Y Pwyllgor Cyllid - Y Bumed Senedd
Finance Committee - Fifth Senedd23/10/2019
Aelodau'r Pwyllgor a oedd yn bresennol
Committee Members in Attendance
|Alun Davies AM|
|Llyr Gruffydd AM||Cadeirydd y Pwyllgor|
|Mark Reckless AM|
|Mike Hedges AM|
|Nick Ramsay AM|
|Rhianon Passmore AM|
|Rhun ap Iorwerth AM|
Y rhai eraill a oedd yn bresennol
Others in Attendance
|Alex Slade||Dirprwy Gyfarwyddwr yr Is-adran Gofal Sylfaenol, Llywodraeth Cymru|
|Deputy Director Primary Care Division, Welsh Government|
|David Meaden||Cyfrifydd Ariannol, Swyddfa Ombwdsmon Gwasanaethau Cyhoeddus Cymru|
|Financial Accountant, Public Services Ombudsman for Wales Office|
|Katrin Shaw||Prif Gynghorydd Cyfreithiol a Chyfarwyddwr Ymchwiliadau, Swyddfa Ombwdsmon Gwasanaethau Cyhoeddus Cymru|
|Chief Legal Adviser and Director of Investigations, Public Services Ombudsman for Wales Office|
|Nick Bennett||Ombwdsmon Gwasanaethau Cyhoeddus Cymru|
|Public Services Ombudsman for Wales|
|Tim Edds||Cyfreithiwr, Gwasanaethau Meddygol Cyffredinol, Llywodraeth Cymru|
|Lawyer, General Medical Services, Welsh Government|
|Vaughan Gething AM||Y Gweinidog Iechyd a Gwasanaethau Cymdeithasol|
|Minister for Health and Social Services|
Swyddogion y Senedd a oedd yn bresennol
Senedd Officials in Attendance
|Samantha Williams||Dirprwy Glerc|
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 09:33.
The meeting began at 09:33.
Iawn. Wel, bore da i chi i gyd. Croeso i gyfarfod y Pwyllgor Cyllid. Gaf i nodi wrth gwrs, fel arfer, fod clustffonau ar gael ar gyfer cyfieithu ar y pryd, neu ar gyfer addasu lefel y sain? Gaf i atgoffa Aelodau—gan gynnwys fi fy hun—i ddiffodd y sain ar unrhyw ddyfeisiadau electronig? A gaf i ofyn a oes gan unrhyw Aelod unrhyw fuddiannau i'w datgan?
Okay. Good morning, all, and welcome to this meeting of the Finance Committee. May I note, as usual, that headphones are available for translation or sound amplification? May I remind Members—including myself—to ensure that any electronic devices are on silent? And may I ask if any Members have any interests to declare?
I should probably declare that I and the ombudsman were business partners, prior to my election and his elevation—
There we are. Okay, duly noted.
It was some time ago. It's not relevant, but it should be on the record.
Ocê, diolch yn fawr am hynny.
Okay, thank you very much for that.
Mi welwch chi bod gennym ni ddau bapur i'w nodi, sef dau set o gofnodion—y cyfarfod a gynhaliwyd ar 3 Hydref, a'r cyfarfod ar 9 Hydref. Ydych chi'n hapus i nodi'r rheini? Diolch yn fawr iawn. Dyna ni.
You will see that we have two papers to note, two sets of minutes—from the meeting held on 3 October, and the meeting held on 9 October. Are you content to note those? Thank you very much.
Wel, awn ni ymlaen felly at y brif eitem gyntaf ar ein hagenda ni y bore yma, sef wrth gwrs craffu amcangyfrifon 2020-21 gan Ombwdsmon Gwasanaethau Cyhoeddus Cymru. Ac mae'n bleser gen i groesawu Nick Bennett, yr ombwdsmon, atom ni, ynghyd â Katrin Shaw, sy'n brif gynghorydd cyfreithiol a chyfarwyddwr ymchwiliadau, a David Meaden, sy'n gyfrifydd ariannol yn swyddfa'r ombwdsmon. Croeso i chi i gyd. Ydych chi eisiau dweud rhywbeth am y papur, neu ydych chi'n hapus i ni fynd yn syth i gwestiynau?
So, we'll go on therefore to the main item on the agenda this morning, which of course is the Public Services Ombudsman for Wales estimates 2020-21 scrutiny. And it's my pleasure to welcome Nick Bennett, the Public Services Ombudsman for Wales, as well as Katrin Shaw, who is a chief legal adviser and director of investigations, and David Meaden, who is a financial accountant in the ombudsman's office. Welcome to you all. Would you like to say something about the paper, or are you happy to go straight to questions?
Hapus i fynd yn syth i gwestiynau.
Happy to go straight to questions.
Syth i gwestiynau—dyna fe. Wel, mi wnaf i gychwyn felly, os ydy hynny'n iawn. Jest i ofyn efallai yn y lle cyntaf, byddwch chi'n ymwybodol ein bod ni fel pwyllgor wedi creu datganiad o egwyddorion ar gyfer y cyrff sy'n derbyn arian uniongyrchol, a jest i ofyn i chi efallai ddweud ychydig ynglŷn â sut dŷch chi wedi dilyn y datganiad hwnnw wrth ddatblygu eich amcangyfrif ar gyfer y flwyddyn nesaf.
Straight to questions. So, I'll start, therefore, if that's okay. Just to ask in the first place, you'll be aware that we as a committee have a statement of principles for bodies that receive direct funding, and just to ask you perhaps to tell us how you followed that statement in developing your estimate for the next year.
Ocê. Diolch, Cadeirydd. Dwi'n gobeithio bod y ddogfen yma—yr amcangyfrif yma—yn adlewyrchu'n dda iawn, ac yn dangos, ein bod ni wedi gwrando, wedi deall, yr egwyddorion. Rydyn ni wedi ffeindio arbedion. Rydyn ni'n trio bod yn fwy effeithiol ac wedi asesu ein prosesau ni. Dydyn ni ddim wedi talu sylw at yr adolygiad ariannol sydd wedi dod o San Steffan. Dwi'n ymwybodol bod hwnnw'n sôn am efallai £600 miliwn ychwanegol, codiad yn y bloc o 4 y cant cyn cyfrif chwyddiant, yn ystod y flwyddyn nesaf. Y cwbl dwi'n gwneud ydy dilyn yr egwyddorion.
Hefyd, rydyn ni wedi gweithio o'r gwreiddiau i fyny, os liciwch chi, i rili weld beth mae'r busnes ei angen, yn enwedig rŵan efo'r pwerau newydd rydyn ni wedi'u cael. Ac wrth gwrs, rydyn ni'n ddiolchgar iawn bod y pwerau yna wedi digwydd. Felly, dyna pam rydyn ni yn gofyn am 1 y cant yn llai ar ôl chwyddiant. Ond, wrth gwrs, mae hynny ar ôl i ni amcangyfrif beth yw'r baseline, os liciwch chi. Achos, wrth gwrs, rydyn ni wedi cael arian ychwanegol yn ystod y flwyddyn i dalu am y rhan o'r flwyddyn pan yr oedden ni'n cael y pwerau ychwanegol.
Okay. Thank you, Chair. I hope that this document—this estimate—does reflect very well, and shows, that we have listened and have understood the principles. We have found savings. We're trying to be more efficient and we've assessed our processes. We haven't paid any attention to the financial review that has come from Westminster. I am aware that that talks about an additional £600 million, an increase in the block of 4 per cent before inflation, for next year. All we've done is followed the principles.
Also, we've worked from the roots upwards, if you like, to see what the business needs, particularly now with the new powers that we've had. And of course, we're very grateful that those powers have been given to us. That's why we're asking for 1 per cent less after inflation. But, of course, that is after we estimate what the baseline is. Because, of course, we've had additional funding during the year in order to pay for the part of the year where we had those additional powers.
Ocê, diolch. Sôn am hynny, wrth gwrs, beth dŷch chi wedi gwneud, o beth dwi'n gweld, ydy dŷch chi wedi ailddatgan costau y Ddeddf ar gyfer blwyddyn gyfan yn y flwyddyn bresennol, am wn i er mwyn cymharu â'r flwyddyn nesaf. Allwch chi jest roi ychydig o resymeg i ni pam ŷch chi'n meddwl mai dyna'r ffordd orau i wneud hynny?
Okay, thank you. Talking about that, what you've done, from what I can see, is that you have restated the costs of the Act for a whole year in the current year, to compare, I would say, with the next year. Can you give us the rationale as to why you think that's the best way of doing it?
Fe wnaf i drio, ond dwi'n mynd i droi at Dave, os ydych chi eisiau ateb mwy cadarn. Dwi'n meddwl yr egwyddor clir oedd inni gael arian ychwanegol yn ystod y flwyddyn bresennol, a dwi'n meddwl roedd hynny ar gyfer wyth mis o'r flwyddyn. Felly, beth rydyn ni wedi gwneud yw cymryd dau draean a dod i fyny efo ffigwr ar gyfer y flwyddyn gyfan. Wrth gwrs, mae yna rai costau yn ystod y flwyddyn gyntaf yna—pensiynau ac elfennau eraill—sydd ddim yn addas ar gyfer amcangyfrif ar gyfer y flwyddyn nesaf. Ond, yn fras, dyna'r ffordd rydyn ni wedi mynd o'i chwmpas hi. Dwi ddim yn gwybod os yw Dave eisiau ychwanegu rhywbeth i hynny.
Well, I'll try, but I'll turn to Dave if you want a more robust response. The clear principle was that we had additional funding during the current year, and I think that was for eight months of the year. So, what we've done is tried to take two thirds and come up with a figure for the entire year. Of course, there are some costs in the first year, in terms of pensions and other elements, that are not appropriate for an estimate for the next year. But, broadly speaking, that's how we've proceeded. I don't know whether Dave wants to add to that.
I think what we were faced with was the budget that you agreed last year was very difficult to compare with what we were proposing, because the budget that was agreed at this committee last year didn't have the pension fund increase, it didn't have any new powers. So, we thought, as a one-off presentation, let's try and say what that budget would have been had we had full funding for the 12 months for the new powers, uplifted for inflation and pension, full-year pension funding, and then try and compare what our bottom-up budget was, and roughly speaking it's just under 1 per cent more than what our estimated restatement of the budget would be. I say 'estimated', but it's a pretty accurate restatement of that budget.
As Nick said, taking into account pay inflation, GDP deflators, et cetera, it's actually about a 1.3 per cent reduction in real terms. And on top of that, we had the IFRS 16 lease accounting change, which is not as important to us as perhaps the Assembly Commission with Tŷ Hywel, but it still impacts on us and we had to state the figures that way. So, it was really quite a complicated way of estimating the change between the two. And if we'd put in last year's budget figure, it wasn't really comparable. That was the rationale.
Yes, okay, that's perfectly fine. Diolch yn fawr. Alun.
Diolch i chi. Mae gen i ddiddordeb mewn—. Doeddwn i ddim yn aelod o'r pwyllgor amser hyn llynedd, so doeddwn i ddim yn rhan o'r craffu ddigwyddodd bryd hynny ar y gyllideb, ond mae'n edrych i fi, o edrych ar y nodiadau sydd gen i ac edrych ar y cofnodion, roedd e'n tipyn bach o tussle rhyngoch chi a'r pwyllgor ar y gyllideb. Roedd gen i ddiddordeb mewn pa fath o impact mae hynny wedi'i gael arnoch chi nawr pan dŷch chi'n cyflwyno'r gyllideb y tro yma.
Thank you. I'm interested in—. I wasn't a member of the committee this time last year, so I wasn't part of the scrutiny that happened at that time on the budget, but it looks to me, in looking at the notes that I have and looking at minutes, that there was some sort of tussle between you and the committee on the budget. I was interested to know what sort of impact that has had on you now when you're presenting the budget this time.
Wel, dwi'n meddwl, yn gyntaf, doedd yna ddim canllawiau ar gyfer y flwyddyn diwethaf. Tussle—wel, roedd o'n eithaf friendly o tussle, os liciwch chi, ond dwi'n meddwl y llynedd, os dwi'n cofio, roedden ni wedi gofyn am rhwng 3 y cant a 4 y cant—mae hynny'n fras iawn off top fy mhen. Wrth gwrs, doedden ni ddim wedi cynnwys chwaith—. Y tussle, os liciwch chi, oedd roedden ni wedi bod yn gofyn am y pwerau ychwanegol yma ers rhai blynyddoedd, ac roedd y pwyllgor yn teimlo ei bod yn amser i mi roi y costau ychwanegol ar gyfer y Ddeddf newydd i mewn. Mi wnes i wrthod. Mi wnes i ddweud, 'Mi wnaf i ei wneud o. Mi wnaf i ddod yn ôl efo supplementary pan dwi'n gweld y Ddeddf yn digwydd.' A dwi'n falch iawn o ddweud bod hynny wedi digwydd, o'r diwedd. Ac, wrth gwrs, mi ddaru ni ddilyn y supplementary, ond roedd y pwyllgor yn teimlo dwi'n meddwl hefyd ei fod o'n bwysig i ni ddangos yn amcangyfrif y llynedd pa effaith roedd hynny yn mynd i'w gael. Felly, yn lle rhoi cais i mewn am tua 3 y cant neu 4 y cant, fe ddaru ni roi cais sylfaenol i mewn am tua 1 y cant, ac wedyn roedd y costau ychwanegol ar gyfer y pŵer tua 8 y cant, sy'n troi i mewn i tua 6 y cant.
Hefyd, dwi'n meddwl yr oedd yna deimlad, os yw'n deg i mi ddweud—. Rydym ni wedi bod trwy gyfnod lle mae yna chwyddiant ychwanegol wedi bod ar ein gwasanaethau ni yn ystod y degawd diwethaf. Mae cwynion yn cynyddu flwyddyn ar ôl blwyddyn. Tu fewn i hynny, wrth gwrs, mae cwynion iechyd yn cynyddu yn gyflym iawn. Wedyn, pan dwi'n gweld y bloc yn tyfu a phan dwi'n gweld gwasanaethau iechyd yn cael eu hamddiffyn, mae yna deimlad efallai gennym ni weithiau, 'Wel, dydy hi ddim yn afresymol i ni ddisgwyl bod yna ryw fath o gymorth i ni, oherwydd rydyn ni yn delio â'r pwysau ychwanegol yna sy'n dod o'r gwasanaeth iechyd.'
Ond fel dwi'n dweud, dydyn ni ddim wedi sôn am y bloc eleni. Rydyn ni wedi sôn am ddefnyddio GDP deflators, ond yr unig beth fuaswn i'n dweud o safbwynt yr egwyddorion lle rydyn ni wedi ffeindio fo'n anodd ydy trio meddwl am y tymor hir, i fod yn onest. Rydyn ni yn dod yma flwyddyn ar ôl blwyddyn—y cyfnod ariannol blynyddol sydd gennym ni—ac, wrth gwrs, dwi'n meddwl buasai pawb yn derbyn ar hyn o bryd ei bod yn anodd cynllunio yn yr hirdymor lle mae yna gwestiynau mawr yn digwydd o safbwynt pa bryd rydyn ni'n cael etholiad, pwy sy'n mynd i ennill yr etholiad yna, a pha fath o gyd-destun ehangach fiscal sy'n mynd i effeithio ar wasanaethau y Cynulliad a'r Llywodraeth.
Well, I think, first of all, there were no guidelines for last year. A tussle—well, it was quite a friendly tussle, but I think last year, if I remember rightly, we had requested between 3 per cent and 4 per cent—that's off the top of my head. Of course, we hadn't included—. The tussle, if you like, was we'd been asking for the additional powers for some years, and the committee felt that it was time for me to include additional costs for the new Act. I refused. I said, 'I'll do it. I'll come back with a supplementary budget when I see the Act happening.' And I'm very pleased to say that that did happen, at last. And, of course, we followed the supplementary, but I think the committee felt that it was important for us to show in the estimate last year what impact that was going to have. So, instead of putting a request in for 3 or 4 per cent, we put a basic request in for about 1 per cent, and there were additional costs for the power of about 8 per cent, which turns into about 6 per cent.
But, I think there was a feeling, if it's fair for me to say—. We've been through a period where there has been additional inflation in terms of our services over the last decade. Complaints are increasing year on year. Within that, of course, health complaints are increasing very quickly. When I see the block growing and when I see health services being protected, there is a feeling sometimes, 'Well, it's not unreasonable for us to expect there to be some kind of assistance for us, because we do deal with the additional pressure that emanates from the health service.'
But as I said, we haven't talked about the block this year. We have talked about using the GDP deflators, but the only thing I'd say in terms of the principles where we've found it difficult is to try and think about the long term, to be honest. We come here year after year—the annual financial period that we have—and, of course, I thing that we all accept that it is difficult to plan long term where there are major questions in terms of when we'll have an election, who's going to win that election, and what kind of broader fiscal context is going to affect the services of the Assembly and the Government.
Dwi'n derbyn hynny, a dwi'n credu bod rhywfaint o dyndra yn eithaf pwysig fel ein bod ni actually yn dod at ble dŷn ni eisiau bod. Ond er mwyn i ni sicrhau yr atebolrwydd sydd ei angen arnom ni, mae hefyd angen rhywfaint o gysondeb gennych chi yn y ffordd rydych chi'n cyflwyno'r gyllideb, fel ein bod ni'n gallu edrych nôl ac wedyn deall y tryloywder sydd tu fewn i'r gyllideb. Sut ydych chi wedi bod yn trio sicrhau bod y cysondeb yna yn rhywbeth dŷn ni'n gallu deall?
I accept that, and I think that some tension is important so that we actually get to where we want to. However, for us to ensure the accountability that we require, there is also a need for some consistency from you in the way that you present the budget, so that we can look back and then understand that the transparency within the budget is there. How have you been trying to ensure that that consistency is there and is something that we can understand?
Dwi'n meddwl bod o'n fwy o her eleni oherwydd y pwerau newydd yma, mae yna dîm ychwanegol ar gyfer sicrhau gwelliant y pwerau a'r functions newydd pan mae'n dod i bwerau liwt fy hun, ac hefyd yn yr awdurdodau ar gyfer delio â chwynion. Ond dwi'n meddwl bod y pethau sylfaenol ddim wedi newid, a'i fod o'n bosibl i ni fod yn agored iawn a sicrhau bod y tryloywder yna i chi. A dwi'n gobeithio bod pethau ddim wedi newid gymaint â hynny yn ystod y flwyddyn ddiwethaf. Dwi yn blês iawn efo'r pwerau newydd, ond rydym ni yn deall hefyd fod pwrpas sylfaenol y swyddfa ddim wedi newid pan mae'n dod i ddelio â chwynion unigolion. Dwi'n gobeithio bod y ffordd rydym ni'n trio bod yn agored efo'r ffigurau yna yn dderbyniol.
I think that it is more of a challenge this year because of these new powers, there is an additional team to ensure improvement of the new functions when it comes to own-initiative powers, and also in the authorities for dealing with complaints. But I think the basic aspects haven't changed, and it's possible for us to be open and to ensure that the transparency is there for you. I do hope that things haven't changed that much during the last year. I am very pleased with the new powers, but we do understand that the fundamental purpose of the office hasn't changed in terms of dealing with complaints by individuals. I do hope that how we try to be open with the figures is acceptable.
Dave, would you like to—
Yes. I think I want to be clear and say that the budget this year was prepared exactly the same way as last year. It was a bottom-up budget. There was a bit of a tussle, for want of a better word, over—. I think there was a feeling that we had tracked the block, because the block had gone up, say, 3 per cent, 4 per cent, our budget had gone up 3 or 4 per cent, and surely that was a coincidence. We always used to look at the block and say, 'How has our budget changed compared to the block?' There was a staff post in last year's budget, an improvement position, that increased the costs up to that 3 per cent, and when you asked us to reduce it to 1.67 per cent, we removed that post. So, it wasn't, 'Where are we going to get that from?' That post was there, it was in the document.
The issue about consistency.
But it is consistently produced on a bottom-up basis. It looks slightly different this year on how we're comparing it, but, from next year, we go back to the, let's say, the old way of doing it.
You might wish to look at the tax base as well in the future, of course, rather than just the block, because I think that rather slavish view of just assuming that money comes down the M4 is something that will probably be changing in the future.
I agree, and that's why the block—. Really, you can't look at changes in the block.
Are you content with—? You've made a number of estimates over the last period about the changes that the legislation has created for you and the financial impact of that. Are you content with the accuracy of the estimates? Are you content with your planning for that? Is there anything there where you believe you've had a shock or a surprise?
Not yet, but it's too early to say. All I can do is quote, was it Galbraith? 'There are two types of economists: those who don't understand forecasting and those that know that they don't understand forecasting.' I'm certainly in the latter camp.
What I think is useful, particularly with input/output models of forecasts and all the rest of it, is, the further back you look, you can see a historic trend. I think the only Welsh-speaking ombudsman who was parliamentary ombudsman in the 1970s, Sir Idwal Pugh—originally from Blaenau Ffestiniog, moved down to the Rhondda, a former Permanent Secretary of the Welsh Office—worried about the fact that the total number of health complaints he received in 1976 was 540. That increased to 710 roughly, some kind of number like that, by 1978. This year, Rob Behrens, his successor in London, will get 27,000. I'll get over 1,000 health complaints; there'll be 2,000 in Scotland; and there'll be another 500, 600 in Northern Ireland as well. So, looking at it on an historic basis, who would have forecast that back in 1976 or 1978?
So, to make short-term forecasts does worry me, but I think we've seen a consistent pattern over the last few years, and I think it's going one way; it's the broader issue, isn't it, about our accuracy? I would think the broader, bigger public interest issue here is about patient experience, and about the culture of the NHS, about value for money and improving people's experiences. So, I hope that these powers—. It's not going to be a panacea, but I would very much hope that we can demonstrate that we're turning the curve slightly over the next two to three years, and we start to see some improvement in those numbers.
And I think many of us welcome that. An ombudsman service, of course, is absolutely critical in any public service to ensure that you have the accountability that the market would provide in a privatised service. It is essential. But, in terms of this period of change from the previous legislation to the new legislation, are you confident that you have the resources you require, and, secondly, that you are able to accurately manage the resources you have in order to meet that change in requirement and change in need?
I do, and I'm happy to put it on record. I think, first of all, we did receive additional resource in the previous financial year to be able to recruit additional staff for own initiative and for complaints standards, and for oral complaints as well. All of those appointments have been made.
We've got a refreshed improvement team. We've got new talent. Some of that talent has come into the improvement team from other parts of the existing service, and then we've back-filled and brought new people into the existing service as well. So, I think that bodes really well. We've had lots of sessions with the staff to make sure that there's no, not resentment, but a cultural drift; they've got to understand it's in everyone's interest that this works, and if improvement works, it's good news for everyone else as well, because they've had a 20 per cent increase the last few years in terms of the number of complaints and pressures coming in upon them.
And, then, in terms of consultation, we were required to consult formally. Before that, we did a pre-consultation. We went up to north Wales. We had a session in Bangor with all the north and mid Wales bodies in our jurisdiction. We had a session in the office. So, I think about 150, 160 different public bodies came to those sessions. We also had, of course, a relatively informal launch in Aberystwyth with the Catalan ombudsman—
Excellent. It's great to hear that.
It is. Rafael Ribó, who sends his regards to the committee. And, of course, in Aberystwyth, a fine place to hold that event. So, that now brings us to the point where, four years in, we received Royal Assent in July, we've consulted informally and formally, we've now laid the new criteria informed by that consultation before the Assembly—I think it was last Friday or maybe this Monday—and that should take us through. We have to do it—the statute stipulates we must do it for 40 days, which I think takes us through to 13 December, the end of this session, which means that we will have met every timeline.
There has been no delay at all on our part, but then, of course, come the issues of actually implementing the more substantial powers. So, what will we do? My challenge and the challenge to staff is: what are we going to do with those powers to make sure that we give voice to the voiceless? That'll be the test. We can follow timelines, but what are we going to do to make sure that this really makes a change? Then, in terms of culture, I think you mentioned the issue of markets. You know, in a non-market situation, already we're seeing some interesting issues emerge. When you look at these numbers, and you look at the culture of some of these bodies with substantial—substantial—resources at their disposal, their attitude towards contestability and actually measuring service satisfaction is, perhaps, not what we'd expect in 2019. So, I really, really hope that there will be a cultural uplift by using those powers.
Iawn, diolch yn fawr iawn. Mi wnawn ni symud ymlaen—Rhun.
Okay, thank you very much. We'll move on—Rhun.
Diolch yn fawr iawn. Bore da. Mi oedd cyllideb atodol gyntaf 2019-20 yn cynnwys arian ar gyfer costau trosiannol yn gysylltiedig â'r Ddeddf—rhyw £27,000, dwi'n meddwl, oedd yn cael ei nodi fel costau un flwyddyn. Ydy'r arian trosiannol yn mynd i gael ei wario yn llawn eleni? Oes gennych chi sylwadau i'w gwneud ar ba mor gywir oedd yr amcangyfrifon o faint fyddai ei angen ar gyfer y cyfnod trosiannol?
Thank you. Good morning. The first supplementary budget for 2019-20 included funding for the transitional costs associated with the Act—some £27,000, I believe, was noted as costs for one year. Is the transitional funding going to be spent in full this year? Do you have any comments to make on how correct the estimates were, in terms of how much was needed during the transition period?
Dwi'n meddwl ein bod ni wedi gwario yr arian i gyd, ac nid oedd dim byd o'i le o gwbl. Dave, ydych chi'n cytuno?
I think we've spent all of the funding, and I think there was nothing wrong with that at all. Dave, would you agree with that?
Yes, we put measures in place to identify the costs from the start. It has been fully spent. We've introduced a cost centre for new powers so that any expenditure that's identified is automatically costed there—staff are costed there. Any purchase orders relating to the new powers are separately identified, so, going forward, we identify and report on new powers. In fact, at each monthly management team meeting it's a standing agenda item—new powers as part of the budget monitoring—just to see how we're progressing. We're on target to spend what we thought we would spend this year in the supplementary budget.
Diolch yn fawr iawn. Yn ogystal ag arian ychwanegol a fyddai'n mynd allan oherwydd y Ddeddf newydd, mi oeddech chi'n gobeithio y byddech chi'n gweld arian yn dechrau dod i mewn o'r costau, neu o'r elfen o osgoi costau oedd yn dod i mewn o dan y Ddeddf newydd, gan ddechrau'n eithaf isel—rhyw £30,000 i £40,000—ond yn codi'n sylweddol erbyn y bumed flwyddyn. Sut mae'r costau hynny—yr arbedion hynny—yn cael eu hadlewyrchu yn beth rydyn ni'n ei weld yn yr amcangyfrif?
Thank you very much. As well as additional funding that would go out as a result of the new Act, you had hoped that you would start to see money coming in from the element of cost avoidance that was coming in, as set out in the new Act, and that would start quite low—about £30,000 or £40,000—but would rise quite substantially by the fifth year. How are those costs—those savings—reflected in what we're seeing in the estimate?
Dim o gwbl. Dwi ddim yn meddwl y byddwn ni'n barod i wneud hynny am o leiaf blwyddyn. Fel roeddwn i'n ei ddweud wrth Alun yn gynharach, dŷn ni wedi gosod y criteria ar gyfer y ddau brif bŵer—pwerau ar liwt fy hun a hefyd yr awdurdod safonau cwynion. Rwy'n gobeithio rŵan y bydd y pwerau yna'n cychwyn ym mis Ionawr. Mae'n anodd iawn imi, rŵan, ddweud pa fath o gostau dŷn ni wedi'u harbed i'r sector cyhoeddus, ond rwy'n gobeithio y byddan nhw'n cael effaith bositif yn gynnar iawn. Felly, mae'n rhaid inni werthuso yr effaith o osgoi costau fel y mae'r pwerau yna yn dechrau cymryd effaith.
Wrth gwrs, flwyddyn i rŵan, byddai hynny'n golygu ein bod yn adrodd yn ôl ar yr effaith, efallai, o Ionawr, Mawrth ac Ebrill—Ionawr, Chwefror a Mawrth, mae'n ddrwg gen i. Ond, wedyn, y flwyddyn wedyn, buasem ni'n gallu gwerthuso blwyddyn lawn o ddefnyddio'r pwerau. Felly, dyna beth y buaswn i'n licio'i wneud, ac rwy'n meddwl, o safbwynt y regulatory impact assessment, mae disgwyliad inni ddangos, ar ôl cyfnod o dair neu bum mlynedd, beth yn union yw'r costau sydd wedi cael eu hosgoi. Dŷn ni'n hapus iawn i drio gwneud hynny, flwyddyn ar ôl blwyddyn, i ddangos bod yr effaith bositif yna'n digwydd.
Not at all. I don't think that we will be ready to do that for at least another year. As I told Alun earlier, we have set the criteria for the two main powers—own-initiative powers and the complaints standards authority. I hope that those powers will start in January. It's very difficult for me to say what kind of costs we've saved for the public sector, but I do hope that they will have a positive impact at an early stage. So, we have to evaluate the impact of avoiding costs as those powers start to take effect.
Of course, a year from now, that would mean that we'd be reporting back on the impact in January, February and March. But, then, the year after that, we would be able to evaluate a full year of using the powers. So, that's what I'd like to do, and in terms of the regulatory impact assessment, there is an expectation for us to show, after a period of three to five years, exactly what costs have been avoided. So, we're very happy to do that, year on year, to show that that positive impact is happening.
Felly, gawn ni ofyn beth ydy'r arwyddion, pan fyddwch chi o'n blaenau ni mewn blwyddyn, y cawn ni dystiolaeth lawnach ymhen dwy flynedd, mewn difri?
So, can we ask what are the signs, when you'll be in front of us in a year, that we'll have fuller evidence in two years?
Mewn dwy flynedd, yn sicr, buasem ni'n gallu dangos yr effaith o flwyddyn gyfan, ond, i ryw raddau, dŷn ni flwyddyn y tu ôl iddi, achos os yw'r pwerau llawn yma'n cychwyn fis Ionawr, flwyddyn i rŵan byddwn ni'n gallu adrodd yn ôl ar beth ddigwyddodd yn chwarter olaf y flwyddyn ariannol bresennol, os yw hynny'n gwneud synnwyr.
In two years, certainly we'll be able to show the impact from one full year, but, to a certain extent, we're a year behind that, because if the powers start in January, a year from now we'll be able to report back on what happened in the last quarter of the current financial year, if that makes any sense.
Mae gwerthuso, wrth gwrs, yn mynd i fod yn allweddol rŵan. Mi oedd y trefniadau ar gyfer yr adolygiad ôl-weithredu gafodd ei nodi yn y memorandwm esboniadol yn dweud y byddai hi'n ofynnol ichi nodi ar wahân y costau sy'n gysylltiedig â'r pwerau newydd, er mwyn ei gwneud hi'n haws i ddeall y cyd-destun newydd. Pa drefniadau sydd gennych chi mewn lle i wneud hynny, i wneud yn siŵr ei bod hi'n glir i ni beth sy'n mynd ymlaen?
Evaluation, of course, is going to be key now. The arrangements for the post-implementation review set out in the explanatory memorandum stated that the ombudsman would be required to identify separately the costs related to the new powers, in order for it to be easier to understand the new context. What arrangements have you put in place to do this, to ensure that it's clear to us what's going on?
Wel, mae trefniadau mewn lle, dyna be oedd Dave yn sôn amdano fe yn gynharach. Dŷn ni'n gwybod yn union pa staff dŷn ni wedi eu recriwtio. Mae gennym ni purchase orders sydd wedi cael eu 'annotate-o' yn glir iawn. Dŷn ni'n monitro o fis i fis, ac mae'r tîm reoli yn adrodd nôl o fis i fis. Felly, mae'r gyfundrefn yna ar hyn o bryd wedi sicrhau nad ydyn ni'n colli dim byd.
Well, the arrangements are in place, and that's what Dave was talking about earlier. We know exactly what staff we've recruited. We have purchase orders that have been delineated very clearly. We monitor from month to month, and the management team does report back from month to month. So, the system is in place at present to ensure that we don't miss anything.
Ocê, diolch yn fawr iawn.
Okay, thank you very much.
Diolch. The regulatory impact assessment estimated that there would be a considerably larger case load increase than you are currently forecasting. Why?
I don't want to quote Galbraith to you again, but I'm afraid forecasts will vary. Certainly from last year, we were pleased that the level of inquiries coming into the office fell. It fell by 5 per cent. Again, in terms of, perhaps, the challenge of the principles for budgeting, we've revised our processes, and a lot of that was through IT investment. A better website meant fewer inquiries—great. It's an efficiency. But where we experienced increases were in complaint numbers—11 per cent—that is towards the upper end of what we were forecasting. I think the forecast was between 5 and 12 per cent. And those are obviously the most important aspects that we deal with. Last year, we had the highest number of complaints to the office ever, and the highest ever proportion of health complaints. So, whilst it's good that some inquiry numbers fell, pressure has never been so high in terms of investigations and resolution, particularly on the health side.
Do you think health could do more, when it's dealing with complaints, to stop them getting to you?
Yes, and I don't think just health, to be honest. I was alluding earlier to some of the cultural issues we see, and if we're talking about a non-market-based system, we've already done some modelling work with the local authorities. I'm not going to name individual local authorities, because that wouldn't be fair—and they've been very helpful. Overall, they've engaged with this. But we're looking at their overall complaint numbers, and some of the feedback is: 'We'll show it to you, but we're not going to show it to cabinet. We only do that once a year.' One of the principles in this, surely, is to make sure that those that have got democratic control know what's happening and what the feedback is to citizens' services and all the rest of it. Other feedback: one local authority could give us their numbers on complaints, but they didn't measure how many were upheld. What kind of business wouldn't want to know how satisfied or dissatisfied your service users are?
Then, I think, in terms of culture and health in particular—and I think our estimate alludes to this—9 per cent of health complaints that we received in this last year were about complaint handling—more complaints about complaint handling than about surgery or waiting times, individually. That's an own goal. That's an own goal. Come on. So, our offer here is to the NHS as well as to complainants: if we can reduce the bureaucratic burden of having to deal with the 9 per cent of complaints that come to us, then that's a resource saving for the NHS, it's less pressure for busy people within the NHS, it's less frustration for complainants, who usually feel pretty hacked off by the time they come to us, because they've already been pursuing this for a year. So, I think it's in everybody's interests that we try to improve that culture.
I could introduce you to a number of people who are all top of the same list for surgery in Morriston, and it's incredibly difficult for three people to be at the top of a list. But I think that there are problems with the way that people are dealt with, and that's perhaps a matter we need to take up with other people.
Your average unit cost per complaint decreased, which is a good thing, but did it decrease because you've had more complaints coming in that were easy to get rid of at the first stage, such as, 'We can't do anything with this, because you haven't gone through the local authority or health complaints procedure', or did it go down because things were dealt with more quickly when they reached being investigated?
Well, a combination of numbers overall were up, but if you look at our level of investigations, they were up, our findings were up, and also, I've got to say, the level of maladministration and service failure that we found was up as well. So, I anticipate we will continue to create more efficiencies whilst the increase in our budget is less than the increase in complaint numbers coming to the office. So, if we do see another increase this year of 5 to 10 per cent, in terms of case load numbers, and you agree to our request of a 1 per cent real terms decrease, then, inevitably, we're going to be more efficient.
What I would like to see is that, perhaps in two or three years' time, when these powers have really had an impact on bodies and jurisdiction, we turn that curve, we're seeing a decrease of perhaps 5 or, who knows, 10 per cent in complaint numbers coming to the office. If that were to happen, then inevitably we will appear less efficient. Those unit costs will go up rather than go down, but the bigger picture will be, hopefully, more satisfaction with public services, less maladministration, less service failure, and I think that's the bigger picture positive.
Okay. And, finally, on key performance indicators, on a complaint not within jurisdiction should be dealt with within three weeks, your target is 90 per cent. Last year, in the year ending in March, you made 83 per cent. Currently, you're working on 93 per cent. Is 93 per cent the number we ought to be hoping to see at the end of the year?
Yes. I have to say we're very grateful to the good work that staff have done, because some of our numbers on KPIs were not looking good. We did have to have a queue system for a period. That affected some of the shorter term numbers as well, but there's been a 20 per cent increase in casework closures. So, I do think people have responded and stepped up to the plate. They've done a great job. We're monitoring this on a month-by-month basis. So, most of our KPIs will improve. Some will actually get worse, before they get better, because people are working harder. So, if you've got a target of closing everything within 12 months and you clear your backlog, then inevitably that number will get worse before it gets better. But the other date sufficient information is received targets we think will improve within year.
Okay, thank you.
Thank you. Mark.
You spoke about the sheer number of health complaints, and the gross cost of investigating those. In terms of the allocations within your estimates, what are you doing to try and reduce the number of those complaints and the costs of investigating them?
Well, we've been doing as much as we can without statutory powers, in terms of improvement, for a number of years. So, that's been piecemeal, in the sense that we have, for our most experienced investigators, designated them as improvement officers as well, so that 20 per cent of their time was spent on what we call 'our best customers', so perhaps the four health boards that generate the highest number of complaints coming in to the office. We've tried to work with them on culture issues, on complaint handling, other issues, but, as I say, it's been very piecemeal.
We've also looked at other issues. We've got thematic powers within the previous Act. So, three years ago, we published a review of the complaints that we receive when it came to out-of-hours services. A lot of push-back from the Government, but I'm glad to say, after the election, they did look at our review and they've since reviewed out-of-hours services and supervision for junior doctors in every health board. So, really proud of that achievement.
Other thematic work that we've done—'Ending Groundhog Day Lessons from Poor Complaint Handling'; another one on delayed discharge. We're going to be doing another one in terms of good practice when it comes to record-keeping. A lot of record-keeping issues suddenly go amiss, particularly when it comes to health-based complaints. So, I think we've done a lot in the past, but this year's estimate is the first one where we can draw on those renewed legislative powers as well. So, having a complaints standards authority—. The only other part of the United Kingdom that has got a complaints standards authority on statute is Scotland. It's something England tried to get, failed to get. I don't think they'll be getting the legislative time to do anything with it anytime soon. It is on the statute book in Stormont, but can't be exercised until Stormont remeets and agrees secondary legislation to draw down those powers. Own initiative: currently, on the statute book and being used in Northern Ireland, but not in Scotland or England. So, this estimate does include—well, it was the first committee-sponsored legislation as well—a full suite of public service ombudsman powers, as good as you can find anywhere in the United Kingdom, so—
I raised my eyebrows slightly at your description of the health boards that produced the most complaints to you as your 'best customers', and I just wonder, as you seek to improve the culture around complaint handling in local health boards—I wonder whether, as well as your own efforts, you might be able to draw on health boards that, perhaps, are better examples of best practice in having a lower number of complaints, which I'd be more inclined to describe as your 'best customers'. Could you persuade anyone from those health boards to work with some of the health boards that are giving you more complaints, if only because the culture within those health boards, and if they have good practice, may be easier to transfer to the health boards that need to improve than, perhaps, the somewhat different skills and culture you may have in your organisation?
When I said 'best customers', it was in inverted commas, you know—[Laughter.]
I do understand that.
We're talking market share. No reward whatsoever. [Laughter.] So, I thought I better set the record straight on that one.
But I think, absolutely—the reason why I was alluding more seriously to the powers and statute was that this is about changing best practice. I certainly would be able to defend—. There's a lot of jealousy from my fellow ombudsmen in other jurisdictions that they haven't been able to secure these powers. So, I think, first of all: what can we do with them to make sure that we're exchanging best practice?
When we get the type of best customers that are actually seeing a year-on-year decrease, then we're always happy to champion their work. We've done that in the past. We've had regional roadshows, seminars, and used some of the honesty that's emerged from some health boards—when, perhaps, they've admitted their failings, re-looked at their values, tried to reboot their complaint systems, tried to make sure that their internal culture tries to make a step change. But I have to say, looking back, occasionally, some of those exemplars of best practice become our best customers again, in the wrong rather than the best sense of the word. But I think we've also been looking at networks. We've had a lot of work with different NHS bodies to try and make sure that these lessons are learned, and we'll continue to do so. And if there were examples from other places as well, then we'd happily use that, and from other sectors—I think there might be cross-sectoral learning as well.
Sorry, Mark—I think Alun wants to pick up on something particularly relating to this.
Yes. I'm interested in this line of questioning because I'm as interested in value for money as I am in the basic estimates, which might be a heresy in this committee. But I'm interested in the examples you've given, both to Mark Reckless and earlier to the rest of us, about how you interact with the public bodies for whom you have responsibility. I'm interested in understanding—. In answer to Mark now, you've just outlined a few of the actions you take. Where are the barriers and what prevents you from playing a wider role? The answer to Mike was very telling about the attitude of some local authorities, and I have to say it's something that I find depressingly familiar and it's something I see and have seen myself. What are the barriers that prevent you from playing a more proactive role, if you like, in cultural change in the Welsh public service in its wider sense?
Well, I think there will be ongoing barriers in terms of us being too close to bodies in jurisdiction. I think that's the defining line, and I think we have to be impartial, we have to ensure that there is confidence from both the patient/complainant community, but also from the health professional community. We want to talk, we want to deal with both, we want to make sure that both of them are aware of good practice and can engage with us. But I think there will always have to be checks in place to make sure that we don't compromise on that. What I do do—and, again, this is something that I learned from Scotland in terms of patient groups, other voluntary bodies, and then separately with health boards—is to have sounding boards, where it's everybody in a room and they can chuck anything at me in terms of the frustrations, the anger, where they think that we've actually perhaps gone wrong, but no detailed notes—it's pretty no holds barred, so that we can try and ensure that we are ready to justify the way in which we go about our business.
But in terms of proactivity, this is our chance, so I think on complaints standards there's an opportunity for us to be much more proactive, and also in ensuring there's more open data available. Wherever it comes from, whichever side of the M4 is the tax base, it's still going to be something like an £80 billion budget on public service. There has to be contestability for the individual, but I think as well that it's important that there's a broader sense of what performance looks like. How often have I seen that 'Putting Things Right' data has to be made available as a result of an Assembly Member's request? I think they should be readily available. I think as well, for the data that I do publish, the complaints that come to me—they're the very worst, where people are perhaps at their most frustrated. It could well be in the interests of bodies and jurisdictions to be publishing all of their data, which it isn't just about the worst 5 per cent—
Well, it is sometimes. I represent the worst-performing council in Wales, and I'm anxious to understand how the power of the knowledge and experience that you have available to you within your body is able to act as a force for good in the improvement of public services. That's something that I think is going to be a valuable role.
The other question raised during scrutiny of the legislation as well, of course, was the risk of duplication, in terms of your role and other commissioners' et cetera. So, we need to be mindful of that as well.
Yes, absolutely, and I think that's a big risk in terms of own-initiative investigations. But I think, to come back to the Member's point, which was an important one, about transparency: inspired by Scottish practice, Scotland—sorry if you've heard this before—33 local authorities and 33 different complaint systems. The ombudsman worked with local government and came up with one complaint system. If you move to Scotland, you now have open data. If you complain about services in Edinburgh, you've got a 95 per cent chance of getting a solution within 20 days. In Dumfries the number might be significantly lower, but that data is now available and available to the Parliament for all 33 in Scotland. That data does not exist in Wales now. In a year's time it should do. I think we will be able to deliver that, so we're be able to look at the performance of not just your local authority, but all of them, and also not just in a league table sense of shaming the lowest performers, but really looking at service areas, issues of improvement and trying to raise the game more generally, but by being informed—and this is vital to the culture, again, of public services—by the citizen's experience, not ministerial diktat. I think that is a really important point in a non-market system.
Okay, thank you. Mark.
I was impressed by your list of areas for proposed savings—staff efficiencies through organisation, lower staff turnover, flexible working, bringing services such as translation in-house, some IT efficiencies, a better website, a paperless office, and strict control of professional fees. It's quite a good list, and I just wondered why we were only expecting to save £66,000 from improvements across all those areas.
Because it's not the first time that we've squeezed the sponge. Those savings have been made this year, and, obviously, we have an ambition to continue that work and to be as efficient as we can.
We've got a very small part of our budget that we can actually make savings from, because, forgetting staff for a moment, with the leasing of the building and even the professional fees, there's going to be a minimum number you're going to have, so it is a bit of a law of diminishing returns. However, we continue to make savings on translation, and we continue to drive the professional fees costs down by putting robust systems in place to manage those professional advisers, but as Nick says, there is only so much that you can get out of the sponge.
Rather than leaving staff aside, you were saying that you could make staff efficiencies through reorganisation, reduced staff turnover, improve flexible working. Wouldn't all those lead to savings in the staff area?
And we do, because we've asked for a lower staff budget than we would get by just increasing for the pay award. So, we've replaced some staff who've left who were on high salaries with lower salaries. We've reorganised teams. We don't always replace like-for-like when somebody leaves. But, you know, we have a staff level now of 73, and we're on 73 at the moment, and we don't plan to increase that. We don't plan any direct savings on that. Obviously, if somebody does leave, we would review the position, but this is the first time I can remember, for years, where we've been at full staffing levels.
Thank you very much. Nick.
Diolch. It is morning, yes—morning, Nick and your colleagues. Can I ask you a couple of questions about risk and contingencies? Your annual report sets out two key risks facing the organisation, in terms of ICT and also dealing with cyber security problems. So, if you could tell us what action you've taken in the last year, and are planning in future years, to try and mitigate the risks.
Sure. I think, for all public service organisations now, cyber risks and IT are probably the key issue when it comes to business continuity. We're dealing with a lot of personal data—a lot of it, obviously, health related. So, we take it very, very seriously. I think Katrin can give some examples of what we're doing to manage that risk effectively.
Yes. We had concerns about our IT support service contract. We had problems with our system, hence the red risk in the annual report last year. That has been downgraded during this financial year because we took steps, then, to manage the contract closely. We also identified that we needed to replace a server; we're currently doing that. That work is due to complete this month, and we are making sure that our IT support provider works very closely with our case management provider, so the database then works for us, in terms of our casework. So, once the work on the replacement server is done, we are hoping, actually, to downgrade that to green. So, it's working far better and we're satisfied with the steps we've taken there.
Also, in relation to our review of our IT provision, we thought we should improve our back-ups system. So, we're currently out for tender for a new provider to modernise our technology. At the moment, we have weekly back-ups that we take off site, and also daily back-ups on site. But we're out for tender to have a more modern cloud-based technology for that. So, we're hoping that that work will complete by the end of this financial year. So, that's in relation to our general IT risk.
And also, in relation to cyber security, that's obviously something that we're always mindful of, particularly current threats from malware threats and virus attacks and that sort of thing. We are trying to do a programme of penetration testing of our systems. We've just finished one step of tests where the provider didn't identify any high risks to that. So, we were pleased with the outcome. They did a penetration test of the gateway to our web set-up, and we're also continuing with that, now, during the course of the year. So, these are factors that have been built into the estimate.
Because I know the Assembly, like all organisations, is subject to cyber attacks and attempted hacking, and I imagine you have the same issues that we do as Assembly Members—you hold a lot of information on a lot of people, which, in terms of data protection, is highly sensitive and needs protection. Given that an organisation like the Assembly is trying to deal with this, do you share best practice with other IT departments across the public sector?
I know our IT manager does meet various networks and is a member of various networks, and also, we do meet with the Wales Audit Office for advice on these things as well. As you say, I don't think that cyber security risk is going to be downgraded. We hold incredibly sensitive information, particularly in relation to personal data, so we're always going to be mindful of that.
The IT department here tell me it's almost like running to stand still, because every time you develop new software, there are individuals out there who are seeking to break it almost straight away. So, are you confident you've got enough investment planned for future years, along with the savings you're making, to keep it all secure?
Yes, we're confident, and we are going to be seeking advice from experts in the field. As you say, I'm not an expert in this field. Our IT manager realises that there are others out there who will know more than him on how to approach our systems. So, we will always get advice on that front—external advice—but, yes, we've built that in.
I'm far from an expert as well. I often find it hard enough to hack into my own system when I forget my passwords. [Laughter.]
Finally, Chair, in terms of contingency, your estimate states that it does not include any contingency provision for meeting unexpected items of expenditure, such as legal challenges to casework decisions. Have you made an assessment of how likely those sorts of challenges are going to be and whether you've got enough contingency for it?
Well, the current system is one where we can come back for a supplementary budget; we do go from year to year. I think there have been two or three occasions when we've had to do that. There was one case, obviously more recently, with the additional powers. That system seems to work well; we're aware of when those windows are, and we've managed risk and hopefully we'll continue to, particularly on the IT side. We've always asked for support in sterling rather than bitcoin, which is—. Should that not be the case, then I think you'd know that we'd been in trouble. But, in terms of annual budgeting, this is not a multi-year budget system; we don't hold reserves and we've always been able to come and deal with this committee should we have any unexpected eventualities.
So, if you had a perfect storm and you did have a major challenge to a decision you'd taken on, maybe, an NHS major body—. You say you haven't got the reserves, so in that—okay, it might be unlikely, but, in that situation, where would you seek to cover the costs for that?
We would come to this—
Yes, it's happened once—. It's happened once in 10 years, as far as I know—I'm not sure about before then—where there was a High Court judge—
Yes, but I think that's the issue; it was so—.
So, it would seem wrong—
As an exceptional.
It would seem wrong of us to say, 'Could we have £250,000 extra funding that we may or may not use?', and I actually met with—a few years ago, I actually met with Welsh Government colleagues, when we had this one case, to say, 'If this is a continual problem, is there a provision that the Welsh Government could hold that we could draw on, like the risk pool, say, in the health service?' Their answer was, 'Well, it's happened once. It's unlikely to happen again, use the supplementary process if you need to', and, touch wood, we haven't needed to.
Ocê, diolch yn fawr iawn. Rhianon.
Thank you very much, Chair. In regard to the Finance Committee's statements of principle, there are obviously some very clear guideline principles outlined within that. So, you've previously told the committee—and I'm a new member to the Finance Committee, so I wasn't here at the time, but you've previously told the committee about your staff turnover and you've put that down to a high level of maternity, I believe, in 2018-19, which I believe you absorbed, previously, and you're predicting more, obviously, in that regard, but that's just normal business; that is running an organisation. So, in regard to the £77,000 increase that I believe you've asked for for the coming term, can you just give me a little bit more outline in terms of whether you think that's a recurrent or a non-recurrent cost, because I'm not clear?
Okay. I'm sorry—the £77,000 increase—?
For the additional staff.
Yes, which, I believe, is within that same envelope that you've put down previously to maternity. I'm just interested in unpicking that.
Yes. There's no maternity or anything in that; that is a projected 2 per cent pay increase, plus increments.
I think we were previously told that, because of exceptional circumstances in relation to maternity cover, there was a need for additional funding. We appreciate that there would be an additional demand now, given the 2 per cent, but has that additional funding—previously now—has the need for that receded—
Yes, it has. Yes, it has.
—you know, how is that demonstrated, really?
Sorry, Chair. Yes, there was—. I think it was a year or two years ago we did have an issue, I think, with maternity and adoption leave, which affected 10 per cent of the workforce in one particular year, so that was a challenge, but it has receded to 2 per cent or 3 per cent, currently.
Okay, thank you. I think, also, it would be perhaps useful if there were the 2018-19 figures in this appendix so that it can be looked at in the round.
Can you explain, then, why the ombudsman pension asset has increased—I believe there's been some significant changes around that—from £30,000 to £810,000 in the year ending 31 March 2019, and what impact this would have upon any future contributions and costs?
It wouldn't be Finance Committee without pensions, would it? And, for new Members, it's worth just restating what this is. This refers to the local government pension scheme. And, perhaps very briefly, back in 2018, we challenged the actuary and the Cardiff pension scheme to say, 'Look, we think we're in surplus here. Why are we still paying deficit payments?' They agreed, and last year—was it last year or the year before; I can't remember—we gave nearly £300,000 back to the Welsh consolidated fund because we didn't need the pension deficit.
However, the pension regulations in place at the end of last financial year do not allow you to fully identify the surplus in your accounts. Legislation wouldn't allow it, hence there's only £30,000 showing in last year's accounts. The surplus was a lot more than that, but the disclosure that we have to provide in those accounts only disclosed £30,000.
So, can you explain why that—?
Well, it goes back a little bit to the financial crisis, where companies were borrowing on supposed surpluses on pension funds—
Sorry. To be more precise, can you explain why the disclosure is only £30,000?
It's because the pension rules in place—and I'm not an expert on pension schemes; it's not an accounting thing—didn't allow you to show a surplus, because companies were—. Particularly in the private sector, there was concern that companies could borrow on surpluses on pension funds. And those were the regulations in place. They changed in May this year and they said, 'Yes, you can show'—not you can—'you must show a surplus on your balance sheet'. The actuary's calculation is £810,000. The upshot of that, really, is that we only have one contributing member into that scheme, and, once that person retires or leaves the scheme, that £800,000 comes back to Nick, and I'm sure he'll give it over to the Welsh consolidated fund. So, that is an asset that we hold that is repayable to the Welsh public.
There's something Mike wants to pick up on.
Only that one of the things I've always thought I knew, which you'll probably say I don't, is that any piece of information that uniquely identifies one person should not be shown. But you just said it uniquely identifies one person. So, I was obviously wrong, and you can provide data that uniquely identifies one person. Because I would have thought that counted as personal data.
Well, we have one member of the Cardiff pension scheme, which is public knowledge.
Okay. Well, we're mindful of that.
I think it would be difficult for anybody to identify—
Yes, out of the whole Cardiff pension. Yes, sure.
—without having knowledge of everybody else's pension arrangements within the office, so, yes.
Yes. Okay. Back to Rhianon. Thank you.
I'm not going to go there. In regard to—. Moving on, then, to your rental and the 20 per cent prediction over that five-year period, could you just extrapolate a little bit in terms of how you are tied into that scheme and whether that potential £40,000, I believe, that you've already built into this budget would be realised? What is your get-out? Is it the best solution in times of austerity? Can you move elsewhere? Have you considered those options? Quite a few questions, I know.
We—. I'll try and answer them all.
I'll come back to them.
We took out a new lease on the building in Pencoed in 2015. It was a time when commercial property rents were relatively low. We negotiated a particularly good deal with the landlords for a new 10-year lease until 2025 and obtained 40 per cent more office space, for free, as part of that contract. So, we are the lowest cost-per-square-foot organisation in that area, and we're probably a third of the cost of, say, this area, Cardiff, wherever—we're only £10 a square foot.
Part of the contract—it's normal in these contracts—is a five-year rent review, and it's a review where the only way is up; that's the way it's written. We engage building consultants who act on our behalf in these matters, and they believe that we will be subject to a 20 per cent rent increase.
But you've built that in now—
We've built that in now. That's in that budget—
Yes. And how much—sorry to interrupt you, and through the Chair. How much is your total rent for the build?
Two hundred thousand pounds. What hits us particularly hard, as well, is we're exempt from value added tax, so we can't claim the 20 per cent VAT back, so any increase is quite high. However, it is still an extremely low rent for a pretty nice-quality office block just off the M4. And we are tied in to another five years, but we will have our negotiations with the landlord around that as well.
Okay, so what I'm not clear about—if you don't mind—. I'm not clear as to whether it's an actual rent rise that you were having to pay at the end of this allocated year, or whether it's something that you were putting aside for that potentiality.
We will have to pay that increase—
So, it's a definitive thing.
Okay, all right. Thank you, Chair.
There we are. So, effectively, you've been doing pretty well over recent years, and you're now having to catch up with—
A little bit, but I think that there's—even at £12 a square metre, that's cheaper than other people in the area as well, so—.
Okay, Members. Any further questions?
Unrhyw gwestiynau pellach? Pawb yn hapus?
Any further questions? Everybody happy?
Yes, sorry, Chair.
Go on, then.
If I may have this one again, in regard to the 3.6 per cent rise that you originally built into the budget, that's gone down to 1.6 per cent, so what is it that you've actually lost?
I think—. We did allude to this earlier. I think some of those figures are perhaps historic, and what we are actually looking for this year is a 1 per cent reduction.
Okay, thank you.
Yes. Okay, that's clear.
Iawn. Diolch o galon ichi am eich tystiolaeth. Diolch am yr amcangyfrif. Mi fyddwn ni nawr yn pwyso a mesur yr hyn dŷn ni wedi ei glywed. Mi gewch chi gopi o'r trawsgrifiad fel pob tro, wrth gwrs, i'w siecio ar gyfer cywirdeb. Gaf i ddiolch ichi am fod gyda ni'r bore yma?
Thank you very much for your evidence. Thank you for the estimate. We'll now be analysing what we've heard. You will have a copy of the transcript as usual to check for factual accuracy. But may I thank you for attending this morning?
Diolch yn fawr iawn ichi, bwyllgor. Diolch.
Thank you very much, committee. Thank you.
bod y pwyllgor yn penderfynu gwahardd y cyhoedd o eitemau 5, 7 ac 8 y cyfarfod yn unol â Rheol Sefydlog 17.42(vi).
that the committee resolves to exclude the public from items 5, 7 and 8 of the meeting in accordance with Standing Order 17.42(vi).
Cynigiwyd y cynnig.
Mi wnaiff y pwyllgor nawr—wel, dwi'n cynnig, yn unol â Rheol Sefydlog 17.42(vi), fod y pwyllgor yn gwahardd y cyhoedd ar gyfer eitemau 5, 7 ac 8 o gyfarfod heddiw. Ydy Aelodau'n fodlon â hynny? Diolch yn fawr iawn. Mi wnawn ni symud, felly, i sesiwn breifat.
The committee will now—well, I propose, under Standing Order 17.42(vi), to resolve to exclude the public from items 5, 7 and 8 of today's meeting. Are Members content? Yes. Thank you very much. We'll move, therefore, to private session.
Derbyniwyd y cynnig.
Daeth rhan gyhoeddus y cyfarfod i ben am 10:32.
The public part of the meeting ended at 10:32.
Ailymgynullodd y pwyllgor yn gyhoeddus am 11:00.
The committee reconvened in public at 11:00.
Wel, croeso nôl i'r Pwyllgor Cyllid. Dŷn ni nôl mewn sesiwn gyhoeddus. Gaf i ein symud ni ymlaen, felly, i eitem 6, sef i graffu ar Fil y Gwasanaeth Iechyd Gwladol (Indemniadau) (Cymru)? Rŷn ni'n ddiolchgar i'r Gweinidog am ddod atom ni ar gyfer y sesiwn dystiolaeth. Mae'n ofynnol, wrth gwrs, i fi gyflwyno Vaughan Gething, y Gweinidog Iechyd a Gwasanaethau Cymdeithasol. Ac yn ymuno ag e mae dau o'i swyddogion: Alex Slade, sy'n ddirprwy gyfarwyddwr yr is-adran gofal sylfaenol; a Tim Edds, sy'n gyfreithiwr, gwasanaethau meddygol cyffredinol, o Lywodraeth Cymru. Croeso i'r tri ohonoch chi.
Os ydy o'n iawn, awn ni'n syth i gwestiynau a gwnaf i gychwyn drwy jest tynnu sylw at y ffaith bod yr asesiad effaith rheoleiddiol yn nodi y byddai Llywodraeth Cymru yn wynebu costau o £30,000, sydd yn cynnwys cymorth cyfreithiol allanol. Y cwestiwn sydd gen i yw: beth yw'r rhesymeg dros ddefnyddio cymorth cyfreithiol allanol yn hytrach, wrth gwrs, na chynghorwyr cyfreithiol y Llywodraeth?
Welcome back to the Finance Committee. We are back in public session. Could I move us on to item 6, which is a scrutiny session on the National Health Service (Indemnities) (Wales) Bill? We're very grateful to the Minister for joining us this morning. It's a requirement for me to introduce Vaughan Gething, the Minister for Health and Social Services. And joining him are two of his officials: Alex Slade, deputy director, primary care division; and Tim Edds, who is a lawyer in general medical services in the Welsh Government. So welcome to the three of you.
If it's okay, we'll move straight to questions, and I'll start by drawing attention to the fact that the regulatory impact assessment notes that the Welsh Government would incur £30,000 in costs, including external legal support. The question that I have is: what's the rationale for using external legal support, rather than using the legal advisers within the Welsh Government?
It's a simple matter of expediency to make sure we're able to undertake the Bill and the regulations in the requisite period of time. It's the same sort of cost envelope that we would otherwise have for introducing a scheme of regulations that we need to implement the existing liabilities scheme in regulations.
Okay. Does it hint at any capacity issues within Government, or is that—?
Well, it's a matter of expediency. There are broader challenges than legal services. I'm trying to avoid getting drawn into a conversation about the impact of Brexit and the fact that lawyers are the growth area of the Government, but there it is.
Well, you didn't avoid it very well. [Laughter.] No, that's fine. Okay. Thank you. Nick Ramsay.
Diolch, Chair. Morning, Minister. Could you explain how the £100 million of liabilities was estimated and how confident you are that this represents the maximum value of liabilities to be assumed by the Government?
It comes from the external financial advice and so that's an assessment of our understanding of those liabilities. But, of course, that's the figure before we undertake the transfer of assets in the exchange of liabilities. So, the actual number will be smaller, but, of course, we have engaged some external legal and financial support in the whole of this scheme, and we've done that consistently with the UK Government as well. And that's been helpful, actually, to have the same set of external advisers. And so that's where it comes from and I think that's a fair assessment, pre the transfer of assets that would take place. And those are matters of negotiation between the three medical defence organisations. So that's, if you like, getting past the nuts and bolts of the legislation and into how you then operate a scheme and what that means underneath it.
And what would be the implications for the liabilities exceeding £100 million, and how would you deal with any additional liabilities?
Well, look, we already run the Welsh risk pool that, effectively, the Government stands behind. It's run by the NHS, so if something goes wrong, then the Government are behind that. That already takes account of secondary care clinicians in Wales and it's seen across the NHS family in the UK as being well-run and effective. So we've got some experience in this area of running something similar in secondary care. Given that the £100 million figure would reduce when you do then factor in the transfer of assets, following negotiation with those three MDOs, I think people should take a measure of confidence that we've got the resource and the ability to be able to run that and to be able to stand behind the costs that exist. But, of course, there is always a caveat in any insurance environment that it depends on the claims that you do or don't get. But, within that, I've indicated—and perhaps we can copy the letter to you—the way that we expect the scheme to work in terms of some capping provision against future claims to be made. So we can provide you with the same letter we're going to send to the Health, Social Care and Sport Committee as well, just for completeness' sake.
That would be useful. Why are costs incurred for commissioning financial consultants to estimate the liabilities omitted from the regulatory impact assessment?
Do you want to deal with that, Alex, as it's a practical point?
The costs associated with the development of the Bill was around the specialist advice in terms of developing the legislation. The reference you make in terms of financial and legal advice is in terms of the commercial deals and the negotiations that are ongoing with the medical defence organisations.
And is that a standard approach to have those sorts of costs for this type of thing?
It is very much so, in terms of making sure that we have robust assurance, in terms of the numbers and confidence in terms of those deals. And, as the Minister described, we have aligned with England in terms of the advisers that they are using, such that we look at this at a UK level and ensure that there are maximum efficiencies.
Are you using the same consultants, advisers?
Yes. Not described in the regulatory impact assessment, but for the commercial deals, yes.
Diolch yn fawr. Rhianon.
Thank you very much. Rhianon.
You've already referenced—thank you, Chair—your discussions with the three medical defence organisations. So, in regard to an update from that to this committee, what are the major challenges, or perhaps not in regard to the asset transfer?
Two of the three, we're in a position where agreement is imminent. Two out of the three have already signed agreements with the UK Government for England. We're in a good position with those as well. The third, we're looking to have more open conversations with them. They've held back from doing so up to now, but we're hopeful that that will now crystallise into more constructive and open conversations with us. And, actually, the Medical Defence Union I referred to are giving evidence at this point, in the next door room, to the health committee.
Okay. Thank you.
Thank you. Rhun.
Are you able to tell us what the level is of asset transfers that you are expecting to take place?
No, that's part of the commercial confidential nature of the conversations that we're having with them. And I think you'll understand why they wouldn't necessarily want to make open the nature of the assets and liabilities they think they're carrying.
What are the key factors in terms of your side of those negotiations, in terms of what you're trying to achieve to protect the Welsh Government and its financial liabilities?
Well, that's part of the reason why we've commissioned the external, financial expert advice, to understand, and you've got to agree to be able to look at the assets and liabilities of those organisations simply to understand, and how that information is exchanged, then getting some external financial expert support to advise this Government, and the same people advising the UK Government in respect of England what the nature of those assets and liabilities are, and what fair value looks like. And you then have to go to a negotiation about what the transfer figure is, for the transfer of assets or liabilities. And that's why that external, financial expertise has been really important, because, even with the expertise that Alex and his team develop, you wouldn't think it would be a fair fight to send Alex in to go and have that conversation with his team. So, that's why we've got the external advice, and it is about getting to a point of understanding what a fair value is. And that's the nature of the offers that are being made.
And, like I say, two out of the three, we think we'll get there pretty soon, and the third, we're hopeful that they're now at a point where they'll have that more open conversation with us. And, as I say, you'll see that in the letter that we exchange with the health committee, and I'll make sure there's a copy to yourselves as well.
Okay. Fair enough. Thank you.
Diolch yn fawr. Alun.
Thank you very much. Alun.
You've covered a lot of the territory that I'm interested in. Do you have—? Are you able to elaborate on how these assets will be managed and how you'll maximise the value of them over the period to 2027?
Do you want to deal with this, Alex?
So, the intention is that the transfer of assets would be aligned with how the Department of Health and Social Care in England have transferred those assets into HM Treasury. The decisions around the utilisation of those assets would align with strategic budgeting, in terms of the budget process that, of course, goes to the Assembly. So, it's a new activity for Welsh Government to have that block of assets to utilise, and so consideration and engagement has taken place to ensure that it aligns with the budget and we use those effectively.
Not wanting to predetermine or pre-empt anything, what is the scenario if one out of the three doesn't conclude?
The Bill is about us amending the primary legislation to enable us to provide this direct indemnity. And the regulations will then provide a scheme for us to do so. But we can't require medical defence organisations to engage in negotiation, and we can't require GPs to migrate into a new state scheme. So, it really does depend on the nature of, and our ability to successfully conclude those negotiations with that third provider. If they didn't—and this is a question we've just dealt with earlier this morning—then that would be a matter for that organisation and their members who have paid historic indemnity insurance. But that is not a position that I think we'll get to, and I don't think it's in the interest of that organisation or its members for there not to be agreement.
Okay, thank you. Mark.
How will the existing liabilities scheme be managed and why haven't you included an estimate for the cost of that in the regulatory impact assessment?
The handling of claims up until April 2021 will be undertaken by the participating MDO, such that the operational responsibility remains with those MDOs who we reach an agreement with. After April 2021, the activity will be undertaken by NHS Wales Shared Services Partnership Legal and Risk Services. The RIA, of course, relates to the Bill, which is the figure described there and as we do with the secondary care activity, and we've started to do with the future liabilities scheme, we will engage with NHS Wales Shared Services Partnership in terms of their operating costs around running the scheme.
Shouldn't an estimate for those operating costs, post 2021, be available in the RIA?
As things stand, we do not anticipate that they need to expand their operating costs. So, at this moment in time, we believe they can take on the management of existing liability claims, which, of course, we've got another window up until 2021 to—. And they reduce over time. We do not think there needs to be a change at this point, but we need to be open to have that discussion with them.
Thank you for clarifying.
Thank you. Mike.
Thank you. What impact do you think implementing the existing liabilities scheme will have on the cost of indemnity for our GPs?
Well, there'll be no additional cost to them because we're talking about existing liabilities where they've already paid an insurance premium and it shouldn't make any difference at all. It should provide greater assurance, though, about the cover being provided. Part of this that isn't quantifiable in terms of the impact of this is actually on the goodwill and confidence of the profession in carrying forward. We've already introduced a future liability scheme, so, for the future, we've already got that scheme in place with the regulations, and that probably makes more of a difference about future engagement and certainly about capping the costs that we know were a really big problem for lots of general practitioners in the last five years or so.
Okay. Fine. Do Members have any further questions or comments? No. There we are. Well, it's a curtailed Stage 1 process and it was quite a short session this morning. We will be reporting by the deadline of 12 November, of course, so can I thank you for your attendance this morning?
And we'll now move back into private session so that we can consider what we've heard and what we've received in terms of evidence. Diolch yn fawr. Thank you.
Daeth rhan gyhoeddus y cyfarfod i ben am 11:12.
The public part of the meeting ended at 11:12.