Y Pwyllgor Craffu ar Waith y Prif Weinidog - Y Bumed Senedd

Committee for the Scrutiny of the First Minister - Fifth Senedd

22/10/2020

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

David Rees MS
Helen Mary Jones MS
Janet Finch-Saunders MS
Jayne Bryant MS
John Griffiths MS
Llyr Gruffydd MS
Lynne Neagle MS
Mick Antoniw MS
Mike Hedges MS
Nick Ramsay MS
Russell George MS

Y rhai eraill a oedd yn bresennol

Others in Attendance

Des Clifford Cyfarwyddwr Cyffredinol - Swyddfa’r Prif Weinidog, Llywodraeth Cymru
Director General - Office of the First Minister, Welsh Government
Jeremy Miles MS Y Cwnsler Cyffredinol a'r Gweinidog Pontio Ewropeaidd
Counsel General and Minister for European Transition
Ken Skates MS Gweinidog yr Economi, Trafnidiaeth a Gogledd Cymru
Minister for Economy, Transport and North Wales
Lee Waters MS Dirprwy Weinidog yr Economi a Thrafnidiaeth
Deputy Minister for Economy and Transport
Liz Lalley Dirprwy Gyfarwyddwr – Adferiad, Llywodraeth Cymru
Deputy Director - Recovery, Welsh Government
Mark Drakeford MS Prif Weinidog Cymru
First Minister of Wales
Simon Jones Cyfarwyddwr, Seilwaith Economaidd, Llywodraeth Cymru
Director, Economic Infrastructure, Welsh Government

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Graeme Francis Clerc
Clerk
Kayleigh Imperato Dirprwy Glerc
Deputy Clerk
Mared Llwyd Ail Glerc
Second Clerk
Matthew Richards Cynghorydd Cyfreithiol
Legal Adviser

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 13:01.

The committee met by video-conference.

The meeting began at 13:01. 

Penodi Cadeirydd dros dro
Appointment of temporary Chair

Good afternoon. Welcome to today's meeting of the Committee for the Scrutiny of the First Minister. The Chair of the committee is unable to attend today's meeting, so therefore in accordance with Standing Order 17.22, I call for nominations for a temporary Chair.

Okay. Are there any other nominations? I see that there are none, so therefore I declare that David Rees has been appointed temporary Chair, and I invite him to take the Chair's seat for the duration of today's meeting.

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

I'd like to welcome everyone to this virtual meeting of the Committee for the Scrutiny of the First Minister. It's a meeting in which we will have three different sessions today, and I apologise for the late changes to the agenda, but I'm sure that Members will understand the circumstances why that has happened. Before I move on, we all are aware of the circumstances as to why the Chair is not with us today. I would like, on behalf of all the members of the committee, to send our condolences to Ann on her loss, and to the whole family. We wish her our best wishes at this difficult time.

In accordance with Standing Order 34.19, the Chair has determined that the public are excluded from attending this committee meeting in order to protect public health. The meeting is, however, broadcast live on Senedd.tv, and all participants will be joining by video-conference. The meeting is bilingual and translation is available for Members. The Record of Proceedings will also be published.

Aside from the procedural adaptions related to conducting business remotely, all other Standing Order requirements remain in place.

Following the announcement made this morning about the changes to the operation of the Wales and borders rail franchise from next year, we have adapted today's meeting to accommodate an additional session with the Minister for Economy, Transport and North Wales, which will commence at 2.15 p.m.

With that in mind, we'll move straight into item 1 on the agenda, which, for me, is the introduction and apologies. I'd like to put apologies in for Dai Lloyd, who sent his apologies in, and John Griffiths, who will be joining the meeting later, due to other commitments he has. Are there any Members wishing to declare an interest at this point in time? I see there are none, so we move on.

2. Sesiwn Craffu Gweinidogol
2. Ministerial Scrutiny Session

We move on to item 2 on the agenda, which is COVID-19 recovery and reconstruction. I'd like to welcome Jeremy Miles, Counsel General and Minister for European Transition, and with him his official, Liz Lalley, deputy director of recovery, Welsh Government. I welcome both to this afternoon's session, and we will now focus clearly on the plan, and we'll move straight into questions, if that's okay with you, because it is important, with the limited time we now have available, that we go straight into those points.

Now, the committee has today published an updated summary of the issues raised during the scrutiny work of all Senedd committees on the impact of COVID-19. As this committee consists of the Chairs of those committees, the breadth of the work done will naturally inform questions today.

Perhaps I'll open up with an overarching question—a very simple one, Counsel General. There was a £320 million package put together for recovery post COVID, and you set out eight priorities in your reconstruction plan. How are you going to actually identify which projects, and which aspects of those priorities, will be shared amongst that £320 million and how will it be balanced out?

Chair, well, I can describe the process by which we've reached this point very briefly, so that I can help the committee understand. About six months ago, the First Minister asked me to lead a process across the Government to identify the main impacts of COVID in the longer term and how we might develop some priorities for the remainder of this Senedd term to respond to that. I can talk a little bit more about the process behind that if you would find that helpful, but it led to a series of ministerial discussions across the summer, having been informed by an extensive set of consultations with stakeholders and policy discussion groups. As I say, I can discuss that a bit more if you would like some further context for it.

But, alongside that, a finance process was run under the aegis of the finance Minister, obviously, to identify how the priorities, which were developing across the Government and which you see in this document, would then have funding attached to them, if you like, in the package that was announced the same day as the document that I myself published.

You'll have seen in the statement that the Minister for Finance gave some early indications of existing commitments that have resulted from that programme. So, there were figures in her statement, for example, around social housing, around biodiversity investment, some educational investment and so on. That's on the record in her statement. But that £320 million fund, if you like, is the product of the process that we've undertaken over the summer to identify priorities. Some of that funding—well, all of that specific funding will be the subject of announcements by Cabinet colleagues in their Cabinet portfolios over the course of the coming weeks; some have already been made. The committee will see a mix, if you like, of projects—areas where the level of investment, if you like, is scaleable, so school repairs and road maintenance might be in that category, and areas where there are new projects being brought forward, so investment in the primary care estate, for example, would be in that category. And there are some other interventions where the existing policy intervention is one that is becoming more urgent, if you like, as a consequence of COVID, and therefore there'll be additional funding going into an existing policy area. So, a good example I think of that would be the expansion of the energy retrofit programme, which Julie James, my colleague, announced a few weeks ago. And there's additional funding attached to an expansion of that.

So, there's a blend, if you like, Chair, of sorts of funding, but, as I say, it's the product of aligning that process of prioritisation with allocating that fund of £320 million.

13:05

So, just for my own clarity, from what I understand you've just said, your Cabinet colleagues came up with priorities that they identified in their areas, they costed those priorities, they put that bid to the finance Minister, and as a consequence you came up with a figure for including those projects and that's—[Inaudible.]—presented.

Yes, that's right. I mean, the finance Minister will give you more detail on the finance process, obviously, but the broad point of it is there are a set of priorities and a set of bids for funding to deliver those priorities and that has gone through either an already signed-off process or a kind of indicative process where the money is earmarked for future announcements in the coming weeks. So, those two things were essentially aligned as the priorities were clearly emerging over the summer.

And are you aware as to whether any of those priorities have changed as a consequence of the recent increase in COVID cases and the COVID-19 situation?

Well, I'm glad you raised that point, Chair, because the document says this at a number of points. What is obviously the case is that the process of engagement—and just to kind of recap very quickly, we had about 2,000 submissions direct from the public through the 'Our Future Wales' channel, which we launched. We did a series of round-tables with organisations across Wales and beyond and we had a sort of standing small advisory committee to help us understand what themes were emerging and to test some ideas during that process. So, that was the consultation mechanism; that led into ministerial discussions over the summer, both in one-to-ones, but also in small groups, and we had a ministerial away day to discuss some of these priorities before publishing them after Cabinet had approved them. But evidently, during most of that period, as you say, Chair, the transmission rate was either coming down or pretty stable. Clearly, the context for that, just before the document was published, is changing and so, clearly, we have to have regard to that context, obviously. But the documents describe what remain the Government's priorities and we will endeavour to deliver them in that changed context.

Thank you. Before I move on to some specific themes within that plan, you just mentioned the consultation that was held, 'Our Future Wales'—will you be publishing a summary of those consultation responses?

13:10

Well, the document that was published, which I released at the start of October, included an annex, which was a summary developed for us by the Wales Centre for Public Policy, based on those 2,000 submissions. So, that's part of the evidence base. I should probably say for clarity at this point, Chair, that the piece of work that the First Minister asked me to do about six months ago has, as it were, come to a close, in terms of my role, on the publication of that document, which describes our plan. The implementation of it from now on, if you like, will be, as I think is evident from what I've said so far—

Okay, thank you. We move on, in that case, to the business and economy section, and Russell George.

Thank you, Chair. Counsel General, we've got limited time, so I'll roll a number of questions into one, if that's all right. First of all: can you outline what role financial support for businesses will play in terms of economic reconstruction? And I'm particularly interested in beyond anything to do with the economic resilience fund or support via the development bank. Also, I'm aware that one of Government's priorities is to prioritise, in the short term, the growth and support for independent-based businesses—either independent-based or the headquarters are based in Wales. What outcomes do you particularly expect from that particular policy, and what do you think we can expect to see by the end of this Senedd term? And finally, if I can also loop in—the reconstruction plan highlights that the Welsh Government will support emerging sectors. So, what sectors particularly are you looking to support?

Okay. There's quite a broad range of questions there, so I'll do my best to try and cover the ground that you've asked for, Russell. On the first point, I know this isn't what you're saying, but those two interventions that you describe as already, if you like, on the table, are in fact very, very significant scale interventions. We're talking about £1.7 billion or something—probably more now, actually, given the announcements of the last few days. The economic resilience fund's third stage will be doubled, so there are some significant figures in there already. There will be more—there is further funding available, earmarked, if it becomes necessary into the future, for business support, which, obviously, the economy Minister will wish to announce in due course. But, alongside that, you'll also see in the document initiatives around procurement reform and local supply-chain development, which, obviously, feed in to that broader picture, as well as specific interventions that are designed to stimulate the economy. And that's all about, clearly, protecting business opportunities and job opportunities. So, significant capital investment, I would say, in a number of different areas, both economic investment and social investment, which will stimulate jobs. And specific interventions to support—on your second point, about locally headquartered, or Welsh-headquartered businesses, you'll see some specific interventions there to support, for example, small and medium-sized house builders with a stalled sites and a property development fund. So, that's specifically designed to target SMEs in the construction sector, for example, in Wales.

I suppose if you're asking me specifically what targets are we expecting to hit by the end of the Senedd term in relation to—I'm not sure it's capable of being described in that exact way, for reasons that I think maybe you'll understand. But, certainly, there'll be initiatives around—which I know you're passionate around—further investment in superfast broadband, for example, to support businesses in parts of Wales where, perhaps, I'm sure you would argue that needs more investment. So, there are some specific aspects to that.

On the point about emerging sectors, again you'll see, I think, in the document—I think there's a pretty consistent theme, actually, around innovation in housing, in energy efficiency, in renewables and so on, and some of that is developed in the document in terms of further support for those sectors. A specific example of that might be, for example, the additional money going into the innovative housing programme, which will be designed to stimulate the modular construction part of the economy, and, again, some additional funding into energy efficiency initiatives in particular. But there are also initiatives that complement our existing suite of interventions around supporting exports and supporting high-value manufacturing initiatives in particular, but some of that is around— in what will be a difficult climate, I would suggest, in the new year, following our departure from the transition period—supporting businesses in those sectors to identify export opportunities and so on; that'll be part of the mix for us as well. 

13:15

I was particularly interested in the outcomes you expect. You talk specifically about supporting independently based businesses in Wales and where there's headquarters, and it's just understanding what outcomes you expect to achieve from that specifically, but also, if I could also add as well, there's a lot of, as I'm sure you will agree and accept, regional inequality across Wales, and how your reconstruction plan aims to tackle that, and whether you've got any comments on the Organisation for Economic Co-operation and Development report in terms of some of the recommendations made there in terms of tackling that particular issue as well.

Certainly. On the first point, I'm not sure I can give you a specific number in terms of what that looks like, but, certainly, we would hope that the initiatives that I've just described would lead to growth in those businesses and certainly protect their resilience in what could be challenging economic times in the months ahead. On the second point that you make, you will have spotted, I think, that many of the initiatives have a very broad current geographic application, haven't they? There are pots of interventions around town centres and local economies, which will benefit all parts of Wales, and that's, frankly, part of the rationale for putting those on the list of priorities, if you like.

On your second—on your last point about the OECD, the Cabinet recently discussed this report in the context of the post-EU regional funding arrangements that we hope to be able to put in place if we get agreement with the UK Government. What I would say is that there's some very challenging stuff in there, quite frankly, about how to run regional economic development better, frankly, into the future and taking advantage of some of the flexibilities, perhaps, that might be available having left the European Union. But I would just say one thing on that: a number of the priorities in that space, in terms of regional and economic policy, in particular, which we've been talking about as part of that process, really align onto the priorities for COVID. So, some of that is around decarbonising the economy, some of it is around healthy communities. Obviously, a lot of it is around jobs and business growth. So, I would argue that that becomes now even more urgent, actually, as a consequence of what we've learned.

Is there anything in the OECD report, in terms of recommendations, that you take any principled objection or disagreement to?

Well, some of it requires further analysis, frankly—

There will be a report coming out from the Government in the next few weeks that responds to that and gives a sense of what recommendations are—of a future, of how to take that forward, if you like. So, that'll be coming out in the next few weeks.

Yes. In the interests of time, Chair, I'm happy to have done my questions, then. You're on mute, Chair.

I keep forgetting. Helen Mary, you had a supplementary you wanted to raise.

Os gwelwch yn dda. Prynhawn da. Dŷn ni'n gwybod, onid ydym ni, dyw effaith COVID ddim wedi bod yn gyfartal. Mae yna grwpiau yn ein cymunedau sydd wedi cael amser gwaeth, ac, o gwmpas issues yn ymwneud â'r economi a swyddi, dŷn ni'n gwybod bod yr effaith ar fenywod a phobl o leiafrifoedd ethnig a phobl du wedi bod yn waeth nag yn gyffredinol. So, sut bydd y cynllun yn ymateb i'r ffaith hwnnw yng nghyd-destun yr economi? Sut byddwch chi yn sicrhau bod yna gyfleon yn cael eu creu ar gyfer y bobl sydd wedi cael eu heffeithio yn waeth? Ac yn benodol, mae yna lot o sôn ynglŷn â buddsoddi mewn creu'r fath o swyddi sydd yn draddodiadol wedi cael eu gwneud gan ddynion, yn y sector adeiladu ac yn y blaen. Pa fath o gynlluniau sydd gyda chi i sicrhau hefyd ein bod ni'n creu'r fath o swyddi sydd yn draddodiadol wedi cael eu gwneud gan fenywod, mewn meysydd fel iechyd, gofal cymdeithasol, gofal plant? Wrth gwrs, dŷn ni am weld y gwahaniaethu yna yn y gweithlu yn newid, onid ydym ni, ond, yn y tymor byr, mae'n bwysig iawn fod yna swyddi sydd yn accessible i fenywod yn ogystal â rhai i ddynion.

Yes, please. Good afternoon. We do know that the impact of COVID hasn't been equal across society. There are groups within our communities that have suffered more, and, around issues related to the economy and jobs, we know that the impact on women and people from black and ethnic minority communities has been worse, generally speaking. So, how would your plan respond to that in the economic context? How will you ensure that there are opportunities created for those people who have been impacted worse? And, specifically, there's a lot of talk of investment in creating the kind of jobs that have traditionally been done by men, in the construction sector and so on and so forth, so what kind of plans do you have to ensure that we also create the kinds of jobs that have traditionally been done by women, in areas such as health, social care, childcare? Of course, we do want to see the workforce changing in its nature, but, in the short term, it is very important that there are jobs that are accessible to women as well as men.

Mae hynny'n sicr. Rwy'n cytuno â hynny. Ar y cwestiwn cyntaf, o ran pobl, buaswn i'n dweud bod mwy nac un categori o grwpiau sydd wedi cael pwysau penodol o ran impact economaidd o ran swyddi: menywod, pobl ifanc a phobl BAME yn eu plith nhw, felly, a phobl anabl, efallai, hefyd. Felly, rhan o'r cynllun yw sicrhau, wrth inni wneud yr ymyriadau yma o ran sgiliau, o ran gallu cyflogi, fod y lens honno yn cael ei roi ar y math yna o gamau rŷn ni'n eu cymryd er mwyn sicrhau hynny fel nod. Ond yr ail bwynt wnaethoch chi, rwy'n credu, sydd yn wir yn gwneud y gwahaniaeth mawr, hynny yw, pa sectorau sy'n cael cefnogaeth yn y tymor hir am y rhesymau—wnaf i ddim eu hailadrodd nhw—sydd wedi'u rhoi. Fel rhan o ddadansoddiad tymor byr, tymor canol a thymor hir rŷn ni wedi bod yn ei wneud o ran matsio sgiliau gyda chyfleoedd yn y farchnad i sicrhau ein bod ni'n darparu sgiliau i bobl ar gyfer y mathau o swyddi sy'n debygol o gael eu creu, un o'r elfennau sydd yn amlwg yn hynny yw bod y sector digidol, y sector iechyd a gofal, a'r sectorau gwyrdd yn amlwg yn rhai sydd angen sgiliau penodol, ac felly mae'r sectorau hynny, byddwn i'n awgrymu, yn fwy tebygol o fod yn agored i bobl o unrhyw genedl—hynny yw, dyw'r sgiw gwrywaidd/benywaidd ddim cweit mor glir yn y sectorau hynny. Felly, mae hynny'n galonogol, buaswn i'n dweud.

Yes, I would certainly agree with that. On the first question, I would say that there is more than one category that has suffered economically in terms of jobs, women, young people and BAME communities among them, and perhaps disabled people too. So, yes, part of the plan is to ensure that, as we make these interventions in terms of skills and employability, that lens is focused properly so that we can ensure that that's covered. But I think the second point that you made is going to make the true difference, namely what sectors receive support in the longer term. I won't rehearse the reasons for that; you've already given those reasons. As part of the short-term, medium-term and long-term analysis we've been doing in terms of matching skills with opportunities in labour markets to ensure that we do provide skills for people for the kinds of jobs that are likely to be created, one of the elements that's very prominent in that is that the digital and health and care sectors and green sectors are clearly ones that require specific skills, and those sectors therefore, I would suggest, are more likely to be open to people from all sorts of backgrounds, rather than having that gender bias. So, I think that's encouraging.

13:20

Before we move on, can I ask the technical team just to have a quick look at the sound? Because as well as the translation we're actually hearing the Counsel General verbatim as well, and therefore we were getting two versions of the Counsel General, in one sense. If you could just have a quick look at that, please. Okay, I want to move on to—

Sorry, Chair, it's the Clerk speaking. I think if the Counsel General switches off his English interpretation it should be fine. At the bottom of the screen there should be a globe, and if you select 'no interpretation' then that should fix the sound.

Okay. Well, we'll keep our ears open for it, and let's just hope that it'll be resolved. Janet Finch-Saunders.

Thank you. Following on from Russ George, in terms of regional economic inequalities that do exist, there is a higher proportion of workers employed in industries that are most affected by the COVID lockdown—in recent studies, seaside towns and rural parts of Wales are actually quite badly hit. Have you thought about or given any due consideration to our proposals as the Welsh Conservatives to introduce an ambitious seaside and market town fund that would enable communities to decide how we can get those worst-hit communities supported better?

Before the Counsel General answers, can I remind Members we are putting questions on behalf of our committees and Members of the Senedd, not on behalf of political parties? Just to remind people, okay. Counsel General.

Chair, two aspects of that. There have been allocations, I think, from the coastal communities fund, which, hopefully, will be supporting at least some of those coastal communities. I would just draw Janet Finch-Saunders's attention to the work in the document around the town-centre focus in particular—there are town centres right across Wales that will need additional support, given the impact on retail in particular, but other long-standing problems, and there are indications in the document of significant investment, whether that's in terms of health and social care facilities, a strategic sites fund with local authorities, initiatives to green the centre of towns, specific initiatives around the circular economy in the middle of towns, and those are interventions, Chair, that will benefit a number of the kinds of communities that Janet Finch-Saunders mentioned there in her question.

Thank you, Chair. Good afternoon, Counsel General. Just following on from those questions around town and city centres, really, and the importance that you've seen within the work that you've been doing, we know that town and city centres have been declining over a number of years, and the pandemic has really heightened that. For some areas, like the night-time economy, in terms of live music venues, bars, restaurants—they've been so important. How can we make sure that they're still part of the future in terms of town and city centres?

Secondly, during the pandemic we have seen more people use local facilities near to where they live, so perhaps popping out to a coffee shop that is close to their home, and more people using those facilities when they're working from home or perhaps because of the restrictions. How can we continue to ensure that they flourish as well?

13:25

Well, I think, Jayne, this question has been very prominent in the discussions that we've had with all sorts of people in the course of the past few months, and the overwhelming message is the one that your question takes as its starting point, really. Ordinarily, you would expect that, where retail, which has been under pressure for some time, hasn't it, in town centres because of out-of-town developments and so on—what you would normally expect to see is that, as the mix in town centres changes, that ought to change to a more leisure, hospitality-based mix, probably, with the sort of things you're describing. But obviously, they are the sectors that have been under probably most pressure recently, aren't they, so some of the interventions will need to be about financial support, as we have been trying to provide as a Government, to support some of those venues, either commercially or as cultural endeavours, if you like, and there are different interventions that we've had in place to address both of those. There is some work that Julie James has been leading on in terms of planning considerations and so on, about how space can be reconfigured in towns and cities to support those sorts of offerings into the future. 

On the last point that you made, which essentially is a point about footfall, isn't it, about using local facilities when you're working at home and so on, obviously you will know the ambition that the Government has set as a target for people to work remotely. I think, again, one of the things we've heard from a number of different people is the importance of remote working hubs in the future working mix—so, using some of those spaces that we will all have in our town centres and cities, repurposing them to be shared workspaces for people. So, in my case, rather than commuting from Rhiwfawr to Cardiff, you could do that to Pontardawe and work from there. So you'd have a much shorter commute, even if you're not working in your own home, which doesn't work for everybody. I think there's real potential for that. We're flagging that in the document. It's not straightforward to achieve, but it's definitely something that we've set as a priority, and I think that has the potential to really drive the kind of footfall that you're describing in your question in a very positive way. 

Thank you. You've actually quite nicely moved on to the next area of questioning, which is transport, because you've just talked about where people go to work. The first question on that is from Nick Ramsay. 

Diolch, Gadeirydd. Afternoon, Minister. Probably an apt, topical question with regard to today's news: in terms of your post-COVID policies, one of those is remote working, and that will obviously have an effect on a financially secure and viable public transport network if it's developed to its fullest. So, how are you making sure that you get that balance right between sustainable post-COVID policies and also making sure that our public transport system is financially secure and viable?

Well, today, as you say, my contribution is likely to be somewhat overshadowed by Ken Skates coming after me, but the point you make is obviously absolutely valid. There is a range of different possible knock-on effects from increased remote working. Some of it is more broadly based than that, about the economics of city centres and town centres and so on, about rental values and all the other things that our current city centre economies are predicated on. So that's an intervention that needs taking into account. On the public transport dimension of it specifically, I think that's certainly something that is under live consideration, clearly, given what we know is already happening in terms of bus services in particular, which I suppose is the area most likely to be impacted in this particular way. But I think you could also imagine a circumstance where this is positive for that, where commuting from somewhere to your local town centre to work is something you might well do by bus and that might well be an economic development that supports richer, better local bus routes. You might choose to do that rather than drive your car to Cardiff, for example. So I think there are definitely considerations that need to be taken into account. I think part of the Wales transport strategy, which will be coming out in, I think, mid November for consultation will obviously be taking some of these dimensions into account. 

Great. Thanks. And secondly, the Economy, Infrastructure and Skills Committee has heard evidence that a fundamental reassessment of the purpose of and the approach to public transport post COVID is required. What specific steps is the Welsh Government taking to support this, both in delivering short and long-term priorities?

Well, I think you're about to discuss the impact on the rail network in particular with Ken Skates, so maybe I'll just confine my comments here to the bus sector in particular, although I'm happy to answer questions on trains if you wish, Nick. But you will have seen the significant intervention—I think I'm right in saying that it's about £140 million, more or less—that's gone into bus services. Part of that is clearly an emergency response. However, part of it is a really critical recognition that, for the level of public money going into what is essentially a public service, the Government and the user, if you like, don't have sufficient control over the outcome. So, part of that future investment will absolutely be about driving different outcomes in terms of routes and service levels in general. Specifically, just to flag, the Minister for transport is keen to expand some of the pilots that have been happening in different parts of Wales around demand-responsive bus services, in particular the Fflecsi service, which you might have heard of, looking to expand a pilot similar to that, because I think that's clearly part of the future make-up of bus services. So, that, I think, is quite exciting, actually. 

13:30

So, just to conclude, greater flexibility, really, in future services. 

Certainly, in terms of the interventions that are currently considered, greater control over how bus services look on the ground, if you like, in terms of coverage firstly, and, secondly, developing even further that idea of demand-responsive transport. 

Yes, just a short question. Isn't there a danger, though, in all this, that we're spreading the resources we have far too thinly? Clearly, transport is a major investment in many ways, whether it be in terms of green transport, new models of transport, new rail infrastructure and so on. How are you going to manage the risk that you do a lot of little things, but not the major things that might be impactive on a post-COVID economy?

That is absolutely a risk, clearly. In a sense, the whole purpose of this document is to try to avoid doing that. What we heard from a number of participants, if I can be blunt about it, is, 'This is all great, but what are you going to prioritise?' So, actually, the document is intended to be the answer to that question, if you like. I would suggest, and I absolutely know that you agree with this, that getting a public transport network that works is absolutely fundamental to any post-COVID vision, really. It's one of the areas, as we know from today's announcement, where there is the most pressure, really. But, I think, what we also learned from today's announcement is that with a bold response, you can do something really quite transformative. 

Thank you. We move on to the next area, which is culture. Helen Mary Jones. 

Diolch yn fawr, Gadeirydd. Dau gwestiwn oddi wrthyf fi. Dyw'r cynllun ailadeiladu ddim yn sôn am ddiwylliant o gwbl, ar wahân i sôn am y £53 miliwn—y cultural recovery fund. Ac mae hwn, wrth gwrs, yn help tymor byr, sydd i'w groesawu yn fawr. So, pa rôl dŷch chi'n gweld am ddiwylliant fel dŷn ni'n ailadeiladu?

Ac mae'r ail gwestiwn ynglŷn â'r iaith Gymraeg. Pa asesiad dŷch chi wedi'i wneud o effaith tebygol COVID ar y cynllun i sicrhau ein bod ni'n cael miliwn o bobl sydd yn siarad Cymraeg, a pha gamau dŷch chi'n bwriadu eu cymryd i sicrhau bod y targed yna ddim yn llithro?

Thank you very much, Chair. Two questions from me. The reconstruction plan makes no reference to culture, other than mentioning the £53 million cultural recovery fund. And that is short-term assistance that is to be warmly welcomed. So, what role do you see for culture in this reconstruction?

And the second question is on the Welsh language. What assessment have you made of the likely impact of COVID on the aspiration of a million Welsh speakers, and what steps do you intend to take in order to ensure that that target doesn't slip?

Diolch am y ddau gwestiwn hynny. O ran y cwestiwn cyntaf, dwi ddim—

Thank you for both of those questions. On the first question—

Sorry, I am still hearing the Counsel General giving his verbatim response, and I can hear the translation response. I can manage it, but I just want to highlight the fact that there is confusion as a consequence of this. 

For convenience's sake, if the Counsel General would prefer to answer this in English until we sort out the technical problem, that—

We'd be very grateful. Would you be satisfied with that, Helen Mary? Thank you. Counsel General, you can answer in English in this case, until we resolve the technical issue. 

Certainly, Chair. I think saying, 'Apart from the £53 million fund, what are you doing?', is not entirely fair. That is a significant intervention in the market, although I do recognise the point that you make, which is that it's a time-limited intervention. But I would still suggest that it's a significant intervention. I think, very early in the document, from memory, we acknowledge the particular pressure, I think, specifically on the arts sector. And I think—I'm not sure if this is what you are asking, to be fair—but the document isn't, if you like, a compendium of the contribution that each sector can make to the future economy of Wales. So, it isn't comprehensive in that sense.

So, the fact that there isn't, as it were, a section on the culture sector, for example, doesn't itself tell us that that isn't clearly a very significant sector in the future economy of Wales. I think, whether it's to do with the Welsh Government-led fund or the arts council-led fund, there's a significant set of interventions there. From a workforce point of view, I think we're the only part of the UK that's put forward, effectively, a creative freelancer fund, and we are looking to see how much—. And that's reopened this week, actually; I think, unfortunately, parts of it are already over-subscribed. We are looking to see if we can enhance that even further, with additional funding, because we recognise the particular pressure that freelancers in that sector are under.

I would say more broadly, in terms of the contribution the cultural sectors generally speaking have made to the COVID response, there's been great innovation in areas like our museums and libraries, and so on, in developing digital offerings to people, finding a new audience for some of that work as well, which has been particularly valuable, I think, in some of the most recent—in terms of circumstances we've found ourselves in over the last few weeks and months.

And I just want to say one thing on this as well: I think we have to see the pressure on this sector alongside the pressure that will come of leaving the EU transition period, and the risk to funding in the future. We are certainly advocating as a Government ongoing participation in Creative Europe, for example. And I think you might know that, in November, we'll be launching—well, there will be launched a website, which we've part funded, which helps freelancers in the cultural sectors understand mobility routes to work and to continue those international partnerships, which I think are important for Wales's brand internationally, but they're also important for the resilience of the sector in the longer term, facing the pressures that it does.

On the second point that you made, there is absolutely an analysis that we've undertaken that looks at the combined effects of COVID and Brexit, actually, on the Welsh language. What we know, unsurprisingly, is that some of the communities that are currently very strongly Welsh-speaking communities are some of the communities most under threat from the blend of those two things. Now, there are some positives, you could argue, from the possibility of greater remote working, which encourages people, perhaps, to work in their communities rather than feel they need to move to other parts of Wales. So there are definitely positives that one can build on there. But equally, there are risks to that, in that people move both ways, don't they, into communities, because that's an option as well. So it's a very mixed picture, I would say, but there's absolutely an understanding that, in particular, some of our rural agricultural communities have particular challenges lying ahead that will be important to address in support of the Welsh language into the future.

13:35

Helen Mary, anything further? Okay. Before we move on, I've been given some advice that perhaps, Counsel General, it might be worth you turning your interpretation on and off again, as that may work—okay?

If I can just follow up, I think we do understand, Counsel General, that the document isn't supposed to be comprehensive, but I think you'll also understand that the cultural sector, while very much appreciating the short-term support, which is invaluable—they're a sector that are feeling really vulnerable at the moment, because they are really vulnerable. And the fact that they aren't highlighted in what is supposed to be—or what people are reading as—the document that sets out the Government's priorities in recovery has sent an unfortunate message, perhaps. I'm glad you've had the opportunity today, perhaps, to reassure people working in the sector that you do see this sector as a vital part of Wales, as we build back.

Chair, I'm really anxious that the document ought not to be regarded as a list of things that we think are important, because there are many things that are very vital to the future Welsh economy, and our future as a nation, that are not referred to expressly in this document. I just want to be very clear that the document is not, as I say, a compendium of all those things. There are specific interventions that we've made, and we will want to continue making, to support the cultural sector, not least because the creativity that that sector brings to bear offers a real opportunity for us to solve some of the challenges that we'll be facing coming out of COVID. It's part of that cultural contract that Dafydd Elis-Thomas has spoken about, which I myself think is a very imaginative idea. So, I want to give that reassurance categorically, given that you've offered me the opportunity. 

13:40

Thank you. Mick, a very short supplementary because we have to move on. 

It will be very short. Do you not think that it perhaps might be appropriate that the creative arts, instead of just being looked at as a cultural sector, should actually be looked at as an industrial sector? Because it is a manufacturing sector, employing tens of thousands of people and it actually produces a product; it is manufacturing. It may be creative arts manufacturing and there's a broader spin-off from it, but do you not think that that might be one of the weaknesses we've had in our approach to economic development over the years?

Well, I think the cultural sector, broadly defined, encompasses, in my mind at least, both what we might describe as the arts aspect of culture, but also part of the creative industries. And I think there is a very significant contribution, if you look at it in the round in that way, which the sector makes to the Welsh economy and Welsh brand internationally, which is obviously increasingly important. So, I'd certainly accept the importance of that.

Thank you. We'll move on now to questions on green recovery and skills, and Mike Hedges?

Diolch, Dai. What I'm asking about is the linking of the green recovery with reducing fuel poverty and reducing fuel inefficiency in homes and the use of some transaction capital in reducing fuel inefficiency and the need to try and link the three of those together. The green recovery cannot exist, in my opinion—maybe in yours it can, but not in my opinion—without dealing with the two problems: one is fuel poverty, but also people who aren't in fuel poverty who are living in housing that is highly fuel-inefficient.

Well, I completely agree with that. I think that—my personal view—one of the most interesting and important parts of the document is the third priority, which talks about investing in low-carbon housing and energy efficiency in housing, because I think that goes to the absolute heart of where all these challenges come together really. Some of it is about fuel poverty, some of it is about energy efficiency more broadly and some of it is about quality of housing. All of that is in the space that achieves an environmental objective, a social justice objective and also can stimulate the development of new suppliers in the market and better skills development in those sectors. So, there are three or four interventions in the document in that space. I think we've already announced about £60 million in that area, generally speaking. And I completely agree with you that you can't divorce those things. And I think what we've tried to do in the document is try and find interventions, if you like, which achieve more than one policy goal and I would think that that sort of intervention is a very good example of that.

Could I come back to the use of transaction capital, because you can use it in the private sector—in fact, you can only use it in the private sector—in order to help, support private landlords et cetera in improving the fuel efficiency of their homes?

Chair, I can't remember exactly whether any of the financial transactions capital in the discussions that we had is allocated specifically to that area. I just can't remember that, I'm afraid, off the top of my head. But I certainly agree that that is something that you can use that for.

What we've been trying to do as well, which I think we mention in the document, is develop a model with local government where we have—it's probably not achievable in the short term, but it certainly would be in the medium term—a kind of scaling up of the retrofit in this space as well, which I think is an important contribution.

But you couldn't use transaction capital to support retrofit.

You can't, because it's being used by the public sector. It must go into the private sector.

Anyway, can I just move on? As you've moved on to social housing, can I also move on to social housing? We know that the only time sufficient housing has been built in Wales or in Britain—and the two are very similar—is when we had large-scale council housing built, which was between something like 1946 and 1970. Since we've stopped having large-scale council housing, we've had serious housing problems. What is the Government's intention to try and upscale the amount of council housing being built and especially ensuring, to come back to my last question, that new council housing is built, like what's being built by Swansea Council, as very low-energy usage?

Well, I'm just looking at the document now. There's an enhancement in the social housing grant, which will obviously deliver some of those outcomes, and, also, additional money going into the innovative housing programme, which is specifically targeted at environmentally friendly social housing, and in particular ones that are developed as a consequence of modular construction, which obviously are very energy efficient typically, so, absolutely, that's very much part of the thinking here. I think our estimates are that, into the next Senedd term, the Government in the next Senedd term, whoever that is, if they were looking to meet the need, if you like, in terms of social housing, would need to be looking at building around 3,500 units a year each year for the Senedd term. So, that's the scale of the task ahead really for the next term, at least. 

13:45

But that level of—sorry, the last point on this, Chair—scale is substantially less than the 1950s and 1960s. Swansea, one year, built more than 3,500 houses, when it was building West Cross and Sketty Park, never mind building the length and breadth of Wales. I would urge you to look at increasing that number quite considerably, and I don't think doubling it would be enough but certainly it would be a move in the right direction. 

Those figures I was giving were for the next Senedd term, so that will be for whichever Government is formed in that term, but I certainly—. What I would say to you is there's no lack of ambition, I would suggest. At this point in the financial year, there's a constraint on capacity to deliver, if you like, in the short term, but I completely accept the longer term picture certainly. 

Diolch yn fawr, Cadeirydd. Dwi jest eisiau holi ynglŷn â rôl Cyfoeth Naturiol Cymru, oherwydd, yn amlwg, dwi'n rhagweld y byddwch chi'n gweld rôl bwysig i Cyfoeth Naturiol Cymru yn yr adferiad yma a'r broses yma. Mae'r ffaith eich bod chi wedi penodi cadeirydd Cyfoeth Naturiol Cymru i arwain y tasglu efallai'n cyfeirio at y ffaith y bydd yna ofyn ychwanegol ar eu hamser a'u hadnoddau nhw. Ond, wrth gwrs, y cwestiwn dwi wastad yn gofyn i Cyfoeth Naturiol Cymru, pan fyddan nhw'n ymddangos o flaen pwyllgorau yn y Senedd, yw eu bod nhw wedi cael cyfrifoldebau a dyletswyddau ychwanegol gan y Llywodraeth yma bron iawn bob blwyddyn ers iddyn nhw gael eu creu, ond maen nhw hefyd wedi gweld torri eu hadnoddau bob blwyddyn ers cael eu creu, sydd yn rhywbeth cwbl anghynaladwy, mewn gwirionedd. Felly, dwi eisiau clywed gennych chi a ydych chi'n rhagweld y bydd yna ofynion pellach ar Cyfoeth Naturiol Cymru i chwarae rhan yn y broses yma, ac, os felly, sut mae disgwyl iddyn nhw gyflawni hynny, pan maen nhw—wrth gwrs rydym ni newydd ei weld e yn yr adroddiadau llifogydd yn y 24 awr diwethaf nawr—yn dweud nad oes ganddyn nhw'r adnoddau angenrheidiol i gwrdd â'r galw.

Thank you very much, Chair. I just want to ask about the role of Natural Resources Wales, because, clearly, I anticipate that you would see an important role for NRW in this recovery and process. The fact that you have appointed the NRW chair to lead the taskforce does indicate that there will be an additional draw on their time and resources. But the question I always ask of NRW, when they appear before the committees in the Senedd, is that they've been given new duties and responsibilities by this Government almost every year since their creation, but they've also seen cuts in their resources annually since their creation, which is totally unsustainable, if truth be told. So, I want to hear from you whether you anticipate there being further demands on NRW to play their part in this process, and, if so, how they are expected to deliver that, when—and we've just seen it, of course, in the reports on flooding in the past 24 hours—they're saying they don't have the necessary resources to meet demand.

Wel, dyw'r cwestiwn yma ynglŷn â dyfodol cyllido cyffredinol Cyfoeth Naturiol Cymru ddim yn un y gallaf i fy hun ei ateb; mae hwnna'n gwestiwn i Lesley Griffiths. Ond, yn y ddogfen hon mae cyfeiriadau pendant eisoes at ariannu pellach ar gyfer isadeiledd atal llifogydd ac ati. Mae e'n wir i ddweud bod impact wedi bod gan COVID ar y gyllideb honno, ond rwy'n credu, o ran cwestiynau ehangach am eu cyllideb nhw, gallaf i ddim fy hun ateb y cwestiwn hwnnw. Rwyf wedi cael trafodaeth gyda Syr David Henshaw ynglŷn â gwaith y tasglu, sydd, rwy'n credu, yn bwriadu gyrru adroddiad i'r Gweinidog yn yr wythnosau nesaf, a bydd hynny, wrth gwrs, yn rhan bwysig o ddadansoddiad y Llywodraeth ac ymateb y Llywodraeth ar gyfer adferiad gwyrdd, wrth gwrs. 

Well, the detailed question on the future funding of NRW is not a question I can answer; it's a question for Lesley Griffiths. But, in this document, there are specific references to further resourcing and funding for flood prevention infrastructure and so on and so forth. It is true to say that COVID has had an impact on that budget, but I do think, in terms of those broader questions on their budget, I myself can't respond to those questions. I have had a discussion with Sir David Henshaw on the work of the taskforce, which, I think, is due to report to the Minister over the next few weeks and, of course, that will be an important part of the Government's analysis and the Government's response for a green recovery. 

Ond, fel byddwch chi'n gwerthfawrogi, neges rydym ni wedi ei chael, fel Aelodau o'r Senedd, gan Cyfoeth Naturiol Cymru, ac yn wir, wrth gwrs, y sector amgylcheddol ehangach—rydym ni'n sôn am bobl fel yr Ymddiriedolaeth Genedlaethol, RSPB—yw bod y cyrff a'r mudiadau yma yn gorfod torri yn ôl oherwydd y colledion difrifol maen nhw wedi wynebu yn sgil COVID, a nhw, yn aml iawn, sy'n delifro nifer o'r projectau rydym ni'n gobeithio efallai eu gwireddu pan fydd hi'n dod i gael yr adferiad rydym ni gyd eisiau ei weld, yn y ffordd rydym ni eisiau ei weld e. Maen nhw wastad wedi rhoi neges i ni, 'Mi allwn ni wneud mwy, ond ddim heb fod gennym ni'r adnoddau i wneud hynny.' Nawr, dwi'n gwybod bod honna'n drafodaeth rydych chi eisiau ei chael gyda Gweinidog yr Amgylchedd, Ynni a Materion Gwledig, ond allwch chi ddim bod yn cynllunio gweithgarwch mewn vacuum chwaith. Hynny yw, does bosib eich bod chi yn disgwyl os oes yna gynlluniau yn dod o'ch gwaith chi, y bydd y Llywodraeth yn camu lan ac yn darparu'r adnoddau i gyflawni hynny. 

But, as you'll appreciate, the message that we've heard, as Senedd Members, from NRW and indeed the broader environmental sector—we're talking about people such as the National Trust, the RSPB—is that all of these organisations are making cuts because of the serious losses that they've faced as a result of COVID, and they, very often, deliver many of these projects that we hope to deliver when it comes to the recovery that we all want to see and in the way we want to see it developing. They've always given us the message that, 'Yes, we can do more, but not without the resources to do that.' Now, I know that that is a discussion that you'll want to have with the Minister for Environment, Energy and Rural Affairs, but you can't be planning activity in a vacuum either. Surely, you would expect that if there are plans coming forward from your work, the Government would step up and provide the resource to deliver those. 

Wel, fel gwnes i ddweud ar y dechrau, mae proses wedi bod yn digwydd ar y cyd o edrych ar flaenoriaethau ar yr un llaw, ac edrych ar adnoddau sydd ar gael ar y llaw arall, ac rydym ni eisoes wedi datgan adnoddau pellach ar gyfer buddsoddiad yn yr economi werdd, er enghraifft, a bydd mwy o bethau yn cael eu datgan gan y Gweinidog yn yr wythnosau sydd i ddod. 

O ran cefnogaeth i'r sector ehangach—hynny yw, cyrff yn y trydydd sector ac ati—maen nhw wedi bod yn cynnig i mewn i'r cronfeydd rŷn ni wedi eu lansio eisoes. Mae amryw ohonyn nhw wedi cael eu hariannu drwy'r ffynonellau hynny, ac mae'r pecyn hynny o adnoddau wedi gwneud rhyw gyfraniad, o leiaf, tuag at esmwytháu rhai o'r pethau sy'n gwasgu'n ariannol ar eu hadnoddau. Dwi ddim yn dweud bod pawb wedi manteisio ar hynny wrth gwrs, ond mae amryw ohonyn nhw wedi llwyddo i gael arian allan o'r ffynonellau hynny.

Well, as I said at the outset, there's been a joint process of looking at priorities on the one hand, and looking at the resources available on the other, and we've already announced further resources for investment in the green economy, for example, and there will be further statements made by the Minister in the coming weeks and months. 

In terms of support for the broader sector—for example, third sector organisations and so on—they have been making bids to the funds that we've already resourced. Many of them have been funded through those funding resources, and that package of resources has made some contribution towards smoothing out some of the financial pressures upon them. I'm not saying that everyone's taken advantage of those funds, but many of them have been successful in achieving funding from those sources.

13:50

According to reports, your green recovery taskforce has received more than 180 ideas for policies and projects, and are presently deciding which to take forward. What guarantees can you provide this committee that proposals for the creation of long-term, green-collar jobs, as well as any requisite retraining or skills programmes, will lie at the heart of any report or plan brought before the Welsh Government?

Well, I'm not myself, obviously, able to influence the content of that report, but I know that the Minister for environment is looking forward to receiving it with enthusiasm, as we all are, given the significance that the green response to the COVID crisis will have for the Welsh economy and the Welsh environment. We have initial views, if you like, emerging from the group, and it's clearly about making sure the recovery doesn't lock in high carbon emissions, doesn't lock in the decline of biodiversity and so on. There are a number of initiatives that we've already taken, which the document refers to, which seek to start to address in the post-COVID world, if I can put it like that, some of those interventions, and puts further funding into existing work that we've had going on for some time, obviously, in that space.

On the point that you make around employment, we're very taken by that point, obviously, and there's a mix of opportunities here, if I can put it like that. Some of it is around supporting people into green jobs, if I can use that term, which is around particularly, perhaps, biodiversity, employment and so on. But another really very important part of it, I think, is in supporting employment in long-term, sustainable sectors, and sectors that can become, frankly, more sustainable by having business support to assist them in decarbonisation. So, what you're trying to achieve is a benign blend, if you like, of business support that focuses on getting those sectors into a more long-term, sustainable place, and then developing the skills pipeline that can provide employment opportunities alongside it.

Thank you. Also, proposals for innovative, floating offshore wind farms, which would find space approximately 45 km away from the coastline, could, potentially, generate over 3,000 long-term green jobs in Wales. That will require, however, collaborative working with the Celtic sea alliance, and the bettering of grid capacity in Wales. I understand there is a really big issue about grid capacity. Could you confirm, if you've reviewed these proposals, whether due consideration has been given to encouraging investment in micro and small-scale hydro schemes? And also, how are you working with the UK Government as regards grid capacity in Wales—a huge issue, you know, in terms of the green jobs and technology?

It is a huge issue. I'm not, myself, in a sufficiently expertly well-informed place to tell you what the most recent discussions are about grid capacity. I certainly take your point about working together with the UK Government on the renewable sector. Obviously, I was very disappointed that the UK Government didn't support the development of the lagoon in Swansea bay. For that reason, I would hope to see more support for the renewable sector from the UK Government into the future. Certainly, as you say, there's a very significant opportunity for Wales there.

Can I ask a follow-up on that point? How much consideration of joint working has been given in developing your recovery plan?

With the UK Government, on particular issues like this, yes. 

Well, some of it, Chair, depends on—. The capacity to deliver into the future on many of these programmes requires a commitment from the UK Government in relation to things like the shared prosperity fund, for example. Some of the initiatives we talk about here are initiatives for the rest of this Senedd term, and it also lays the ground for much longer term investment in jobs and skills, for example. Now, that is going to be compromised unless we get the sort of co-working from the UK Government that we frankly hope and expect to get. It is very much going to be shaped by whether the shared prosperity fund is one that is genuinely co-designed and effectively reflects the principles that we've been building on with our stakeholders here in Wales. We want to see that. As I mentioned in my answer to Russell George earlier, we think there's a very strong alignment between the kinds of things we could be doing with successor EU funds and the needs of the post-COVID economy in Wales, so we hope the UK Government will agree with us. 

13:55

Thank you. I want to move on now because time is moving against us to some issues on health and social care and inequalities, which will start off with Lynne Neagle.

Thank you, Chair. The older person's commissioner has expressed strong concern that older people weren't highlighted as a specific group disproportionately affected by the pandemic in the recovery plan. How do you respond to that criticism and what assurances can you give that this is going to be a recovery plan that doesn't leave anybody out? 

Well, I mean, I think if you read—as I know you have, obviously—the 'Leave no-one behind' report, which the commissioner published, a number of the themes from that report are reflected in the document and I certainly think that—. And I've just, for the record, had two conversations with the commissioner, one specifically on her response to the report, which was a productive conversation, and we've agreed to do joint-working on some of the intergenerational opportunities, I would suggest. So, that was very constructive, but I also think—. My own view is that the most important thing is what substantive impact does the plan have on the lives of older people, and I completely accept the fact that, as part of the narrative of understanding who has been adversely impacted, older people absolutely are part of that, clearly.

What the document doesn't do, as I say, is list every group that's been impacted, but I really expect that we will be judged on the actual impact this plan has on the lives of older people, and I would suggest—. There's a commitment in there in relation, for example, to support for older workers or older people most removed from the workplace. There are some specific commitments on lifelong learning, for example; there are some specific commitments in terms of social care; there are—we just talked about—some specific commitments in relation to public transport. So, many of those, I would suggest myself, will have a very, very beneficial impact on the lives, perhaps, particularly of older people in some of those cases, so I'm really keen to make sure that those things that genuinely will deliver improvements are actually capable of being delivered.

Thank you, Chair. The plan lays significant emphasis on using technology and digital as an enabler for new models of care, and there are some good examples of where that's worked through the restrictions in lockdown, but there is a danger of digital exclusion among people on low incomes or people over 75 or perhaps those who live in rural areas, and I think some people will always need to have face-to-face care. What practical steps will the Welsh Government be taking to address those needs and concerns?

Well, I think it's a significant issue, clearly, and I would say there are other groups of people who are also at risk of being excluded here, so young learners in schools who don't have access to digital resources, for example. There's a range of other groups as well. So, I think what is clear is that there have been gains, for example, to the health service and to some local government services being able to deliver some of those services online. Obviously, what that does is it frees up capacity in the system that can then be made available to those people who can't engage, perhaps, digitally in the same way. But there are two, I guess—. The document, I think, in a couple of places, at least, talks about user-centred design for services and citizen-centred design; I think that's really at the heart of it. So, as you undertake these innovations, which are positive innovations and clearly will be built on, you're also going to do that in a way that brings the user into it so that you've got a means of reforming the system that works for all the people who need to be able to use it.

So, there are some specific things, which are at the hardware end of it, so specific investment made into providing equipment—laptops and tablets and so on—for care settings and for other settings, which has been very helpful, I think, in providing the channel for communication, but some of it is around skills, some of it's around inclination, some of it's around confidence. So, it's actually much more complex than providing hardware; I absolutely accept that.

I think what's happening alongside this is we hope that the work of the digital centre of public services will become very embedded in how we try and transform some of these services from a digital point of view. I think the week after next, there's a new chief digital officer for local government across Wales starting their work. There was a plan to have one for health and social care, but that's been delayed by events of the last few months. That's really about investing in leadership in digital, in public services, so that you can do the transformation in a way that goes beyond providing tablets to people and asking them to use them. That's a good and important intervention but it doesn't reach everybody. So, just to be clear, the digital inclusion piece of this is absolutely central to being able to roll out, as we want to, further digital services.

14:00

Can I just come back, Chair, as well? Following on from the points that Helen Mary and Nick had made around the cultural sector, I just want to say about the excellent work that's been going on in Wales around the cultural sector in the arts and health. I'm just thinking that it's really important to remember that that can play a real role within the recovery as well—not just in physical health, but mental health as well.

Yes, and we've talked about this before, Jayne, in different settings, haven't we? And I completely agree with that and I think there are some very good examples of that, including in my own health board in Swansea bay and elsewhere in Wales. Certainly, I think that the creative contract that I mentioned earlier is part of that sort of approach, isn't it, of introducing creativity into all sorts of aspects of public services, which I think is a very positive development?

Thank you. John, do you want to talk about the issues on inequality at this point?

Yes, thank you very much, Chair. Hopefully, Jeremy—I'm sure you would have seen my committee's report on the pandemic, which as as the title said, really, put equalities and vulnerabilities in Wales into stark relief, so we knew about these inequalities and unfairnesses in Wales over quite a period of time, but the pandemic really drove it home in terms of just what it means to people when health is at stake as it is at the moment. So, I just wonder what lessons in terms of building back better, Jeremy, will have been learnt? What are the headlines, really, in terms of what we've learnt through the pandemic and what we really need to have the more equal and fair Wales that we all want to see as we move forward?

I completely agree with what you said, John, in terms of COVID either highlighting or actually exacerbating, really, some of the existing inequalities. I think there's a substantial foundation now for work in terms of addressing some of the inequalities that members of the BAME community have particularly experienced in the past few months, both from a health perspective, for a range of complex reasons, but also from an economic perspective. And I think that the work of Judge Ray Singh and Emmanuel Ogbonna's report in particular, in my own view, is providing a compelling set of recommendations in terms of what we need to do. Some of that's already started to be taken forward; Jane Hutt's been leading on some of that for us in the Government, but there are also broader socioeconomic inequalities that have been put in stark relief, frankly, and some of that—.

What we have been told is for young people now entering the labour market, they are the cohort of people for whom that disadvantage is most likely to be locked in throughout the entirety of their working life unless we do something about that at this point, just for reasons of longevity in the jobs market. So, some of it is around making sure people can stay on in school as long as possible, or go on to college or university, and there are a number of interventions we've already either announced or put in place to support that. Some of it is around making sure young people can stay in work, and supplementing that with obviously good skills training and also incentives for employers to take on apprentices, which we talked about a little bit in the document as well. So, some of it is about interventions at that level to make sure that we try and minimise the impact into adulthood, if you like.

But I think, just generally, we are keen and conscious—. I spoke a little bit earlier about interventions around women in the workplace, for example, particularly understanding that, in the last six months, some of the burdens or responsibilities of care have been, perhaps, more keenly felt by women in the last few months than even ordinarily, and a number of the interventions in the document, which have already been announced, have been designed to try and address some of those particular burdens. I think, generally speaking, as we've tried to address our response across the board, we've at least done our best to apply the equalities lens to those decisions. You know, some of those choices are very punishing choices, really, and the impacts are pretty difficult on some groups whatever choice you make, to be blunt about it, but we have tried to apply an equality impact assessment to most of those interventions that we've taken.

14:05

Helen Mary Jones, do you want to come in with a supplementary?

Thank you, Chair. Just very briefly, I'm very pleased to hear you talk about young people, Counsel General, because we know—. I'm of the generation where the young people—I was young in the 1980s, and lots of my contemporaries' financial situation never recovered from a year or two of unemployment, and I'm very glad that it's a priority to make sure that doesn't happen to this generation of young people. But can I just ask: to what extent were young people consulted in the process that led to this document, and to what extent will you be able to continue to consult with young people as you deliver on these priorities? Because I think we know that it makes a lot of sense, when we're designing interventions for any group of people, to design those interventions with those people, rather than imposing them on them. And I'm particularly concerned here, I guess, for young people who might be furthest away from the job market—young people who haven't necessarily left school with very good qualifications and who might need more support.

Well, firstly, just to say this is part of—this is the start, I guess, of what we would describe as a national conversation. So, consultations with all sorts of groups of people need to continue, obviously, around the document—just to make that broad point. Through the work of the Future Generations Commissioner for Wales, we were able to consult with a cross-section of young people in relation to some of the interventions we're discussing here, and I've asked them if they would be prepared to kind of critique the document, if you like, that we were talking to. I think we've also reached out to the Youth Parliament—obviously it's a question for the Youth Parliament if they wish to do it—to make available myself and others to engage and be scrutinised, if you like, if the Youth Parliament wishes to do that, and then to calibrate some of our specific policy interventions based on that.

So, yes, the answer to your question is 'yes', but, plainly there's more to be done into the future on that, for the reasons that I've said. And I think the point you make about—[Interruption.] Forgive me, Chair.

The time is almost up, and I want to go back to John Griffiths and he'll have the last set of questions, including John, if you want to, on sport and leisure.

First of all, I'm just going to ask about—. One thing we've seen during COVID is the community pulling together quite effectively and impressively to help people in the neighbourhood who are elderly or who are shielding or have particular vulnerabilities and so on; some of it's been structured through local authorities and the voluntary sector. What have we learnt there for the future, would you say, in terms of how we build on that as we move forward?

Well, I had a couple—I think two—round-table discussions with a cross-section of organisations from the voluntary sector with very different remits and different roles—some of them campaigning, some service delivery and so on. There is a very common set of threads, I think, we've heard from that set of discussions: one is concerns about the resilience of some of part of the sector, firstly; secondly, how the volunteering effort worked well, mostly, across Wales—not exclusively, but mostly worked well—and the challenge for us is to either support that or allow that to flourish, rather than trying to take it over, if you like, which is sometimes the instinct, isn't it, when things work well?

I myself think that finding a way of fostering the community action that we've seen develop remarkably across Wales is part of the answer to another challenge that we face, which is the mental health challenge, bluntly—the very widespread, in my anecdotal experience, level of trauma—mostly quite low level, thankfully—that most people have felt in terms of the dislocation, at least, caused by COVID, and for some people it's obviously much more serious than that. And I think that harnessing those two things is a means of solving some of those challenges. People have coped, if you like, in the last six months, by making a contribution to supporting their community, and I think that there is something in that that we need to build on, if we can.

14:10

Succinctly and quickly, and then the Counsel General will answer succinctly and quickly.  

Sport, leisure and physical activity, Jeremy, is very important to health and preventing ill health. We see the leisure trusts under real pressure now, with possible redundancies, funding cuts and so on. It's a real worry, because they have the facilities, the organisation and the staff to deliver, so I think we really need to support them as we go forward. 

I do note that we've made an intervention already of around £14 million to parts of the sport and leisure sector, but I take the point that you are making, which is about the countywide delivery and beyond of some of those services. I know that Julie James is very mindful of that challenge and is talking to local government colleagues.

Thank you, Counsel General. We have reached the end of our allocated time for the session this afternoon. Thank you very much for your time and your company, and Liz Lalley as well. As you know, you will receive a copy of the transcript, as usual. If there are any errors on it or any inaccuracies, please let the clerking team know as soon as possible, so that they can be corrected. Thank you again for your time this afternoon.   

For Members, I suggest that we now take a five-minute break. We will reconvene at 14:15 for the next session with the Minister for Economy, Transport and North Wales.

Gohiriwyd y cyfarfod rhwng 14:11 a 14:17.

The meeting adjourned between 14:11 and 14:17.

14:15
3. Sesiwn Craffu Gweinidogol
3. Ministerial Scrutiny Session

Can I welcome Members back to this afternoon's meeting of the scrutiny of the First Minister committee? We have, now, item 3, which is an additional item to the original agenda. Can I welcome the Minister for Economy, Transport and North Wales, Ken Skates? With him this afternoon is the Deputy Minister for Economy and Transport, Lee Waters and Simon Jones, director of economic infrastructure in the Welsh Government. Members will be aware that a statement was made earlier today by the Minister, and this session now allows opportunities for some questions and scrutiny of the issues around that statement. I'll start, therefore, with Russell George.

Thank you, Chair, and thanks to the Minister and officials for attending, as well, at such short notice. Can I just ask a couple of legal question, to start with? What's the legal basis for the approach that you've announced today, given the fact that section 25 of the Railways Act 1993 expressly says that public sector bodies 'shall not be franchisees'? It would be interesting to understand what powers are being used, in terms of your decision today. And can I also ask: who is the operator of last resort for the Welsh rail franchise under the same Act? Is it the Secretary of State, or is it the Welsh Government? Because we're limited for time, I'll get my last question in on this section as well—

I'll give you time; don't worry about that. Let them answer those two and I'll bring you back.

Thank you, Chair. Thank you, Russell, for your question. Welsh Ministers are the OLR. Can I just say from the outset how grateful we are to be able to address you today and to be scrutinised? We're looking at bringing forward an oral statement on this issue as soon as possible after half term, and essentially what we've announced today is designed to protect services, safeguard jobs, and secure the metro. Section 30 of the Railways Act 1993 makes provision for rail services, so on your direct question about where does the legal power sit, it's within that.

Okay. Also, are the operator-of-last-resort provisions being applied in this case? I'm just trying to understand that. Is KeolisAmey handing the franchise back to be taken on by the new company? Is that what's proposed?

We're using the operator-of-last-resort provision. We're entering into a new agreement with KeolisAmey and that's designed to do three things. First of all, the day-to-day running of the services will become the responsibility of a public body. That'll be TfW Rail Ltd, that will be a subsidiary of TfW, and there will only be one shareholder and that will be TfW. In turn, of course, there's only one shareholder of Transport for Wales, and that's Welsh Government. So—

14:20

Just to understand that, is KeolisAmey—or Keolis and Amey as I think it's referred to in your statement—will they be a partner in the new company?

Okay. And it will be contracted by the company to deliver the services—that's the way you propose it works.

We're keen to make sure that we retain the experience and the expertise that both Keolis and Amey have brought to Wales. I mean, they're incredible companies and internationally renowned, and it's vitally important that we have them on our side, not just to transform services, but also to deliver the metro. The metro is an important additional element that makes our contract with KA different to the franchises that exist across the border in England. So, whilst we've taken a similar approach, in many respects, we've got that added huge investment project—the metro—which makes our solution slightly different. I don't know whether Simon Jones has anything to say on this. Simon?

Thanks, Minister. The metro has been at the heart of our thinking on this process, so we've not been able, perhaps, to do this in quite the same way as would've been done elsewhere in the UK, because other rail franchises don't typically have such a significant and complex engineering project attached to them. So, throughout all of this lot, our priority, as well as making sure that employees are safe and services are delivered, is that the metro is secured, as the Minister said. So, whilst we are moving to TfW directly operating trains, we were very conscious of the need to keep KeolisAmey, who came up with the concept design for the metro, involved in this for the duration of the project. We need to be able to rely on their expertise in the long term in order to be able to secure the metro, as the Minister says.

Thank you. You've answered some of my later questions. Is it possible also, Minister, to talk about some of the governance arrangements here? How is the new company going to be scrutinised, I suppose, effectively, beyond February of next year?

Well, TfW will remain responsible for TfW Rail Ltd, who will be responsible for the running of the services. The same governance arrangements in terms of scrutiny of TfW—scrutiny of Welsh Ministers—will be in place. But, of course, with direct control, it means that we are more accountable, if you like, so, if anything, governance arrangements will be even clearer as a result of what we're announcing today.

And can I just check what type of contract the new subsidiary will operate? Will it be like a franchise, or a concession, or is there some kind of new arrangement that you're working towards?

I'm going to bring in Simon on the details of this. But of course, it's worth saying that what's been signed this week are the heads of terms; it's the principle of what we're doing, and now we're going to work through in greater detail how it's going to be operating. Simon.

Effectively, I suppose the nearest parallel is with this being a concession, because since the start of the pandemic, Welsh Ministers have essentially been taking the financial risk on the service, just as administrations across the UK have been—so, the Department for Transport and colleagues in Scotland. It's exactly the same arrangement there where, actually, the risk has had to pass to the public sector from the private sector. We don't know when this pandemic situation will come to an end; we don't know when the suppression of passenger demand or passenger revenues will come to an end. So, we will need to maintain an arrangement where that risk is borne by the public sector until we get clarity about what the future might look like. So, I think the answer is that it's going to look very much like a concession. Keolis, I think in one of their communications to some of their stakeholders today, recognised that no private company in the world would be able to deal with this sort of financial pressure that the pandemic has brought about.

On that point in terms of the financial pressure, what are the financial implications of the decision? I ask that question, of course, on the basis that it's a huge potential financial burden on the Welsh Government in terms of other budgets—education, health and so forth. So, perhaps the Minister could outline what the financial implications are.

14:25

Yes, sure. Well, the running of the services won't cost more than the current arrangements under the emergency measures agreement, and the EMA costs are associated with coronavirus—huge additional costs—because so much of the revenue is associated with the fares that passengers pay. I think the figure—Simon will be able to correct me if I'm wrong—is that, between 53 and 54 per cent of the overall take for the operator comes from fares. That's pretty much dried up. Patronage went down to 5 per cent, and as a consequence, £170 million in revenue was pretty much lost, because it's just not being taken at the moment because of COVID restrictions and the impact of the virus and the way that we operate.

And this isn't just exclusive to rail, as I know you're aware, Russell; there are huge challenges for other areas of public transport in terms of bus services as well. What we know is that the model that has been operating for many public services is now broken as a result of coronavirus—of that there is no doubt. Simon's already said, in their communication today, Keolis have identified that no company would be able to shoulder the sort of costs that are associated with operating in the COVID environment.

Can I just check—I think you just said, Minister, that no further additional money would be required. Can I just clarify that I've heard that right?

Well, it's all—. For this year, it's all captured within the emergency management agreement, so it won't cost any more than that. Longer term, we won't be paying a profit for the operator and so, there could be cost savings there. But right now, we face the prospects of coronavirus impacting on public services right across the board, and the cost of some—

So, will additional funding be needed in terms of the longer term? That's what the question is, I suppose.

Well, we're going to be working through the cost implications as part of the detailed negotiations, and when I make the oral statement, hopefully in two weeks' time, I'll be able to provide detail of the costs moving forward. And I think—. Simon, did you want to—? Lee. It was Lee, sorry.

Could I just say something brief on that? Clearly, COVID in itself implies additional cost, and that has been seen, as Simon said, across the country, and we've seen other franchises in England being handed back. The difference we have in Wales, because we have an arm's-length body in TfW, and because we have a different contract in wanting to create the metro, we have different options here. And the option of doing nothing in the face of this—because, effectively, we signed up to a pain-sharing partnership with KeolisAmey. The whole business model collapsed in the face of COVID because the revenue wasn't coming in, and Keolis, in effect, weren't prepared to shoulder their share of the pain. Now, we had a choice at that point: do we continue to put money into this existing partnership, to prop it up and to continue to provide a dividend to Keolis, or do we make a different choice, where we want to keep the partnership going? But my point to make to Russell in terms of costs is: we had a choice of having a managed exit from this or an unmanaged exit, and an unmanaged exit would be very expensive.

The specific question, though, is about the long-term implications. I understand that there's a reason—[Inaudible.]—but it's the long-term implications of what additional costs might be required.

Sorry. Lee was right: it's all dependent on passengers coming back, and passengers coming back is dependent on coronavirus. And this is irrespective of what model you operate; it would've been the same if we had continued with the existing arrangements. But the difference is that we would then have, as Lee has already said, it would then have led to a collapse by the operator and a catastrophic transfer, then, to the operator of last resort. What we're able to do now is manage a careful transition that will take us through to February, and then beyond, with the establishment of TfW Rail Ltd, as—

Russell, I need to bring other Members in. If there's some time left over, I'll come back to you, okay?

Thank you, Chair. Can I just say I think this is pretty clearly the right thing to have done? I know, Minister, you referred to the model being broken post COVID; I'm not entirely sure that it was the right model pre COVID, and I've never been a massive fan of public subsidies for private profit. So, I think this may turn out to be one of the good things that comes out of the coronavirus crisis.

Chair, I've got three specific questions I'd like to ask. Would you prefer me to ask them one after another or shall I ask them all and then let the Ministers and their official respond?

One after the other, I think will be easier, so that we can get clear, succinct answers from them.

14:30

Yes, thank you very much. So, can you just tell us a bit more, Ministers, about the thinking behind why a subsidiary company to Transport for Wales was needed? I think you've mentioned, Minister, that it's in line with international best practice, but I'd like to understand a little bit more what that means. I suppose it goes back to Russell George's earlier question about accountability and lines of sight, and I just wonder why we need that extra layer.

Sure, okay. The structure that's proposed mirrors what's already being used by the Department for Transport in England. They've got a holding company with operator-of-last-resort companies sitting beneath it. It's a tried and tested model, one that works well and one that we can adopt here very easily. Essentially, what we will see is the subsidiary, TfW Rail Limited, operating with its own licences, and accountable to the Office of Rail and Road. So, it's a very clean, proven way, it balances the need for best value for money for the taxpayer, whilst maintaining also a rail service and providing the best possible experience for the travelling public, and I think the governance arrangements will be strong and clear as well.

That's helpful. Thank you. You mentioned, Minister, that there will be an ongoing relationship with the companies. I'm presuming that there will be a cost to that. Now, I appreciate with commercial confidentiality and also that you're at an early stage, you may not be able to tell us in detail—you may never be able to tell us in detail, because of commercial confidentiality before the money is spent—exactly what that cost will be. But could you describe for us in a bit more detail what Transport for Wales Rail Limited will get out of that ongoing relationship, how that will work and how that will be structured?

Yes. So, the structure and how it will work are part of the negotiations that are taking place now, now that the heads of terms have been agreed. Essentially, what the agreement will allow for is for Transport for Wales to tap into two major international companies and all of the experience and expertise that they bring with them. And it will help not just in terms of being able to deliver major infrastructure transformation, the metro, but also in terms of integrating ticketing and making sure that we integrate heavy and light rail, making sure that we are able to transform services based on what these companies have been able to do elsewhere around the world. So, expertise, delivery of the metro, passenger improvements and proven track records is what it gets us.

That's helpful. Thank you. Finally, I just want to ask you to expand a bit on the impact on the staff of this. Obviously, we will need people to run the railways, and I'm sure you wouldn't want to lose expertise, but I think there may be some sort of concern out there, people may be a little bit worried about what this means for them in terms of their jobs and, indeed, in terms of their local services. But if you could just focus in your response on the impact on the staff: what, if anything, will be different for them?

Thank you for the opportunity that you've provided me with now to discuss the concerns for staff. I think it is absolutely right that we talk about the future of 2,500 people who are employed by Transport for Wales Rail Services. Today marks the beginning of consultation on the Transfer of Undertakings (Protection of Employment) Regulations 1981 process, and we expect all of those members of Transport for Wales Rail Services to TUPE across on the same terms and conditions. So, I can give assurance to the staff of TfW Rail Services that they will be involved in the consultation, unions will be involved in the consultation and we want to make sure that their terms and conditions are protected as they TUPE across.

Minister, out of adversity, there are sometimes silver linings, and we know that section 25 of the Railways Act, which prohibited public ownership, has been a millstone around the way we've had to be able to develop our devolved responsibilities on transport.

I'm very pleased to hear about the engagement with staff and so on. Can I ask—I'll put the three points I wanted to ask together in one question. The first thing is: what level of engagement have you had with the three core trade unions, that is, ASLEF, RMT and TSSA?

The second thing is, in terms of the development of this new model, is there an opportunity to really do something more imaginative, in fact even more European in a way, in the sense of having representatives of the workers on the new subsidiary company involved in the operation and decision-making process? Because it seems to me that that would be a real foresighted change or innovation that could be made.

And thirdly, in terms of the fact that going down this road, all the work and investment that's going to take place where we take the responsibility now, which the private sector cannot sustain, we want a long-term model rather than one with franchises in England that they revert back to as soon as—after being in the public sector, they go back into profitability and then revert back so that the profits go back into the private sector. How do you envisage ensuring that we now have a long-term change ownership model, will this require revocation of section 25, and will you be now pressing UK Government to revoke this section? Do you see the new model as being one that is an all-Wales integrated transport system—so, I suppose, bus, rail and indeed air as well?

14:35

That's a big ambition that I think needs to be carefully considered, but it's an ambition that I think generally the people of Wales would certainly support. There are a number of questions that Mick has asked—I'll try to quickly rattle through all of them.

First of all, engagement with unions has been incredibly strong for some time now. I have monthly meetings with all trade unions, and also, separate to that, I have monthly meetings specifically with rail unions where we're able to discuss a whole range of contemporary issues and look forward at how we may plan for the future. During the height of the coronavirus pandemic and lockdown, those meetings were even more regular. I think the principles of social partnership and fair work that have applied to the operations of TfW will continue through to the subsidiary. Trade unions have been offered a place on the board of TfW, and that demonstrates, I think, how we are keen to make sure that union representation is at the heart of all of the operations and decisions that take place. Broadly, the unions, as I think you've seen already today in the media, support this move. They want to work closely as it develops and as we move forward to February of next year and beyond.

You talk about whether a change in the law will be required; will section 25 have to be dealt with, finally? Well, it's for DfT to work out what they want to do with this particular section of the Act, because they face the same problem across the border as well. The measures that are being brought in, strictly speaking, are meant to be temporary measures, but we don't know how long 'temporary' actually is, so we'll be using this model for as long as it takes.

And do you see that, in terms of the communication with the public now on this—obviously, there's a lot of media today, but I see the messaging, this is really now a publicly owned service run for the people of Wales and accountable to the people of Wales—is that how you envisage the future of this industry?

Yes, it is, and that's why I think, again, generally the people of Wales have welcomed today's announcement, but I do have to stress that, right across the public sector at the moment, there are real challenges in delivering services with them costing more, and with public finances under great strain. But yes, accountability direct to the public is something that the people of Wales, I'm sure, will be celebrating.

Diolch, Gadeirydd. Dwi jest eisiau dod nôl at yr agwedd gyllidol, achos yn amlwg, rydyn ni newydd weld cyllideb atodol, ychwanegol y Llywodraeth yn cael ei gosod ychydig ddyddiau yn ôl, ac mi oedd yna ddyraniad ychwanegol sylweddol i Drafnidiaeth Cymru, wrth gwrs, yn sgil COVID—rhyw £113 miliwn oedd y dyraniad hwnnw. Nawr, o beth rŷch chi'n dweud, yn amlwg mae rhywun yn deall bod cyd-destun COVID yn golygu bod angen yr arian ychwanegol yna, ond ydw i'n glir, felly, i ddeall eich bod chi'n dweud fydd yna ddim cost ychwanegol i drethdalwyr Cymru yn sgil newid y model a'r holl broses o gwmpas hynny yn benodol? Hynny yw, mae angen creu'r endid newydd ac mae angen y broses TUPE rŷch chi wedi sôn amdani. A hefyd, ail ran y cwestiwn, mewn ffordd, yw: oes gennych chi'r capasiti o fewn y gwasanaeth sifil yn y Llywodraeth i ddelio â hyn i gyd, oherwydd mae hyn yn digwydd ar adeg pan fo, fyddwn i'n dychmygu, pwysau aruthrol ar y capasiti sydd gennych chi yn y lle cyntaf?

Thanks, Chair. I just want to return to the financial aspects, because we've just seen a supplementary budget laid just a few days ago, and there was a substantial additional allocation for Transport for Wales as a result of COVID—£113 million, I believe. Now, from what you say, clearly one understands that the COVID context means that additional funding is needed, but am I clear in understanding that there will be no additional cost to Welsh taxpayers as a result of the change in model and the whole process around that specifically? Of course, you need to create a new entity and you need a TUPE process, as you've already mentioned. Also, the second part of the question, in a way, is: do you have the capacity within the civil service in Government to deal with all of this, because this happens at a time when I would imagine there is huge pressure on the capacity that you have in the first place?

14:40

Apologies, Chair, I didn't pick up on the first part of the question, so I'll deal with the capacity question, if I may. Clearly, the fact that we'll TUPE over 2,500 people into Transport for Wales Rail Limited, including experts and managers, will help in terms of supporting capacity. And, of course, Transport for Wales has its own board, who are looking very carefully as well at the organisation's capacity. Within our organisation, Simon's team, I have to say they are pressed; they are under enormous pressure. Any additional capacity that we're able to secure would be very welcome indeed, and we are looking at how we can do that. Of course, there are constraints, though, in terms of financial resource to be able to support that. But it is something that we are looking at very, very carefully indeed, not least because we've got the added pressure of Brexit and all of the transport-related uncertainties that are to come in the weeks and months ahead. 

So, the cost of the model—

Can I try and answer the first part of the question, as you didn't hear it?

So, in terms of the—. There are two elements to the cost. The one is the transitioning out of the existing partnership model. So, there are some one-off costs there for compensating KeolisAmey for their intellectual property and so on. Then, in terms of the running costs of the new model, we don't anticipate them being higher; in fact, they should be lower, because we don't have to pay the profit element that, currently, Keolis has. In fact, that will be—there should be some savings there. 

Yes, so, wearing my Finance Committee hat, the question basically was: given that we've seen the supplementary budget, you don't foresee that your department will be asking for any additional money as a result of what's happened, over and above what's already been allocated to you in additional money because of the effects of COVID more generally.

Well, the money we've been asking for additionally is to compensate for the loss of revenue. So, it's been significant: in buses, £140 million; in railways, £165 million this financial year. So, very heavy additional costs, because we want to maintain the services but obviously the business model is no longer there. But, in terms of the running costs, no, we don't anticipate additional costs. 

Or the additional capacity that the Minister mentioned, potentially. 

[Inaudible.]—earlier to seeking additional capacity in terms of the civil service and—[Inaudible.]

That's within the organisation, so that would be from the centre. But that's a human resource matter within Welsh Government; it's not to do with the actual operation of the border franchise services. 

We've almost come to the end of this session. Russell, I said I'd come back to you for the final two minutes and, there you are, you can have the last question. 

Thank you, Chair. On the financial aspects again, Minister, have I got this right? There was £5 billion of investment announced in 2018. So, how is that going to be split between the various parties and companies involved?

Well, that £5 billion amounts to the cost of running the services, the transformation, the metro programme. So, there are a huge number of budget lines that are captured within the £5 billion headline figure. And in terms of the operating costs, it'll be Transport for Wales Rail Limited that are responsible for that, and therefore the expenditure will fall with them. As we've already said in the announcement, in terms of the delivery of the metro, that contract with Amey Keolis Infrastructure Limited will continue. And in terms of the joint venture for making sure that we've got the expertise and the experience to be able to transform services, the costs of that I've already said we'll be working through as the detailed negotiations continue. 

Simon, anything more on the £5 billion at all?

Minister, as you say, it's quite a complex picture. I think you offered earlier in your oral statement to provide a bit more detail about this, and that's perhaps something that—

I should say—sorry, Chair, for any—. Just to clear up any doubt at all, our commitment to the rolling stock remains. That was that £800 million programme. That remains. And the metro, £736 million, that remains. That will be delivered. 

And if the Chair allows me to ask a final question—. Obviously, there's a big role for the UK Government here in terms of the cross-border nature of the franchise and the fact that rail is a reserved matter. So, I wonder what discussions you've had with the Minister, the Secretary of State for Transport, and what is the UK Government's position on the decisions that you've made.

14:45

Well, it's broadly similar to a decision that they made in regard to Northern Rail earlier in the year. We have regular discussions with counterparts in the Department for Transport; in fact, the next meeting is due to take place later this afternoon. So, engagement with the other DAs and with Whitehall is pretty good. 

Have the UK Government got a position on what you've undertaken here in Wales? Is there a position from themselves?

Well, given that they've had to do something so similar with Northern, I would suspect that there is only great sympathy for what we've had to do, and agreement that it's the right course of action. What we would not want to see happen here in Wales is for that catastrophic failure to occur, and a transfer to take place without any consultation on TUPE. And we've been able to establish a 90-day consultation period as a result of good, strong negotiations with Keolis Amey, an agreement that enables us to retain their expertise, their superb capabilities, whilst also ensuring that we deliver a new model where we have accountability fully to Welsh Government, where the public can be satisfied that we are serving their interests, not profit. 

Thank you, Minister. We've come to the end of our time allocated. Can I thank you, the Deputy Minister and Simon Jones for attending this afternoon at very short notice? It's very much appreciated, the opportunity to ask some questions and scrutinise the announcement today. So, thank you very much. As you will know, you will receive a copy of the transcript. If you identify any factual inaccuracies, can you please let the clerking team know as soon as possible so that they can be corrected? So, once again, thank you for your time. 

And, for Members, we'll now have a 15-minute break. We'll recommence at 3 p.m. when the First Minister will be in the next session. 

Gohiriwyd y cyfarfod rhwng 14:47 ac 15:00.

The meeting adjourned between 14:47 and 15:00.

15:00
4. Sesiwn Craffu Gweinidogol
4. Ministerial Scrutiny Session

Can I welcome Members back to this afternoon's meeting of the Committee for the Scrutiny of the First Minister, and to the next item on the agenda—our evidence session with the First Minister? Can I welcome Mark Drakeford, the First Minister? And with him today is Des Clifford, director general of the First Minister's office. Welcome, both.

I'm sure you're aware that the theme today is related to COVID-19 and the recovery plan, but also we are keen to explore the current position, as far as the Welsh Government's concerned, on Brexit and European Union relationships and the transition period. And we'll start off in that area, if it's okay with yourselves. I suppose the first question is: what level of confidence have you been able to gain from discussions you or Ministers have had with the UK Government as to the possibility of a relationship being agreed before the end of the transition period?

Well, Chair, I think it is difficult to offer you a great deal of confidence, given that we are so very late in the day and the brinkmanship continues. I think there is a deal there to be done—it will not be the sort of deal we were promised; it will not be comprehensive, it will not be deep. But, even in the last days, I think it is possible to do better than 'no deal'. We follow the negotiations from afar, really, and have no direct ability to influence them. But my view is that the obstacles on the path of a deal—state aid, fisheries, and now, of course, the adjudication arrangements—they're all capable of being solved; it is political will rather than technical obstacles that stand in the way.

Have you been given more confidence by the fact that they're starting negotiations again today—that there still seems to be a desire to reach a deal on behalf of both parties?

Well, Chair, I remember the very first meeting that the Welsh Government had with the UK Government immediately after the referendum. It was in July 2016. David Davis, the then Secretary of State for Exiting the European Union, came to Cardiff. He met the then First Minister—I sat in on the meeting—and we were assured that this was the easiest deal that would ever be done, that all the cards were in the UK's hands, and that it was all going to be a breeze. Here we are, weeks away from leaving the European Union come what may. So, I think you've got to be realistic about how much confidence you can take from a process that has failed at every stage so far to deliver on the promises that have been made for it. It can happen, but, as I say, it's political will rather than anything else that has to be summoned up to make it happen.

Let's put the confidence to one side, and ask the question—. You mentioned earlier that you were not really a part of the negotiating team, and you weren't involved in those negotiations, which I know we've talked about for many years in my committee. But have you been given assurances that you will see text of any agreement prior to their approval, so that the Welsh Government can have an analysis of what it actually means of that agreement?

No, we've had no such assurance, nor do I expect that we will see it, other than maybe a very short time before it is made public in every other way. So, I'm afraid that's been a bit of a history of all of this—that devolved administrations, across the United Kingdom, get a very tiny amount of headroom once the decisions have all been made, but not in any sense a sharing of a text on which we would be able to comment or represent Welsh interests.

15:05

Thank you, Chair. Well, First Minister, that's another reason for Wales to stand on the international stage in its own right. I know that we are not here to discuss that, but it's one answer to the frustrations that many people feel.

Could you tell us a little bit about what work the Welsh Government is now doing then, with a 'no deal' prospect obviously looming, to ready business in Wales for the end of the transition period? Clearly, we have noticed a ramping up of advertising, and that narrative from the UK Government. Is there anything in particular that the Welsh Government is doing to play its part in that respect? 

Well, Chair, throughout the process of leaving the European Union, we have used Business Wales's EU preparedness portal as the front-line provision of advice and guidance for businesses specifically here in Wales. We continue to make that service available. We are using the Business Wales networks as well—its newsletter, its social media channels, its mailing lists—in order to reach as many businesses in Wales directly on preparedness.

We have the European transition working group, which is a sub-group formed by the Council for Economic Development, again in order to make sure that we are sharing with our partners as much of the information as comes our way. In the end, it has to be the UK Government that leads on this matter, because they know things that we don't know. We pass on everything that we are able to pass on in order to help businesses to prepare, but we can't do this for the UK Government. We can try and do it alongside them, and we do that.

I think that it's important to say, Chair, isn't it, that we are pitching that information into a sector that has a very significant degree of EU fatigue, and who have been marched up this hill a number of times over the last couple of years, only to be marched back down it again. Every time that happens, I think that it is harder for businesses to summon up all of the energy and resource that they need to prepare. I think that the UK Government's own figures of preparedness are demonstrating that.

So, how do you characterise the relationship, then, in terms of co-ordinating the approach to the end of the transition period between the Welsh Government and the UK Government? In your earlier answer, you sounded a bit despondent yourself in that respect.

Well, in some ways, Chair, that engagement has stepped up significantly very recently, but that's also a bit characteristic of the way that things are done with the UK Government. There will be long periods of silence and then, when a crisis emerges, suddenly we are all back around the table together again.

So, Welsh Ministers are now attending meetings of XO, as it's called. This is the UK Government Cabinet sub-committee for transition planning. Ministerial colleagues here attended meetings of that UK committee on 6, 13 and 21 October, but those were the first invitations that we'd received since January. So, I would say that, at the moment, because we are staring at such a difficult period, then devolved Governments are being invited back to be part of that planning. But, it's after a long period in which we were not included in the UK thinking.