Y Pwyllgor Cyllid - Y Bumed Senedd

Finance Committee - Fifth Senedd

21/09/2020

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Alun Davies MS
Llyr Gruffydd MS Cadeirydd y Pwyllgor
Committee Chair
Mark Reckless MS
Mike Hedges MS
Nick Ramsay MS
Rhianon Passmore MS

Y rhai eraill a oedd yn bresennol

Others in Attendance

Adrian Crompton Archwilydd Cyffredinol Cymru, Archwilio Cymru
Auditor General for Wales, Audit Wales
Andrew Hobden Economegydd, Yr Is-adran Cyngor Economaidd, Llywodraeth Cymru
Economist, Economic Advice Division, Welsh Government
Georgina Haarhoff Dirprwy Gyfarwyddwr Cwricwlwm, Llywodraeth Cymru
Deputy Director, Curriculum, Welsh Government
Isobel Everett Cadeirydd Bwrdd Swyddfa Archwilio Cymru, Archwilio Cymru
Chair of the Wales Audit Office Board, Audit Wales
Kevin Thomas Cyfarwyddwr Gweithredol Gwasanaethau Corfforaethol, Archwilio Cymru
Executive Director Corporate Services, Audit Wales
Kirsty Williams MS Y Gweinidog Addysg
Minister for Education
Sara James Pennaeth Ymchwil Ysgolion a Gwasanaethau Gwybodaeth a Dadansoddi, Llywodraeth Cymru
Head of Schools Research, Knowledge and Analytical Services, Welsh Government

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Bethan Davies Clerc
Clerk
Georgina Owen Ail Glerc
Second Clerk
Leanne Hatcher Ail Glerc
Second Clerk
Mike Lewis Dirprwy Glerc
Deputy Clerk
Owen Holzinger Ymchwilydd
Researcher

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 14:30.

The committee met by video-conference.

The meeting began at 14:30. 

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

Croeso i chi i gyd i gyfarfod Pwyllgor Cyllid Senedd Cymru. Yn unol â Rheol Sefydlog 34.19, dwi wedi penderfynu gwahardd y cyhoedd o gyfarfod y pwyllgor er mwyn diogelu iechyd y cyhoedd. Yn unol â Rheol Sefydlog 34.21, cafodd hysbysiad o'r penderfyniad hwn ei gynnwys yn agenda'r cyfarfod yma. Mae'r cyfarfod yn cael ei ddarlledu'n fyw, wrth gwrs, ar Senedd.tv, a bydd Cofnod y Trafodion yn cael ei gyhoeddi yn y ffordd arferol. Ar wahân i'r addasiad gweithdrefnol sy'n ymwneud â chynnal trafodion o bell, mae holl ofynion eraill y Rheolau Sefydlog ar gyfer y pwyllgor yn parhau. Felly, i gychwyn, gaf i ofyn os oes gan yr Aelodau unrhyw fuddiannau i'w datgan? Nac oes. Iawn. Rŷn ni wedi derbyn ymddiheuriad gan Siân Gwenllian, felly fydd Siân ddim gyda ni y prynhawn yma.

Welcome to you all to this meeting of the Finance Committee at the Welsh Parliament. In accordance with Standing Order 34.19, I've determined that the public are excluded from the committee's meeting in order to protect public health. In accordance with Standing Order 34.21, notice of this decision was included in the agenda for this meeting. This meeting is being broadcast live on Senedd.tv, and the Record of Proceedings will be published as usual. Aside from the procedural adaptation relating to conducting proceedings remotely, all other Standing Order requirements for committees remain in place. So, to start, could I ask whether Members have any interests to declare? No. Fine. We've had apologies from Siân Gwenllian, so Siân won't be with us this afternoon.

2. Papurau i’w nodi
2. Papers to note

Awn ni ymlaen, felly, at yr ail eitem, sef i nodi cofnodion y cyfarfod a gynhaliwyd ar 14 Medi 2020. Dwi'n tybio bod Aelodau'n hapus i nodi'r cofnodion. Ie. Diolch yn fawr iawn.

We'll go on, therefore, to the second item, which is to note the minutes of the meeting held on 14 September 2020. I suspect that Members will be happy to note those minutes. Yes. Thank you very much.

3. Y Bil Cwricwlwm ac Asesu (Cymru): Sesiwn dystiolaeth
3. Curriculum and Assessment (Wales) Bill: Evidence session

Ymlaen â ni, felly, at eitem 3, sef, wrth gwrs, i gymryd sesiwn dystiolaeth ar y Bil Cwricwlwm ac Asesu (Cymru). Dwi'n estyn croeso arbennig i Kirsty Williams, y Gweinidog Addysg, aton ni, ynghyd â'i swyddogion, sef Georgina Haarhoff, dirprwy gyfarwyddwr y cwricwlwm, Sara James, pennaeth ymchwil ysgolion, gwasanaethau gwybodaeth a dadansoddi, ac Andrew Hobden, economegydd yr isadran cyngor economaidd. Croeso i'r pedwar ohonoch chi. Awn ni'n syth ymlaen i gwestiynau. Mae gennym ni awr wedi'i chlustnodi ar gyfer y sesiwn yma, felly gwnaf i gychwyn, efallai, drwy ofyn i'r Gweinidog roi ychydig o gyd-destun inni ynglŷn â sgêl a maint yr her o safbwynt yr holl dasgau a'r holl weithgareddau sydd angen eu cyflawni i fynd ati i gyflwyno'r cwricwlwm newydd, ond yn benodol, efallai, i sôn beth mae hi'n gweld yw'r risgiau allweddol wrth geisio rhoi'r cwricwlwm newydd ar waith yn llwyddiannus. 

We move on, therefore, to item 3, namely to have an evidence session on the Curriculum and Assessment (Wales) Bill. I extend a warm welcome to Kirsty Williams, the Minister for Education, as well as her officials, namely Georgina Haarhoff, deputy director of curriculum, Sara James, head of schools research, knowledge and analytical services, and Andrew Hobden, economist in the economic advice division. Welcome to the four of you. We'll go straight into questions. We have an hour set aside for this session, so I'll start off by asking the Minister to provide some context for us in terms of the scale of the tasks and activities required to deliver a new curriculum, but specifically to mention what she sees as the key risks in trying to implement the new curriculum successfully.

Thank you very much, Llyr.

Diolch yn fawr. Diolch am y gwahoddiad y prynhawn yma.

Thank you very much. Thank you for the invitation this afternoon.

The curriculum and assessment Bill before the committee, indeed, before the Senedd, provides the legislative underpinning for the development of a wholescale reform of curriculum and assessment for Wales. It'll be the first time in our nation's history that we will have created a national curriculum, designed by the people of Wales, for the children and young people of Wales. Its origins lie in a number of reports, namely an Organisation for Economic Co-operation and Development report into the state of Welsh education in 2014, and the 'Successful Futures' report by Professor Graham Donaldson that highlighted some strategic challenges facing Welsh education in terms of outcomes for students, but also the shortcomings of the current curriculum that was originally designed in 1988. That was before the fall of the Berlin wall, before we all carried around, essentially, computers in our pockets, and, therefore, does not meet the needs of children and young people, or, indeed, employers, and I would suggest our society in the world that we expect our children and young people to move in. And, my goodness me, if you were not convinced of the need for reform prior to COVID-19, then I think COVID-19 has just demonstrated why we need to reform how our curriculum is currently organised.

Clearly, it focuses on the knowledge, the skills and experiences that children will need to be successful in their adult lives, and those are encompassed in the four purposes outlined in the Bill, underpinned, then, by areas of learning and experience, which we believe will deliver those purposes and deliver the characteristics and the attributes that our children and young people need to be successful. Now, clearly, a piece of work of this kind is significant and challenging, and the Bill just represents one part of the work that has been ongoing since I came into office. So, as early as 2016, we saw the development of the first part of our new curriculum, with the publication of our digital competence framework, but the Bill before us, as I said, provides the legislative underpinning.

During that time, we've been working with the profession. This is a curriculum, as I said, that has been written by the professionals of Wales. We've been involved in a process of co-construction that has led to, in January of this year, the publication of the details underpinning the areas of learning and experience—the 'what matters' statements and the principles that will be really important. Clearly, a curriculum is only as good as the professionals that are charged with its delivery, and therefore one of the key challenges for implementation is ensuring that our schools are ready and our teachers are ready with the necessary pedagogical skills to underpin this new approach to education. That ranges from skills that schools have to develop their own curricula through to, in some cases, new content and expectation around new content. So, that's, obviously, a significant challenge in ensuring that all of our schools and our teachers are ready for the new curriculum.

Other implementation challenges are making sure—Chair, I know this is an area that previously you've been greatly involved in and concerned about—that is the readiness of resources in both of our languages, to make sure that teachers have the resources that they need, and students have the resources that they need, to be able to deliver a new curriculum. Clearly, there is, with such a big emphasis on digital competence, obviously, the digital infrastructure to ensure that all schools have equity of opportunity to participate in the curriculum. That's just a quick overview. I'm so sorry; it's a significant piece of work, and I could talk for a significant amount of time on it.

14:35

And I'm sure you'll do that in the appropriate committee.

No, no, that's fine. I asked the question, and I just wanted to identify some of the key risks, because, clearly, I think we're going to pick up on some of those that you mentioned as we go along.

Of course, the curriculum and the regulatory impact assessment are designed, really, to improve outcomes, aren't they—particularly, we all want to see improved pupil attainment in Wales. Now, the RIA details two options: the 'do nothing' and the legislate option. I'm just wondering whether you considered any other options in terms of improving attainment and why, maybe, those might have been discounted in favour of the two that you considered in the RIA.

Firstly, I think there are two reasons why we felt that some kind of middle-ground approach or middle way was not acceptable. Clearly, given the challenges and the analysis of the problems, and some of the strategic challenges facing the Welsh education system, 'do nothing' was not an option. We want to improve education in Wales. Education reform forms a significant platform for the Government as a whole.

Secondly, clearly, as I said in my answer to the first question, incremental change to the curriculum, adding bits to it, actually was just going to exacerbate the problem. One of the real challenges for current practitioners is since 1988 we've kept adding bits and bits and layers and layers on top of the requirements of the national curriculum, which had made it incoherent and incredibly unwieldy for professionals to engage with, and often has led to a tick-box exercise in terms of coverage of some subjects. So, incremental change wasn't going to deliver, I think, the step change that we needed for individual pupils and young people. But also, the needs of employers and society have changed significantly since the development of the national curriculum. So, only a wholescale approach was appropriate.

But, clearly, whilst outcomes for individual students are an important part of the RIA and our education reform, the RIA also points out broader societal benefits from curriculum reform, as well as just increased attainment for individual students.

So, is it fair to say that the RIA is a by-product of a decision that had already been made, as opposed to being part of that planning and deliberating in terms of coming to the decision to legislate?

No, not at all. A decision of this kind and the work associated with it—you do have to balance the risks and benefits associated with that. But having looked at the scale of the issues on coming into office, I had a free hand, I could have stopped any work that had been going on with curriculum reform, but I was absolutely convinced that an incremental approach was not appropriate, and the change that we wanted to see could only be achieved as part of a wider education reform programme, with curriculum and assessment reform at the centre of that.

But, clearly, a curriculum on its own cannot change outcomes for students, which is why we've talked about identifying some of the risks of implementation, and some of the wider issues that of course form the Welsh Government's 'Our national mission' education reform plan that was published back a number of years ago now. 

14:40

Yes, you know what I mean, I hope. [Laughter.] The RIA notes that it isn't possible to quantify the benefits of a new curriculum in a robust and meaningful way. I'm just wondering whether you have any specific indicators of quantifiable aspirations for the new curriculum, and if not, then how do you intend to assess the value for money of such a huge undertaking, really?

Well, of course, we do have—as I said, curriculum reform is at the centre of a wider piece of education reform work in the Government that is outlined in 'Our national mission'. Clearly, that is raising standards for all students, so that document also talks about our aspirations in terms of the number of people undertaking GCSE science, and we talk about our aspirations for the Programme for International Student Assessment results. But actually, in some ways, what we're trying to do in the Bill is move away from a narrow set of indicators that demonstrate success in our education system to a wider understanding of what 'good' looks like, and of course standards are an important part of that, the attainment gap is an important part of that, but also looking to ensure that we increase levels of health and well-being, especially mental health, for our students. Health and well-being is an important area of learning experience within the new curriculum, looking at issues around value added, so the actual impact of education on a child, and recognising that each of our children are individuals and that success looks different for each individual child.

If you think about a child who finds it really difficult to come into school in the morning, the school working with that family and that child leaving school with some accredited qualifications—that's a success. For other children, our more able and talented children, there are different criteria. So, what we're trying to move away from is a very narrow set of indicators for what success looks like, and, clearly, alongside the curriculum and assessment, we're developing a new accountability regime. Too often, some behaviours in schools have been driven by an accountability regime that has unintended consequences. It's wanted to do the right thing but has led to unintended consequences. So, I think it's important to separate out here that we are looking at a set of outcomes for the curriculum, leading to the four purposes, but taking that away from some of the accountability that has led to certain behaviours in the past. I don't know if Georgina would like to add anything, if that's possible, Chair.

Thank you. I hope you can hear me.

That's exactly how we feel about it. I think there's another element to this, which is that it's also about changing relationships and working together as a wider sector. So, a lot of it is not just about specific targets, but it's also about how the relationships develop across the sector, how we all deliver for learners, the relationship with parents and with communities as part of the new curriculum. So, specific targets, or specific indicators of achievement—whilst they are important, they are not the whole picture. I'm imagining that something we might come back to is the evaluability assessment, and that's really there and is set out quite clearly as part of the regulatory impact assessment to talk about how we're going to capture some of those wider benefits in a sort of broad and all-encompassing way and not really focus on the narrow targets that the Minister mentioned.

Okay, well, we certainly will pick up on that later on, but we'll move on now, then, to Rhianon. Diolch.

Thank you very much, Chair. There is a very significant range—50 per cent—included across the RIA. Do you feel confident, based upon the indicators for the 15 innovation schools that, in a sense, you're basing our costings on—do you feel confident that the Welsh Government has assessed this adequately in terms of the impact on schools and practitioners?

Okay, well, I recognise it's a small number of innovation schools data that has been used to inform the RIA at this point. Although very small in number and representing a small fraction of the school sector in Wales, innovation schools, we felt, were best placed to estimate potential resource requirements for schools in Wales, because they've been really at the forefront and the centre of the development of the curriculum to date. Those schools—I'm sure you do realise, but just to recap, perhaps for people watching the feed—innovation schools morphed out of our pioneer schools. So, these are the schools that have the deepest understanding of the requirements of the new curriculum and have had most time to engage and think about the developments of the new curriculum. As you'll be aware, a wide range of responses were provided by the innovation schools, demonstrating uncertainty, to a large extent, about what would be required. So, we need to recognise that that remains. That's been sense-tested with other people in the sector, as to whether they represent a reasonable expectation for the implementation. 

The other thing, I think, if we're fair, was limiting in our ability to develop the RIA is that those innovation schools were asked to provide their feedback prior to the curriculum guidance being published. You'll be aware that we've given a commitment to do more work in this area and provide an update prior to Stage 2, when we are able to engage with a broader set of stakeholders around some of the costs associated. But those schools were chosen for a reason, because they have that enhanced knowledge because they've been involved in the process from the beginning. 

14:45

Thank you for that response. In regard to some of those concerns around implementation costs, sufficient funding for schools on the ground, a concern around suitably qualified teachers, particularly in Welsh, and the time necessary for the professional learning to get to that pioneer, then innovation school status, is the Welsh Government prepared to provide the support required to schools and practitioners in some very important areas within that highest cost scenario? How do you then intend to monitor the actual costs of that change to be able to respond agilely?

Well, of course, I think it's really important to say that we're already investing in professional learning, for instance. In the last financial year and in this financial year, we're working alongside our regional consortia to provide additional support for schools to work together and help develop skills around curriculum design and implementation. So, that's for the existing workforce. With regard to a new workforce, then clearly we continue to provide a range of initial teacher education incentives. I think you're absolutely right to pinpoint issues around the ability to recruit those teachers skilled in Welsh, not only to deliver a broad range of subjects in the Welsh-medium sector, but also to ensure that we have really, really great Welsh tuition in our English-medium sector, which is really important. Those with the ability to teach through the medium of Welsh attract the highest level of support in the ITE sector, and we're maintaining this year at around £25,000, for instance. 

Clearly, we will need to keep this under review as we take the next steps forward with implementation. So, over the autumn term and as we head to the new year, we will be working on a shared expectation document, outlining [correction: document. We will outline] very clearly the roles and responsibilities of each part of the education sector, as well as implementation guidance. Now, clearly, that needs to be co-constructed with the sector, and that work will also continue to help us ensure that we are supporting schools with the right level of resources. But as you'll see from the RIA, a lot of the costs are associated with professional learning and development, and that's why, in the last two years, we've invested in record amounts of professional learning since the creation of the National Assembly. But, again, I don't know if Georgina's got any additional areas that I've missed. 

Thank you, Minister. It's fair to say, as the Minister has pointed out, that a lot of work has been done and continues to be done to support the sector in delivering the new curriculum. So not only the 'Curriculum for Wales: designing your curriculum' guidance, but we have I think it's around 10 elements of new guidance that we're proposing to consult on and publish over the course of the next year, co-constructed to a large degree with practitioners, both to upskill them and to share with them what we really mean by the new curriculum. So, we're anticipating that, actually, the costs at the higher end really are at the higher end, and the 50 per cent is really quite a reasonable estimate for what it could look like.

We do, as the Minister mentioned, have a number of publications and thinking around implementation that we're designing. The shared expectations document that we had planned to publish before COVID, because it was ready—we'd co-constructed it with schools, the regions, Estyn and various other stakeholders about what this looks like for schools over the course of the next two years or so. And then there are a number of other elements including, as I say, implementation work that will really bring people together and start to think about what they need to do. 

So, as the Minister's mentioned, a lot of this is really about mindset, philosophy and thinking differently about education, learning and teaching, and we're hoping to do a lot of that quite fundamental work over the course of the next year. 

14:50

Thank you. And, obviously, such a transformational agenda has been worked on for some considerable time. The impact of COVID-19, however, beginning to be felt in March has actually been very, very difficult, as you all know, for the education sector. So, this Bill was introduced on 6 July, so the question really pertains to why have so many important stakeholders not been able to contribute prior to the pandemic within the RIA mandate, and how have you ensured that the information included in the RIA could be considered as part of your options appraisal? I believe that there is a stakeholder group as well that's been established from January. I don't know how you'd respond to those points. 

You're absolutely right, Rhianon, the impact of COVID-19 on education in the round has been significant, and as Georgina just highlighted, we were all ready to go with our implementation plan [correction: our shared expectations document] when we had to close schools for the purposes of statutory education. And we're having to update that implementation plan [correction: that shared expectations document] in the light of COVID, because we don't want to send it out to the sector pretending that COVID never happened because, clearly, schools are having to contend with COVID in the here and now.

So, undoubtedly, COVID has had an impact and it has had an impact on the ability of some of our partners to be able to participate in this process to date, but you'll be aware, for instance, that Estyn have confirmed that they expect to manage any additional costs within their core funding. Regional consortia have adapted practices in readiness for the new curriculum. Qualifications Wales have provided costs as to the impact on their functions, and those are outlined in the RIA. That predominantly arises out of undoubted need for change in qualifications as a result of the new curriculum reform. And we continue to look to see what other costs might fall on other bodies, whether they be the Catholic Education Service, for instance, which is very interested in this work, and whether there will be minor consequential costs associated with sixth forms or the further education sector, remembering that the Curriculum and Assessment (Wales) Bill is three to 16. 

So, undoubtedly, there's been an impact and we will continue to work with those partners, as outlined in correspondence to the Chair of the Children, Young People and Education Committee, and others, and we will update that as we are able to get partners to engage in this work again.  

Thank you. So, that's answered part of that question that I was going to ask you. In regard, then, to the impact on resources and the impact, potentially, on deadlines of the COVID-19 pandemic, has this had any majoritive resource implication and time implication? 

Clearly, COVID has had an impact on all budgets in the Welsh Government, and education hasn't escaped that. It has meant that, for instance, we've had to repurpose some of our funding, predominantly because the traditional way in which we would have expected to deliver those particular work streams—you just can't deliver them in the normal circumstances, and we've had to focus on the priorities in the here and now. Undoubtedly, we will have to keep under review the implementation timelines for the curriculum, given the impact of COVID-19. The enthusiasm for the curriculum remains undiminished in the sector. People really want this to happen, but we have to monitor very closely the ability of the sector to cope with everything that COVID-19 is throwing at it, and we're throwing at it at the moment, and ensuring that there is still the time for schools to engage in the work that is necessary to stick to implementation dates, and we will keep that under review. But, at this stage, we do not intend to amend the implementation dates but, clearly, we will keep that under review as we learn to live with, and hopefully overcome, the challenges of COVID-19.

14:55

Yes, okay. Thank you, Rhianon. I'm keen to make progress, so I'll just make a point, because it's a point that we make regularly when it comes to legislation these days unfortunately. We're constantly finding ourselves with legislation being tabled and regulatory impact assessments being published that are incomplete in terms of costings, with further costs and information expected from other stakeholders. And, of course, our role, as a Finance Committee, is to scrutinise the RIA as it stands at Stage 1. Promises of introducing amended RIAs and amended costs at Stage 2 is no good to us because, of course, we don't get to scrutinise those. So, that's just a point that I'd like to make that I've made previously and, no doubt, we may choose to make again in our report, but we'll move on now to Nick.

Great, thanks. Thank you, Chair. Afternoon, Minister. Can I ask you a little bit about the costs that have already been incurred in preparing for the new curriculum? Can you confirm that those were in the region of £100 million since 2015? And, were we to be in a situation where the curriculum didn't go ahead, would that money have been wasted or would you view it as having been money wisely spent?

Thank you, Nick. I can confirm that the word is 'sunk' costs, I'm reliably informed by my officials who deal with the terminology. It doesn't sound like a very pleasant term, but indeed that is the cost since 2015. I would argue that the investment in professional learning is never wasted at all. There's been widespread welcome for the bits of the curriculum that we've already invested in.

So, I spoke earlier about the digital competence framework, for instance. That's already, I believe, successful. We talked earlier about the need to transform the digital infrastructure in preparation for the new curriculum. Well, my goodness me, aren't I glad that we've invested in Hwb, because I don't know what we would have done during the pandemic if Hwb didn't exist? We would have been absolutely sunk without the basis of that digital learning platform and the fact that all children have access to free Microsoft software, Google for Education software, Adobe software, and the platform has enabled teachers to keep in touch with children.

So, I think those kinds of investments that we've already made have already proven themselves to be useful. I don't believe that the money that has been spent has been wasted, should we be in the very unfortunate and very regrettable position if the Bill wasn't to pass. But there's real enthusiasm for the curriculum and assessment reforms out there in the sector and I hope that that enthusiasm will translate into enthusiasm for the Bill when it's in the Chamber.

Thanks, Minister. You mentioned the sunk costs. I believe you provided sunk costs for maintained schools and education other than at school as well, but those don't seem to be in the aggregated sunk costs. How is that money being accounted for?

The information on maintained schools and EOTAS—sorry, education other than at school—

—was collected through discrete pieces of work and the outputs from those pieces of work, both sunk costs and forward looking assessments, have been reported, as you said, in a single place in the RIA. However, I agree that it would be sensible for all the information on sunk costs to be reported in the same part as we move forward, bearing in mind the telling off we’ve just had from the Chair about amendments to the RIA. But I don't know if Andrew could give some further information on that.

If Andrew is there—

15:00

Yes. Sorry, I was just waiting for the option to unmute. Thank you. Yes, in terms of how those EOTAS and maintained school sunk costs are accounted for in the RIA, they've been treated exactly the same as all of the other sunk costs, in that they are presented in the RIA for transparency purposes, but they're not actually included in the costs of the Bill. So, they haven't been aggregated up to be included in those headline costs.

Okay. So, moving on, in terms of the costs attributed to schools and how they've been analysed and prepared for, the—I'm going to try and say it right—RIA—. That's right, isn't it? The information provided notes that costs associated with schools have been gathered through engagement with 15 innovation schools, which is around 1 per cent of schools in Wales, but not all of these responded to inquiries. So, my question is: to what extent do you consider this to be an adequate evidence base for estimates in the RIA? And what prevented you from approaching more schools?

As I said in answers earlier, I recognise that this is a very small sample of schools, but it was important that we had the opportunity to liaise with schools who were closest to the work and the development work, and therefore would have a greater level of understanding of what, potentially, is needed. And again, even those schools that are close to it had to do this work for us in the absence of the guidance that was published later on in 2020. So, that's why we took the decision to work with a small group of schools who were closest to and had been involved in the various elements of the pioneer school movement. We felt that they would have the best understanding of the costs involved. I don't know if Sara, who is working on the evaluation side and the research side of the curriculum Bill, would like to add anything at that point.

Hi. Yes, thanks. The innovation schools, as the Minister said, were far better placed to assess the costs, and the research work involved with the innovation schools was quite intensive. Our researchers worked alongside them to help them understand what was being asked of them, but they were considering what additional time resource would be required for their staff to be able to understand the implications of the reforms, and to understand what they would need to do to go along that professional learning journey, and then put time into actually designing the curriculum when it came to doing so appropriately for the pupils from 2022 onwards.

There were quite a broad variety of different approaches that the innovation schools applied. Some felt that curriculum development and design were very much part of the their day-to-day work already, and they didn't envisage a particularly great quantity of additional costs, but there were others who felt that the curriculum reforms—when they made the judgment at the time—would actually make a significant difference to the amount of work that they'd be required to do, hence the variation in estimates that the schools actually made. Because of the intensive research work that had to be done alongside schools to discuss with them what they felt the implications were, and to draw out the estimates, it's for that reason that it was felt that non-innovation schools would really not be so well placed to be able to estimate the impact of the reforms for them. Is that helpful?

Yes, thanks. So, I think I understand why you've used innovation schools, but does that mean—? How relevant will the information be then to the non-innovation schools? Have you engaged with them at all to try and at least get some sort of understanding of where they would be, and how they would deal with these costs?

Yes, absolutely. I don't want people to think that this is a process that has just been limited to the innovation schools. Prior to the innovation schools, we had pioneer schools, and the expectation of all pioneer schools was to begin to share their learning and to disseminate information and support non-pioneer schools. No school is starting from scratch, even our non-pioneer schools, and prior to COVID-19 I was in schools every single week of term time discussing the curriculum. Even in our non-pioneer schools and non-innovation schools, work has been undergoing, and as we've just heard from Georgina, a lot about this is a change of mindset, culture and a way of doing things.

Now, undoubtedly, again, that will have sectoral difference. The approaches, the pedagogical approaches that underpin the curriculum and assessment Bill would be much more familiar, for instance, to a primary school setting because of the nature of their foundation phase work as to some of the challenges faced in the secondary schools. No school is starting from scratch, but when it comes to trying to identify those costs, innovation schools we felt were best placed, but we're certainly not excluding non-pioneer or non-innovation schools from this work. As Georgina said earlier, as we go to our shared expectations and implementation work, there'll be an opportunity for every school to be able to get involved in understanding what the curriculum means for them. And as I said, some of that work is ongoing.

15:05

Thank you, Chair. Unmuting took rather longer than I expected. Can I welcome you, Minister? I've got a few straightforward questions. I'm very pleased it's costed plus or minus 50 per cent. Far too often we've seen in the past somebody's had a number one unit, number three unit, taken an average of two units and marked that down as the cost. So, I'm very pleased with that. Where can I find the calculations—or have I missed them somewhere—showing the upper and lower levels to see what has actually affected those things? Where can I see the workings?

Well, first of all, Mike, can I thank you for what you've said? Your good opinion is rarely bestowed, so it's worth all the more when it is. There's a number of factors that went into establishing those figures, but in terms of where those workings out are, then, Sara, can you help me out?

Yes. I think only the overall tables were presented in the summary to the RIA.

The tables are there. Can I just say that Welsh Government and the Westminster Government are incredibly good at producing tables? Where those numbers come from, it's like alchemy. Some of us like to get behind those tables to see if it's a reasonable calculation to go in there: do I have to challenge that calculation? When I look at a table, I get the end result, which is the end result.

Well, Mike, I take your point. So, the analysis is based on the innovation schools' responses to our representatives and with the regional consortia. We didn't consider the full range of costs generated from the innovation schools data to be wholly realistic, hence we looked for a middle ground. Officials have also been involved in the analysis of that work, including secondees from schools who come to work for the Welsh Government with exceptional levels of experience and expertise. But if we can provide more information, I can go back and I can ask whether there is other stuff that might be useful to the committee, if that was felt appropriate, Chair.

I'd find it very appropriate. I'm not saying your numbers are wrong because I've got no way of saying they're wrong; I'd just like to see how you got there. This is not anything about you; I keep on saying that to every Minister who comes in here who gives us tables without showing their workings out. But moving on from that—

Well, Mike, some of the methodology is in the RIA—. I think it's around page 62.

I'll move on. You're going to create space for schools and practitioners to support their transition. I think that will be very warmly welcomed in the sector because my experience within education is that to do this as well as rather than instead of is something that teachers complain about continually with very good reason. But how much of the total cost is in there to provide support for the transition?

15:10

Well, you're absolutely right that one of the practical challenges that has an impact on resources is the ability to create space for schools and practitioners to support the transition. That is predominantly around releasing staff for professional learning opportunities, releasing school leadership teams to create the space to be able to think about curriculum design as well as developing implementation plans. So, we expect a great deal of the resources that we're putting into the process to be able to allow that to happen, because we believe that's where the greatest cost to schools will fall—creating that time, which usually involves, as I said, additional staff to allow staff to do other things.

And you've got costs expected at take up from 2022-23. I can't ask you what you're going to be able to do in 2022-23, because we don't know if any of us will still be in office or the offices we currently hold. But would it be possible to leave a note for your successor—or for yourself, if you are your successor—actually saying that there is a need in 2022-23 to report back to the Finance Committee, which will exist—whether any of us are here to be on it is another matter, but to the Finance Committee—actually indicating whether what was expected has actually happened.

Yes, absolutely. And you're quite right, Mike, that Ministers come and go, Members of the Senedd come and go, but, clearly, education officials tend to stick around longer, so that corporate knowledge will be there, and hence the real importance of setting out that shared expectations document in the weeks to come, and the implementation plan in the weeks to come, so each part of the sector is aware. Because we're talking a lot about schools today, understandably, but there are roles for the middle tier as well in this process.

Thank you, Mike. I was going to ask a few additional questions about costs, but, given that time is short, we'll move on to Mark and, if we have time, we'll come back to a few of those later. So, over to you, Mark.

Could I ask you, Minister, about the education other than at school costs? I understand from the RIA that there were small-scale investigations, and I just wonder if you feel they were sufficient to get a good handle on costs in that area.

Okay. Thank you for your questions, Mark. Equity and equality for learners in these education streams are underpinned in the ambitions of the Bill, and we're putting in place a clear framework for learners in EOTAS, including pupil referral units, in the Bill. It entitles learners in EOTAS to have access to the new curriculum arrangements, which I believe is a step forward from where we are at the moment. A small-scale study of six local authorities was undertaken to establish an understanding of the potential impact of reform in the EOTAS sector. The authorities were selected to represent a range of sizes of authority, levels of rurality and the language of provision, and the authorities were spread from all regional consortia areas. It did identify a number of costs. All said that they were likely to appoint additional staff to ensure the statutory requirements for this sector would be delivered, and those are outlined in what we have presented in the RIA—I think we should find a different set of letters; it's very difficult to say, very difficult to say. [Laughter.] However, again, there is a degree of uncertainty. There's no point in me hiding away from that, and specific guidance on the new curriculum will be developed with specific reference to this particular sector. Again, I take the point that the Chair said earlier, that this is a huge piece of work and it's an ongoing collaboration, but a genuine attempt has been made, involving the views of a wide part of the sector.

Yes, I accept a genuine attempt has been made to estimate costs in—and I'll follow you—the EOTAS sector. I just wonder, in having done that work and surveyed six local authorities, spoken with people involved in the sector there and tried to estimate costs—given you've done that work, why not at least make an estimate of what you might expect that to be on a Wales basis, rather than doing all that work and not putting even a tentative number for Wales-wide into the RIA? We accept they're estimates, but wouldn't it be better to have something than nothing?

15:15

I think the challenge is the wide range of different learning needs in that sector, and that can be sometimes difficult to quantify, because it's very much a needs-based approach. But I don't know whether Georgina or Andrew have anything further to add to my original answer. 

Could I go on and ask you about the assessment arrangements under the new curriculum, both in terms of potential costs for this RIA—what will the new assessment be compared to existing, and what would the marginal cost increase, or, indeed, a decrease, be of that— but also are these assessment arrangements sufficiently defined to allow stakeholders to engage with what is proposed and for you to design this in as good a way as you're able?

Of course. Well, what's really important—. And I'm glad to have the opportunity to talk about assessment, because, in all discussions of this Bill we've talked about the content, and we forget to talk about the assessment part of it, and it has to be an intrinsic part; it can't be separate from teaching and learning in schools. And when developing your curriculum, the assessment arrangements should sit alongside that, so it's not a separate process with costs associated with it.

I think it's also important to say that the assessment that we're talking about is a range of assessments that happen throughout the child's learning journey, and they're not part of the formal end-of-year examinations and qualifications. Schools are already delivering online personal assessments for all learners in years 2 to 9, which replace the national literacy and numeracy tests, and we're already supporting those. And we've been very clear in the guidance that we have already given to schools—so, they don't need to wait on this; there is published guidance entitled 'Supporting learner progression: assessment guidance' on the arrangements that schools will be expected to develop as part of their curriculum planning. It sets out the purpose and the principles of progression, as well as the key processes of communicating and engaging with parents as a part of that. But those are not above and beyond our expectations of schools at the moment. So, there already is an expectation to have those conversations, to have those reporting mechanisms to parents; it's just perhaps that the nature of those assessments will change, but the expectations and the costs associated with doing that will not change as a result of this Bill.

Thank you. And as we as a Finance Committee assess the timing of the costs in the RIA, are you certain, as Minister, that the curriculum change should still go ahead on the previously announced timetable, or is that something that is under review, given the evolving COVID situation?

Well, clearly, it is my sincere hope that we can stick to the original timetable, but I cannot be—you know, we can't sit here Canute-like on the beach pretending that COVID-19 isn't going on. And COVID-19 is going on and it's having an impact.

So, there is still a huge amount of enthusiasm out there in the sector. At this stage, we're sticking to our implementation timelines, but, clearly, successful implementation is key here and if the overwhelming feedback from the sector is that more time is needed, then obviously—you know, the principle of the new curriculum has been co-construction and we will listen. But, actually, some professionals are saying to us, 'Why go back to the old and do that for a year or two and then move to the new?' Actually, we should be seamlessly moving to the new now and taking advantage of what they see to be some of the very elements of the new curriculum that children need now, whether that's the area of learning and experience around health and well-being, or whether it's the skills about independent learning. That ability to keep yourself motivated and learn independently above and beyond what you do in school, my goodness me, hasn't that been needed in recent months? But we'll keep this under review, clearly, because this entire project has been exemplified by the fact that we are doing this with the profession; we're not doing it to the profession.

15:20

Thank you very much, and I'm grateful also to the Minister for her time this afternoon. In terms of the costs, Minister, that have been allocated to the Welsh Government itself, the lion's share of that seems to be through supporting professional learning across the country. Can I ask you, first of all, in terms of the detailed costs that the Welsh Government expects to incur during the appraisal period, do you remain confident that the costs listed in the impact assessment remain the costs that you anticipate the Government incurring?

You do. Good, thank you. And in terms of the—I think it's £126 million, £127 million—

Point eight—you're better than me at this, Minister—in terms of spending on professional learning. Now, that will be spent in schools, yes, amongst the teaching profession. How do you intend that to be allocated across the country to individual schools or to individual local authorities?

The funding that goes to schools is determined based on a funding formula that takes into account the number of full-time equivalent teachers in a school setting, based on pupil level annual school census data that is submitted to Welsh Government. The funding is then allocated via the regional consortia with a directive to passport that directly to schools. So, that's how it gets to schools.

But I should also point out that other elements of professional learning are accounted for in the RIA and those are allocated in different ways. So, Alun, you'll be familiar with the establishment of the National Academy for Educational Leadership. That leadership academy is funded via an annual grant.

Funding for provision of resources for schools to use on in-service training days is also then allocated in a different way. We fund regional consortia to enable them to provide professional learning opportunities, experiences and resources. We've also had the schools as learning organisations project—that is funded to allow schools to participate in that.

So, whilst the bulk of the majority is for professional learning that we believe is best directed to individual schools, because the headteacher and the senior management team in that school are best placed to understand the learning needs of the profession in that school, there are wider national elements as well to support that.

Okay. I'm grateful to the Minister for that. I don't have any further questions on this.

Right. Okay. Well, we'll go back a little bit, then, to funding to schools, because a number of schools have suggested that more investment in digital is necessary in order to meet the new curriculum requirements. I'm just wondering where that's represented in the RIA and how key or how essential you feel the success of the new curriculum is when it comes—. What I'm trying to say is that better digital infrastructure is key, I'd imagine, isn't it, in terms of delivering a successful new curriculum, so where is that investment represented in the RIA?

Well, Andrew or Georgina can point out the exact page number, which they've probably got in front of them and I haven't, but just to say that we've invested a huge amount of money in digital infrastructure. In the first instance, it's the connectivity outside of school. On coming into this position, 37 per cent of schools had access to the broadband speeds that were necessary; that is now 100 per cent. So, having achieved that, we've now turned our attention to the infrastructure within schools as part of our edtech programme. So, in the last financial year, £50 million was spent on educational technology. That's distributed to each and every single local education authority, who, again, are best placed to understand and survey their own individual schools.

We create the template of our expectations. So, we have a national expectation that all pupils in Wales get those national standards. But we've made, as I said, £50 million available in the first year and significant amounts of money again—I think it's in the region of £33 million, if not more [correction: £30 million]—in this financial year. I'm really pleased to say that some local authorities are taking the opportunity to top that up out of their own capital funding. That has been very much on the focus on making sure that individual schools and/or digitally excluded individual students have the kit that they need. But I would turn your attention to pages—. Let me see. Allocated costs—I think they are on page 94, but, Georgina, tell me if I'm wrong. I'm trying to flick through and answer your questions. 

15:25

Okay, we'll take that as page 94, then, yes? We'll look at that. Can I just ask as well, then—? The RIA notes that there's no expectation that the changes brought about by the new curriculum will lead to changes in the allocation of teaching and learning responsibility payments. On what basis has that assumption been made, and have schools said that they'll maintain the current staffing structures and arrangements in response to the new curriculum?

There is no requirement in the curriculum and assessment Bill to change staffing arrangements, and, of course, individual staffing structures are a matter for individual headteachers and their governing bodies. But there is nothing in the Bill before the committee that requires them to do that, and nor do we believe that it is necessary that those structures would need to change. But it's really for individual governing bodies to make those decisions on how individual staffing structures in schools are operating.

Okay. So, we'll conclude, then, with the post-implementation review, which describes how the Welsh Government will go about understanding how to evaluate the new curriculum. How
important is evaluation to the new curriculum—and I presume that I know what you'll say—but why was the evaluability assessment not undertaken earlier during the planning process?

Well, we intend to set out our plans for evaluation in the curriculum implementation plan that we're going to publish, building on the work and recommendations of the OECD. So, we've had external challenge, really, and the question from them to us is: how will you know that this has worked? What will good look like, and how will you know that you have succeeded? It's really important that the evaluation isn't about holding individual schools to account, because that sets a whole set of hares running and ,again, creates some perhaps unintended consequences. This evaluation is about how the system as a whole responds. 

So, the research and evaluation programme will begin prior to Royal Assent, should that be given, should the Bill pass through its stages in the Senedd, with work to understand and measure readiness in order to support effective implementation. The programme will also include the evaluability assessment—that's a terrible word; I'm going to see if we can find a different word, because it's not a great word—that will draw together views on the outcomes and impacts that we should measure, review existing and planned sources of evidence and identify the research activities that will be required outside of Government to measure them. And we're looking at a 10-year implementation process throughout that point. But Sara is the expert on the research and the evaluation.

We have conducted evaluability assessments in relation to some other key flagship Welsh Government policies in the past. The Minister has described very clearly what the intention is for the evaluation programme, but we might commence it with a readiness assessment, a formative evaluation stage, which is really focused on whether the reforms are being implemented as intended and identify where support should be targeted to improve implementation, an emerging outcomes phase, which would explore how learners' experiences are improving and how support can be targeted to effect further improvements, and impacts phases that will look at the effects upon pupil learning journeys in the round and the extent to which the four purposes of the curriculum have been achieved. And so, a full evaluation programme can extend for a number of years and encompass a whole range of benefits that we hope will accrue from the curriculum reforms.

And I think, Llyr, what's important to recognise is that we need to have strong pupil voice as a part of that evaluation—so, actually, the consumers of the product, how has that been for them, as well as the providers of the product. So, it's important to hear, obviously, from governing bodies and headteachers and practitioners, but it's equally important that we hear from children and young people themselves about their experience of the curriculum.

When we were talking earlier about the impact assessment, it is about, yes, the qualifications that children achieve, but it's also about destinations—what happens to those children. Where do they end up as a result of being in school? Where do they end up—in training, apprenticeships, higher education? So, it is about having a longitudinal aspect to the evaluation as well—you know, NEETs, and understanding the impact on all of this, and the wider individual impact as a person, but also the economy. We know that higher levels of skills are intrinsically linked to a healthier economy, and so, it's about the impact on the individual as well as the societal and community impact also. But what's really important is children's voices, young people's voices, and parents' and communities' voices, the voice of business. The world of work has to be heard in that as well as the practitioners.

15:30

Yes, well, I couldn't agree more on that, so that's a positive note, probably, for us to conclude on. Any further questions or comments from Members? No. Okay. Well, can I thank you, Minister, for your deliberations this morning, or this afternoon, I should say? I think we have until early December to report, so we'll have plenty of time to digest the evidence that you've given us. No doubt we will be reporting in time for the end of Stage 1. So, thank you for joining us. The committee will now break for 15 minutes. It's a technical break, but I'd ask Members just to reconvene a few minutes before 15:45. Diolch yn fawr.

Gohiriwyd y cyfarfod rhwng 15:31 a 15:45.

The meeting adjourned between 15:31 and 15:45.

15:45
4. Goruchwylio Swyddfa Archwilio Cymru—Craffu ar yr Adroddiad Blynyddol a Chyfrifon 2019-20 a'r Cynllun Blynyddol 2020-21: Sesiwn dystiolaeth
4. Oversight of the Wales Audit Office—Scrutiny of the Annual Report and Accounts 2019-20 and the Annual Plan 2020-21: Evidence session

Welcome back to the Finance Committee. We move on to our next item on the agenda, item 4: oversight of the Wales Audit Office—scrutiny of the annual report and accounts for 2019-20 and the annual plan 2020-21. It's an evidence session, and I welcome Isobel Everett, chair of the Wales Audit Office board, Adrian Crompton, the Auditor General for Wales, and Kevin Thomas, as well, who is director of corporate services at Audit Wales. Thank you for joining us, the three of you.

We'll go straight into questions. We've got about an hour and a quarter, and I'm sure we'll use every minute of that time as well, but I'll start, if I may, because this is the first time, of course, that the Wales Audit Office and the Auditor General for Wales have appeared before Finance Committee under the new Audit Wales brand, and I'm just wondering whether you might want to take the opportunity, really, just to tell us a bit about how you came to the conclusion that you needed a rebrand, how much, maybe, the exercise has cost and how you might know that the exercise is actually achieving its objectives.

Shall I take that one, Llyr? Thank you very much, and it's a pleasure to be with you this afternoon. The first thing I'd say is that I'm trying to stop myself using the word 'brand', because it, for me, carries pejorative tones and suggests that we spent a lot of money on changing the logo and all things fall into place. It's nothing to do with that.

The committee will be familiar with the fact that, a couple of years ago, we initiated a review of our communications work, with an eye to ensuring that we were more impactful in our messaging. This was something that was amplified with the fresh ambitions that I and the board set out for the organisation about a year, 18 months ago. The new identity that we've adopted as Audit Wales is one small part of that journey.

So, leading up to the new identity, we undertook a lot of research with our stakeholders, our staff, the public at large, and that told us that we needed to improve the way in which we communicated with them, and, in particular, they told us that we needed to be clearer in our reporting style, shorter, more succinct, more accessible, and also that the multiple identities that we had in our published outputs as Auditor General for Wales and Wales Audit Office often caused some confusion in their minds, and so diluted the impact of our work. So, that really was the main driver for the change to the new identity as Audit Wales, which we felt was clear, simple, it does what it says on the tin, is in line with our colleagues in Scotland, who operate as Audit Scotland, as you know.

In terms of costs and how we went about delivering this change, we engaged a small local contractor to support us in some of that development work, but they worked very closely with our own in-house communications and designs team, in part to ensure that we kept the costs down. So, the specific costs that we incurred to co-develop the new visual identity was just over £13,000. In addition, we commissioned a video that we use in-house and on our website for external stakeholders to explain the new identity, and we've also incurred a few costs with practical changes like signage for the offices and so on. So, altogether, that amounts to around £20,000, which I think is a small price to pay for what is an exciting, refreshed and much leaner and simpler visual identity.

I'm very conscious, of course, of the statutory differentiation that is made between my role as auditor general and the WAO, and that remains very important, certainly in some guises. So, clearly, when we are entering into anything contractual or with a legal ramification, or when we are very clearly operating in one guise or the other, then we continue to make clear the distinction that exists. But the cases where that is relevant are relatively small; they're significant, but few and far between. For the overwhelming majority of our externally facing outputs, the single, umbrella identity as Audit Wales is more appropriate.

15:50

Well, you anticipated my question in relation to the division of responsibilities and the fact that you are creating one overarching identity, so I'm grateful for your response to that. Can I just move on, then, to another question? Because in 2018-19 you achieved one out of eight indicators in leadership and culture measures, and this year improvement is still required in terms of employee experience. So I'm just wondering what activities you're undertaking in this area to improve those results.

Okay, thank you, Llyr. So, those indicators in our suite of KPIs are drawn from our annual people survey. So, we use the civil service people survey. I guess the single most powerful measure of employee engagement is the engagement index that flows from that. A year ago, when we ran the survey, we scored 69 per cent on that engagement index, which puts us in the upper quartile of all organisations that utilise that same survey. So that is, to me, a signal that we have an engaged workforce and a healthy organisational culture.

But I remember the last time I spoke to you in this committee, we spoke a lot about leadership and the leadership scores that we had seen coming through from the people survey. In last year's survey, we saw some significant improvements in those leadership measures—in relation to some leadership questions, double-digit improvement, which is a really significant hike. So, very pleased with that, but there is clearly more that remains to be done on that front, and as I said to you a year ago, leadership for me is a fundamental category from which everything else flows in any organisation of our type.

In terms of what more needs to be done, you'll be aware that I'm in the middle of a complete overhaul of the senior structure of the organisation, so I'm confident that that will contribute to continued improvement in our leadership matrix. We're also conscious, though, that there are other elements within the people survey where we clearly need to do more to improve the employee experience, most notably in respect of the way that we manage change, in the way that we support staff in their learning and development, and also in performance management. In respect of change, this year we've put in place for the first time a professionally driven change programme and team that has given the board, for the first time, a transparent picture of all the various change projects and programmes that we have on across the organisation, and is enabling us to manage that far better than we have done in the past.

In terms of learning and development and performance management, a raft of activities through the year to improve the way that we are performing on that front, but these are areas, certainly over the last six months, where it is a challenging environment to address some of those themes. So, we're having to find different, innovative ways of delivering learning and development offers and performance management to staff in a virtual environment. The feedback that we're picking up through our fortnightly pulse surveys that we've been undertaking through lockdown doesn't give us the same kind of picture as you'd get from the people survey, but certainly, from my perspective, some encouraging signs, and I can say more about that as we go through the session if you would like.

Yes, that would be good. Okay, thanks. You've also reported the measures close to being achieved with the measures that were achieved, under one category, and I'm just wondering, really, why you feel that's appropriate, is it as transparent maybe as it should be, and how would you respond to audited bodies that might do that. Kevin has indicated that he wants to come in there.

That's always the challenge for us, to see how it would play if the boot were on the other foot. In terms of transparency—. So, this is in the presentation of our KPIs in the annual report. So, in terms of transparency, we continue to publish the precise figures that we are achieving and the targets that we're aiming for. So, I am comfortable it's entirely transparent. The red, amber, green system that we use, frankly, is simply to make sure that we focus on the big stuff, so we know where the areas are where we may need to make some significant improvement and that we don't dance on the head of a pin in areas where we're already performing well. That doesn't mean we don't give it any attention at all in my executive leadership team and at board. We have a frequent and regular assessment of our performance against all our KPIs and I press, and the board presses me very hard, to ensure that we're delivering as best we can on all fronts. 

15:55

Just to add, really, that as well as the transparency with our annual report and accounts, we also share that performance on an ongoing basis with all staff. So as well as that scrutiny from the executive leadership team and board, we do share that performance on an ongoing basis. 

Okay. Thank you. The annual report notes that quality reviews showed 100 per cent of sampled audits in 2019 met the required quality standards. You're now establishing a formal audit quality committee. Tell us a bit about what the functions and status of that committee will be and why you think it's necessary.

If I may, I'll ask Kev to come in in a second as he's leading on audit quality and can tell you more about the committee itself, but if I may, I'll just preface that by saying that audit quality, for me, is paramount in importance. We pride ourselves on the quality of what we do at the moment, but I'm very conscious of the need never to take our eye off the ball on that front. So we have seen the result from audit failures in the private commercial sector in the last few years, and you may have seen the Redmond review of audit in local government in England that came out a fortnight ago. These give us salutary lessons on the need never to take our eye off the ball in terms of quality. And quality for us comes in a range of different steps. It's not just about the technical expertise of our auditors, it's about how we recruit staff, how we develop them, the culture within the organisation that keeps that continuous focus, as well as some of the external assessment of the quality of our work that we can draw in. The new quality committee is an important part of that, and so I'll ask Kev to say a little more.

Thanks, Adrian. Yes, just to say a little bit about the quality committee, Adrian delegated overall responsibility for assuring the quality of his audit work to me as executive director of corporate services as part of the restructure that he's just referred to. We established the quality committee in July of this year, which includes independent membership, and I think it really reflects the importance, again as Adrian's outlined, that we place on audit quality. 

The committee itself has three key areas within its remit: firstly, we look at the arrangements that Audit Wales has got in place to manage and monitor audit quality, to make sure that they're effective, that they're in line with international standards on quality control; secondly, to make sure that the work that we deliver is of an appropriate quality standard and it meets not just the requirements set out in our own guidance and code of audit practice, but also relevant professional auditing standards; and also that things don't stand still, that audit quality continues to improve in line with best professional practice, because inevitably it's an evolving and improving thing. We are also, of course, charged with making sure that we are investing the right level of resource to ensure all of that audit quality is actually happening.

You mentioned, Llyr, the KPI within the annual report and accounts, and alongside that you'll see in our annual plan that we have further, more stretching performance measures in relation to audit quality. That's to make sure that 90 per cent of our audits are rated as 'good' or above. 'Good' is equivalent to one of the Financial Reporting Council's standards, 2A, and that 100 per cent meet that satisfactory standard, which is the FRC's category 2B. So, all in all, there is a package of quality measures that we have in place, not just to maintain but to continuously improve the quality of what we do.

16:00

Okay. Thank you very much for that. We'll move on to Rhianon, then.

It's just a ploy to add to the drama I think, isn't it? You need to unmute yourself, Rhianon; I think you know that, don't you? There might be an issue. There we are. That's it. Great. 

Okay, thank you. Sorry about that, Chair. Thank you for that. In regard, then, to the annual report, it notes that

'The Board is satisfied with the quality of the information it receives, although there is scope to improve both its breadth and timeliness'.

So, in regard to the questions earlier around transparency and language use, can you outline what this means in practice for the board in terms of having timely and the amount of information that is necessary, and why it has also re-occurred in 2019-20?

More than happy to. As you know, we've heavily invested in data analytics, not just to improve our audit processes, but we've also driven that it be used internally as part of our governance tools as well. So, we have now started, over the last year, to move to a real-time interactive management information dashboard, Microsoft Power BI. That covers not only our KPI tracker, our annual plan and areas of focus, but also our strategic and operational risk registers, as well as our equality objectives tracker. The comment was really about embedding that even further. So, we're hoping that our financial reporting tool will also be able to be shortly added to that dashboard. So, it isn't anything sinister; it's just about driving that interactive management information, which is going very well.

Okay, thank you. In that regard, in terms of being able to be clear in language, I have to be honest, when I was reading through this, I had to read a number of paragraphs twice to capture what it meant. So, I'm just slightly confused in regard to—. I don't want to backtrack to earlier questions, but I am slightly confused as to your target around 'missed'. You've either achieved a target, as you would say to those that you audit, or you haven't achieved a target. Will you look at that 11 out of 26 indicators? I think that's an interesting one. How do you respond to that as a general comment from me, before I go on to my next question?

I'll come in briefly, if I may, and just say that it goes back to the fact that the board has a lot of information to process and, as Adrian said, it's important that we focus our scrutiny and challenge in the right areas. So, some indicators may be indicated as green but have missed the target, but it isn't going to fundamentally affect whether we achieve our ambitions. So, that's why there may have been—. We're still transparent, as Adrian has outlined, but we tend to focus our challenge and support around remedial action and new mitigating actions in the area that, if you like, would keep us awake at night.

Just to build on that, Rhianon, I recognise where you're coming from, but a dashboard like that, the management information that the board and I use to help drive the organisation, it needs, in my view, a degree of subjectivity and judgment to be applied on what things matter most at any given point in time. So, as I said, in terms of transparency, I think we're being completely transparent—we're saying what we've achieved and what our target is—but as a tool to help us take decisions in real time as the year progresses, personally I'm entirely comfortable with the approach that we're adopting. And I'd be entirely comfortable with that approach if I saw it in other bodies in the Welsh public sector. The converse would be that an indicator will flick from amber to green or amber to red with a tiny change in performance between periods. That, in my view, is no more perfect than the system that we adopted.

Okay. Thank you for that. So, in regard to procuring your services for the independent review that's highlighted within this document of the board effectiveness, how do you intend to proceed with this? Because obviously it didn't go ahead, and I'm not quite clear as to why. And when will it be undertaken? 

16:05

Isobel. Isobel, you need to unmute your microphone. There we are. 

My apologies. So, yes, it's considered good practice to undertake an independent review, or rather a board effectiveness review with independent input, once every five years. Our last review was in the summer of 2021—sorry, it was the summer of 2016, so summer 2021 is our deadline. Now, we did have a very disappointing response to a recent tender exercise and we took the decision that we would have to get that independent input in another way. So, as well as doing our regular internal board effectiveness reviews every year, this March we actually undertook some board development days with independent input, which also looked at some of our effectiveness in that respect. 

That's not good enough going forward, and, right now, the specification for an independent review of board effectiveness is being prepared. But we took the decision that it might be best to do when the new chair was established in post, so it will be done in the next financial year. 

Okay, thank you. And that would be within the time window, then, of July 2021, yes? 

Okay, thank you. Strategic risk, then: obviously, a comment running through this is that there's a cautiousness or even a risk averse approach, but the strategic risk relating to Wales audit office's longer term financial position is detailed and obviously it notes the deficits in the medium-term financial plan. So, can you extrapolate on what has led to those deficits and how you intend to address them?  

Can I kick off? 

Do you want to pick that up, Kev? 

Yes, that's fine. Our medium-term financial plan is something that we update on an ongoing basis. It's recently been updated. The version that we were looking at, which is covered by the annual report and accounts, had identified some fairly significant deficits over the medium term, driven by a number of factors. One of them was the then anticipated loss of agricultural funds grants audits by the end of this calendar year, which has subsequently been extended by another three years, and alongside that a whole host of inflationary pressures. Whilst that agricultural funds work has been extended, it has improved the position. That's not to say there isn't still a deficit, and in reality what that's done is push back the scale of that deficit by three years.

In terms of your question around how we look to address that, the first ports of call in bridging any gap calls us to look at savings and efficiencies. One of the key areas where we've had some real success in recent years is in terms of our skill mix. So, for example, over the past eight years, the number of directors in the organisation has reduced by about 25 per cent, the number of trainees has increased by over 200 per cent, but overall staffing levels have remained broadly the same. Alongside that, we've got other projects that we're looking at. We have a travel and subsistence review that's going on at the moment. We're looking at a project called Our Future Workplaces, which looks at how we work for the future, the size and the content of our estate, and also looking at driving up efficiencies through our analytics-assisted audit—all of that work around the data analytics that we shared previously with the committee.

So, I think it's fair to say, whilst we'll continue to identify cost efficiencies to help bridge that gap, I think inevitably it's going to be necessary to pass some inflationary costs on either through fees or through an additional call on the consolidated fund. But that's something that the board would look to make decisions on each year alongside the savings and efficiency programme I've outlined. 

Just to add to what Kev said, your question may stem from the fact that we've flagged this as part of our strategic risk register. So, is this a particular thing that we identify at this point in time? Yes and no. But it's particularly prominent for us at the moment, in the same way that it would be for just about any public sector organisation, because of the acute pressures that are on the public finances. On the way that we model for the future, though, our starting point is to assume an increase in the costs that we face but not to automatically assume that we're passing those on either to the consolidated fund or through fees. So, that inevitably will lead to an increasing financial gap in years further down the line. In my time in the role, I initially found that quite scary, because the numbers look intimidating two or three years out, but actually it's a very valuable way of focusing the mind. It means that we have a constant eye on the efficiencies that we need to drive through the organisation. And when we get to the board or to the finance committee, or to our stakeholders, contemplating any increase either in a draw on the fund or an increase in fees, we've done everything we need in the lead-up to that to make sure that that is minimised.

16:10

Thank you. I would argue that, as the Wales audit office, you're in a different position to other public bodies, and I'm sure you'll argue the opposite.

However, last year, there were two disclosures under the whistleblowing policy. Is there anything that you are able to say about the disclosure, further to what's inferred? I know it's still being investigated—one of them from 2019. So, has any of this concluded, and are there any results from that? I believe it was around recruitment—one of these issues.

I'll ask Kev to come in, but, just to pick up on the previous question when I said we were in the same position as other parts of the public sector, you're absolutely right—we're in a uniquely privileged position in terms of how we resource ourselves, but that does not mean that we don't recognise the importance of driving out efficiencies and operating as efficiently as possible in everything that we do. We're in no way complacent about the unique position that we occupy.

But, Kev, you're probably best placed to answer the question about whistleblowing, I think. 

Sure, yes. Both of the whistleblowing disclosures that we reported in the previous year's annual report and accounts have been concluded. You're right—the one that carried over had been started in the previous year. It was concluded in the year of account. That did relate to recruitment processes, and it has helped to inform some improvements, some streamlining and clarification to our recruitment arrangements.

In terms of the latest year of accounts, we received no disclosures of concern under our internal whistleblowing arrangements. We take that as a positive sign. But alongside that, I think it's really important that staff do have confidence that (a) that they can make a disclosure if they feel that's appropriate, and (b) that that disclosure would be taken seriously if that happens. And that's something that's covered by our annual people survey. In the last one, 78 per cent of staff strongly agreed or agreed that they had confidence in our whistleblowing arrangements and that investigations would happen properly should a disclosure be made. And another 17 per cent said that they neither agreed nor disagreed. So, I think, overall, there seems to be a strong level of confidence in the whistleblowing arrangements that we have. Of course, we'll carry on asking that question—we don't rest on our laurels—and we're about to launch the next civil service people survey on 1 October, when we'll cover that question again. And, again, we'll benchmark and we'll report on our performance against that benchmark in the next annual report and accounts.

Okay. Thank you, both, and thank you, Rhianon. We need to make progress now, so we'll move on to Mark.

Could you explain the purpose of the senior management restructure and the associated severance scheme?

Certainly, Mark. I'm going to reflect back to when I first took up the role. The senior structure that I inherited, I would say, I'm sure had been right for the time, but it did not feel right for me in terms of the way that I wanted to take the organisation forward. So, there were a number of features with the previous scheme that I wanted to address. I wanted to have a smaller senior team in place, so to make it a little leaner, to give a much clearer distinction for the organisation about where accountability and responsibility for strategic leadership in the organisation lay, and also to ensure that the senior structure that I had in place reflected the things that kept me awake and, therefore, the things that I needed in place to drive the organisation forward. So, the structure that I'm putting in place has three roles at the top of the organisation that reflect those three themes: first and foremost, our ability to deliver our audit work; secondly, to reflect the ambition that we have to be a model public service organisation and therefore to run a very tight corporate ship ourselves; and thirdly to reflect the change of emphasis that we touched on at the very start of the session in terms of having far greater impact in the way that we communicate with the outside world and the way that we manage change in the organisation.

When you go through any restructure, and certainly one of this magnitude, it's important that we follow best practice in terms of HR and also encapsulate in that our own internal HR policies, so that's what I've done in these cases. So, essentially, I've deleted from our structure four roles that we had previously and replacing that with three new roles—three different new roles. The individuals who are referenced in last year's report and accounts—. Well, any individual whose position is put at risk by virtue of a restructure has a number of options available to them. They can choose to put themselves into a competition for the new positions, or, as in this case, they can elect to take an exit from the organisation. That's what the two individuals have done in this case—no reflection on their performance whatsoever, but just personal decisions that they have come to.

You, I'm sure, will want to know about the costs and payback of the restructure. The costs are not insignificant, I realise, but they are arrived at within the parameters that are set by the civil service compensation scheme that we operate under. My predecessor undertook a piece of work that looked at senior exits across the public service a few years ago. One of his recommendations was that they should provide payback to the public purse within three years. This restructure in its entirety will pay for itself in two years' time and then give ongoing savings of £120,000 a year thereafter. So, I'm comfortable that it stands up to scrutiny in terms of cost and payback, but, as I said at the start, its primary motivation was not as an efficiency drive; it was to ensure that I'd got the leadership structure in place to take the organisation forward.

16:15

So, on page 80 of your annual report, paragraphs 223 and 224, it says the annual saving from the restructure—at least referred to there—would be £322,000 but that the restructuring costs are £639,000. It then goes on to conclude that payback is therefore due within 19 months. Now, when I divide £639,000 by £322,000, I get to 1.92—one year and 11 months or 23 months. Am I doing something wrong there or how are those costs calculated and turned into a payback period?

I don't know the detailed answer to that. What you're probably looking at within the context of the annual report are the costs associated with the restructure and the exits that we knew of at the point when we were putting the report together. So—

It refers to the two exits there: £178,000 with respect to Anthony Barrett, and then £140,000 with respect to Mike Usher, and then that £322,000 annual saving compares to the £639,000. I just question the division of spend there.

I won't attempt to do mental maths with you now, Mark, but perhaps we could drop you a note to provide further detail on the calculation of the payback period. 

I entirely understand, given the level of detail. Could I ask, though, I mean, if you—? You've come into the organisation and if you believe this the right way to restructure, then I don't want to gainsay that. But having taken that decision and therefore various particular roles are no longer needed and, therefore, I assume, redundant, why is it, then, that we then spend nearly two years of public money with respect to those posts to make the changes, rather than looking to statutory or indeed contractual entitlement of the individuals concerned?

16:20

Sorry, could you just clarify what you meant by the final—

It seems very expensive to be making these voluntary—. It's decided to do it and then you determine what the package is, discussion with the individual, and it turns out at close to two years' cost. It seems an awful lot. If roles are redundant, why is so much more paid to make those changes than what the contractual entitlement might be?

Well, the contractual entitlement under a compulsory redundancy approach is relevant to this. We would certainly have taken that into account in arrival at those figures. I'm not going to stray any further into the personal negotiations and circumstances in relation to those two individuals. As I said in my opening answer, though, we are governed in terms of the payments that we can make by the parameters that are set by the civil service compensation scheme, which, in turn, will influence the sums that would be payable under compulsory redundancy terms as well. But, first and foremost, we are not an organisation that rushes to compulsory redundancy. As I say, we follow best human resources practice and that envisages that individuals have a range of opportunities—they can either choose to put themselves forward for any potentially suitable roles in any new structure; if not, we do our best to find alternative positions for them in the organisation, and only then move to a severance arrangement.

And is that an 'either/or'? If someone chooses to put themselves forward for one of the new roles, but then isn't successful in that application, does that affect their potential entitlement or the sum of voluntary redundancy that they might otherwise agree with you?

Sorry, Mark, could you repeat that?

Are those alternatives? If someone puts themselves forward for one of the new roles and isn't successful in that competition, does that then affect their potential eligibility for a voluntary repayment if they'd said, by comparison, that they perhaps weren't applying for one of the new roles and wanted the voluntary repayment?

No, if individuals put themselves forward for competition and are then unsuccessful, then the next stage would be, as I said, either to look for alternative positions in the organisation—and, at this level, that's very unlikely—then to be offered voluntary severance and only in a last resort to move to compulsory redundancy.

And how would you assess the level of those payments compared to, say, what might be expected for equivalent roles in the private sector?

I have no idea, I'm afraid, of what the equivalent payment would be in the private sector.

Okay. Again, if I could perhaps ask, if you were able to write or just point us to a useful comparator, that would certainly be helpful. And finally from me, could I just ask about taking all the audit work in-house? I understand previously you've had about 10 per cent of the work outsourced to private firms and you've now moved away from that, I think, at the beginning of this financial year. How is that going and was that the right decision, from what you've learnt since—[Inaudible.]?

I certainly think it was the right decision. It was a decision that the board took at the tail end of last year, so we're still just about winding up the work that our private-sector contractors are doing in respect of last year's accounts. We keep it under review and will do, in years going forward, to make sure that it remains appropriate for us. It's a big change of operational arrangement for us, but we're very confident of our ability to deliver all of the work in-house, and, first and foremost, our ability to do that to ensure that the quality of what we're doing is consistent across the board, and provides value for money for the taxpayer.

16:25

Thank you, Chair. The first question is—I'm sure it's a simple explanation—expenditure on financial audit was £606,000 higher than income; conversely, expenditure on performance audit was £606,000 lower than income. Is this just an accounting problem or has anything gone wrong under the Public Audit (Wales) Act 2013, which said profit should not be made?

Mike, if I take that one, it's certainly not a problem. The 'no more than full cost' rule is calculated within fee rates when we set the fee in the first place. That ensures that we comply with the legislation, and, our external auditors, they come in each year and they check that we have indeed complied with the legislation. That's exactly what they've done this year, and you'll see that in the unqualified opinion that they've issued on our accounts.

The difference you refer to is largely due to timing of when our fee-earning work is delivered. It reflects the way that the costs are allocated between the two practices at a high level. We apply that 'no more than full cost' rule on a project-by-project basis rather than between the two practices—financial and performance audit. The fee rates that we set are designed to recover all costs other than those that are met through the Welsh consolidated fund, and we attribute those to projects based on the time spent to actually deliver the audit work. This is not a perfect science. You've alluded to the complexity of our funding regime, which I think is a key factor here. But, for me, the key issue is that our auditors, they've reviewed the methodology, they're content that the methodology meets the requirements of the Act in the most appropriate way, hence, again, that unqualified opinion.

Okay. Shouldn't it have just been shown, though, to both be equal and shouldn't it have been shown as sundry debtors or sundry creditors?

This is the correct accounting treatment, Mike. This is something—as I say, it's a complex area because of the funding regime, but we, and our auditors, are satisfied that this is the correct way to disclose.

Just to clarify, if only for me, that, really, we're producing accounts that are dealing in cash, not in commitment accounting.

We're dealing in accruals accounting, Mike.

But if—. Sorry, maybe it's just me, but if you've got an accruals accounting and you've got £606,000 of work done, you've got £606,000 of work to be paid for, shouldn't that be balancing out in terms of accrual under sundry, rather than showing the £606,000 one way or the other?

I'm not sure I follow, Mike. I think this is—. As I say, this is a very complex funding regime that we've got. As I say, we are satisfied—and our auditors—that that's the correct way to disclose.

Okay. I think, through the Chair and the Clerk, I will be writing to you asking for further clarification on this issue.

Two other points I'd like to raise. You had money in for a dispute. Has that dispute been solved and did you need the money?

Okay. We made a provision for a dispute with a contractor for about £100,000. That dispute has been successfully resolved in our favour. So, in the end, we didn't need that provision.

And you've added in 5 per cent additional cost due to coronavirus. I'm sure a lot of organisations you're auditing wish they could do exactly the same for lots of things they did. Or have I got that wrong? Because I would have thought that we would have expected some saving as well because travel around the country, et cetera, would have stopped.

This isn't an additional cost for the audited body, Mike. The 5 per cent's an estimate of the likely extra time that we'd need to charge, that would be used, because of remote working and the reduction in income that we would have expected in 2019-20. It doesn't impact on fees charged to audited bodies; that is based on actual time charged. This cost to complete accounting adjustment is what the 5 per cent is about and that's an adjustment that we need to make each year to meet accounting standards. Again, that estimate was assessed by our external auditors, who concluded that that was reasonable. In the current year, we've recently completed an exercise based on work done to date and we've identified that that additional cost of audit is running at about 3 per cent. The audit work that we've got for the remainder of the year we expect to be slightly more complex, for example, because of things like the McCloud judgment, so we think probably 5 per cent is going to be pretty much on the nail by the end of the year. Of course, any adjustment for the 2020-21 accounts is going to be dependent on what happens with the pandemic position and where we stand at the end of March 2021.

16:30

What about the savings you should be making from lack of travel, et cetera, and, same as the travel costs, savings on hotel costs and savings on people moving around the country, in both time and cost?

Sorry, Kevin, if I can pick that up, Mike, because you're absolutely right, we are making significant savings in that regard. It's just important to distinguish, though, between that and your previous question, which, as Kev explained, is more to do with the adjustment that we have to make at the end of any year about work that is carrying forward into the subsequent reporting year. So, it's a technical adjustment to take account of that flow of work rather than additional costs that we place on our audited bodies. We are making obvious savings in-year this year because our staff are not travelling anywhere, you're absolutely right. We're incurring some costs as well that we wouldn't otherwise, most notably making sure that staff have the equipment they need to be able to operate remotely effectively, but those are relatively small compared to the savings that we're making, as you said. 

Okay. Thank you, Mike. Thank you. What's led to the increase we've seen in moneys or in amounts owed to Audit Wales at the end of March 2020, particularly from the NHS and local government bodies? Or is that not the case?

Can you point me to the relevant page of the—

I haven't got the copy of the report in front of me; it's just that I was led to believe that there's been an increase in the amounts owed to Audit Wales at the end of March 2020, particularly by NHS and local government bodies. Is that not the case, is it? Or is it just money that hasn't gone through the system or something?

Kev, can you shed any light?

I'm not sure what timing differences there are on that, Llyr, but no specific concerns in that respect. Again, it might be a timing issue, but again we could follow that up with you after the meeting.

Well, we'll write as well if we feel that it warrants that. I just wanted to ask as well about the travel allowance. Obviously, it's something that you've been looking at, and there's been a process to look at the value for money around that. I'm just wondering what that's going to lead to in terms of an outcome, mindful of the fact—and I know you're aware of it—that a number of staff see it very much as part of their salary package and, obviously, there might be a sensitivity around that as a result.

Yes, absolutely. So, committee will have seen the report that we commissioned from RSM, our external auditors, to give us that evidential base to review the travel and expenses scheme. The travel allowance that sits within the scheme is a fixed payment that is made to a large number of our staff who are deemed to have to travel for their work. Now, over the years, we have been travelling less and less, and, obviously, over the last six months we've travelled not at all. Having such a large fixed element within the regime therefore starts to become increasingly anomalous. In reviewing it, I'm very conscious, as you suggest, it's not making me the most popular auditor general in the world, because this has very real personal financial consequences for a lot of our staff. My approach, therefore, is to be as open and honest with staff as I possibly can be. The RSM report demonstrates that if we were to replace the allowance with a more traditional mileage sum that the bulk of the rest of the public sector would adopt, we would save significant sums every year.

So, what the board has done is make clear that the review as a whole needs to deliver some significant financial savings—£1 million over five years—once we've transitioned to a new scheme. But, within that broad parameter, we've established a staff cross-section task and finish group, which has been challenged by me to develop proposals for an alternative, fit-for-purpose travel and subsistence scheme that we can implement. So, delivering those significant financial savings but using some of the money that, at the moment, we spend on the travel allowance to give ourselves a system that is right for the shape of the organisation in the future.

16:35

Thank you, Chair. Twice in one day, auditor general—it's good to see you again, and your team.

In terms of the annual plan and the effect of the COVID-19 pandemic, will the indicators and measures you've included in this year's plan remain the same in the light of the pandemic and its impact on working arrangements at the Wales Audit Office and organisations you interact with?

The short answer is, I think, 'yes and no', but I'll let Kev explain what I mean by that.

Yes, that's absolutely right. Yes, they'll stay the same for now; they continue to be relevant. We are currently looking at whether to make some changes to targets that we included in the annual plan and we'll do that through the interim report that we'll be laying shortly. The key performance indicators that we're looking at at the moment in particular are KPI2, the delivery on time, and we're looking at the KPI around sickness absence, the one around environmental impact, greenhouse gas emissions, and also, the number of good-practice events that we hold, which has inevitably been curtailed because of COVID.

More broadly, one of the additional measures that we've put in place, and Adrian has already alluded to this, is that we've been undertaking fortnightly COVID-related pulse surveys of staff to assess how they are responding to the current situation, looking at both the work element, but also at the personal one. And, again, I mentioned earlier that we'll be launching the civil service people survey again on 1 October. The vast majority of questions there remain the same, and obviously they inform a number of our KPIs, but there is a new suite of indicators within that survey that look at staff experiences of working during COVID. All of that will be covered in the interim report, but, of course, as we think about our annual plan for next year, we will again reflect on whether or not the KPIs and the targets remain valid and relevant. 

In terms of value-for-money studies, there's information in the plan on work in progress and new work that's to be taken forward. Can you give us any deadlines for that work?

Nick, you'll know from the Public Accounts Committee that this is a kind of constantly movable feast in that we are constantly refreshing and re-evaluating the progress of particular pieces of work—this year more than ever. So, since the start of lockdown, we've completely revisited the whole of our performance audit programmes locally and nationally.

I think, to give you a shot-in-time update on the progress of our VFM programme overall, probably the best vehicle to use will be the interim report that we will present to the committee in a month or so. That will give you, across the board, a picture of what the programme is looking like at that point. But as I say, it's constantly evolving and moving, as you know, in response to our ability to deliver but also the demands that we receive from PAC and others in terms of prioritisation.

16:40

And what sort of work has been delayed because of the pandemic? Is there anything in particular that you have had to shelve to make way for COVID work?

Well, just three broad themes, I suppose. In terms of our accounts work, at the start of lockdown I was worried about our ability to deliver that full stop. In reality, the staff have performed miracles, and also colleagues in audited bodies as well, to work with us to enable us to complete our usual cycle of accounts work. It's taking us a little longer in this environment, but we are getting there.

In terms of our performance audit programme, like I said, we've revisited that from top to bottom. So, some work that we would have had in mind for this year simply no longer feels like a priority or would be the best use of our resources. So, we have done a number of things. We've either tried to refocus pieces of work that were in train already, so that they now have more of a COVID focus—. So, you have may have seen, for instance, this last week, we published a big study about the restart of planned care in the NHS. That was a body of work that we had under way in any case, but obviously its focus now becomes very relevant to restarting that in a COVID environment. And we're doing some brand-new pieces of work that we simply hadn't thought of at the start of the year, to reflect the environment in which we are operating. So, for instance, we'll be doing some work over the next couple of months in respect of test, trace, protect, and we are also working with the National Audit Office to do some work around personal protective equipment provision. So, it's been the most significant reshaping of our programme that you could imagine.

Alongside that, I have been very keen for us to deliver work that is entirely novel and new for us, and indeed for any audit institution that I'm aware of. So, we've established something called the COVID learning project, which is not traditional audit work at all, but is seeking to use our audit expertise and networks throughout the public sector to garner examples of some of the new and novel and good practice that we are seeking up and down the country, to analyse that centrally and then to play that back to our colleagues elsewhere in the public service in close-to-real time. So, that's an entirely new stream of work that was simply not on the cards at the start of the year.

Thank you very much. Okay, we'll move on to Alun, who I know wants to ask a few questions particularly of the chair.

Yes, thank you very much. I did enjoy reading the notes—the 'valedictory reflections' I think you called them, Isobel. Always interesting reading valedictories, of course; perhaps not as colourful as some Foreign Office missives, but you always get a sense of where the organisation actually is at the moment, and I'm grateful to you for writing that note. Can you tell us where you think the board is? How is the board functioning at the moment?

I think that the board is functioning very well and the governance arrangements that I had to put in place very early on are delivering. We retain the driver about being a model public service organisation, and I don't say it lightly because there is evidence that the board is performing. Since I've been in post, we've had unqualified accounts and robust internal audit reports. You don't actually want it too easy because it means that they are not challenging you to improve. We've had not only an independent board effectiveness review, but we've had board development and our own annual internal reviews. And I just ought to pay credit to the board secretaries we've had, which keep those governance arrangements fresh and best practice. And, of course, we're subject to the oversight and scrutiny of yourselves as Finance Committee.

So, I think that the board is in a very strong place. The appointments that have been made during the seven years have given us a really rich vein of experience, skills and approaches, which means that we avoid groupthink. Some of the debates are challenging and robust, but I'd rather have it that way. We are not full of conflict. We work collaboratively through conflict towards action. So, I think we're in a pretty good place at the moment.

Okay. I'm grateful to you for that. You say, in the first couple of paragraphs of your letter, that you are anxious that the body or the organisation practises what it preaches, which I think is what you said in that. How close do you think Audit Wales is now to reaching that ambition?

16:45

It's very difficult, because obviously the statutory regime that we are under is so different, in fact unique, compared to most other public bodies in Wales. However, what I can tell you is a relentless focus on efficiency and value for money, following the seven principles of public life, being a good employer or even a great employer, because GREAT is the acronym of our behaviours, which reflect our values—. I know that Adrian in his audit work is always very keen to ensure that an organisational strategy is measurable in terms of its impact, and whilst we've got further to go in a golden thread right from those ambitions down to individual work plans, the board is always focusing on impact—what is going to be done differently as a result of the work we're doing? We are aligned as a board to keep in mind 'assure, inspire and explain'. So, I also think that, unlike some organisations, we demonstrate foresight and future thinking. So, aided and supported by the Finance Committee, our ability to invest in data analytics, change management—which we're very grateful for, the support you've shown—and keeping ourselves looking outwards and looking forwards has been particularly important.

If I go back seven years, though, the focus was very much internal. We needed to have sound business systems in place, and I'm very, very proud of the work everyone's done, right across the organisation, around our risk-management systems, our cyber security approach, the way we deal with resource planning, and, as I've obviously spoken about in the letter, the culture change, which is now very, very evident. So, in terms of practising what we preach, yes, we've got sound governance, we have challenge, we have scrutiny, relentless focus on value for money and impact.

I'm grateful to you for that. The board's been through some significant change, of course, as the organisation has, in the time that you describe, and you also, I think on page 2, list a number of areas where you believe the board has made some significant progress, and I think you go through internal scrutiny and challenge, corporate strategies, policies, business plans, and you carry on in that paragraph, and I think that's all very impressive and very important. So, where haven't you made the progress that you'd like to have made? Where are the areas where you believe that the organisation still has some distance to travel, or the board, perhaps, has some distance to travel?

Okay. We're never complacent, and we've already focused on some of the areas around culture where we need to further embed our approaches, as Adrian has outlined, around leadership, consistent leadership, our learning developments and our career paths, and change management. But perhaps some of the other gaps that I would talk about are around diversity and inclusion. We've got to look at other ways of narrowing our gender pay gap, we want to increase our black, Asian, minority ethnic representation and strengthen our Welsh language capability. We've had some very robust discussions at board around the absolute business advantages of diversity and inclusion and the moral imperative to do so, and the board continues to ensure that that gets enough attention and drive behind it.

Something else that's also been hinted at during the course of this debate is around—I call it the operational model. It's got to be sustainable in the long term. We can't keep driving out efficiencies to match inflationary pay awards, and I have actively encouraged Adrian and Lindsay to start a debate about ensuring we have a sustainable, long-term strategy around fees and the balance with the Welsh consolidated fund. And the other thing, I suppose, I'm disappointed in, and I believe a number of you will be as well, is that we never collectively manage to get the changes to the Public Audit (Wales) Act through the books, because I think that would have allowed the organisation to get to the next level of slickness and drive out further efficiencies. So, that's perhaps not for me, but I'm still very proud of what I have delivered so far.

Thank you for that. So, tell me about culture, then. You know, it's one of these things that people talk about, isn't it, the culture, the culture in different organisations, whether it's internal culture or whether it's corporate culture. Tell me what you mean by that. Tell me what you believe needs to change and tell me how you have sought to deliver that change.

16:50

Okay. Well, first of all, it wasn't just what I see needed to change. The board championed the organisation and the senior executives to see if they were content with what the people survey were telling us, and I'm absolutely eternally grateful to the organisation for picking it up and running with it. We had a bottom-up approach to looking at the values and behaviours of the organisation.

To come back to what you're saying, if you think about how it's evidenced, for me, it's evidenced by the type of conversations I have, it's the tone of those conversations, it's the feel of the place, it's the behaviours I witness—far more collaborative, less hierarchical, a respect for people's role as opposed to just auditing knowledge. All of this hints at a cultural change. The relationships I have, not only with Adrian and the senior executives, but right across, with staff, are open, they're trusting, and, again, we're seeing not only the respect for roles, but, very healthily, a bit of challenge if people are not acting in accordance with the behaviours that we have set as being in line with what we want to see.

If we can look at hard evidence around that, we've already talked about whistleblowing, and the fact that we are not having many whistleblowing disclosures, I think, is a positive thing, and the people survey tool. We've talked about the civil service staff survey and, certainly, that overall engagement score is like a shorthand measure of the culture, and to be, or to have got to, top quartile in 2019 around engagement, the whole organisation should be proud of, because it's their organisation, it's their score. So, yes, further to go, but there are soft and hard evidential—there is soft and hard evidence for it.

Okay, I'm grateful to you for that. One of the issues that you've raised with us this afternoon, and you do in your letter, both in terms of looking back and looking forward, is that issue of diversity within your organisation. There are a number of public sector organisations at the moment that are—some are struggling more than others, to be kind, in terms of trying to reach the ambitions, I think, that we will all share. How far along that journey do you think Audit Wales is? How far has Audit Wales moved in the time that you've led the board, but also in terms of the structure, going back to the culture again, and where do you think that leaves it at the moment and facing the future?

Okay. So, obviously, our overall performance is in our equality reports, and I'm pleased that we meet our equality objectives within those, but that's not enough for us. The board has repeatedly had discussions about the business benefits of a diverse and inclusive workforce, and, as I say, we're driven not just by those business benefits or the law, but by a moral driver around that diversity inclusion. And we have kicked off a suite of actions that go back to reviewing our recruitment processes, where we recruit, how we recruit, how we write person specifications, and some of this is medium-term work, but I have no doubt that, over time, that will change.

What is really good to see is that amongst our trainees and apprentices that diversity is already coming into play, and things like BAME representation, and the gender, and Welsh language, are thriving and alive and far more representative of our society in Wales within our trainees and apprentices. But, actually, conversely, that actually makes our gender pay gap worse, because they're at a lower level of the organisation.

You'll have probably seen that we've invested heavily in ensuring that staff can be engaged through Pawb, our equality interest group, which can feed its views through. We also have taken big steps ensuring that we engage, or the auditor general engages, with appropriate groups in undertaking the auditor general's programme. We're signed up to Leonard Cheshire, Chwarae Teg came and did an audit, and we're pleased with where we are and we're still following through some of the actions on that.

So, in terms of how much further we've got to go, I think we've built a very sound platform, and, more importantly for me, it's awareness. There are discussions. We talk about it a lot. It's not just, 'Oh, my goodness, we're going to Finance Committee, we'd better have an answer for—'. That doesn't mean to say we're making rash decisions to change some of those stats, because Adrian and I are absolutely clear that the leadership of the organisation has to be right. So, whilst there are potential opportunities, for instance, to look at BAME or gender when we come to executive director appointments, that is not the only driver. It is in the mix.

16:55

Okay. I'm grateful to you for that, Isobel, and thank you for your time and for those notes, it's a fascinating read. Thank you.

Indeed, thank you very much. I think we could probably start unpacking a lot of those issues that you've raised with us, but time is beating us, and you do remind us, I think, that we should never stand still, and you certainly haven't allowed the audit office to stand still in your seven years as chair. Can I reiterate the thanks that I conveyed to the Senedd a week or two ago, and in thanking Adrian and Kevin for joining us today, thank you as well, Isobel, not just for today, but for the way that you've always engaged with this committee constructively and co-operatively? Certainly, your successor will be building on very firm foundations and we're all grateful to you for always having the work of the audit office, obviously, at heart, but also the way that reflects and influences the wider public sector as well, I think, is another contribution that certainly you've made. So, diolch yn fawr iawn, and can I thank the three of you for joining us?

5. Cynnig o dan Reol Sefydlog 17.42 i benderfynu gwahardd y cyhoedd o weddill y cyfarfod
5. Motion under Standing Order 17.42 to resolve to exclude the public from the remainder of the meeting

Cynnig:

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

Motion:

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

Cynigiwyd y cynnig.

Motion moved.

We'll now go into private session, and, therefore, I propose in accordance with Standing Order 17.42(ix) that the committee resolves to exclude the public from the remainder of today's meeting. Are all Members content? Yes, thank you. Okay, we'll go into private then. Diolch yn fawr.

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 16:57.

Motion agreed.

The public part of the meeting ended at 16:57.