funding assessments?

No. If you know that, because you've got an absolute analogue set of arrangements, you're going to get an uptake of such and such a level and it's going to play out in this particular way and, roughly speaking, that's going to drive that much compensation, then you would engage in a different set of discussions. I think that's fair. But we were delivering on a budget envelope that had been already set out and against a particular set of targets, which we then added to in terms of the delivery of the scheme.

I think most people will draw the assumption that we paid way over the odds for the scheme than we should have done. Can I ask you about state aid risks? Obviously, there is some concern that compensating bus operators so significantly could have been a breach of state aid rules. Do you want to just put us in the picture as far as the Welsh Government's concerned? How did you satisfy yourself that you weren't?

We don't believe that there's a state aid implication here because, effectively, it's a public service obligation that's being undertaken across the whole of Wales. Every participant bus company that's out there at the moment, plus anybody else wishing to join the scheme, can take part. In the original phase, it was done on a formula basis, as you've described. So, nobody was benefiting to the exclusion or the disbenefit of other people, and we were delivering on a public good, ultimately, which was reduced cost of transport for 16- to 18-year-olds. So, I think we are pretty clear on that.

Yes. We haven't received any evidence that what we've engaged in is in any way distorting the market. No-one's made a complaint that anything we've done has distorted the market. As Andrew says, this was open to all current operators and any new operators. So, if anybody wanted to become part of the scheme, they were not barred from doing that, so we weren't excluding anyone. There wasn't any distortion in the market. And just to go back to the earlier point I clumsily made about the 2013 figures, the amount of compensation that they received through this was actually just taking it back to the level that they were having in 2013. So, actually, we weren't throwing a whole load of extra money around that there wasn't a precedent for either.

Okay. Thank you for that. Can I just touch on now the latest figures for the current financial year? Do you want to just bring us up to speed in terms of the number of live passes that there are in circulation right now? I should declare an interest, by the way. My son and my daughter both have these passes. I don't think they've ever used them—

And that's what's causing the large uptake in north Wales. [Laughter.]

Sheena, are you in a position to provide these data and analyse them for Members?

We've had, since the start of the scheme, up to about 30,000 applications. And just most recently we've been tracking to see what's happened since the launch date on 14 February. To 12 May, we've had 2,300-odd applications, and quite a significant proportion of those are from 19 to 21-year-olds as well. What we haven't been able to do yet is see if those 19 to 21-year-olds are some people who were 18 and had a 16-18 pass and then flipped over, because we needed them to reapply because, obviously, you couldn't extend it. So, we're just going through some of that data at the moment. So, it is looking positive that this extra age cohort is encouraging others as well to get their pass.

What proportion of those would be active users—so, people who've registered and then put their passes into use?

I think it changes monthly. So, what I would prefer, if I could, is if I could get you some detail on that and give you, say, the past six months of all those live passes so you could see that. It's probably the best thing if I give a data sheet.

Well, how many have never been used? You must have some of those figures, no?

Off the top of my head, I don't know. I need to find that out for you.

We can provide that for you.

The other thing that we've done as well is just about journeys. Again, this is just some analysis that's been done over the past fortnight. So, it's already recorded in the Wales audit report that the estimated journeys, when we went to the demand-led—so, this is post April 17—was around about 1.34 million journeys. What we're now seeing in 2018-19—so, this isn't the full year of data—we're getting up close to 4 million journeys of MyTravelPass. So, these are sales. This is when somebody gets on a bus and it's not just—it's the ticket sales. So, it could be a weekly ticket, say. So, you won't see that click again; it'll just be them showing their ticket. That also helps us with fraud, in comparison to concessionary fares, because the concessionary fares are free—they have to tap every time. With MyTravelPass, it's just the tap when you buy your ticket. So, that's really encouraging, and that takes me back to the point about the whole life of this scheme—that, if we decided that it wasn't worth proceeding any further a year ago, we'd never have got to the 4 million journeys of young people using MyTravelPass. What we want to see is that growing and growing and growing.

14:25

It's not just about them using it, though, is it? The policy intent was to get them to and from a place of education or work. How are you monitoring whether that's actually been achieved?

I think the only way we'll be able to specifically get the training and the work bit is to do this survey that we've talked about in the summer, to actually speak to people and say, 'Right, out of a typical week, what do you do? Do you go to college, or is it just for leisure? Or is it just to see friends?' I think we just have to try and do a representative sample. The issue as well why we went from a product that was just for work and training was that—. One of the issues for a driver would be that somebody gets onto the bus, and there could be a conversation on using MyTravelPass—'Are you sure you're going to college?'; 'Are you sure you're going to work?'—and then starts to increase the dwell time, and that then interferes with other passengers. So, one of the biggest things we wanted to do was to get this ticket that was for anytime, anywhere, on any operator, and that you just go on and you tap it. And we didn't really want to segment it into training, work et cetera. What we wanted was a mindset change of those who are a younger age that travelling by bus is one of the options that you have for transport, rather than, obviously, mum and dad's taxi. 

It will probably need to take a couple of months, I would imagine, because the way in which we do it is we actually get on the bus, like we did for TrawsCymru. We send bus monitors onto the bus to talk with people when they're on the bus about their trips, so we want to do quite a lot of that. 

That as well. 

We can do that, but we don't get very good uptake and very good answers, whereas if somebody sits with them, and asks them questions, the information that we get back is a bit more rich. 

I know, but—

Not if it doesn't give you the data that helps inform your policy making. 

Of course, but have you even tried? I'm just surprised that no surveying work was done at the end of the pilot period: 18 months—no survey work done. How can you reflect on a pilot and whether it's been successful if you've not done any survey work?

I think we're trying to get as much done as we possibly can, as I answered earlier. There's an awful lot going on—the consultation, we're trying to renegotiate, we're trying to go demand-led; all of these things have to be done. But I agree with you, we need to get some data about how people are using it, but, just as a very quick test, going from 1.34 million journeys up to near enough 4 million—we're going in the right direction. 

Yes, and now what we need to do is get that data-rich information to decide how we really start to purposely put the marketing to different people so that we can increase it even more. 

Can I just add one point to that, because I think it plays into some of the wider things that we're trying to do? One of the challenges is the technology arrangements that we have on the buses, so, as Sheena's said, people are buying essentially paper ticket products that they're then showing to the bus drivers as they get on and off. So, it's really difficult to track—once they've made that purchase, it's really difficult for us to track how they're using it, other than seeing that journeys are taking place. So, one of the things that the Ministers are particularly keen to do is build on what has been acquired through the Wales and borders franchise by Transport for Wales to give us a single ticketing platform, an account-based ticketing platform, for all public transport in Wales, so that there'll be a single system you can use for your train, for your bus, potentially for your bike hire thing, for park and de. And then we'll get a much richer source of data about how all those things are being used and how they all interact.

Thank you, Chair. I've got a number of different questions in different areas. I wanted to start with governance. So, the auditor general's report highlights the absence of formal documentation between the Welsh Government and related parties to support the governance of the scheme right through to the end of 2017-18. What's the story there?

Well, I think the original agreement was worked up directly with the industry and with the local authorities, so everybody would have been party to those discussions and the basis on which the pilot was to operate, and that was set out on our website, I think, and Traveline pretty clearly. Draft guidance was produced. It should have been formalised in an—well, we should have gone on and done that, and that was one of the points that was picked up in an internal audit report. And we have, just in the last few weeks, gone out to to the latest version of the guidance, and put that out formally. But I don't think anybody was in any doubt about the way that the scheme was operating; we've seen no evidence that there was any confusion about that from within the sector or within local authorities. 

14:30

So, the guidance that's gone out to the operators has actually been issued from Powys County Council. So, we've gone into partnership with them to help us manage MyTravelPass with these increased journeys that I've talked about. And the way in which that happens is that Powys send an agreement to every operator who's going to claim for MyTravelPass sales. They have to sign that agreement and then Powys will make a payment, and Powys are also overseeing and checking all those invoices et cetera for us. So, that guidance is out there for operators.

If you're somebody that wants to apply for a MyTravelPass, if you go onto the Traveline website, there's a 'frequently asked questions' section, and it also goes through how you go about applying for the pass. So, I don't think anybody was in any doubt of how to apply for it, but I do take the point about having some formal guidance. It's gone out now, but it would have been better if it had gone out a bit earlier, but that now is in place.  

Okay. Comparing it to the concessionary schemes for older and disabled people, there've been some very unfortunate and well-publicised cases of company fraud in relation to those passes. So, what assessment have you made of the potential fraud risk to the MyTravelPass scheme, and what controls have you put in place to try and mitigate that?  

I'll ask Sheena to say a bit more about the detail, but, obviously, in the initial phase, the funding, as Mr Millar was pointing out earlier on, was on a formula basis, so it wasn't about ticketing arrangements. That's the first point to make. The second point to make is that the use of the MyTravelPass is on a purchase not in respect of a journey, so that is slightly different from the concessionary fares for senior users and for disabled users. But we have done a range of work around this, not least in light of the experience of the two fraud cases—Express Motors on the one hand and Padarn Bus, I think, on the other—but perhaps Sheena can say a bit more about these. 

Yes, and I think it actually starts when somebody actually applies for a card. So, for MyTravelPass what we've also introduced when somebody goes online, particularly with this new age cohort, which is 19-21, is an Experian check, because you need to check that they are who they say they are. So, that's actually part of that application process, so that we get that correct. For example, if somebody is in full-time education in Wales but lives in England, they can apply for a pass. So, we need to check all of those details, and the same for an overseas student as well who's in education within Wales. So, we've managed to do that at the start point of somebody applying, and then, in terms of fraud, as Andrew said, we've done a huge amount of improvements. Just this year, since Christmas, we've had two workshops where we had North Wales Police come along to talk to members in south Wales and north Wales just about the lessons learnt from those two court cases. And that was attended by all local authorities—their auditors, their financial officers and the actual officers doing the work.

So, I think we're making sure we're using all of the lessons from the concessionary fare fraud into this particular product, but one of the biggest or significant things is that you're not having this continuous tap that you do with the concessionary fare. And what we're doing with that is we have the fraud unit within Welsh Government, and we're doing a complete trend analysis of the national data on that. So, if we see a pattern that we don't quite like—50 taps in an hour or something like that—we will go to that person and ask them, and that will be our intention with MyTravelpPass as well. If we start to see in the trend data that something doesn't look quite right, we will go and ask those people what's happening with it. So, we have to have a proportional response—we can't do it for every single thing—but when we start to see certain trends and thresholds, we will then step in. 

And what about lost passes? Have you got any safeguards there, because my understanding of those fraud causes is that there was some issue there with lost passes?  

Yes. We rolled out a series of new electronic ticket machines—I think it was in the past six to eight months; I'll check the date—and one of the issues with the old electronic ticket machines was that they had a threshold of hotlisting. So, it was up to something like 500 cards. So, now with these new ETMs, if we hotlist somebody because they've rung up and they've said they've lost their card, that's it, the card won't work. So, all the bus operators have those ETMs now. So, again, we'll be obviously looking at that and using that same system.

14:35

Thank you. Your paper says that action in response to the internal audit report has included reimbursing bus operators based on the actual number of journeys undertaken. The auditor general's report sets out that operators were already being reimbursed from April 2017 onwards based on discounted ticket sales. So, can you clarify the statement in your paper: has there been a further change to the compensation mechanism?

I think this is probably about the internal audit recommendation about reimbursement and local authorities through to bus operators, is that right?

Yes. I think there may be a misinterpretation in this, but I need to get the bottom of it as well. Basically, what's happened is that, in April 2017, we've gone to demand-led, and then we reimburse operators on the basis of the number of ticket sales, as we've already mentioned. So, I'm not quite sure what this post-April 2017 change is, apart from the change that we went from the formula base. So, I just need to check what's happened there.

Yes, obviously, yes.

Thank you. And just some questions, then, around extending the scheme to 19 to 21-year-olds. It looks as though the Welsh Government has doubled the scheme budget to cover the extended age range. What assumptions has the Welsh Government made about uptake from 19 to 21-year-olds that underpin that revised budget, and what evidence informed those assumptions?

I think, in light of some of the comments from the earlier part of the session, we probably ought to set out our workings for you so you can see what we're doing. It's slightly crude maths anyway, but if you're adding another couple of years into the mix in terms of the age range you are going to have—given that the cohort's reasonably stable—a similar set of budgetary implications for adding those extra years in, but there's quite a bit more that's gone into it.

There is, yes. There is some detailed analysis and, again, we'd be more than happy to share that with you—how we've got to that budget and with that increase of that demographic as well.

Thank you. And could you tell us how common it was for operators to already previously offer discounts for 19 to 21-year-olds and if you're seeing them remove those offers now?

It's difficult to say, out of the 80 operators, that all of them actually gave a youth or discounted fare. Also, there's the issue that, whichever product the operator gave, they were usually limited to a certain area as well, whereas, obviously, MyTravelPass does the whole of Wales and any operator. But what we are aware of, now that the pilot has gone beyond its initial stages and we're now into, I suppose, year 3, year 4—we're starting to see some of the bigger companies—. So, First Bus in Swansea, for example, have got rid of their travel pass, their own commercial product, and we're seeing an increase in those applications for MyTravelPass. So, I think when that certainty increases, as we go along, we'll see more operators giving up their own products and then we'll just have this one MyTravelPass, but it's difficult to say exactly across the whole 80 of those all the different products that they had.

Okay. And this is a theoretical question that might never arise, but if demand significantly exceeds your expectations, how will any additional cost be met?

With all demand-led schemes, there's an element of risk, and they can go down and they can also go up. I think the hope of Welsh Government is—and, obviously, we've put all the effort in to have this product—that this actually becomes quite successful. So, I think we would do whatever we do normally within a department. In the transport department, we're running with an in excess of £900 million budget. Some schemes go quicker than others and we find ourselves managing budgets throughout the year. So, in that case, what we've asked the Minister for is approval up to the £2 million, which is the detailed analysis that we'll send through to you. If it goes and as we monitor monthly if it starts to look as though it's increasing and going beyond there, then we'll write to the Minister and say that we need to get this payment authorised.

Can I just add to that? I think the answer to that probably needs to be seen in a longer term context of the reform agenda for the bus industry as well. So, I guess we would see that, eventually, the youth compensation thing forms part of a wider suite of arrangements that we have with operators. There are other policy objectives that we want to achieve with the bus industry in working with them—so, more accessible buses, lower carbon emissions, better air quality, carrying cycles, all of that stuff; there are a whole load of things. And if all we ever do is go on a piecemeal basis to the bus industry and say, 'How much is it going to cost to have this thing?' and then, 'How much is it going to cost to have this thing?', actually, that's no way for us to strike a deal. So, I think what we're aiming to do is take a step back and identify all of the policy outcomes that we want to achieve and put that onto the table, either as part of an enhanced quality partnership, which is a provision in the White Paper, or, where we contract for services, which is in big parts of rural Wales, actually bake that into the section 63 contracts. Or if we ever move into a franchising space, build that into the—all of those policy objectives have got to be delivered under a franchise. So, it just becomes a contract where we say, 'These are the things we want and these are the conditions', and then we go to market to find out what the best value for delivering that entire suite of things is.

14:40

Thank you. The extension of the scheme to 19 to 21-year-olds was delayed by two months—the roll-out there. What were the technical issues that arose that led to that, and why hadn't those technical issues been foreseen by the time of the Cabinet Secretary's announcement in mid November?

I think it's simple to say we thought we had foreseen everything and then we had the project and then we launched it and we found that we had some technical difficulties in there. So, if somebody fails an Experian check, which is their credit check, we then need to get more information off them, like a passport number or something else. I can now say that it's working successfully, it's fully functional, but we did have a few teething problems as we sometimes do with a digital product. But I accept that if we could've foreseen it then we would have. So, since the Minister announced it, within two months, we had it fully functional.

I think there was an issue, amongst other things, wasn't there, with international students. Because opening up the size of the cohort brought residency in—establishing identification checks in—for a different group of people. I don't think we had fully appreciated what we needed to do there to make sure that we cover those travellers off in terms of the arrangements.

I think where we'd probably like to go in the future is some form of auto-enrolment, but we're just considering that at the moment, about how could we possibly do it. I actually don't think that—

Auto-enrolment.

When you turn 16 and you—

When you turn 16—. So, like a national insurance card. You turn 16 and you'd get your MyTravelPass without you having to—

Yes. But we'd still have to have some kind of online application for those people who aren't auto-enroled in Wales—for those overseas students, for those students in England working in Wales. So, you'd still need two systems, but that's something we're thinking about and I've got no idea how quickly that could be done, or how we could do it. I don't think—. I'm not aware of any other product in Wales that is auto-enroled for any service across Wales at the moment, so—

Not of this nature. And you need a photo card as part of it, don't you?

You need a passport-size photo, as well. So, that's something that we're looking into, and I think for that sort of age group, that would be much easier than going online and applying for a pass. We've had some problems with some of the photos that have been sent in as well. So, we've had to just put a guide about what you send in—you know, it's not a party picture or anything. [Laughter.]

It's a passport—

So, we've had to send some things back. So, it's those kinds of things that we really need to look into. So, I don't think it's a simple thing to do, but that's something for the future.

With regard to that, I'm just wondering around the costings. Would that actually perhaps be a cost saver or cost neutral, or would it actually cost more? Any ideas?

That's a good question.

I don't know. I think we'd have to really look into it, because I still think we need the online application, or some form or application form beyond it for those who can't be auto-enroled.

But it needs to be seen, as Simon was saying earlier, in that wider context of what we're trying to deliver across the transport network as a whole. And Sheena's earlier point about trying to do this in a way that allows you to move seamlessly from one form of public transport to another.

Thank you. My final questions are just around the wider vision, really, for public transport in Wales. So, I'm wondering what, if anything, the Welsh Government is doing at this stage to consider further extending the eligibility range for the scheme or the scope of the discount.

As I indicated earlier on, I think Ministers are looking at a wider suite of policy objectives. There have been various representations made that the age range should be extended. There are other groups that make representations about how they should have some form of discounted travel. So, I think Ministers want to be able to take a step back and look at that. But as I said earlier, there are other policy objectives that Ministers want to achieve as well. The economic action plan talks about moving to a zero-carbon bus and taxi fleet within 10 years of the publication of this document. That's a significant step that needs to be taken. There are 2,000 buses in Wales, so moving that to zero emissions is a big step in itself. I've mentioned cycling, I've mentioned information provision, Wi-Fi—all of those things I think Ministers want to achieve, so I think it isn't just about eligibility. There's a broad range of objectives that Ministers have, and the White Paper and some of the other work that we're doing with our partners in TfW, Transport for Wales, are about giving us the ability to be able to have those conversations with operators and work together to make all that happen.

14:45

And for all your blue-sky thinking, where in the world are you looking to if you could name a few countries or areas who have got it right? What would you say?

There are lots of different places that we could look at. We don't have to look far from home to see the success of things like the Oyster, and those kind of payment mechanisms, and how successful that's been in London to create that integrated public transport network that Ministers want. I think we've talked a lot to our friends in Merseytravel about the scheme that they operate there in terms of the way that young people can travel on the bus network. I know that Ken Skates, for instance, is particularly taken with that scheme, where young people pay £1 for every journey, or £2 to use the network as much as they like in a day. So there's a simplicity and an elegance to that, I suppose. So, I think there are lots of places that we could take examples from. We are slightly different in that we're a country, not a city, so these things need to be scaled up in a different way. But I suppose the platform that Transport for Wales gives us, and the regional metros give us, allows us to be able to explore these things in more detail.

I just wanted to ask about the application processes. I was quite impressed with the application process in terms of it being online when my kids were sending their applications in. It was very simple, very, very straightforward, and I think it was within a week the pass turned up through the post for them to use. To what extent are you trying to learn lessons from that more widely about the concessionary fares scheme, which obviously operates very, very differently, and can be quite cumbersome, actually, for people to provide sufficient evidence for, and all of those sorts of things? I wonder: is there a potential national application process that could be introduced for the concessionary fares scheme, and are you looking at that?

I think one of the challenges that we have with the older person's concessionary scheme, which is one of its strengths as well, I suppose, is that it's embedded in statute, so actually trying to make changes to it is quite difficult. So, by statute, the older person's scheme has to be compensated by the local authority. So, there are 22 different ways of doing things. As Sheena said, we're working with colleagues in Powys County Council to administer the MyTravelPass scheme, so we have a single organisation doing that, and I think part of the work that we're trying to push forward through the White Paper, which talks about joint transport authorities, will allow us to be able to bring together functions so that we can get the best bits of all of our partners around Wales and bring that together potentially into a single solution for the older person's travel pass.

It just seems to me to be an obvious win in terms of the lessons learned with MyTravelPass. Can I ask as well—? You make lots of references in the evidence you've provided to the number of applications that have been received. Obviously, the number of applications being received is one thing. The fact is people are dropping off the age range at one end of the spectrum and then you've also got—it's not just about the valid passes, if you like, but you've also got to look at the number of active users of those passes. So in terms of the figures that you've provided, are they the valid passes, active passes or just the total number of applications? Do you differentiate? Just for my sanity.

It is quite difficult, because there's the number of applications, the number of live passes, or active passes, and obviously month by month that will change, but the figures that we work through with—

14:50

When you say 'live' and 'active'—'live' being eligible for use? Live and active are two different things, it seems to me. 

Yes. 'Live' could be that it's in somebody's drawer and not being used, but it's live, ready to go. And 'active' is it's being used to get to their college, or wherever else. So the figures that we went through with the Wales Audit Office, working very closely with them for a long time, are in the report, but what I would be more than happy to do is to give you that same breakdown that we've put in the report, but to date. And also to show you what's happened with the 19, 20 and 21-year-olds. I'd be more than happy to give you all of those details. I've got a whole load of graphs in the back, which are up to date, but I haven't gone through some of them at the moment, so—

You'll just have to forgive me as well—. I know that, obviously, those who applied for the previous age-range cards would need to reapply—

That's correct. 

But we're writing to each of those—[Inaudible.]

We're writing or e-mailing—whatever correspondence we've got, we're getting—

And I assume that the only reason you're having to have them do that is because there's an expiry date on the original card that can be used—

Yes. Correct. 

—separately from the electronic system, if needs be, as a back-up.

And in terms of the new cards for any 16-year-old applying now, it sees them right through until they are—

Twenty-one. 

Right. Okay. And so the only risk to them not being able to use that in the future is if the plug is pulled on the scheme, isn't it, by a Minister at some point.

Yes. That's correct.

Okay. In terms of the marketing, that's now being brought in-house, I think. What was the thinking behind that?

There have been several phases of the marketing work, and it was only in the initial phases of the pilot that we worked with Traveline Cymru, and then, following conversations with the industry, the Miniser proposed that the Confederation of Passenger Transport would take it on, again working with Traveline. And we've now brought it back in-house. Is that correct?

We have. Yes, that's correct. 

Yes—working with our internal comms, but also working closely with CPT as well. So, if they've got any other ideas of what they would like us to do, then clearly we'll add those in as well. Basically, bringing it back in-house was a bit cheaper and also, from a Welsh Government point of view, we can control the whole national messaging, if you like. 

Just before I bring Simon in, the CPT have done a report on the marketing scheme. Is that something that's been—

That's correct, yes. 

And has that factored into your thinking around bringing it in-house and how effective it is?

Yes, it has. 

Just on the bringing it in-house and Sheena's answer, I think it's notwithstanding what we might do with Transport for Wales in the longer term. So, 'in-house' might include that marketing being delivered by Transport for Wales at some future stage. 

Right. Okay. How much of the scheme budget is the Welsh Government allocating to support ongoing marketing activity, and what are the main areas of focus—i.e. education institutions or other learning providers?

We do a range of things, don't we? I think we've got £150,000, is it, for—.

Yes. It's around the order of £100,000, or £150,000, but I can, again, get that detail for you. 

So, it's a range of face-to-face communications, as you were suggesting, Chair, including work with the educational institutions. As I've just mentioned to Mr Millar, there's contact directly with people approaching their eighteenth birthday, work with local authorities' communication teams, that sort of thing. Again, based on the experience of what we think works. And then that will be further informed, I think, through the survey work over the summer to see what works for people, how did they find out about things. 

Is there a potential that that'll fall into the same problems or pitfalls that happened—

In terms of what, sorry?

Well, going back to the earlier pilot and the poor estimates of what the costs were going to be. Is that something—? Given you're starting from scratch with the marketing, is that going to be a problem at all?

No, I don't think so. We've got a marketing plan and the budget that I've just mentioned, so we're more than happy if you want us to show you the marketing plan that we have, and share it. And if there are any further recommendations that the committee think should be added in, then that would be very welcome. There's not much more to say.

Can I just say, Chair—? As you've just disclosed the amount you're going to spend on the marketing, does that mean that you'll have to spend that if you get a third party in, because of the fact that you've already disclosed it on the public record?

That's the total amount of budget that will be available internally. What we choose to do with it and what we go out and buy off the back of that is a matter for us. 

That's precisely what the—. It was a £9 million budget—

I don't think the analogy is—

14:55

Well, it's the same. It's exactly the same, with respect, Mr Slade, isn't it? At the end of the day, you don't have to spend it just because you've got it in your budget, which is precisely what you did originally. 

That's what we've allocated to marketing and promotion as part of the scheme for this arrangement, and that will fund a range of different things with different components. 

It certainly is. Previously, there was no formal agreed marketing contract and plan against which performance could be evaluated, as we know, with departure requests needing to be made retrospectively. How were these failings allowed to happen, and what have you done to reinforce basic expectations around procurement and contract management? 

There are a couple of things there, I think, Chair. One is around the arrangement with Traveline, which is a grant-funded organisation—a long-standing arrangement with that body. And I think one of the reasons we went with Traveline and continue to work with them is because they're a one-stop shop for everything. So, if you want to ring up—back to Mr Millar's point earlier on about whether we can simplify this and make it more straightforward and not have to ring up lots of different people—that whole suite of services was available there. And in the early phases of the pilot exercise, we were to some extent testing the water, weren't we, and working with as proven a partner as we'd got to help us drive that forward. 

On your wider point about procurement, procurement training is a key part of what we do across the group. We've talked in other evidence sessions around our work on procurement and procurement capability raising, and that's a core part of what we're trying to do, not just within my group but across Welsh Government as a whole. 

The relevant departure requests that had to go in are a formal part of the process of unlocking a payment, so it's an important piece of documentation. It probably should have been there earlier, but, ultimately, it was about unlocking the payment as agreed with the arrangements we put in place. 

Okay. Looking at some of the wider policy issues, how do you see MyTravelPass fitting into the wider policy landscape in the context of the recent White Paper on improving public transport? 

We're in the process of analysing the consultation responses, aren't we, which are 500 plus, I think? 

Yes, so there's a lot of information to sift through. I've talked about some of that already, Chair, in terms of the way that MyTravelPass is one of a number of, or discounted travel for young people is one of a number of policy objectives that Ministers have. And the White Paper, along with a suite of other activities that have been undertaken for us on our behalf by Transport for Wales, will give us a different way of interacting with the bus industry to allow us to achieve more of those policy objectives for the amount of money that we've put into the industry. 

Okay, and in terms of the—. You mentioned the Oyster scheme earlier that operates in London, and maybe in the future moving towards something like that. What's the potential of having a single scheme that provides discounted transport across bus and rail? 

I think there's a lot of potential in it, and we're working hard to try and bring that about, but it's back to Simon's point about some of the complexities associated with it. Some of these schemes are run on a legislative basis, some of them are in terms of voluntary co-operation, and we fund those arrangements in a particular way. We haven't go anybody else out there doing quite what we're wanting to do at a national level; regional, perhaps. If you look at other countries in relation to bus services, very often they're fully regulated or very largely regulated, so we don't have that kind of arrangement that we've got here within the United Kingdom or, certainly, Great Britain, and closer to home. 

But, no, there's lots of potential to do this in a way that allows people to move freely across different parts of the public transport network to provide a truly integrated approach for Wales, and that's what—. You know, the creation of Transport for Wales is partly about what we're trying to do through the White Paper, and some of the stuff that both Sheena and Simon have been talking about. 

I remember in a previous life as Chair of the Enterprise and Business Committee, as was, we looked at integrated ticketing in transport. One of our witnesses said it's a fiendishly difficult thing to achieve—'fiendishly', I remember, was the adjective. 

It's a challenge that is not to be underestimated, but that doesn't mean we shouldn't have a go at it. 

But I think that what has happened is we've created Transport for Wales, we've got a rail franchise that has given us some technological tools to be able to help with this, and we're creating some legislative tools through the White Paper. So, it is fiendishly difficult, but you need a suite of tools to be able to deal with it, and I think what we're now doing is amassing those tools to allow us to be able to work our way through this.

And I think it might have been Professor Stuart Cole, actually. It's the sort of thing that chimes with him, but I might be wrong there. That was in the last Assembly. 

And finally from me, what's your overall assessment of the current financial stability of bus services in Wales, and in the light of the proposals for changes?

15:00

Do you want to take that one?

Yes. So, this is not a high-margin industry. There have been some well-publicised cases of companies failing over the last few years, speculation about a whole series of others. The market is really fragmented. Sheena has mentioned that there are 80 different bus companies in Wales that claim older persons concessionary fares compensation from us. That's a huge number of organisations, looking at quite a small pool of potential passengers. So, it's difficult for the operators. It's a difficult operating environment for them. We want to use the suite of tools that I've just talked about to be able to create opportunities for those organisations to work in a kind of long-term, stable environment.

I think Ministers have made it clear that their ambition is to see more people accessing public transport rather than fewer. So, I think Ministers are clear that they want to create more opportunities in that space, and it's a question now of how we work with the industry to create those opportunities, given that we have limited financial resource as well. So, part of the secret here is potentially getting more people to choose to pay to go on the bus. 

And they also want that seamless transition between the—. If you're doing a journey, you just want to do the journey, don't you, with a public transport ticket? You don't really want to worry about whether it's train or bus.

It is, but there are decades of custom and practice as well in the way that the bus industry has operated. There aren't that many railway stations in Wales with a bus stop within 250m. And, historically, that's been because, I guess, bus operators have seen the railway as a competitor rather than as a complement. And I think one of the things that we want to achieve, particularly for metro—because we're not going to be successful with metro without that—is to make it easier for passengers to be able to take through journeys.

Sometimes it looks as though the timetables deliberately don't match up. Maybe that's a—

I'm sure they wouldn't have done that.

Maybe that's going back to your comment about the two traditionally being seen as competitors. I don't know. Or it's just my experience coming from where I do. Any other questions? Darren Millar. 

Can I just ask one if I may? You've talked about a ticketing regime that is consistent for bus and rail, and I think that's very, very desirable if it can be achieved. What's stopping you, as someone who holds significant purse strings— not all of the purse strings, but significant purse strings—from being able to say to any bus operator that receives any kind of financial compensation from the Welsh Government, whether that's through a local authority or from the Welsh Government directly, 'If you're going to have any money from us, you've got to accept these tickets in the sorts of different forms?' There's nothing stopping you, is there?

Yes, there is, I'm afraid.

So, the mandatory concessionary fares scheme sets out how the operators are compensated. So, we are required, or the local authorities are required, to compensate them and then they are required to carry those passengers at no charge to those users. So, that framework actually means that everything else is much more difficult for us to do. And there is no desire from Ministers to remove that eligibility from those older travellers. But because that's £70 million a year that flows into the industry in a way that's delivering that single outcome—delivering that single outcome really, really well—it means that we can't put any other terms and conditions around that big slug of money. 

And that's primary legislation, isn't it, not secondary? 

It's primary legislation, yes. 

Okay. So, there is an issue, isn't there? That needs to be sorted. 

Okay. I thank our witnesses, Andrew Slade, Simon Jones and Sheena Hague for being with us today, and for helping with our enquiries. That's been really helpful. We'll finalise the transcript and send it to you for you to assess for accuracy. Thank you. 

Thank you, Chair, and thank you, committee. 

4. Cynnig o dan Reol Sefydlog 17.42 i benderfynu gwahardd y cyhoedd o'r cyfarfod
4. Motion under Standing Order 17.42 to resolve to exclude the public from the meeting

Cynnig:

bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42(vi).

Motion:

that the committee resolves to exclude the public from the remainder of the meeting in accordance with Standing Order 17.42(vi).

Cynigiwyd y cynnig.

Motion moved.

I move 17.42, Standing Order, that is, to go into private session.

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 15:04.

Motion agreed.

The public part of the meeting ended at 15:04.

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