Y Pwyllgor Cyfrifon Cyhoeddus - Y Bumed Senedd

Public Accounts Committee - Fifth Senedd


Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Angela Burns MS
Delyth Jewell MS
Gareth Bennett MS
Jenny Rathbone MS
Nick Ramsay MS Cadeirydd y Pwyllgor
Committee Chair
Rhianon Passmore MS
Vikki Howells MS

Y rhai eraill a oedd yn bresennol

Others in Attendance

Adrian Crompton Archwilydd Cyffredinol Cymru
Auditor General for Wales
David Richards Cyfarwyddwr Llywodraethu a Moeseg, Llywodraeth Cymru
Director of Governance and Ethics, Welsh Government
Gawain Evans Cyfarwyddwr Cyllid, Llywodraeth Cymru
Director of Finance, Welsh Government
Matthew Mortlock Archwilio Cymru
Audit Wales
Natalie Pearson Pennaeth Datblygu Sefydliadol ac Ymgysylltu, Llywodraeth Cymru
Head of Organisational Development and Engagement, Welsh Government
Peter Kennedy Cyfarwyddwr Adnoddau Dynol, Llywodraeth Cymru
Human Resources Director, Welsh Government
Richard Harries Archwilio Cymru
Audit Wales
Shan Morgan Ysgrifennydd Parhaol, Llywodraeth Cymru
Permanent Secretary, Welsh Government

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Claire Griffiths Dirprwy Glerc
Deputy Clerk
Fay Bowen Clerc
Joanne McCarthy Ymchwilydd

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.

Cyfarfu'r pwyllgor drwy gynhadledd fideo.

Dechreuodd y cyfarfod am 09:31.

The committee met by video-conference.

The meeting began at 09:31.

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

Great. Can I welcome members of the Public Accounts Committee to this morning's meeting? No apologies have been received and there are no substitutions. Do Members have any declarations of interest that they wish to make at the start of the meeting? No. Okay.

2. Craffu ar gyfrifon 2019-20: Sesiwn dystiolaeth gyda Llywodraeth Cymru
2. Scrutiny of accounts 2019-20: Evidence session with the Welsh Government

Item 2, then, and our evidence session with the Welsh Government on the scrutiny of accounts 2019-20. Can I welcome our witnesses back to the Public Accounts Committee? Would you like to give your name and position for the Record of Proceedings? Starting with you, Shan. You might need to unmute.

Thank you. Shan Morgan, Permanent Secretary for the Welsh Government.

David Richards, director of governance and ethics for the Welsh Government.

Peter Kennedy, director of human resources for Welsh Government.

Natalie Pearson, head of HR strategy, organisational development and engagement for Welsh Government.

Gawain Evans, finance director for Welsh Government.

Great. Okay. Thanks for being with us this morning. We've got a fair number of questions to ask you as usual. So, if Members and witnesses can be succinct, that would be helpful. I'll kick off with the first question on performance reporting. In your letter in September last year, you said that some new key performance indicators would included in the 2019-20 accounts, but that doesn't seem to have happened. Why not?

Okay. Perhaps if I can explain the background a little. We'd been, obviously, encouraged by the PAC to develop a new framework for performance management within the Welsh Government civil service. I, in part 1 one of the account, gave an update on progress in developing and implementing that new framework. I decided that it wasn't the time to include full details of the system in the published accounts, partly because this is very much an internal tool to help the Welsh Government improve its performance. Much of the information that we draw on to do that is actually sensitive, staff-related information. But also because it's not yet complete, as the accounts make clear.

We based the framework on a very comprehensive system—I think we're the first in the UK civil service to do it—based on the International Civil Service Effectiveness Index, developed for us in the Welsh context. So, it sits very much within the overall strategic framework for Wales that is provided by the Well-being of Future Generations (Wales) Act 2015 and, obviously, reflects the First Minister's aim of building one Welsh public service. The framework, as it sets out in the accounts, involves 18 different themes, split into two groups: functions—what we actually do in the Welsh Government—and attributes, which are how we do it. I do believe that this will, when we're able to complete it, provide a very comprehensive and rigorous basis for monitoring and assessing our performance as an organisation.


When do you think—? Shan, when do you think that will happen, then? Obviously, you've set out reasons why it's not in this year's accounts, are you envisaging that for next year's accounts, or at what point will it be seen as more of a standard procedure to include?

Well, to be honest, it is being developed incrementally by our knowledge and analytical services team. Two things have led to a delay in the progress that we'd hoped for. The first thing, not surprisingly, is that some of our key business and policy leads have been very heavily involved in the COVID-19 response, as you would expect. And, similarly, we needed to develop some new data collection mechanisms to provide all the information that we want to collect. Some of those don't exist, and that will take some further time. So, that's why I'm saying the implementation has been incremental. The same resource constraints are obviously going to continue, even as we move into what we hope will be the COVID-19 recovery period.

I would like to underline that I do think this is a very ambitious project, and I do think it's very rigorous and comprehensive. I don't want to rush it; I want to create a system that will be of lasting value. I would be very happy to provide the PAC with a progress report before the end of March, so before the end of the financial year. And as for what I include in next year's accounts, I'll be able to report to you on how things are going in developing the framework, but, as I said, I have to add the caveat that a great deal of our resource, as you would expect, is currently focused on a response to COVID-19. I would very much welcome the thoughts of the committee, in the light of this discussion, on what you think I should include. I'll obviously have to balance that very carefully with some of the sensitivities of the information.

Because I think, Shan, there were some raised eyebrows in committee over the fact that the key performance indicators have not all been included. I think we just assumed, initially, that if KPIs are there, they'll be used. We can certainly provide an input. Do you think, over the medium term, would you envisage all the KPIs eventually being used, or is there any point having KPIs if they're not actually going to be included?

I think there is a great deal of point having KPIs. I think it will provide a much more structured and systematic way for us to assess our performance in the Welsh Government. But, as I said, it's very much an internal tool for how we are functioning as an organisation. These were never designed as an external-facing set of indicators and frameworks. It's about how we, within Welsh Government, hold ourselves to account for the performance of the organisation. The annual accounts are obviously a public document. That's very different from having a discussion or presenting a report to the PAC about how the system is operating. So, I do feel we've made a great deal of progress. I think it's the right approach, it's the right thing to do. It's complex, it's time consuming, and time, over this crisis period, is one of the things that has been in very short supply.

Since those new KPIs haven't all been included, what other measures are you using this year to assess the performance of the Welsh Government?

Well, we've continued using the sorts of measures that we always use, and I don't think our performance is ever going to be able to be reduced to a single set of indicators. It's a large, complex organisation, and that's why we're developing what is a wide-ranging framework.

I think some of the most important ways of assessing our performance, for me, are the feedback that I get very directly from contact with the First Minister and his Cabinet about how well they think we're supporting them and helping them to deliver their objectives; obviously what staff are telling me, through how they feel about working in the organisation, and our regular staff survey gives us a great deal of information about that. We also listen to what our stakeholders are saying to us about our performance, and not least the views in the reports from this committee, as well as from the Auditor General for Wales. All of that gives an overview of how we're performing. And then there is some hard factual evidence, which contributes to that overall assessment, which is whether we've kept within our budgets for the year—as principal accounting officer that's extremely important to me; whether we achieve the savings that we're setting out to achieve from our estates programme; how we're performing in delivering relevant training skills to staff; the diversity targets; and the response times on correspondence and other things that can be measured. So, we look regularly at all of those things.

The difference with this new framework is that it will be able to bring together, in a much more systematic and structured way, all of the different indicators that tell us how we are performing. In all of that, I must underline how very proud I am of how the Welsh Government is performing. I think, over the course of this past year, people have responded absolutely magnificently.


Okay, thanks for that. We'll move on now, and Gareth Bennett.

Thanks, Chair. Since you gave evidence last year, there have been some changes at UK Government level in terms of the civil service. As we know, Sir Mark Sedwill left recently, and we've now got Simon Case as the new Cabinet Secretary. How do you feel this relationship is working with the Welsh Government, and have there been any changes to the impact on the evidence you gave last year about your accountability arrangements?

When I took up this job—. I have engaged with now three different Cabinet Secretaries, so Jeremy Heywood first, then Mark Sedwill and now Simon Case. So, I've experienced three different Cabinet Secretaries in this job. What I would always underline is what I've said previously: I am very directly accountable to the First Minister; I agree all my performance objectives with him in line with his priorities; his feedback provides the main element of my own performance appraisal with the Cabinet Secretary. And I'm absolutely clear that my loyalty is to the First Minister and to the Ministers of the Welsh Government.

The Cabinet Secretary, now Simon Case, is my formal civil service line manager. I share with him what I've agreed with the First Minister, and he carries out my annual appraisal, based also on a discussion with the First Minister. So, what I'm saying is the First Minister is very much at the heart of everything I do, and how my performance is assessed. The arrangements that now apply with Simon Case are exactly the same as applied with his two predecessors. He's already had an introductory discussion with the First Minister and with me, and I think the relationship is working out well; it gives me no cause for concern, and no cause to want to change or modify anything I said to the committee about my accountability arrangements. I think, overall, my assessment is that Simon Case and I have quickly established a constructive dialogue in this role. I can see that he is very sensitive to the devolution settlement, and certainly recognises the fact that I look to the First Minister for direction. What I have found is that in all of the meetings that he has that I take part in, with all of the Permanent Secretaries, he's made very much a point of inviting the three Permanent Secretaries from the devolved administrations to give their views specifically on any major subject under discussion. So, my reflection is that he understands well the nature of devolution, and respects the responsibilities that we have.

Okay. Well, thanks for that. That's good to hear because, obviously, he's taken over at a time when he's got a lot of things on his plate, so it's good to hear that you have got a cohesive arrangement with him already. What were the main findings of your baseline review of all posts in the organisation? Did it provide sufficient information to support the Welsh Government's workforce planning, and, if so, why are you planning a further review exercise?


I'll give you an overview of the findings of the baseline review. It was a very detailed exercise, we carried it out in September last year, but I may ask Natalie to come in if you'd like a bit more detail. What we wanted to do was to have a thorough look at the way that our resources in the organisation are lined up to ministerial priorities and portfolios, as well as, obviously, our statutory delivery responsibilities in a way that we hadn't really done before, and we also used it as a way of identifying the deployment of professional and specialist staff in the organisation, and the areas of work that they're aligned to.

I think one of the key findings that stood out was that 42 per cent of our staff at the time that the baseline review was conducted were working on policy or Government business, and that 41 per cent of our staff were very directly involved in the delivery of front-line services. So, it gave us a very clear picture of who we are and what our areas of work are. Obviously, the rest of the staff of the Welsh Government are engaged on professional or corporate functions, including legal services, translation, audit, finance, HR, all of those professional services.

One thing I have to underline, of course, is that it was a snapshot at the time last September, and since then, I think few people within the organisation are untouched by the need to respond effectively to COVID-19. So, things have moved on. We have managed our response to COVID-19 by ruthless prioritisation and redeployment of people within the organisation, so you would expect that the deployment of staff is now fairly different from how it looked last September, well before any of us had ever heard of coronavirus, and, really, that just goes to show that workforce planning is never static, it always moves on. We have had to keep our resourcing under constant review during the crisis, and decided that we need to look again, not just at where our resources are deployed at the moment, but much more broadly at the kind of capacity and capability that we will need as an organisation for the next five years.

So, I've actually put in place three major pieces of work on our future workforce strategy; on our future workplace strategy—how we are going to make best use of our estate and our working methods, given the new default of working remotely, what that will mean for the future as we move out of the crisis period; and the third major piece of work is on our future digital strategy. So, in all of this, we'll be looking very much to build on lessons that we've learned throughout the crisis, and really try and take, where we can, from this awful period, the best practice that we've been able to identify. So, that's, in a nutshell, what we found from the survey, what we're doing with it and why we need to come back again.

Yes, that's understandable, and I'm interested in the working-from-home issue. That was something I was interested in before all this, so it will be intriguing to see what happens in years to come on that score. So—

At the moment, we think that about 95 per cent of our staff are regularly working from home. We've made arrangements that mean that we can allow up to 20 per cent capacity of our four buildings that are open at the moment to be occupied with people either who have a particular business need or have well-being related reasons for wanting to spend at least some time away from home. And I recognise it isn't easy for everybody to work from home. There are people with caring responsibilities at each end of the age spectrum, and people whose domestic accommodation doesn't necessarily lend itself to carving out office space. We've done our very best. I'm enormously grateful to our trade union side colleagues who have worked very closely with us to try to make sure that people are able to work safely both from our workplaces and also from home. And we've obviously provided advice, support, appropriate furniture, all of that, as part of the package. It seems to be operating successfully. I'd be very happy to send the committee more information about what we're doing. We've been sharing best practice with other organisations, like the Confederation of British Industry Wales, which came to look at what we were doing, and so did the Welsh Local Government Association. We've talked to the Northern Ireland Executive, the Driver and Vehicle Licensing Agency and others about how we're making sure that we are, as we should be, an exemplar in responding to the restrictions that are in place in Wales. 


Thanks. Moving on to disability and black, Asian and minority ethnic issues, the accounts report that you met or exceeded your overall targets for staff in these areas. How are these staff represented across grades in the organisation?

That's not something that we—. Well, we don't normally collect data by grade. We have specific targets for the organisation as a whole or, for example, in the case of women, the proportion of people in the senior civil service who are women. But we have some data that shows the breakdown across the organisations by the different grades, so I'd be very happy to send you the details. What it tends to show, overall, I would say, is that for all of those in the protected characteristics groups, the proportions in our workforce tend to be higher in the more junior grades, and that's why we've put a big emphasis now on building a pipeline to enable people to move up the organisation and, ultimately, to progress into the senior civil service. But I would be very happy, Mr Bennett, to send details by individual grade of where people are in those categories. 

Okay, thanks for that. Should there be, in your view, an analysis across the grades? And also, the other issue is: would you be reporting on disability and BAME pay gaps?

I think what is useful is to show the overall figures, which is what we do, because that reflects the targets that we follow. I think it is also valuable to show figures in the different categories for the senior grades, in the senior civil service, because I think that is what we have to aim for, to have an equitable distribution of people across the protected characteristics at the senior grades of the organisation, as well as elsewhere in the organisation. But, as I said, I would be very happy to give you that information. 

Okay, thanks. Moving on to the Welsh language, what specific targets have you set for the first five years of the new Welsh language strategy, and what do you mean with your aim to become an exemplar when compared to similar bodies in Wales? What does that actually mean in practice?


Okay. I will start by saying I'm very proud of all the work that has been done on developing this strategy. We co-created the strategy, working with a very wide range of people across the Welsh Government, and again, closely involving our TUS colleagues, who made a very constructive contribution. And what we decided—as the committee will be aware—is to set ourselves mast ends over a period of time that would enable us to fulfil a trajectory towards meeting the overall targets. So, what we did with the statisticians in our knowledge and analytical services department was develop a statistical model that maps out the likely trajectory—or the trajectory we need to follow—from now to 2050, with target dates, obviously, and that trajectory shows us what changes we need within the Welsh Government's civil service. I think we've got a good starting point, and the trajectory also has been designed to take into account wider policy interventions like the effect of the new curriculum on school leavers' Welsh language skills, and they, of course, will come into the Welsh Government and bring those skills with them.

But just to be specific, for the next five years, our key projection is to see an increase in the number of staff who speak Welsh at level three or above, and the levels start with level 1, which is courtesy Welsh. We want to see an increase in those who speak level 3 or above from 22 per cent, as it stands at the moment, to 24 per cent, and as you implied, I think the most important target that we have over the first five years is that the Welsh Government should become an exemplar organisation, when compared with similar public bodies. We set out 10 very specific actions that are designed to meet that objective and help us contribute towards the overall goal; we will review the actions and the targets in 2025 and set out new objectives.

But in terms of your question about what does being an 'exemplar' mean, it's actually already set out for us in 'Cymraeg 2050' that we should lead by example in the Welsh Government. That, as I've said, means we have to assess ourselves against other public bodies. We've done a great deal of that; we've learnt lessons from the Senedd Commission, obviously, and from South Wales Police, North Wales Police, Rhondda Cynon Taf council, Ynys Môn council, and many others to find out what they're doing that works, and I've been very struck by the discussions that I've had with people there about the role of leadership in making things happen. We'll draw on their best practice, and part of that, during the first five years of the strategy, will be making the Welsh language at courtesy level—level 1—a requirement across the organisation, and that reflects what we've learnt from those—.

Shan, at that point—and Gareth, excuse me—can I just bring Delyth Jewell in, because I know she's dying to ask a supplementary?

Diolch, Gadeirydd. O ran hyn, eich strategaeth ar ddefnydd mewnol y Llywodraeth o'r Gymraeg, dwi'n deall bod hysbysebu swyddi a gosod gofynion ieithyddol clir ar swyddi newydd yn rhan greiddiol o'r strategaeth hynny. Mae cam gweithredu 6 yn dweud,

'Erbyn hyn, nid yw’r ymadrodd “nid yw sgiliau Cymraeg yn angenrheidiol”, a ddefnyddir wrth hysbysebu swyddi, yn adlewyrchu gofynion nac ethos y sefydliad.'

Ac mae'n dweud hefyd,

'Bydd yr angen i ddangos lefel "cwrteisi"'—

fel dŷch chi newydd fod yn sôn amdano fe—

'yn cael ei gyflwyno’n raddol—rhywbeth a fydd yn cychwyn gyda’r Uwch Wasanaeth Sifil. Unwaith eto, dyma fan cychwyn ar gyfer proses o welliant parhaus mewn perthynas â’n sgiliau Cymraeg.'

Ysgrifennydd Parhaol, mae gen i gopi o hysbyseb swydd gaeodd dros y penwythnos ar gyfer penodi prif was sifil newydd i arwain adran addysg y Llywodraeth, ac, o dan y pennawd 'sgiliau Cymraeg', mae'n dweud nad ydyn nhw'n angenrheidiol i gyflawni gofynion y swydd. Rydych chi newydd hysbysebu swydd, felly, ar gyfer uwch-was sifil fydd yn arwain gwaith mewn maes hollbwysig ar gyfer cyflawni strategaeth y Llywodraeth ar gyfer miliwn o siaradwyr Cymraeg heb fod hyd yn oed sgiliau Cymraeg cwrteisi yn orfodol. Pa ffydd o gwbl y mae'r pwyllgor yn gallu ei chael yn y strategaeth, felly, os yw hi wedi methu yn y prawf cyntaf—ac mae honno'n brawf rydych chi wedi ei gosod i chi eich hun fel sail i broses o wella'n barhaus yn y sefydliad?

Thanks, Chair. In terms of your strategy for internal use of the Welsh language, I understand that setting clear linguistic requirements for new jobs is a core part of that strategy. Now, action point 6 says that 

'The reference to “no Welsh language skills required” when advertising posts no longer reflects the requirements or ethos of the organisation.'

And it also says,

'The requirement to demonstrate courtesy level Welsh'—

as you've just mentioned—

'will be gradually applied across the organisation, something that will begin with the Senior Civil Service. This again will be the start of a process of continuous improvement of our Welsh language skills.'

Now, Permanent Secretary, I have a job advertisement that closed over the weekend for a new civil servant to lead the education department in Government, and under the Welsh language skills heading, it states that they are not necessary to the requirements of the job. You've just advertised a job for a senior civil servant who will lead work in a vital area for delivering the Welsh Government strategy on a million Welsh speakers without courtesy level Welsh being a requirement. What confidence can the committee have in the strategy if it has failed its first test—a test that you set yourself as the basis for continuous improvement in the institution?


The courtesy level Welsh will be included in the induction programme for all new staff, so that is how it will come in. Just to be clear, what I'm trying to do with this strategy is generate enthusiasm for the language rather than create any anxiety or a sense that you can't come here if you're not a fluent Welsh speaker. I want to encourage good people to come here and encourage them to learn Welsh. We have set up a very wide range of language learning opportunities, we've completely overhauled the training we had available, and in fact, over the COVID period, we've seen a massive increase in the take-up of those language opportunities—I think something like a 73 per cent increase in language qualification training. So, I hope that what we are doing is creating that interest and enthusiasm for Welsh. I am making it clear that Welsh language skills are an asset for this organisation, and, as I said, all induction training for new staff will ensure that they focus on level 1 and are encouraged to move on in the organisation as they increase their ability in the language.

Yes please, if I may.

Mae'n flin gyda fi—dwi'n dysgu Cymraeg, ond mae fy Nghymraeg yn ofnadwy.

I'm sorry—I'm a Welsh learner, but my Welsh is terrible.

So, I'm afraid I'll have to continue in English. On the specific role that you mentioned, it's a fair challenge. We've identified it ourselves, and we're actually pulling that role down and recasting it, and we'll happily share the recast version if that helps. It's an error on my part in terms of allowing that one to go up as it was drafted. It doesn't mention anywhere near enough the importance of Welsh-medium education, for example, and the fact that that role will lead the Welsh language policy unit. So, we're recasting that advert to correct what is an error. You'll see some changes shortly.

Chair, everything I've said still applies to all jobs—all new people coming in will be encouraged. As part of their induction, they'll go through level 1, and the whole culture will be to value the Welsh language. I think there is already in this organisation inevitably a great deal of respect and enthusiasm for the language as something uniquely Welsh, obviously.

Sorry, Chair—I think Rhianon's indicating that she wants to—

Yes, I don't want to get lost down the rabbit warren of this. I'm slightly confused as to how—. I'm conscious we're going into more policy areas and off our line of questioning, but there is always a balance in regard to everything that has been said and then actually disbarring those without any Welsh language skills, and we know majoritively that there are issues there in terms of socioeconomic class, as well. So, I think it's a very careful balance, and it's one that I think we've articulated this morning, and I think it demonstrates the tension there. That's all I was going to say, Chair.

Good. Okay, Delyth, did you have another set of questions?

Yes. Did you want me to come in on the One Wales public service here?

Chair, could I just interrupt to say I recognise the concerns that the Member just expressed? That's essentially why we've called our strategy, 'Cymraeg: it belongs to us all', and, as I said, that's very much what I'm trying to encourage—a sense of enthusiasm for the language, no sense that if you don't speak fluent Welsh you can't be Welsh. I want to break down that hostility, encourage enthusiasm and encourage a culture where understanding of the Welsh language is seen as an asset and something that people want to do. And we've invested in a huge range of training, from formal academic courses to intensive language courses, which I've done as well, and also encouraging people to use widely available things that are quite fun, like Duolingo, which just makes it all a bit easier and accessible to learn the language.


Thank you for that. Moving on from that, thank you for sharing some information in private with the committee around improving the machinery of Government in the One Wales public service. I just wanted to check a few procedural things first, if I may. Could you confirm, please, why you weren't able to share those papers in the public domain? 

They are not Welsh Government papers—that's why. They were papers commissioned by the First Minister. As you'll be aware, this whole subject—One Wales public service—has been a very longstanding priority of the Welsh Government and successive First Ministers. The current First Minister has a very strong personal interest in this agenda, and I think, overall, when I talk to him about this, what he's aiming to achieve is a more permeable culture, where experience across the public services is seen as an asset and that people are more interchangeable across the whole of public services. 

I think what happened was that as he was preparing to take on the office, a number of people approached him asking to put across their own ideas. That's obviously a very common thing. They prepared some reports for him, based on a series of brainstorming discussions, and that is where those papers came from. So, they're not Welsh Government papers; they were the result of private discussions submitted to the First Minister for information. That's why I would not publish them, not because there's anything to hide but because it would not be appropriate for the Welsh Government to publish those as documents of the Welsh Government.  

Okay, thank you for that, Permanent Secretary. The papers do reference—I know we can't go into any detail at all in terms of the contents—something that you referred to there, about round-table sessions held in Tŷ Hywel in March 2019. So, that was three months after the First Minister became First Minister. Could you just confirm if you were part of those meetings? 

I was not a part of those meetings.

Okay, thank you. It is also surprising that you, as head of the civil service, didn't play a prominent role at all in discussions about the future structure and direction of the civil service. Again, given you weren't present and given what you were just telling us in terms of the reasons why you were not able to share or to publish the papers publicly, should we as a committee assume that these were predominantly internal party meetings of a political nature? 

As I wasn't present, I can't comment on the nature of those meetings, but they resulted in papers that went to the First Minister. I'm sure he receives many others. I think any First Minister receives papers and contacts from a very, very wide range of members of the public and stakeholders, so I am sure that all First Ministers are in a similar situation. 

Okay, thank you for that. So, no civil servants were part of those meetings, then. 

I don't think so. I think they were all external stakeholders, as far as I'm aware. FootnoteLink

All right, thank you for that. Again, it's slightly frustrating we can't refer to the content of the papers, but there is one letter in it—I won't refer to the contents—but refers—. It appears on a ministerial letterhead, where it's referring to some of these deliberations. Again, considering some of the enforcement that has happened recently of members of opposition parties in terms of the boundary between parliamentary duties and political work, could you give us an assurance that there is a clear and enforced separation between the work of Government and the work of individual members of the Government in a party political context?


I can absolutely give you that assurance, and I would put separately the fact that the Welsh Government, as you would hope and expect, works very closely with a very wide range of stakeholders. I think we've seen that even more during the COVID-19 crisis, when we have worked with a very wide range of stakeholders, and across all parties, to make sure that we are delivering the best possible results for the people of Wales.

Okay, thank you for that. Turning to the substance of this, could you summarise, please, your understanding of the First Minister's vision for improving the machinery of Government and the concept of the One Wales public service? What specific changes has he asked you to deliver, please? I understand, for example, that a Cabinet Office group delivery manager role was created last year.

I talk to the First Minister about his vision of a One Wales public service and what he wants to achieve. I think he sees this as the ultimate goal, but obviously what he's aiming to do is build, as I said, a culture where the difference services across Wales work together collaboratively and in social partnership to make sure that we really are delivering the best possible services for the people of Wales, and, as I said, we've really seen that in action during the COVID-19 crisis. It's been absolutely essential to joining up our efforts across Wales and making best use of the resources that we have available. Part of what we've been doing is investing in people and developing skills across the public sector. So, Academi Wales has developed a new One Welsh Public Service campaign to encourage learning across the whole of the public services, and provided training courses, which have had a very high take-up. The First Minister gave a speech at the public service leaders' summit in Swansea, back in, I think it was, last autumn. He set out his vision there of One Wales public service, which was very much about the importance of developing a culture of leadership, permeability and interchange across the public services in Wales, and equally he is very keen to make sure that we benefit in Wales from expertise coming from the wider UK civil service and that we have interchange across the UK civil service as well.

Thank you for that. In terms of what's informing the vision, has the First Minister shared with you any other documents or assessments, in terms of critiques from external people about how the machinery of Government operates and suggestions for improvement?

No specific documents, but we discuss regularly his views about the performance of the Welsh Government, as I said in response to the question about KPIs, and where he wants us to improve our ways of working. I haven't been given any specific papers, but I have regular contacts, obviously, with the First Minister, and a big focus is discussing the performance of the organisation.

Okay, thank you. So, the Welsh Government doesn't hold the detailed papers that had been prepared prior to the round-tables that we were just discussing earlier—they're not in the Welsh Government's possession.

I'm not sure which ones you're referring to. I can double-check, but—

I will certainly do that.

I just imagine there are a lot of preparations in hand for the arrival of a new First Minister.

Of course. Finally from me, and I know that Jenny Rathbone will want to come in in a moment, you referred the last time that you gave evidence to how, actually, because of the pandemic, there are positive things that can come out of this in terms of how practical cross-working can happen with local government and other bodies, and we can learn from what's happened in the past few months. In terms of the practical levers that could be used that have been delegated to you in your role, looking at pay and conditions below senior civil service level that could make it easier for people to move between Welsh Government departments, to NRW or to different local authorities, just like they can move between Welsh Government and Whitehall, what would your vision be for the next steps in terms of how that could be taken forward?


I may ask Peter to come in to spell out exactly how our pay and conditions are determined. Obviously, as I said in response to an earlier question, we are part of the UK civil service; we operate within that framework and within the terms and conditions of employment, which include pay and conditions, obviously. So, we operate within that framework and we have some flexibility to adapt for the Welsh context, but it is limited.

One thing I would say is that we have a strong tradition of secondments into and out of the Welsh Government. So, for example, we have a number of officials, including at a very senior level, from the NHS and health boards in the Welsh Government; they're seconded in on their own pay and conditions. So, I don't think that those things need to be a particular barrier. I think what will be important is developing a culture where people see the value of secondments to different places and then, perhaps, returning to the original place.

I've been a serial secondee all my life and I have valued that enormously, including going out on a secondment to the European Commission in Brussels. It's certainly something that I value and I hope that, across the whole of Wales, people will increasingly see that value. That, to me, is the really important thing. I don't think we should allow pay and conditions to be an obstacle to developing that kind of culture, which we can do through fostering engagement, contacts and training. We held at the International Convention Centre Wales last year a major event under the umbrella of the well-being of future generations, which brought together all the public leaders across the whole of Wales to discuss issues of interest to all of us. So, I don't think pay and conditions are at the heart of it.

Obviously, COVID has provided us with multiple examples of really rapid implementation of decisions, of thinking outside the box, doing things differently and working across organisations. But just moving beyond that particular crisis—although, obviously, we've got European transition on the horizon—I just wondered if you could tell us how you think this idea of really embedding secondments across Government is being implemented. I think improving the quality of policy thinking and problem solving capacity doesn't just relate to emergencies, so I just wondered if you could tell us a little bit about how you've used both the crisis and the obvious desire of the First Minister to really embed this sort of thinking outside the box.

I think there are two things to say. First, we have no difficulty attracting applications for jobs in the Welsh Government from a very wide range of organisations. I'll perhaps ask Natalie or Peter to say a bit about the latest recruitment exercise that we've done, where we were massively oversubscribed with applications from a very wide range of UK Government departments. I think people recognise that we can offer quality jobs and a quality lifestyle in Wales, with a very wide range of responsibilities.

In the time that I've been here, I have seen a lot of people moving to the Welsh Government, either on permanent contracts or on secondment, and I think that is immensely valuable. For example, the head of our NHS, who is also the director general for health and social services, Andrew Goodall, who you know well—he is seconded in to the Welsh Government. There are many specialists and professionals who are seconded in directly so that the Welsh Government can benefit from their up-to-date skills, and that's something that we always encourage and foster.

I think as well that we will be able to embed that culture even more strongly through remote working, because it's now far easier to work in different places—you don't have to physically move to a place to be able to work very successfully in an organisation. That's certainly what we're doing. So, I think, more and more, people are looking at wider opportunities than what might have been a traditional career path, and I think all of that will help embed the kind of permeability from which we benefit greatly, and which the First Minister is very keen to encourage.


Okay. And lastly, could you just say a little bit about how you think it's invigorating thinking and delivery in local government, particularly around the well-being of future generations Act and public services boards?

The well-being of future generations Act provides the overall strategic framework for how we all work, as you'll be aware. I think we have really seen that in the response to the crisis, and I think we have adopted a rather different approach in Wales, working very closely with local stakeholders, from how things have been done elsewhere in the UK. So, for example, the tracing system—test, trace, protect—was co-created in line with the ways of working of the well-being of future generations Act, co-created with the stakeholders and customers concerned. As a result, we secured buy-in right from the start and it has been very successful. I would say the same thing about the shielding initiative, albeit on a smaller scale.

I'm sure that's all really interesting, but I'm more interested in things like public procurement and the foundational economy, where, obviously, local government and Welsh Government play a very important role.

I agree. I'll come back, actually, to the new ways of working and how we use our workforce and our estate in the future. Remote working means we don't have to be tied to large offices across Wales, and in the longer term, we are looking at options for hubs and physical joint working with local government and others, which, I think, can only be beneficial. We already see that in two of our offices—or we did before the crisis. In Newtown we're co-located with the local authority, and we're moving to that in Llandrindod Wells. But in the longer term, as we develop the workplace strategy for the future and how best we can use our estate, we're hoping to move to a system of hubs, where we can co-locate in smaller locations with local government and other stakeholders, and I'm quite sure that that will build the kinds of relationships that we need to improve the services at local level and to have an impact on the foundational economy.

Shan, just before we move on—you mentioned secondments and you mentioned capacity issues and how you're dealing with that. I know you've got some external support, but there's been a refocus internally. I think your own internal reporting has shown that there's a need for assurances on capacity—that internal audit has identified weaknesses with some of the workforce management initiatives. Do you want to comment on that? From what you've said on internal capacity, you seem to be dealing with that, but this internal report didn't suggest that.

The first thing I want to say is I think this organisation has responded absolutely magnificently to the crisis. There is no doubt, as you say, Chair, that we are stretched as an organisation. What we've had to do, therefore, and in response to that report, has been to prioritise ruthlessly across the whole organisation and make sure that we are deploying our staff to the most urgent priorities. We've set up a process for doing that, which is managed by the executive committee, the top decision-making committee of the organisation, and we look, on a regular basis, normally fortnightly, at where the priority areas are and how we can move people across to those. They have been in relation to the direct COVID-19 response—so, for example, track and trace. We are looking now at standing up the emergency co-ordination centre for Wales, and in the longer term, we'll obviously look also at the impact of the EU transition on where we need to put our workforce. So, people are stretched, they are working extraordinary hours. The commitment that I see from staff, I think, is really extraordinary and impressive.

I discuss this regularly with the First Minister, obviously. He's clear that we have to maintain this process of ruthlessly prioritising and deploying our staff as flexibly as we can. He agreed to an injection of additional staff, which is the recruitment exercise that has been going on most recently. But he's also very clear—and I think this is a really important point—he has a very strong principle that we cannot treat the Welsh Government any more favourably in terms of resource than our partners in the rest of the public services, including local government and the health boards. That's an absolutely fundamental principle for the First Minister. So, Chair, you're right; it's a challenging situation, we are stretched. I'm very proud of the way the organisation has responded, and we will continue that rigorous process of reprioritisation and deployment across the whole organisation.


Okay. Thanks. And in terms of the whole-of-Government accounts, can you provide an update in respect of the discussions with the Scottish Government, the Treasury and Audit Wales in respect of the merit of a whole-of-Government account?

This is an area, frankly, where we haven't been able to make as much progress as I would have liked to. We are committed to looking at the benefits still of a whole-of-Wales account, as I have already made clear to the committee. But the COVID-19 crisis and the response to it has meant this is one area where we've had to pause the work. We've postponed the discussions that we promised with HM Treasury and the Scottish Government and, indeed, with Audit Wales. We will consult them, and I will aim to write to you, Chair, before the end of the financial year on the outcome of those discussions.

I should add a caveat, though, which is that a whole-of-Wales account is not going to be possible until we've completed our alignment project, which matches the statutory accounts and budget boundaries of all the relevant bodies. We're making very good progress with that, and we currently now have 23 central Government bodies aligned. But we will need to complete that process before we would be able to go ahead with a full whole-of-Wales account. So, my apologies, Chair—

That's all right. You can't do everything. So, that something that's on the back burner with the pandemic. That's fine. That's understood. Okay—Rhianon Passmore.

Thank you very much, Chair. If I may say, quickly, I do welcome very much the outcome and the tone of what seemed to be the conversation with the First Minister around both the ruthless prioritisation and the recruitment exercise. Because we all know that COVID-19 isn't going anywhere fast and also the likelihood of WTO rules for EU exit is becoming more and more stark. So, I think these issues are ongoing, and I just wanted to welcome that, Chair, if I may.

With regard, then, to what you said about the organisation being an exemplar organisation, in your letter in October—and we're talking now about ARAC—you said that you are concerned that publishing the papers for the Welsh Government's audit and risk assurance committee would dilute the quality of its deliberations. So, with regard to that, can you extrapolate why you think that's the case and why this would be different for the audit committees at local health board level, which are required to make public the papers and minutes for their meetings? But, obviously, I'd be interested in hearing what you say in response to that.


Thank you. Well, in response to the PAC raising these issues, we've made inquiries with other organisations to see what standard practice looks like elsewhere, and we've found that it isn't standard practice for UK Government departments' or devolved administrations' or state body audit and risk committees to publish their papers. You're right that it is a requirement within the standing orders that go to NHS bodies in Wales that all committees meet in public and publish their papers on the websites in advance of the meetings. They have specific guidance on how this applies to audit committees, and that clarified, in fact, that, because of the often very sensitive and confidential information that the ARACs cover, the audit committees could continue to carry out those activities and discussions in private. So, what that means is that, in practice, there's quite a range of arrangements, within NHS bodies in Wales, for audit committees, on exactly how they conduct their business. Some of them meet in public; some of them have private session elements, either throughout or partly.

We, in the Welsh Government, follow HM Treasury's audit and risk assurance committee handbook, and we follow, therefore, best practice for central Government departments. A central part of that is that ARAC membership has to be independent and objective, and that the members should be able to apply real open and constructive challenge to the works of an organisation and to be able to scrutinise all those issues in a very open and frank way. And, obviously, that means that, very often, sensitive and confidential areas of operational activity are discussed. The minutes of these sorts of meetings obviously record these discussions and the exchanges, as well all of the agreed follow-up actions. So, the Welsh Government ARAC minutes, as well as the papers, contain some very sensitive and confidential information that is not for public consumption. The minutes are, obviously, available to the Welsh Government's internal and external auditors, and Audit Wales, of course, are invited to all ARAC meetings, and receive all the papers. So, I feel that we cover off public interest by having Audit Wales very much embedded in all of those discussions.

I have discussed, given the committee's interest, this issue with the chair of the Welsh Government ARAC, and we concluded together that, because of the sensitivity of the issues discussed, it would not be appropriate to publish minutes or papers of the ARAC.

Thank you very much, Permanent Secretary. So, in that regard then, what you're saying, so that I'm clear, is that that would be novel then for us to do that, and that no other devolved Government within the UK does that?

That's right. It's not standard practice at all, and it is mixed practice amongst NHS bodies as well. 

I'll be coming to that in my next question, which is in a similar theme. So, in light of this stated position regarding our practice, what direction and guidance has been given to sponsored bodies, following our recommendation that they make their board and audit and risk assurance committee papers publicly available, obviously to ensure consistency and transparency for the public?

Through the public bodies unit of the Welsh Government, we keep our arm's-length bodies up to date with guidance, with COVID-19-related issues. In fact, the committee's recommendation is being discussed today at the public leaders forum meeting, and that's a meeting that brings together the chief executives and chairs of all of the arm's-length bodies. So, I've asked the public bodies unit in the Welsh Government to stress the need for transparency, making sure that decision-making processes are transparent and that we have an appropriate balance between that transparency and also making sure that an audit committee, specifically, can conduct its business in private to make sure that it remains effective. So, we will hear more once the public leaders forum meeting has taken place today.


And will that be, in some shape or form, fed back to this committee?

We can certainly do that. There aren't any formal minutes of the public leaders forum, but I'd be very happy to feed back to the committee on their views.

Good. Thanks, Rhianon. Angela Burns, on internal control issues.

Thank you very much indeed, Chair. Good morning, Permanent Secretary. I just wanted to talk a little bit about the internal control processes and mechanisms within Welsh Government, because you'll be aware that this committee has already dealt with areas of non-conformity, or perhaps lack of control, in areas such as the rural development grant, which had to have a—. Rural development grants made without competition—you know, there was a qualification on those accounts. There's also been the Welsh audit office giving qualified opinions on the European agricultural funds, we've had technical assistance claim payments made without the necessary checks in place, all the issues around Job Support Wales; we talked the last time we met about the issues around the regeneration investment fund for Wales. So, all of this strikes me that in some cases—not all the time, obviously, but there are instances where there's poor documentation, poor practices over the documentation. So, I just wondered if you were able to share some details of where the Welsh Government's European funds audit team has disputed a number of the findings of the European Court of Auditors. Can you provide an update on that latest position and the possibility of funding that will be lost? I am then going to go on and talk about some of the other issues where there have been differences on, particularly, the technical assistance notes and things like that.

Okay. Right. I'll start, then, with the European funds audit team. You will be aware the European Court of Auditors reviewed their work on the auditing of structural funds. They raised, initially, a number of proposed corrections to the audit details. They were set out in a draft report, and that has been very strongly and robustly challenged by the European funds audit team, and, in fact, as a result of the challenges that they made, all of the financial corrections that were proposed by the European Court of Auditors have been reversed. There is one outstanding issue in relation to state aid, but I can say that there are no financial implications resting on the outcome of that continuing discussion on state aid. We are clear that the European Court of Auditors has incorrectly made that determination; we will continue to challenge it.

I think, in relation to what you said, the key point is we have lost no money from EU funding for Wales. We've responded very strongly to the criticisms, and, of course, the European Court of Auditors audits the European Commission, rather than the Welsh Government, but we have worked together with Welsh Government legal services, European funds audit team and others to pull together the evidence to respond to them. So, that is just one—at the end of that process, it's clear that there is not a systemic problem, that money has not been lost to Wales, and only one particular project has been affected. We met with the European Commission officials back in October to discuss the finding, and we will wait to hear their response on that. So I think our approach to that showed a very rigorous approach to auditing and evidence making by our team on that work.


It's very welcome that your team is finding the evidence of where there may be issues, where things haven't happened correctly. So, once such instance was that the European funding audit team found, on two occasions, that management deviated from an agreed process, and concluded that no assurance could be provided on the process for claims for technical assistance. Of course, what we've seen is we haven't seen why—why they should have chosen to have deviated. And I do accept that, actually, whilst you may have processes in place, there could be an extraordinary reason why somebody is compelled to deviate from an agreed process. So, it would be really helpful if you could explain why it happened, what those deviations were, and whether there were then any further consequences for the managers who made that choice to deviate, such as further training. And if you found that those deviations were not down to some extraordinary reason that would never occur again, what processes have you put in place to ensure that there'll be no further circumvention of any Welsh Government controls?

I can respond to most of your questions by simply saying, 'yes', but I will explain the background. This issue on technical assistance related to two claims only, and two claims on one single occasion. And I would like to say I have every confidence in the governance culture of Rural Payments Wales. I think they are a very impressive team of people. They have a fantastic compliance record with the European Commission. In this particular case that you've highlighted, I know that the head of Rural Payments Wales took a risk-based decision as an exceptional measure to be applied just to those two claims, which were considered low risk, in order to meet European payment targets, in order not, obviously, to lose money to Wales. 

The decision included mitigation action, as you would expect, which was to check the claims retrospectively, but still within the appropriate accounting year. And the risk was considered low in particular because, under that measure, the Welsh Government was the beneficiary and, should any overpayments have been made, once they'd been checked, then full repayments could be assured, because it could come from the Welsh Government. Unfortunately, human life came in and a critical staff member went on sickness absence and therefore the retrospective check was not completed within the accounting year, hence the issue. So, with the agreement of Audit Wales, the claims were removed from the paying agency account to make sure that there was no risk to the European fund, and the full value of that expenditure was submitted in the following accounting year.

Officials all accepted the fundamental findings within the report and completed a programme of corrective action, which was very much as you yourself just outlined. All the claims have been successfully paid. There has been no loss of EU funding to the Welsh Government resulting from that. And, as part of the corrective action, the head of Rural Payments Wales has attended refresher governance training and rolled out a further training package to his staff that reinforces the importance of not deviating from established controls. But I support him entirely in the risk that he took. I think he took a well-judged decision, based on risk. It was an unfortunate human factor that came in that meant that this situation arose. But I am very confident that they understand the implications and they take governance very seriously, and that all the corrective action, everything that you yourself mentioned in your question, has been taken forward. 


Thank you for that clarification. Now I'd just like to turn to Job Support Wales, which I mentioned a little bit earlier. We were told in September by the director general for economy, skills and natural resources that the Welsh Government hoped to publish a review about the procurement exercise for Job Support Wales.

Firstly, can you provide an update on when that report will be published? And secondly, can you please let us know what review and actions have been undertaken following the legal counsel's comments about the need for Welsh Government procurement and policy teams to improve their documentation to support final decisions? Because I was really concerned, because it does tie in to, for example, the regeneration investment fund for Wales scenario that we discussed a couple of weeks ago, where Welsh Government wants to take action, but the legal team says, 'Not really confident that we have what we need in place to make sure that we are totally watertight.' And I'm certainly not saying, Permanent Secretary, that this is systemic, but I'm saying there are enough of these that keep popping up for us to say, 'We need to have a look, to ensure that there is really strong, not just record keeping, but detailing of the sort of thought processes behind the decisions that are made.' Or else, we're just going to keep repeating this, aren't we?

I agree very much with the importance of strong governance and rigorous record keeping. This is a message that I have given to staff, particularly in the context of the COVID crisis, when things have been incredibly fast moving. So, I take very seriously all of those comments. You'll be aware that the Minister for Economy, Transport and North Wales actually published a written statement on the review of the Job Support Wales procurement back in, I think, October—yes, the month before last, it would have been. So, that has been published, his statement. Our internal audit services have completed their review of the kinds of actions that the management of the Welsh Government need to put in place to make sure that our controls are as strong as they possibly can be.

Sorry, can I just interrupt you there, Permanent Secretary? Are you saying that the review about the procurement exercise for Job Support Wales has been published? Because if it has, I apologise, because I've missed that.

No, I'm sorry. There are three separate things. There's the statement that the Minister for economy and north Wales published; there is an internal audit service review, and the draft report. So, we intend to—. Once that report by our internal audit services has been completed, we will look at when the independent review into the procurement exercise should be published. So, you're quite right; it has not been published yet. Our intention has always been to publish the independent review report.

I'm sitting too still; my lights have gone out. Sorry. [Laughter.]

So, what I want to do is make sure that we are clear about the actions that we need to take internally to strengthen our controls. So, I can inform the committee of when that independent review report will be published. It will be once we have agreed the internal audit services report on the implications for the Welsh Government, what we need to do in consequence as follow-up action.

It will have to be soon. I don't know if David Richards is able to give any more detail on the timescale, but if not, I can find out and report to the committee on when we think the report will come out. We have no intention of delaying it. We simply want it to come out as soon as we're clear about what the implications are for the Welsh Government.

I don't know, but I would hope so. I would hope so. Can I come back to you on that, please?


I think that would be really helpful, because as we all know, the Job Support Wales issue was highly significant and very, very problematic. I think it would be really helpful if this committee could be reassured as to the absolute nuts and bolts of what went on, and more importantly, what's been put in place to ensure that this scenario doesn't ever happen again, and also to be reassured that—. Just simply, once again we've had legal counsel say, 'We can't progress down this particular avenue because systems are not in place, because we're not confident of the evidence that we could put to our side of the argument.' We've just got to get smarter, because the guys out there, the people that we're up against, are experts in this and we don't want the Government to be taken to the cleaners, simply because it's the taxpayers' money that gets involved.

I agree absolutely, and that's why we're putting a strong emphasis on making sure that we're clear about the actions that need to be taken by the Welsh Government to implement the recommendations of our internal audit review that is looking at the strength of the controls. So, I hope that you will be able to be reassured, when the report comes out, that we are taking this very seriously indeed.

Apologies. I just wanted to touch very quickly on my last question, which was about counter fraud, because of course, again, if you're going to—. We need you to be an exemplar to all the other organisations, both public service, NGOs, the works, out there as to how we might counter fraud and have the best possible fraud management systems in place. Again, good fraud management, a lot of it comes down to having rigorous systems involved, good documentation, good processes, and the ability to audit trail back. So, again, that goes to the heart of having those strong systems, and I just wondered if you might be able to give a little bit more of an overview about what actions you've taken in light of the Auditor General for Wales's recommendations that you should enhance your leadership on counter fraud. How will you judge your outcomes, that you have actually done that, and that it has strengthened and improved those activities across the whole of the Welsh public sector?

We took very seriously the auditor general's recommendation and we've taken a variety of actions to take that forward. Our head of counter fraud in the Welsh Government is actually the deputy chair of the Wales-wide fraud forum. Thanks to him, he has strengthened public sector membership of that management team, and local government is now represented, so we have encouraged other organisations to commit to the forum and to bring their expertise and experience, and enhance fraud awareness. That forum has been a real focus, particularly during COVID, for running virtual workshops. Next year it's going to be offering fraud training qualifications through a leading fraud training provider.

In all of our contact with bodies in Wales we try and raise awareness of fraud risks. We also, at UK level, have regular meetings with the UK Cabinet Office counter fraud team to make sure that we are up to speed on the latest developments, sharing intelligence and lessons learned, so that we really are up to date. We disseminate that learning and identification of potential fraud threat throughout the whole of the public sector in Wales, including through the Wales fraud forum. We send regular bulletins to local authorities as well as to our public bodies, so I think there is a great deal of activity. We convene meetings regularly with local authority fraud leads, and our head of counter fraud is always available to present to stakeholders, and he's increasingly being asked to do that. As you'll be aware, we participate in the UK's national fraud initiative and make sure that we benefit from the information and best practice ideas that that provides, and we pass those messages on and follow up.

I think you mentioned the risks in COVID-19. We're acutely conscious of that, and sharing information on potential fraud opportunities. We expect there to be quite a lot of work on this next year, when all of UK COVID funding is cross-matched. So, we are working very closely with the UK Cabinet Office in terms of potential COVID-related fraud, and our head of counter fraud has actually just established a post-COVID counter fraud assurance group, which brings together officials from our internal audit and our grants centre of excellence to look at all Welsh Government-funded COVID-related grant schemes to establish a programme of counter fraud work, because I think you're absolutely right that there is a risk and we need to be focused on mitigating all of those risks.

In terms of how do we measure the effectiveness of what we do, I think it's about greater awareness of risk across the whole of the public sector, more activities on fraud prevention, and we're certainly seeing that, and generally a higher level of skills across the public services. And we're doing our best to inject skills training into the wider public service. Of course, I would look to the auditor general as the best judge of whether what we're doing in this area is effective. We're trying to respond wholeheartedly to the challenge that he gave us—his recommendation that we should show leadership. We want to do that, and we'll welcome his views on that. Of course, I'm very conscious that what he said in his report was absolutely right; we have a responsibility to show leadership, but we cannot actually be held accountable—


Actually, that's something I wanted to just—. If I can interrupt you there, because I think you've made your point quite clearly. I didn't mention COVID and I was very glad to give you the platform to talk about your COVID fraud detection—

I thought you did in the previous—

No, but that's perfectly fine. And actually, I have no doubt that the Welsh Government is doing really well to try to mitigate fraud, but I can tell you that, reading the evidence, what really shocked me was the July 2020 Audit Wales report that said some senior public sector leaders are sceptical about the levels of fraud within their organisation. So, I thought that was exceptionally naive. How many times do we deal with constituents who've just been ripped off by somebody phoning up and saying that they're a Microsoft computer, or some such thing, or a BT engineer, whatever it may be? We've had this discussion before in the audit committee, haven't we, about the fact that you can advise and guide, but you can't tell public sector, councils, et cetera, what they should and shouldn't do. So, I was just particularly interested in what you might be able to do to change that extraordinary culture where the senior public sector seem to be sceptical about the level of fraud because, actually, I think fraud is one of the big industries of the twenty-first century in modern-day Britain. 

I think it comes back to our role in raising awareness of the risk of fraud across the whole of the public services in Wales. And obviously, we are focusing on providing the right level and quality of training to those who really need to engage on that. But I hope that through the work that we're doing through the Wales fraud forum, we really are raising awareness of the risks of fraud, because I agree and I do think that at a time like this, when people are responding very rapidly to a crisis situation, there must be risks. So, I think my response is that we have to be part of the awareness-raising effort, and I think all of the things that I set out that we're doing, that our head of counter fraud is doing, are really targeting that outcome.

Okay. Thanks, Angela. We need to make some progress. Local authority grant funding now, and Vikki Howells.

Thank you, Chair. Can I just check how long I'll have for this section, because according to my timings the session is due to finish now?

If the officials are happy to continue a bit longer, we've only got a few papers to note after this. So, have free rein, within reason, of course.


Thank you. My questions are about local authority grant funding. Firstly, with regard to section 151 officers, what further assurances were sought that those section 151 officers, at year end, in respect of local authority grant schemes—? How did they provide assurance that, as was the case previously, those section 151 officers had certified the individual grant claims?

Okay. I think I should set out the overall framework. The decision in relation to these audits wasn't taken without very serious consideration, and what became clear to us as we examined the system—sorry, I have to move to get the lights back on—was that we had actually introduced something additional and very time consuming for local government, which was not like anything else that was in place for other grant recipients. So, I think that's the first point to make. We looked at the need for those additional audits over a three to four-year period. We worked very closely with both local authorities and, obviously, Audit Wales, and the final decision was taken partly on the basis of the very small number of observations that were made by Audit Wales across those schemes that took part.

Just to say, we don't rely solely on the assurances that come from section 151 officers that you referred to just there. The assurances that we seek in relation to the payments for local authorities are the same as for any other organisation that receives Welsh Government grant funding, with the exception that Audit Wales's annual audit of each local authority will also cover systems and some transaction testing across all sources of income and expenditure. So, those controls and governance apply equally to grants received by local authorities from the Welsh Government. Now, payments against the hypothecated grants that local authorities receive are made in arrears, based on a cost incurred by the grant recipient, and we receive details, we receive evidence to validate those claims. They may also be reviewed periodically by our own internal audit team. And I should just say, section 151 officers are now asked to complete annually a statement of expenditure for all grant awards that are in excess of £100,000 received from the Welsh Government. So, basically, that stands for all section 151 officers, and, aside from that, we took away the additional burden, after extensive consultation, including with Audit Wales, and local authorities are assessed using the same very robust approach as we do for all grants that are awarded to private, third and all other public sector organisations.

Okay, thank you very much. I think you might have just touched on this next question briefly in your reply. So, what I'm wondering is whether the Welsh Government has modified its monitoring arrangements for local authority grant funding in light of the decision to remove the need to seek external financial audit scrutiny, and how you assess and evaluate whether the grant funding delivers the planned outcomes.

You're right—I think I probably edged over into your second question, didn't I, in answering your first, because basically we continue to apply all the very robust assessment systems and measures as before, as for all of our grant recipients, but now in addition there is this annual statement of expenditure for all grant awards that are in excess of £100,000, but otherwise we have all of the same very rigorous measures in place and all new grant schemes have to be submitted for review by our grants assessment panel. There is a structured approach to approval of new schemes, and there is, for each grant scheme, a mandatory award letter that sets out standard terms and conditions and includes what deliverables are expected from that scheme. So, local authorities operate within the same very rigorous framework as all other grant recipients. We simply removed the additional burden that we had been applying to them, as I said, in consultation with both local authorities and Audit Wales.


Okay, thank you. My third question was going to be about COVID-19 support, but that's already been covered. So, that's it from me. Thank you, Chair.

Thank you very much. I just want to look at our relationship, your relationship with arm's-length bodies and particularly the tailored review approach that you've decided to adopt. The pilot for this approach was with the National Library of Wales. How well do you think that it achieved your objectives for ensuring that we're delivering value for money and efficiency? 

I think it was a very successful approach. You'll be aware that the national library volunteered to be the first body to have a tailored review. The idea was this it would be a pilot that we could draw on for a future programme of work, and I have to say that I'm very grateful indeed to the library for coming forward to help us in this way. I think it therefore achieved one of its objectives, which was piloting successfully this new process. I'll invite David Richards to come in in a few moments, because he was personally very closely involved in that.

But I think the report that came out of that tailored review process was welcomed both by the national library and by the Minister. The national library has developed an action plan for how they plan to take forward the recommendations of that report. We ourselves have prepared an action plan to take forward the recommendations and that will be monitored by our public bodies unit. And I think—David can say more, perhaps—one of the really important features of this new approach was that we tried to do it in partnership with the body concerned so that it was something that was done collaboratively, although rigorously, rather than something that was done to the body. So, as a result of this tailored review, there've been findings and recommendations for both the library and the Welsh Government in how we go about doing things. Perhaps, Chair, I could invite David Richards to say a bit more. He could bring to life the process and the findings of that report.

Thank you. We do it by setting up an independent team—independent of both the organisation and ourselves—

David, I think we know this, because we've been briefed on this. I think I'm much more interested in using the time to find out from you how—. You know, there were 34 recommendations and this report was published in March, obviously just before the skies fell in. So, 34 recommendations are quite a lot. How do you think it's been a useful way of identifying the most pressing issues facing both the national library and also the obligations of the Government?

I think the three big issues that came out of that were the financial challenges that the library is facing, the skill set that the library will need at both board and senior staff levels to move forward its new challenges and the way that it needs to think hard about its commercial strategy going forward, because that's going to have a high—. Perhaps the fourth of my three things is it thinking about its property position going forward; they're in a very unique situation. So, I think those are the four main things that came out of it. Both the library and ourselves found that really helpful.

As far as the process was concerned, it worked overall. We think we can do it quicker and a bit more simply next time; the process was probably a little bit more elaborate than is needed to be effective, particularly as we've got quite a big programme to work through.


Okay. Did the tailored review tell you things that you didn't already know?

It highlighted the need for skills, going forward, which I think neither we nor the library had really identified or focused on. It told us some things which I think both we and the library had probably not put a sufficient focus on, which is the demands of their commercial activities going forward, and I think the library feels that's something that needs to move up their agenda. So, we kind of knew it, but we weren't focused on it as much as we could. So, it's a mixture of new things and helpful reminders and pointers.

Okay. It does put in plain sight the threat to the national library's financial viability and, in the context of all the challenges, the pressure on public resources makes that, obviously, very challenging for both the Government and for the national library. Is there anything you'd want to just say about how you're going to approach that? Obviously, the budget for next year has not been set yet.

That one's a decision for Ministers, and I know that they're very aware of that and they're taking that fully into account as they weigh it through. As the more general position, we don't fix these things. We don't kind of manipulate them in the background. The panel came out and said, 'We think there are funding issues.' And that's great, and we'll look at them and take them into account. So, we really want an objective report to this, which we can take and use and build on.

It very much reflects the conversation we were having earlier about a One Wales civil service. I just wondered if you could tell us how you're planning to take forward this planned programme of reviews of arm's-length bodies. Are you able to tell us at this stage which bodies are going to be included? 

No, I can't tell you at this stage. We've had a senior manager who was leading on these reviews, and she went off to COVID work quite early on in the pandemic, so the next stage has been delayed. But what we're going to do is roll out reviews across our bodies, if we can do, during the term of the next Senedd, but we'll do it on a risk-based approach. So, we've developed a risk-based model to prioritise, which will take into account both the size of the body, the kind of issues that they're dealing with at the moment and the way changes might be affecting them. So, we'll apply that risk-based model and decide which ones need to go first and we'll take a pretty mixed approach. Some of our bodies are huge and some of the companies are very small indeed, so you'd want to tailor your approach to the size and just how much use it's going to be.

Okay. The Permanent Secretary mentioned that the public bodies unit is going to be monitoring the Welsh Government's action plan arising out of the pilot tailored review. Could you just tell us what its role is in supporting arm's-length bodies during the pandemic or what is its wider remit, hopefully, when we move beyond the pandemic?

We set the public bodies unit up because we thought that our approach to dealing with our public bodies was too fragmented. It generally went through all the individual sponsor teams, and you got inconsistencies and you got not as much expertise in dealing with some of the issues that we needed to. So, we thought, 'This is going to work better if we actually have a single point who can do a lot of the liaison with common issues with public bodies.' So, we set the public bodies unit up before the pandemic. If we didn't have it, we'd have had to invent it for the pandemic because they've played a big liaison role in going out to share with our public bodies our experiences on remote working, sharing our experiences on fraud, on the way that the Permanent Secretary has taken an accounting officer approach. We shared our experiences on furloughed staff. We sought staff we might be able to bring in to help us on the pandemic on a short-term secondment, which has worked in a few places, and we've had experience back from them, actually, of what they found thing to be working like through the pandemic, and that's come back through the channels and we've shared it more widely.

Okay. So, just to summarise that—it is half a dozen people, or 20 people? How large is this body?

The public bodies unit within the Welsh Government, it's about half a dozen people, I think.

Okay, thank you; just to get a sense of that. So, in the Permanent Secretary's letter in August, Shan reported that Ministers were in the process of assessing the pressures on each public body after dialogue with them. Could you say anything about the results of that assessment and the action points that have been agreed to date?


Perhaps I can just intervene briefly to say that that is, as you'll be aware, very much a matter for Ministers. I know they had a discussion about the outcome of the exercise and I'm sure they'll be taking that into account when they finalise their budget proposals. But I don't think there's any more I can say about it at this stage.

Okay. Clearly, many public bodies are struggling in the middle of the pandemic. As a member of the climate change committee, I'm aware that the chief executive of Natural Resources Wales was speaking about a £15 million shortfall in the budget, of which about £9 million was covered off by savings. But, clearly, it poses substantive questions for both NRW and probably many other arm's-length bodies about how we make money go further.

I agree. In the Welsh Government, we are stretched. I think Ministers would say that that has been as a result of successive periods of austerity. But it is very much a matter for Ministers to decide how they want to allocate their budget, recognising some of the difficulties that you're talking about. But you're absolutely right, there are some very tough decisions to take.

Okay. Could you just tell us what the role of the public leaders forum is in, obviously, having that exchange of views on all these challenges?

It's a very lively and informal grouping of all of the chief executives and chairs of the different public bodies. Initially, it was established to meet about twice a year, but in fact, the leaders themselves have asked for more frequent meetings, particularly at the moment, so they're being held about every three months at the moment. The whole idea is to give that kind of informal space for the leaders of our public bodies, together with Welsh Government Ministers and officials, with an independent chair, who is Elan Closs Stephens, to come together and talk about issues of common interest, some of the sorts of things that David was talking about earlier. But it gives them an opportunity to raise issues of common interest, raise concerns of the kind that you've just been describing, and, importantly, I think, identify opportunities for joint working and collaborating across the range of arm's-length bodies. Those meetings are informal, there are no official notes. The public bodies unit provides support, obviously, to the forums. I think I must have attended now about half of those meetings. I personally find them very energising meetings to attend, and a genuine feeling of having an opportunity to engage with the top public service leaders from our arm's-length bodies across the whole of Wales, and to understand what their concerns and priorities are. So, I find it a very valuable forum for exchanging ideas and information. It's very much a two-way process, obviously. And, of course, they do contribute to the First Minister's goal of building a one-Wales public service as well.

Thank you. So, who decides, specifically in this forum, what the action points are to be taken forward and who approves them?

The action points come out of the discussions, the secretariat is provided by the public bodies unit, and the next steps, as well as the agenda, are discussed with the independent chair of the forum, and responding to requests from members of the forum.

Thanks, Jenny. Very finally from me, Shan, just going back to—something that occurred to me—the questions on local authority grant funding, and we've got some papers to note later from the auditor general. There have been some issues raised about—. I know you've addressed the issue of funding going to local authorities, but what about the actual distribution then of that funding from the local authorities? Is that something that the Welsh Government keeps an eye on as well, to make sure that the money is being effectively spent at all the levels? 


That will be part of the process of engagement with our local government partners, and also a part of monitoring the expenditure. But I'd be happy to write with more details of how that works in practice, Chair.

If you could, that would be great, because, as I say, you've touched on the funding from the Welsh Government itself, but I just think there's an area there—. It's clearly a significant amount of money, so it's important that it then is distributed when it gets to the other end as well.

Absolutely. It comes within the audit framework that I described earlier on.

Good, okay. Well, thanks for being with us a big longer than expected. There was a lot to cover there, but some very full questions and answers, so thank you, Shan, and your team, for being with us.

Chair, can I thank you and also the committee and Audit Wales, of course? I would like to take this opportunity to thank my own staff in the Welsh Government for another, I think, very successful year—extraordinary year—delivering results for the people of Wales. I've seen a response and a commitment that have been genuinely overwhelming. I'm extremely proud of everybody in the Welsh Government, and delighted to be able to work with all of you to make sure that we are delivering the best possible services for the people of Wales. So, thank you.

Okay, thanks. Thank you, Shan, and thanks to your colleagues.

3. Papurau i’w nodi
3. Papers to note

Okay. Moving on to item 3 and, as I said before, we've got a few papers to note. Firstly, the Auditor General for Wales report on covering teachers' absence, and this is a follow-up. The Welsh Government has yet to formally respond to the recommendations contained in the report. I don't know, Adrian, whether you or your team wanted to comment on this paper.

Thank you, Nick. Well, hopefully fairly self explanatory. Members will understand the vital part that temporary teaching resource plays in the normal operation of the education system, even in normal times, and in the current challenges we face, even more so. Our report highlights a lot of important developments since we reported back in 2013 on this issue, but also we think the Government could do more to demonstrate the impact of some of the actions that it has taken. For example, setting some clearer and longer term measures against which to assess progress.

We point out, too, our view that the Government needs to consider whether there are enough temporary workers available to help manage the COVID-19 response, alongside preparations for the new curriculum, in particular where there are already known shortages in some specific subjects. We've drawn on this work to support our response to a recent consultation from the Children, Young People and Education Committee on the Curriculum and Assessment (Wales) Bill, and, as you say, Nick, we will await the Welsh Government's formal response and, obviously, we'll expect to share that with the PAC in the customary way.

Okay. So, we'll await that Welsh Government response as well, and then we can decide on further action. Thanks, Adrian.

Secondly, another letter to note, and that's from the Welsh Government. That's an update from the WG on the revised patient safety notice, regarding standards for medicine storage. This relates to previous work that committee has done, so we've received that. Are Members happy to note that paper? Jenny, were you trying to—?

It is, obviously, very topical, given the complications of storing the BioNTech Pfizer vaccine. I just wondered if the auditor general has anything to say on whether all the health boards have sufficient capacity to store it at very low temperatures.

Not something that we've addressed at this point, Jenny. I'll discuss with the team, and get back to you at the next meeting if there's anything helpful that we can provide in that area.


Thanks, both. And preparations for the end-of-Brexit transition, that's on pack pages 37 to 50. The auditor general has copied his recent letter to the Chair of the External Affairs and Additional Legislation Committee for information. That committee considered the letter on 19 November, and I think I'm right in saying, auditor general, they're returning to it on 10 December, so we need to note that letter. I don't know whether you had anything you wanted to add to that, Adrian.

Nothing further to add to it, Nick, no, thank you.

So, we'll wait to see the response of the external affairs committee to that.

Okay, moving on—I told you there was a lot to note—the code of audit practice, that's pack pages 51 to 52, and the auditor general has copied his recent letter the Chair of the Finance Committee for information. Auditor general, I think I'm right in saying that, under section 10 of the Public Audit (Wales) Act 2013, you prepare and publish a code of audit practice that prescribes the way in which the functions of your office are carried out, and there have been some changes to that code, I believe.

That's right, Nick. On this occasion, the changes are pretty superficial and formulaic, so changes of role titles, references to myself rather than to Huw Vaughan-Thomas and so on. So, copied to the committee for courtesy and information, but nothing significant to draw to your attention.

Good. Okay, so we note that letter.

Another of your reports, Adrian, 'Providing Free School Meals During Lockdown', again, very topical at the moment. The auditor general published this report last month, looking at how councils were approaching this continuing challenge of providing free school meals during the lockdown in the spring and summer, whilst the schools were closed. Auditor general, did you want to comment on this? This is clearly topical and maybe a bit controversial in some areas.

Well, certainly topical, and just for the committee to note—and I think we mentioned this at the last meeting—this isn't one of our usual audit reports. This is a piece of work that has come out of our COVID learning project, which is looking to pick up in close to real time some of the practice that we're seeing across the country, and so we hope it provides a useful snapshot of the changes that local authorities have made during the course of the year and feeds back a few lessons to be learned that we hope are helpful to the continuing response.

Thanks, Adrian. Personally, and I'm sure other Members agree, I think this is a really important area that it's vital that councils get right at this time for the sake of our schoolchildren. So, if Members are happy, we can note this report now, and I can write to the Chair of Children, Young People and Education Committee advising them of that. Happy with that course of action at the moment? Good, okay.

And NHS Wales finances data tool—the auditor general published this new data tool at the end of November, which shows each NHS body's additional spend due to the pandemic and current financial position. Two key areas of spend were personal protective equipment, that's at £130 million, and staffing at £109 million. As we know, bodies are employing a mixture of overtime, agency staff, students and returners. Adrian, did you want to say anything about this or your team?

Thanks, Nick. A couple of things, just to say that I'll aim to write to the committee later this month with an update on some work we're doing on procurement and supply of PPE, and just in general terms, you'll have seen this snapshot before, and what it shows this year, of course—notwithstanding the enormous additional sums that have been spent through the NHS—overall, the financial position of NHS Wales is broadly stable compared to last year, assuming that the Welsh Government broadly funds those additional COVID-19-related costs. As was the case last year, there are three NHS bodies forecasting a deficit, Hywel Dda's position appears to be improving, Betsi Cadwaladr looks to be largely similar to last year, and Swansea Bay continues to deteriorate. Since we reported these figures in October, the Welsh Government has announced a package of strategic assistance funding for Betsi Cadwaladr, which includes £40 million to cover the projected deficit for the current year. 


Thanks, Adrian. I mentioned some of the figures, but overall, the figure of £469 million of funding to NHS bodies for COVID, these are enormous sums of money, so it's important that the committee keeps an eye on this. Are Members happy to note that report now and keep a watching eye? Good.

Okay, and I think I'm right in saying that the last paper to note is community safety in Wales, pack pages 53 to 95, that correspondence from the Welsh Government. This was one of the first inquiries the committee undertook on community safety in Wales, and we've received regular monitoring reports during the lifespan of the programme. The programme was concluded at the final board meeting on 15 June, and the closure report has now been agreed by the board. Some of the outstanding work is still at an early stage and needs oversight and governance before it becomes fully embedded into the existing business as usual arrangements. Auditor general, anything you wanted to say on this?

Just one thought, Nick. I think some of the issues that are highlighted by this theme of work may be things that you're seeing coming through in your inquiry work into the Well-Being of Future Generations (Wales) Act 2015. So, I'm not sure there's space in your programme to do anything specific further in relation to community safety, but you may be able to weave some of those themes into your questioning and consideration around that particular inquiry. 

Okay. I can have a discussion with the clerks about that. Are Members happy for me to do that and note the paper today? Okay, I think that's the last one. A marathon of papers to note there. 

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


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


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

Cynigiwyd y cynnig.

Motion moved.

So, so that we can discuss the evidence we received earlier, I move under Standing Order 17.42 to exclude the public from item 5 and also the meeting on 14 December. Happy with that? Okay. Do Members want a short break? Yes, a five-minute break, and then we'll come back and discuss the evidence earlier. 

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 11:32.

Motion agreed.

The public part of the meeting ended at 11:32.

The Permanent Secretary subsequently wrote to the committee to say that, in fact, members of the First Minister’s staff, including special advisers, were present to support him and take notes in the usual way.