Y Pwyllgor Cyfrifon Cyhoeddus a Gweinyddiaeth Gyhoeddus

Public Accounts and Public Administration Committee

16/11/2023

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Adam Price
Mark Isherwood Cadeirydd y Pwyllgor
Committee Chair
Mike Hedges
Natasha Asghar
Rhianon Passmore

Y rhai eraill a oedd yn bresennol

Others in Attendance

Adrian Crompton Archwilydd Cyffredinol Cymru
Auditor General for Wales
Jane Richardson Prif Weithredwr, Amgueddfa Cymru
Chief Executive, Museum Wales
Kate Eden Cadeirydd, Amgueddfa Cymru
Chair, Museum Wales

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Fay Bowen Clerc
Clerk
Katie Wyatt Cynghorydd Cyfreithiol
Legal Adviser
Lisa Hatcher Dirprwy Glerc
Deputy Clerk
Masudah Ali Cynghorydd Cyfreithiol
Legal Adviser
Owain Davies Ail Glerc
Second Clerk

Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.

The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.

Cyfarfu’r pwyllgor yn y Senedd a thrwy gynhadledd fideo.

Dechreuodd y cyfarfod am 09:16.

The committee met in the Senedd and by video-conference.

The meeting began at 09:16.

1. Cyflwyniad, ymddiheuriadau a dirprwyon
1. Introductions, apologies and substitutions

Bore da a chroeso. Good morning and welcome to this morning's meeting of the Senedd Public Accounts and Public Administration Committee. We've not received any apologies for absence, and I'm pleased to see all Members present with us, and Natasha Asghar who is attending remotely. Do Members have any declarations of registrable interests they wish to declare? Thank you. 

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

We have a number of papers to note. The first being a letter from the director general of the climate change and rural affairs group regarding Cardiff Airport next-generation security scanners. The director general wrote to this committee on 26 October, drawing our attention to the written statement made by the Deputy Minister for Climate Change regarding next-generation security scanners. The statement sets out the Welsh Government's decision, as the sole investor in the airport, to provide an equity investment of £6.6. million to the airport as a one-off measure to fund the compulsory, regulatory requirement of installing said next-generation security scanners. The letter also sets out the director general's intention to write shortly to this committee with the next six-monthly update, as agreed previously with the committee. So, I invite Members to comment on the letter and statement—if you have any comments—or to raise any matters you wish to discuss regarding any further action you'd like us to take at this stage regarding our work on Cardiff Airport. Natasha. 

Happy to note the letter, Chair, for now, but I am looking forward to hearing the update in six months' time, as much as everyone is, I'm sure, in the committee. 

Just one point of detail it might be worth the committee seeking clarification on before that routine update, which is to get some clarification on the details for the arrangements for the equity investment supporting the cost of the new scanners. Quite what that is, and on what terms, is unclear, so I think that might be helpful.

Thank you very much. I didn't announce it, but that's Mr Crompton, the Auditor General for Wales. Do any other Members have any further comments? None that I can see.

We'll move on to the next item, which was a letter received from the managing director of Green Man, written to us setting out why she thinks the Welsh Government would seek to support the Green Man festival. The committee is aware of unresolved issues relating to the Welsh Government's ongoing arrangements with the current lease of Gileston Farm, which we understand came to an end on 31 October. The committee is still awaiting information on any ministerial decision about this or any alternative contingency arrangements, or extensions that may have been in put in place, and our work is on hold until we receive this further information. Noting that this is on hold until we receive that further information, do Members have any comments on the letter and whether they wish to take any further action at this stage regarding our work on this matter? So, Rhianon Passmore, and, then, Mike.

I just think it's quite useful for this to be set out in context in terms of the overall investment, and I think it's of use to note how much money is being spent across Wales in tourism and compare that to the rest of Great Britain. So, I just think to note the letter, but it is quite useful to have that in front of us and the success, to date, of the festival economically for Wales.

09:20

Thank you. I think, as we previously agreed, as and when we do decide to go forward with this, this is one of the witnesses we'd be seeking to bring before us. We've had a—. Sorry—yes, Mike. Mike Hedges.

One question, Mark. They say they generate profit into the Exchequer. Can we ask them how much?

Yes. Thank you. I can't see any other further comments. No. In which case, I'll move on to our third item to note, which is a letter from the Chief Executive and Clerk of the Senedd regarding scrutiny of the annual report and accounts 2022-23. This is in response to our request for further information following the evidence session we held on 12 October. Again, I invite Members to comment on the letter and raise any matters you may wish to discuss on any outstanding areas you wish to seek further information on. So, Members, again, any thoughts, comments or issues you'd like to seek further information on? Content? 

Thank you. In which case, can I invite Members just to note the report, noting in the meantime that the contents of the letter have been reflected in our draft report, which will be considered in private in our meeting later today? Thank you.

Our next item is a letter received from the Permanent Secretary regarding the report of this committee on the scrutiny of accounts of Welsh Government 2021-22. The Permanent Secretary has thanked us for our report, which was published on 20 October. His letter sets out how the Welsh Government are carefully considering our recommendations, but are also currently focusing resources on ensuring they meet the planned date for sign-off of the 2022-23 accounts at the end of November. The Permanent Secretary states that he hopes to respond—hopes to respond—positively to the recommendations of the committee by the end of January 2024. Do you wish to comment on that, auditor general, or—?

Not on the content of the letter, Chair, but in terms of the timing for sign-off, we're still aiming for that date. It will be tight, but there are no major issues that are of concern to us at this stage. So, if it's beyond the end of November, it won't be by very much, and we'll keep the committee informed if it's more lengthy than that.

Thank you. Can I therefore invite Members to note the letter? Thank you very much indeed.

We have another item, item 5, a letter from the Minister for Finance and Local Government regarding the legislative consent memorandum on the Economic Activity of Public Bodies (Overseas Matters) Bill. Why we can't get some short titles for these things, I don't know. The Minister has written to us in response to a number of queries we raised in relation to this legislative consent motion, and I propose that Members note the letter and discuss its contents during the private session later in today's meeting. Are Members content to note the letter on that basis? Thank you very much.

We have a sixth item to note, a letter from the First Minister, which was sent to the Chair of the Children, Young People and Education Committee in response to issues relating to ministerial appointments. We were copied into the response given this committee's ongoing inquiry into public appointments in Wales. Can I ask Members to note that letter? Thank you very much.

We have a seventh and final item to note: a letter from the Chair  of the Climate Change, Environment and Infrastructure Committee, who's written with an update on that committee's planned work in relation to scrutiny of Transport for Wales. Again, can I invite Members to note the letter?

09:25

Note the letter. I'm sorry, I missed agenda item 2.3, which is the letter to you, Chair: scrutiny of annual report and accounts. Have we done that?

Right. Going back to that pack page 9, there's an annex and a supplementary, and it just does detail the cyber-attack scale, and I just would like to go back to that and state that's fantastic; that's what we would expect to receive, but I still don't know, looking at that, how we fare compared to other devolved institutions. I don't get a sense of scale there. Is that good, is that bad, is that middling? So, that's my comment on that agenda item, Chair.

Yes, that was the item 4, I think, the 2021-22 accounts.

Okay. Thank you. We've captured that. In that case, we're slightly ahead of time, so we can have a short break until 09:40 and go into private session in the meantime.

Gohiriwyd y cyfarfod rhwng 09:26 a 09:50.

The meeting adjourned between 09:26 and 09:50.

09:50
3. Craffu ar y cyfrifon: Amgueddfa Cymru
3. Accounts scrutiny: Amgueddfa Cymru-Museum Wales

Croeso. Welcome to our witnesses. I'd be grateful if you could state your names and roles for the record. 

Bore da. Kate Eden, cadeirydd Amgueddfa Cymru.

Good morning. Kate Eden, chair of Amgueddfa Cymru. 

Bore da. Jane Richardson, recently appointed chief executive, Amgueddfa Cymru. 

Again, thanks for attending the committee. As you will expect, we have a number of questions for you, and I'd be grateful if both Members and yourselves could be as succinct as possible to enable us to cover the range of issues generated by the topic. As convention has it, I'll start the questioning and then bring colleagues in. I have a couple of questions initially for the chief executive. So, to start, you approved and signed the financial report for 2021-22 on 21 September this year, some 10 days after taking up your post at the museum and 18 months after the end of the year to which it relates. What actions did you take prior to doing so? 

Thank you very much for the question. If I can just make a few remarks going into that question. Obviously, this has been a very, very difficult time for the museum and for all those involved, and it's also been something that's occurred over a very protracted period, as will become clear through our discussion as well. I do just need to emphasise the great sensitivity and confidentiality around much of what has been in the Auditor General for Wales's report, and because this settlement is still live, there will be things that we're not able to share. We don't want to come across as not being open with you, but because it could compromise a very sensitive settlement and potentially reopen it, and expose the organisation to unlimited financial liability, there will be things that we're not able to say. 

And I think it's also fair to say that we've really welcomed the reporting. As an organisation, we've had the tailored review and the auditor general's report. We do have some disagreement over the interpretation of Audit Wales's report, which I'm sure we'll come to later, but we were glad that there were no further actions for us from the Charity Commission, and that we have already been able to implement quite a bit of the learning from this and the recommendations made, as we'll come to later I'm sure. 

And just to say, both Kate and I, we're new in post, we're very excited about the future, and although today you'll be talking about what's been happening in the past, we would love to get the opportunity to talk to you a bit about the vision, and we'd also like to extend an invitation to you that if you'd like to come and see us onsite and look at some of the work that we're doing, we would love to host you. So, just to make that invitation right at the start. 

But just in terms of the accounts, as you said, I've only recently taken up the role full time within the past few days, but I was able to do some part-time work from early September to familiarise myself with the organisation, so that I could hit the ground running when I did start. It was important that I was able to look in real detail at these accounts before signing them off, so I took the whole matter very seriously. I was confident that the two previous accounting officers had been content to sign them off. That gave me some confidence, but I also sought assurance from our director of corporate resources, our head of finance, the treasurer on our board of trustees, legal advice and our colleagues in Welsh Government. I was also pleased—. We've had, obviously, very extensive contact with Audit Wales over the previous period, and I was confident that Audit Wales had signed off the financial elements of the accounts. So, although it had obviously been complicated and delayed, I was confident that I could sign off those accounts with confidence. Thank you.

Thank you. Questions will come to the role played by the Charity Commission later. We are aware the settlement has been agreed, finalised and published, and is already in the public realm, so we would seek to focus our questions on information that is already in the public realm. If there are matters that you feel you can’t share with us in public, we’d be grateful if you could indicate whether you would be prepared to share them with us in private, in which case we would consider going into a short private session accordingly.

09:55

I think that would still be problematic, because it would still break the confidentiality clauses that surround the settlement. So, I think we are obliged not to share some of the details around the negotiations on the settlement, but if we get to that, I could indicate where we feel we're able to share, and where there might be greater sensitivity.

Thank you. As I say, we'll seek to focus on what's already in the public realm. But the financial report was laid before the Senedd in English, but is available on your website in English and Welsh. Why is that?

Because the timetable—. The accounts that are laid down on the Senedd are laid down by Audit Wales, so that wasn't for us to do. Our own policy is that we would lay our accounts down bilingually, so when it comes to our own website, we would always want to publish those in English and Welsh. We actually did publish an English-only version on the Charity Commission website in order that we could do that as soon as possible after the deadline. So, with our accounts—I'm sure you're all aware—we have to submit them for consideration by the Minister, and the Minister has 10 days to be able to look at those accounts before we can publish them anywhere publicly. Audit Wales aren't bound by that same requirement, so Audit Wales are able to publish immediately. We then waited 10 days, and then as soon as we had the authority from the Minister to be able to publish, we immediately did that on the Charity Commission website, got them translated and then uploaded them on our own website. 

Thank you. Before I bring in a colleague, in terms of settlements, they normally involve closed liability in order to reduce risk. I wonder if you could therefore clarify why you used the term 'unlimited financial liability' and whether you're able to tell us, in that case, why there wasn't closed liability in this case.

The nature of the claims that were brought. Because of what they represented, employment law, there would have been no cap on the financial claim that could have been made under those heads of claim, which was why a settlement was preferable, and why the trustees pursued that course of action. Is that fair, Kate?

Why wasn't there, as is common practice, a closed liability clause in the settlement?

I'm afraid I don't know the answer to that question. I'd need to take advice and come back to you. 

Thank you. In which case, can I bring in Rhianon Passmore, please?

Thank you, and welcome. This must have been a very difficult time to step into new roles. Turning to responsibilities and roles and the timing of raised concerns, the financial report, you say, was delayed because of senior executive concerns about the clarity around roles and responsibilities and also the time taken to complete related processes. Could you talk the committee through, briefly, that chronology?

Yes. It's quite confusing to get your head round on paper, and it has taken us some time to unpick this. The accounts themselves for 2021-22 had been completed on time. We'd been working with our colleagues in Audit Wales and that was all clear. However, this situation, this dispute, this breakdown in relationship that was going on in the organisation was live, and at the time that the accounts would have been finalised and laid down, it became clear around the summer that a settlement was going to be likely and that, because of the timing of when everything started—. It's described, I understand, as an originating event. So, even though the settlement itself would have been agreed the year after 2021-22, because the incident originated in 2021-22, it had to be linked back to those accounts. So, the team at that time felt that, if they had put those accounts in, by the time it got to the end of the financial year, those accounts would have been inaccurate because another event would have been put into them. I hope that I am explaining this clearly enough. So, at that point, it was clear that there needed to be a delay to understand the scale and nature of the settlement, so that when the 2021-22 accounts were finally submitted, they were an accurate picture of that year. But because, then, the discussions over the settlement were quite prolonged, that's why we ran into the challenge around the significant delay in bringing them forward. 

10:00

The significant event, in terms of clarity for the committee, would have been centred around roles and responsibilities.

Sorry, could you—?

In terms of the delay, and the issue around clarity of roles and responsibilities, is that significant in terms of the overall delay, in that chronology? How would you say that that would fit in with that? 

It's not particularly the roles and responsibilities, I would say. Would you, Kate? It was about trying to untangle a very, very complex employment dispute, in effect, and understanding how to get a route through that in what had been an unprecedented case. So, because it involved both the then president and the director general, that made it very difficult to—. That's, I think, where it relates to the roles and responsibilities. It's how those two roles were able to interact and to be able to come to a conclusion on that that led to the delay. 

Okay. Thank you. The financial report for 2021—you say that responsibility for decision making in relation to functions is clearly set out in the Royal Charter. So, again, if this was the case, why was there a lack of clarity about roles and responsibilities?

I wonder whether this phrasing of 'lack of clarity of roles and responsibilities' isn't perhaps helping us, really.

The challenge was that you've got a situation where, obviously, the amgueddfa has three masters. It has Welsh Government, it has the Royal Charter, and it has the Charity Commission, and you are discharging different functions against those three relationships. So, that, in itself, adds some complexity.

When the director general had a grievance that he wanted to raise, that initially has to go to Welsh Government. So, then, that adds an extra stage. Then, Welsh Government has to brief the amgueddfa trustees. Then, the amgueddfa trustees, at that point, have to understand how they can fulfil their duty of care and responsibilities to the director general, who has raised a grievance, and at the same time be able to perform and discharge their functions when that grievance relates to the chair. 

So, what I'm trying to unpick, really—you have mentioned a significant event and a grievance—is in terms of how did that affect, if you could be really clear, the preparation of the financial report for 2021-22, and the consequent delay? I know that you have touched upon it earlier. 

There was no one significant event.

There was no one significant—. This was the culmination of two and a half years of an escalating issue—

—and the only event was the discussion about the settlement, and how big the financial commitment would be in that settlement. Therefore, that needed to be reflected in 2021-22.

I'll bring you back in, in a few moments. In his public interest report, the auditor general says that Amgueddfa Cymru did not have adequate policies in place to deal with concerns raised by its most senior officers and/or against non-executive board members. Why was this? 

I think it's important to remember that this was an unprecedented breakdown in relationships for the amgueddfa. I think it's true to say that there were employment and dispute policies in place at the time for the amgueddfa, but because of the nature of the dispute between the two parties—one being an Amgueddfa Cymru employee, and the other being a Welsh Government appointee—this was necessarily a little bit more complicated than the existing policies at the time would allow. Therefore, that necessitated the involvement of Welsh Government.

This states that the policies that were then in place were not adequate, which appears to be what you're indicating.

10:05

Yes, I think it was quickly realised that there wasn't a policy that was broad enough to cover the eventualities of that particular issue, and therefore a new policy was put in place fairly quickly after that issue arose. 

And would it be right to assume that corporate bodies normally would have had such a policy in place in the first place? 

Well, our understanding is that in many cases in Wales they don't, because this has caused a lot of thought and reflection. And I know Welsh Government have developed their own policy to address this situation, and they shared that with us, as the chief executives of the various public bodies. So, I think, it's something everybody has learned from and that everybody will be able to be in a much more robust position going forward. 

And we've taken a lot of learnings from the extent of the policies that we have in place to cover all eventualities, and we have reviewed those and they have been strengthened, as a result of those events. 

Okay. The auditor general notes that the former director general submitted a complaint to the Welsh Government in June 2021, but this and matters raised subsequently were not resolved until December 2022. What is your understanding of why the disputes were not resolved more quickly? 

Well, part of it is there are two stages, where Welsh Government have to investigate and then they have to make recommendations back to the amgueddfa board. Part of it was due to the actual nature of the complaints that were made, the grievances that were raised and, I'm afraid, those are the bits that I'm not able to go into, because they are bound by the confidentiality agreement around the specifics. But it was very, very complex, very wide-ranging and involved a number of unprecedented situations to enable it to be resolved. 

And I'm sure—. Although, clearly, you were not in office at the time, so you're not accountable in any way for this, but 18 months is a long time. Hopefully, it wouldn't, but if the same situation arose in the future, could we expect that to be processed more quickly? 

I would love to say that we could, but it always comes down to people, at the end of the day, and trying to get a resolution between people—you can't make any promises. The one thing I would say is that I know there's been significant disquiet over what is seen to be the size of the settlement, but that is exactly why a settlement needed to be reached, because it had gone on so long, and if it had gone on to tribunal et cetera we'd been warned that it would have gone on for at least another 12 months, and then still may not have been resolved at the end of it. So, that's why the trustees, we understand, acted in the best interests of the museum to bring it to a closure as quickly as they could, but nobody in the amgueddfa wanted it to take that long, that's for sure. 

No, I think the question is more whether processes could or would now ensure that corporate governance arrangements, and the systems you have in place for grievance and discipline, would enable that to be dealt with in accordance with HR law—human resources law—more promptly? 

Yes. There's been a significant amount of work at the amgueddfa to modernise and strengthen those policies that are in place to cover these eventualities. The terms and conditions of the chief exec's contract has also been updated to reflect some of those concerns as well. So, there have been steps taken to avoid or mitigate the risk of that happening again. 

And, in fact, our HR team and head of HR have taken forward a programme of work for the whole of the organisation to review how grievances are dealt with at every single level, so that all grievances in the organisation can be dealt with more efficiently and in a timely way. So, we've taken that learning not just for the senior level, but for the whole museum. 

Roeddech chi wedi dweud bod Llywodraeth Cymru yn ymwybodol o'r gŵyn neu'r consérn yma gan y cyn-gyfarwyddwr cyffredinol. Pwy oedd yn arwain ar hyn o fewn Llywodraeth Cymru? A oedd e'n mynd yr holl ffordd i'r Perm Sec? Neu a allwch chi jest roi darlun i ni o bwy oedd wedi cael y wybodaeth ynglŷn â'r anghydfod yma?  

You said that the Welsh Government was aware of the grievance or the concerns emanating from the former director general. Who was leading on this issue within the Welsh Government? Did it go all the way to the Perm Sec? Or could you just give us an idea of who had the information about this particular dispute? 

10:10

Diolch am y cwestiwn.

Thank you for the question.

I'm not sure we can properly answer that to your full satisfaction, because we weren't there at the time, but I think the auditor general, in his report, makes reference to a number of individuals within Welsh Government who had sight of that, and the process and procedure that was used within Welsh Government and the levels to which that was raised within Government.

And you're not able to give any further information in relation to that.

Nothing in addition to what's in the report, I'm afraid.

No. Welsh Government's head of HR was certainly very involved, working alongside our head of HR so that the policy and the arrangements were done hand in hand. But it went through the accounting officer line, as you would expect. But I think because we weren't there at the time, I don't think it would be fair for us to try and recollect names that we may have heard. I think the auditor general's report is the more reliable source for that.

Beth oedd rôl y pwyllgor archwilio, risg a—beth bynnag yw'r term ffurfiol—? Mae gennych chi bwyllgor risg ac archwilio, ac mae hynny fel arfer yn cynnwys rhai o'r ymddiriedolwyr, ond rhai pobl ychwanegol, annibynnol—ie? A oedd gyda nhw rôl yn y broses yma? Mi oedd yna gyfeiriad, yn adroddiad ariannol y flwyddyn gynt, at gwestiynau ynglŷn â llywodraethiant yr oedd prif swyddogion o fewn yr amgueddfa wedi codi. Hynny yw, yn barod, bryd hynny, mi oedd yna ymwybyddiaeth wedi cael ei gofnodi. So, beth oedd rôl y pwyllgor archwilio a risg yn ymchwilio i mewn i'r mater yma?

What was the role of the audit and risk committee—whatever the term is, formally—? You do have a risk and audit committee, do you not, and that usually includes some of the trustees, but also additional, independent individuals—yes? Did they have a role in this process? There was a reference, in the previous year's financial report, to questions around governance that the main officials within Amgueddfa Cymru had raised. So, already at that time, there was an awareness that had been put on record. So, what was the role of the audit and risk committee in terms of investigating that issue?

Diolch. Given the importance and the scale and size of this problem, this was a board-level discussion, rather than an audit, risk and assurance committee discussion. But our treasurer chairs our ARAC committee and our treasurer was very much involved in the discussions at board. So, the discussion would've taken place with all of the trustees, rather than just several of them, as are present on our audit and risk committee.

The references in the previous year's accounts and report to governance concerns relate, I understand, to the situation that we are discussing at the moment, which was becoming apparent at the end of that previous year's audit, and therefore the auditor general and his team wanted to return to that, which they subsequently did.

Isn't one of the reasons that we have independent members on these audit and risk—you know, ARAC—committees, which are pretty standard throughout the public sector and, indeed, in parts of the private sector in different form—isn't one of the reasons for that because circumstances do arise where the board itself is conflicted so it relates to actually members of the board or the board's role, so the ARAC committee is kind of another line of defence, if you like? Doesn't that slightly raise a question mark as to why they weren't involved? From what you were saying, they didn't really have a substantive role in this process—wouldn't it have been wise to involve them because of the fact that there are, actually, non-trustee independent members on that committee?

Yes. And I think there are things that we would do differently this time around. We have had external independent members on the ARAC committee, as far as I understand, within the amgueddfa. I couldn't tell you, I'm afraid, whether there were any in place at the time of the dispute, but that is something that we've sought to rectify very recently and we're just in the process of appointing two external independent members to that committee.

Right. Sorry, I was under the assumption—I think that your ARAC committee can have up to four independent members. So, you're not aware, at this stage, whether there were any independent members at all at the time of this dispute.

10:15

I would have to go back and check for you.

Okay. If you could let us know, because I think that that's quite an important piece of information.

Thank you. We'd be grateful. If I can bring Rhianon Passmore back in.

Thank you. Again, you both weren't in post, but you are now in post, and we've touched upon grievance policy now being cascaded and refreshed throughout the organisation. So, in terms of governance, which we've just been talking about, the changes that you've made are putting how many new independent members onto the board? Did you say it was two?

We are just in the process of appointing two independent members to our audit and risk committee.

Into vacancies.

Yes, into vacancies on that committee. There will be some turnover on our board as a result of a number of trustees coming to the end of their tenure, so we currently have a joint recruitment programme for up to five new trustees out at the moment, and we are hopeful of appointing and getting them to start in the new year.

Thank you. Going back to November 2022, pre yourselves, when the former director general ceased to discharge those duties in that role, are you cognisant of any changes to the governance arrangements from 17 November, or would you like to write to us to let us know?

At that point, we'd also had the benefit of the tailored review, and therefore a programme had been put in place to look to see how we could implement the findings of the tailored review. That happened before us starting, so there was consideration given straight away to how any governance learning and actions could be implemented before we started. Was there anything else that—

So, were there changes put in place as a result, from that point in time?

From November 2022—

Yes, when the director general ceased his position officially.

There have been a number of governance changes that have been put in place subsequent to that, yes, off the back of the tailored review that we had earlier.

One is changes to the titles of president and vice-president. The tailored review felt that those titles were perhaps slightly misleading and could be interpreted as almost executive in nature, so those were changed to chair and vice-chair, and those were the terms and conditions under which I was appointed. There have been changes to the chief exec's terms and conditions as well, to strengthen and modernise those, and, again, those are the terms under which Jane was appointed. 

Thank you. And my final question, in regard to meeting in person. Given the board of trustees conducted all of its business by e-mail during a critical period from September 2021 to March 2022, with no in-person or online meetings, how is it possible to say in the financial report that the governance arrangements remained in place, subject to a change to the arrangements for some meetings? That seems quite extraordinary.

Yes, and I think it is as a result of very challenging and unprecedented times. The board of trustees at the amgueddfa meets four times a year. In the period that you refer to between September and March, there was one meeting in September that did not take place and one meeting in December that was conducted via correspondence. That was as a result of the Welsh Government complaints process that was being conducted at that point and to safeguard the well-being of our employees, to ensure compliance with employment law. So, reasonable adjustments were made for that December meeting, hence why it was conducted via correspondence. The Welsh Government complaints process was finished by the February, and, at the request of trustees, meetings in person were re-enacted from the March, because it was recognised that there was a significant risk to the governance of the organisation by not meeting or by doing things via correspondence.

10:20

Bearing in mind the Welsh Government involvement at that point, is it still possible to have that amount of time without an in-person meeting, bearing in mind a similar—God forbid—situation in the future?

I would find it very difficult, under the new regime, that that would happen. 

Thank you so much, Chair. Ladies, firstly, welcome. I want to start from now and then work my way backwards, if that's okay. Based on everything that's happened, the area I'm going to be asking you on is around the payment to the former director general. Has the museum actually undertaken a review of what happened, what does it see as the lessons for the organisation, and what exactly are the steps that you've taken now to address them as a lesson for the future?

We've been going through it forensically, as you can imagine, and in a way, Kate and I coming anew has created the opportunity for the team to be able to do that. So, we have gone through the chronology, identified the lessons learnt, and Kate and I have been putting in a lot of questions around that.

I think the other thing to bear in mind is that the tailored review was going on throughout this whole process, and a tailored review is an extremely thorough piece of work. Because it was undertaken over a considerable period of time, with the range of expertise it had in it, the recommendations are very strong and comprehensive. So, I think Kate and I both felt, coming into our roles, that we'd in effect been given a road map towards improved governance and a more robust organisational approach going forward. So, I think the two things side by side have been very complementary. But yes, this has been the subject of significant review and investigation internally.

Let's start on the actual financial implications. The employment tribunal claims made by the former director general were resolved through mediation. Why did the organisation take that approach, what value-for-money assessment was made about it, and on what evidence was it deemed appropriate to proceed as it did?

On the reason for coming to a settlement, the board were acting under legal advice at the time, and the very strong legal advice was that because the process had gone on for so long, for the interests of the museum to continue to carry out its mission, this situation needed to be brought through to a conclusion. They then had two options: do they look to go into mediation and settlement, or do they look to pursue the tribunal route. So, they considered and risk-assessed both of those. Their conclusion was that the tribunal route would have been very lengthy, because of the time that things were happening and the calendar within the tribunals, as well as the nature of the case. As I said earlier, it could have been another year for the case to be concluded, and then there would have been the time taken for whatever the outcome had been to be followed through. And it was felt that that was not sustainable for the organisation. The senior team had been able to continue the very successful running of the museum during this period, but the pressure on the team was increasing, and clearly, you need your leadership. So, it was largely to do with the time, but also to do with the finances. Again, as I mentioned earlier, because of the nature of the claims made, the legal advice was very strong to the amgueddfa that the public purse could bear a much, much higher cost if we were to pursue the tribunal route, and therefore, although the settlement is a significant amount of money, it was better value for the public purse to follow that settlement route.

Who exactly approved the settlement with the former director general, and was it in line with the museum's policies and procedures?

Yes, it absolutely was. On the settlement, the board had to meet to agree that process and the board had to agree who would have the delegated authority to undertake that settlement. That's all been clearly minuted. Although our processes require officers within the board, the senior officers who hold particular posts, to undertake those delegations, you only have a limited number of those officers, and one of them was implicated and one was conflicted. So what the board did, and we believe it was absolutely the right decision, was to appoint the third of the officers to undertake that delegation, and also the chair of our appointments and remuneration committee, who although not an officer, clearly is holding a senior role within the board, and it's a relevant role. So, they were given the ability to undertake the mediation and the ability to sign an agreement in the room. Part of the premise of the mediation was that everybody entering that room had to have the power to bind their organisation to an agreement. So, it was not possible to undertake a mediation discussion and then bring a settlement back to the board. The mediation terms wouldn’t allow that. So, those two trustees had to go in with the power to sign, knowing that they had the confidence of the board in the decision that they made.

10:25

You mentioned the trustees. I appreciate that you weren’t there, but why were minutes not prepared on a simple basis on the decision to proceed with mediation and delegate responsibility for the process to two trustees?

I think it’s true to say that minutes weren’t prepared, but notes were taken of the meeting, so there was a summary of the decisions taken and the decision to delegate that mediation to two of the trustees, one officer and one non-officer member. But I think the amgueddfa would say that, given what we know now, clearly, fuller minutes should have been taken at that time.

How and when did the organisation engage with the Welsh Government about the concerns raised by senior staff? Did it at any point obtain advice and support from officials in resolving the issues?

Yes, because the grievance initially had to be heard by the Welsh Government, so the Welsh Government were there right from the very beginning. In fact, they’ve been aware through the whole process. Before it became formalised as a grievance, they’d been aware that there were difficulties and they’d been providing support and trying to facilitate solutions with that. So, there’s been a real partnership approach with the Welsh Government through the whole process.

Is it fair to say that the organisation did notify its Welsh Government sponsor about the proposed settlement agreement as per the requirements, which replaced the calling-in arrangements? For my clarification, and I'm sure the committee's as well, if so, when did this happen? 

The Welsh Government were in the room in terms of agreeing the settlement. So, the Welsh Government were part of that discussion. It had to be a three-way discussion. So, they were as close to it as the amgueddfa trustees were.

The former director general ceased to discharge his duties from 17 November 2022, but museum will pay his salary and oncosts from then until 30 September 2024. How does this compare with the terms set out in his employment contract? 

The contract for the director general role at that time had a 12-month notice period. One of the changes that Kate alluded to is that, when the role was advertised and I was appointed, that’s been reduced to six months. So, whatever would have happened in this situation, anybody fulfilling that role would have been entitled to 12 months full salary, and that’s why the settlement figure can be a little misleading, because in a way, when you look at that figure, you want to disaggregate the salary that the individual was entitled to.

I think this is going to be the question that everyone wants to know the answer to: who exactly is going to be footing the bill for the £325,698 to be paid to the former director general under the settlement agreement?

The majority of that falls to the amgueddfa. Obviously, of that in excess of £300,000 figure, the 12-month salary would have been paid anyway. So, that would have been budgeted, that was part of what we would have covered. So, then, when you look at the remaining costs, there is a contribution from the amgueddfa's insurance policy and there has been a contribution from the Welsh Government, but the majority of the cost is borne by the amgueddfa.

That was the settlement payment, but has anyone quantified the total cost, including the settlement agreement, the legal costs, staff time and any other related expenses, such as increased audit fees? Will those fees and all of these costs fall on you as the museum or are they going to be borne by anyone else?

We have got the full costs of all the professional fees incurred through mediation, HR, legal et cetera. So, we have a full figure for that. Audit Wales are about to share with us their figure. We've had an indication, and there is ongoing dialogue on that. I think they're just clarifying their own situation. We have not been able to quantify the staff time involved. As I say, because it's a process that actually went on for two and a half years, it would be so costly, in effect, just to do that exercise that I think Kate and I feel that that's not something that will really help us in moving forward. So, in terms of all the professional fees, we are clear, Audit Wales fees will be clear very soon, and, yes, apart from that contribution from the Welsh Government and our insurance, all of that is borne by the amgueddfa

Once you actually have all of those costs together, would you be comfortable sharing those with the committee?

Yes. The costs for everything apart from Audit Wales are in the auditor general's report, because it's that just over £700,000 figure that the auditor general has included. And, yes, we'll happily pass on the final cost from Audit Wales, no problem. 

10:30

Natasha, I have a couple of questions and then I’ll come back to you, if I may.

Going back to the salary, how does the salary paid you referred to deliver value for money for the public purse, given that the Auditor General for Wales states in his public interest report that the settlement agreement provided the former director general with 22 months’ notice, more than the 12 months set out in his employment contract?

Again, when you have a report, people have different perspectives on it. So, that’s one of the details where we have a different interpretation. So, the actual settlement with the director general was for a period where there was, obviously, a transition—there needed to be a transition where he was still handing over to the senior team. His responsibilities needed to be passed on; you’d always have that. So, there were some months over that winter where he was just helping to brief his team about how they could lead the organisation, and then the settlement agreement was for 12 months full-time and six months part-time. As we said, the 12 months was a contractually agreed amount, so the six months is what was in addition. And in any negotiation, one side might ask for one amount and the other side might suggest another, and you have to come to a conclusion. So, that was part of the settlement that happened through that mediation, to have 12 months full-time and then six months part-time.

What about the other four months, because the auditor general’s public interest report referred to 22 months?

So, that’s what we would describe as the director general having a transition before moving into that settlement arrangement where he was passing on responsibilities, briefing the team, et cetera, over that winter period.

Okay. The Auditor General for Wales also says that the majority of the legal costs of £419,915 incurred to date have fallen to Amgueddfa Cymru, and you expect to recoup £93,230 of these through insurance. Why could you not recover more of the legal costs through insurance?

The insurance policy only covers particular elements of a dispute like this. So, that £400,000 figure isn’t all legal fees; it’s professional fees. So, it includes things like the mediation, et cetera. So, where there were elements that could be claimed on insurance, we did claim. And it’s really important to remember that, when the settlement was being agreed—well, when that agreement was happening through that mediation—the insurers were on the phone. So, the trustees were coming back to talk to the insurers. The reason the insurers were happy to give the go-ahead from their perspective was that they also knew that, if we didn’t reach a settlement, the financial exposure was much greater and therefore their own exposure as insurers was much greater. So, the insurers were also part of this discussion. But, as I say, it was only certain aspects of the claim that could be covered under that policy.

Thank you so much, Chair. The Auditor General for Wales has said that there’s insufficient documentation for him to satisfy himself in relation to whether the decision-making process that resulted in payments to the former director general complied with charity law. So, what are the implications for the museum, and has the Charity Commission contacted you specifically about your financial reports and the auditor general’s findings?

Yes, thank you for the question. So, clearly, we are very aware of our obligations under charity law. We have notified the Charity Commission via two serious incident reports of these matters. We have been in correspondence with the Charity Commission, and evidence has been provided to them that has satisfied them that the actions of the trustees were in the best interests of Amgueddfa Cymru. There was a meeting with the Charity Commission and the amgueddfa lawyers in May of this year, and the Charity Commission are satisfied with what they’ve heard and assured us that no further action would be taken at that point.

Can I also add, Natasha, that Kate and I had the opportunity to meet with the auditor general, who was kind enough to come and spend some time with us, and we have shared with him that, as the amgueddfa, we do not recognise that opinion that he has given? We respect that it is his opinion. With any legal matter, you often have two opinions, but, as you can imagine, our legal advice was very, very robust, and we are absolutely clear as the museum that we were not in breach of Charity Commission law.

10:35

So, can you confirm, for my benefit and, I'm sure, the committee's as well, that all issues with the former director general and other staff have now been resolved, and that all relevant payments are reported in the financial report for 2021-22?

The matters have been resolved, although the settlement is still live because it isn't complete. The payments are paid over a period of time, so there are future payments that will come out in subsequent accounts for 2022-23 and 2023-24, but, in terms of the spirit of what you're asking, yes, the matter has been resolved.

Okay. And can you disclose the amount that's going to be shared in the financial report for 2022-23, going forward and subsequent years, or is that something that we're going to have to see when it comes out?

It's just to do with the way that those figures that you're already sighted on have been allocated according to the financial year, but we're very happy to come back to you with that information.

But there's nothing that has not been disclosed in the auditor general's report.

I agree, but, just for our understanding as a committee, we would equally like to see how those payments are going to be spread out over the coming years and how it's going to be shown in your accounts. I think that's what we'd just like to see as a committee.

Thank you. So, for clarity—and the 12-month contract that would have to have been paid anyway—what you said is that the mediation process, the insurers being present and the fact that there has been an absolute desire to get best value for the public purse at that time, despite processes and policies not being fit for purpose, which the whole of the public sector, public bodies, are learning from and have new regimes, if necessary, in place, what you're saying, then, is that if this had gone to tribunal, all of your legal advice, from what you said, I think, is that this could have been doubled as a figure.

So, you actually think it would not have been overall the amount that we've got, it would have been more than double. So, in terms of the overall question of value for the public purse, bearing in mind the issues that there are—the governance issues and also the policy issues within the museum—that critical question is that this figure could have been double or even more, yes?

Yes. That's been really important to me. I came in horrified at this amount.

I came in from the outside, as any member of the public would, and I thought, 'What on earth has gone on here?' And I am completely satisfied and confident now that this was the better outcome for the public purse, given the benefit I've had of the detailed briefings and information I've been able to see.

Can I just go back on a couple of questions about the Charity Commission? You've indicated that the Charity Commission states that no further actions are required in relation to Amgueddfa Cymru's governance, however, the Auditor General for Wales noted that not taking action is not the same as the Charity Commission being comfortable with Amgueddfa Cymru's approach to resolving the dispute and the payment to the former director general. So, has the Charity Commission explicitly stated that it is content with how the museum has handled the employment dispute?

My understanding is that they've closed the case and, therefore, there are no further actions to answer. I could not tell you if they've specifically used the phrase 'content' with the outcome. I think the phrase 'value for money' is one that nobody is comfortable with in this circumstance. The trustees are not comfortable with the phrase that this 'represented value for money', but we do feel it was a reasonable outcome and that the trustees acted on legal advice at every turn and that they have not breached charity law.

Okay. But, again, as the auditor general has stated, it's not the same as necessarily being comfortable with the approach. I'll bring in Adam Price in a moment, but will you be reporting the issues identified by the Auditor General for Wales in his public interest report as a serious incident, as required by the Charity Commission guidance, and if not, why not?

Yes. One serious incident has already gone in when the accounts were published. We got the auditor general's public interest report last week, so we are just taking legal guidance as to the content of the prospective next serious incident report.

10:40

Following the logic of what you just shared with us, that your legal advice leads you to believe that mediation and the sum of money that was arrived at was actually good value for the public purse, because the risk was that the cost would have been two to three times, potentially, if the alternative of going to tribunal was followed, it's a reasonable conclusion to draw from that that the former director general had a pretty good case.

We can't comment on the specifics of the case. I hope you'll understand why not. There were multiple grievances raised, and therefore, of the multiple grievances that were raised, through the investigation and the independent advice that we were able to secure, only four were upheld, and they were governance technicalities. Under legal advice, because of the sensitivity of some of the claims and the unknowns of a tribunal, and the fact that these specific claims had unlimited financial liability—if they had been capped, then you could have weighed up, 'Well, this is the maximum that you might be exposed to'—because they weren't capped, the legal advice was that we shouldn't pursue the tribunal route. That does not mean that we accept that there was a case. That was a different kind of consideration. Again, it's so difficult, because it takes us into the confidential realm of the specifics there.

In putting what you have put into the public domain, that the legal advice suggested that it was probable that you would be facing a greater cost if you followed the tribunal route, there is only one conclusion that anyone reasonably can draw from that: that the legal advice suggested that, probably, not in relation to every grievance and not in relation to every particular point, but, in total, it was probable that the former director general would succeed in the tribunal.

The—. Sorry, Kate.

I was just going to say that the legal advice was based on a number of things—so, the likelihood of success for Amgueddfa Cymru, but also the associated legal costs with pursuing an employment tribunal. It's important to remember—.

Sorry, if I could just say it wasn't just one employment tribunal, it would have been two.

Did the legal advice advise you that, probably, the case would succeed?

There were different claims, and they gave an indication of the likelihood of different elements of the claims in terms of success. So, that's what I mean—

Yes, I'm trying to answer the question. Across the number that were made, they gave an assessment on each one, about, 'This one probably wouldn't' or, 'This one may do'. There was that kind of nuance to it.

Did they find in any of them that there was a probability of succeeding, in any of them?

There were elements, I understand, where there was a chance of success.

I don't know. I don't know, I'm sorry.

I don't think we can answer that question today. We could take it back and see what we can provide subsequently.

We'd be grateful if you would, and what terminology was used—whether the word 'probable' or an equivalent term was or was not used. Natasha, do you have any more questions?

Thank you, Chair, just my final question now. The tailored review panel recommended, subject to legal consideration, that the museum, going forward, introduce a dispute resolution process in the event informal and mediation processes are exhausted. Has it done so, and, to the committee, what assurance can you give that we will not see a repeat of these recent events?

Yes, it has been implemented. I think the assurance that we can give is that that recommendation, together with a number of the other recommendations of the tailored review, which have already been completed, fundamentally shifts the way in which the chair and the chief exec work together, that it's much clearer about the roles and responsibilities, and that Jane and I, I think, give our full commitment to ensuring that no breakdown in relationship—which is from where this stemmed—would ever be repeated under our tenure.

10:45

Well, Mike Hedges now has some further questions about the tailored review. 

I've further questions about the tailored review, but just one question, and this is when I discovered what I thought I knew was wrong. I thought I understood that the employment tribunal payments were capped, and that, in 2022, the highest payment was £165,000, and that, since 2023, it's been capped at £107,500. Why was yours not capped?

My understanding—and I'm sharing what I've been briefed on—is that it is capped for certain claims, but there are particular claims you can bring, which I'm not allowed to share with you, that are not capped, because of the nature of those claims. 

Well, the two that are not capped—and you can tell me if I've got this wrong—are race discrimination and sex discrimination. Are there others you say that are not capped?

There are others that are not capped. 

Well, perhaps our legal people can let me know, and let the committee know, because that is what is publicly printed, which is that claims are capped unless they're one of those two. Now, if there are others, I think that the world would like to know that, because, publicly, it's been published all over the place that it's capped unless it's sex or race discrimination. 

Please ask them to check that. Can I move on to the tailored review? You've talked a lot about the tailored review; in fact, I'm coming in at a stage where you've probably answered quite a lot of what I'm about to ask. The first question is: the tailored review panel issued its interim report in December 2022, which focused on corporate governance, and you've talked a little bit about what you've done. Is there anything more you would like to say about actions that were taken following its receipt?

Yes. The thing that I've been really impressed by is the structure that the team have put around delivering the tailored review. So, we have a task and finish group, which has nominations from the board on it, who are very actively engaged. And we also have Welsh Government on that task and finish group, which is really important, because it means that there's strong dialogue and strong read-across around the recommendations that were made for Welsh Government and ourselves.

We have developed project initiation documents for each of the recommendations, so each recommendation is being considered as an individual project, with resources and individuals allocated to it. Twenty of the recommendations have already been delivered, and we are meeting regularly to monitor the progress against the others. The challenge, as always with a tailored review, is resourcing, because some of the recommendations, as you will have seen, have a very, very big price tag next to them. So, those would be the ones that we will struggle with without financial support. 

And, unfortunately, the tailored review described the recommendations in the final report as a programme of work; what it didn't do is put them in priority order. Have you put them in priority order?

We haven't prioritised them, but we've collated them in a number of different ways. So, there are a number of corporate governance and strategic board level recommendations, where only the board can make a decision against those. And, then, there are a number of operational or business-as-usual recommendations, if you like, which are where the senior executive team can, essentially, carry on with those, and that will be reported to the board at regular intervals, but don't necessarily require a decision from the board. So, that's the way in which we've provided a hierarchy, if you like, of those recommendations, which has been working well for us so far, but, clearly, with 77 recommendations—although 20 have been completed, or are no longer under consideration—we need to keep all of those under regular review. 

What's the difference between a hierarchy and a prioritisation?

Probably not very much, but, if you would like to take our methodology of dealing with them as a hierarchy as a prioritisation, then, I'm happy to characterise it as so. 

You have to decide to do one first and another one second. You call it a 'hierarchy'; I would call it a 'prioritisation'. I think that's a matter of semantics rather than anything else, but I think the word 'prioritisation' gives a greater urgency to what you're doing rather than a 'hierarchy'.

My final question: what's your assessment of the findings of the tailored review panel set out in its final report, and, being new in post, is there anything that surprises you, or which you would have challenged had you been involved in discussions with it? Are there bits you, basically, disagree with or think that the tailored review have got wrong?

10:50

I think they did an incredibly comprehensive and thorough job. They interviewed over 111 people; they reviewed thousands of pages of documents; and they interacted very closely with staff and trustees throughout. They visited all seven sites. I think it provides a blueprint or a road map for the way forward. There may be nuances that we need to work through of some of their recommendations, but, fundamentally, I think we're in agreement with the vast majority.

I appreciate the way you use words. You're in agreement with the vast majority. If you're in agreement with the vast majority, you must not be in agreement with some. Using the term 'vast majority' excludes some. Which are the ones that you're not in agreement with?

One that we have had some discussion and debate over internally is their recommendation to remunerate trustees. 

That's pretty much the only one. Pretty much—I know. The only other thing I would say is that the recommendations around the capital programme and the maintenance backlog clearly have a very large price tag attached to them, and our ability to implement those recommendations are reliant on capital.

But, if you're talking about capital, I've no idea how much you need to spend as an organisation, but people have capital programmes that last for decades in order to modernise their estate.

Yes. Our situation is more serious than that. We have a maintenance backlog that's very challenging, and in National Museum Cardiff in particular we have a very significant problem around mechanical, electrical and plumbing works there, and that project alone, to bring those up to the standard that they need to be in a very short time, is £30 million. The capital challenge for the museum is significant.

Well, that's the question, isn't it? We need to be talking to Welsh Government, we need to be talking to funders. But I was discussing this with Welsh Government senior colleagues just a few days ago, and they've asked us to submit a brief to enable them to better understand what the pressure is. My colleagues are forming that at the moment.

Well, we wouldn't want to move. We need, first of all, to explore how we can secure that money to make the building safe.

Because you've got a very valuable land value of the property you've got at the moment. Moving to a less valuable parcel of land, you may well be able to build or take over something that would be both cheaper to run and would not cost the £30 million, which you say is urgent. 

Food for thought. Food for thought.

Thank you. If those works are not funded and delivered, is there a risk at some point that health and safety requirements would require public access to be denied?

Thank you. If I could now bring in Adam Price, please, to ask a few questions around your financial report 2021-22.

Ie. Wel, jest i arwain o'r sylwadau hynny, fe ddywedoch chi—. Cwestiwn i'r cadeirydd ydy hwn. Fe ddywedoch chi'n ddiweddar wrth y pwyllgor diwylliant y bydd rhaid torri eich côt yn ôl y brethyn. Sut ydych chi'n mynd i wneud hynny yn ystod y blynyddoedd nesaf, gan wneud hynny mewn ffordd sydd yn dal yn eich galluogi chi i gyflawni eich amcanion? Ble ydych chi'n mynd i ffeindio cynilion?

Yes. Just to lead on from those comments, you said—. This is a question to the chair. You said recently to the culture committee that you'll have to cut things accordingly. How are you going to do that over the next few years and do so in a way that still enables things to achieve your objectives? Where are you going to find savings?

Ie. Diolch yn fawr iawn. If I start, and then pass over to Jane on that one. I think everybody's aware that the financial situation is very challenging at the moment across the Welsh public sector, and we are actively modelling a number of financial scenarios for the coming year. We have just appointed an interim chief financial officer who is working on a long-term financial strategy, and we also have an income-generation strategy being pulled together at the moment. Jane will probably elaborate on that.

Yes. I mean, even since 2021-22, we've seen—. Everybody was waiting for things to get back to 'normal' after COVID, and we've recognised that we haven't returned to what was normal. There has been a change in visitor behaviour, there's been a change in the commercial model. Income streams that have previously performed well for us now don't, like corporate hire. So, we're having to rework our commercial model and be really clear on our strategic priorities, so that we can reshape the organisation, in effect, to be able to deliver those in a very challenging financial environment.

10:55

Iawn. Diolch. Fe wnaethoch chi daliad ychwanegol o £0.75 miliwn i'r gronfa bensiwn yn ystod y flwyddyn ariannol dan sylw—2021-22—ac rŷch chi'n dweud eich bod chi'n mynd i glirio'r diffyg yn llwyr dros yr wyth mlynedd nesaf. Mae'r diffyg, beth yw e, tua £57 miliwn, £58 miliwn, rhywbeth felly? O gofio'r pwysau ariannol ehangach sydd arnoch chi, hynny yw, sut ŷch chi'n gallu cyflawni'r amcan hynny, ac ydw e'n ddoeth rhoi cymaint o bwyslais ar hynny, o gofio yr holl anghenion ariannol eraill sydd gyda chi?

Okay. Thank you. You made an additional payment of £750,000 to the pension fund during the 2021-22 financial year, and you say that you're going to clear that deficit fully over the next eight years. It's around £57 million, £58 million, something like that. Bearing in mind the financial pressures, in a wider sense, that you face, how can you achieve that objective, and is it wise to put so much emphasis on that, bearing in mind all of the other financial needs that you have?

Diolch am hynny.

Thank you for that.

I'm really pleased to say that, thanks to some very good decisions made by our pensions board, the pension situation has changed significantly. So, it is now operating in a surplus position. So, as we'll be reflecting in future accounts, that pressure is no longer live for us, which is extremely helpful.

So, does yna ddim diffyg o gwbl, felly. Rŷch chi wedi cyrraedd y nod yn barod, wyth mlynedd yn gynt.

So, there's no kind of deficit. You have achieved that already, eight years ahead of time.

Newyddion da i'w rhannu gyda'r pwyllgor, felly. Iawn. Wel, llongyfarchiadau i'r rhai oedd yn gyfrifol am hynny.

Mae yna gyfeiriad wedi bod yn y wasg a'r cyfryngau yn ddiweddar, wrth gwrs, at yr eitemau coll, oherwydd y diddordeb ar ôl datgelu sefyllfa yn yr Amgueddfa Brydeinig, ontefe. A oes gyda chi rywbeth rŷch chi eisiau rhannu gyda ni sydd yn ehangu ar hynny? Ydych chi wedi gwneud rhagor o archwilio? Oes yna ragor o bethau coll, neu ydych chi wedi darganfod rhai ohonyn nhw?

That's great news to share with the committee, then. Congratulations to those who were responsible for that.

Reference has been made in the media and in the press recently to missing items, due to the interest following the revelation of the situation in the British Museum. Do you have anything that you'd like to share with us that expands on that? Have you done any further audit? Are there other missing items, or have you found some of those?

Diolch am ofyn am y pwnc yma, achos mae mor bwyisg.

Thank you for asking about this subject, because it's so important.

I'm really grateful to have the opportunity to address that particular matter. My colleagues were very conscientious in responding to the freedom of information request, and I really want to be able to assure everybody that the situation in Amgueddfa Cymru is completely different from the situation in the British Museum. So, as context, it's important to remember we have 1.3 million people coming through our museums, and, inevitably, if you want free flow in a site like St Fagans, and you've got replica items on display, there is a chance that somebody's going to put one of those replica items in their bag. So, that does happen, but we don't want to make this a roped-off environment.

So, yes, our research showed that, since 2017, a total of 16 items had been identified as missing, and that was the kind of active monitoring we were doing. And then, because of the FOI, we went back, right the way through the collection to before the 1950s, and, as you alluded to, we reported, very conscientiously, that over 1,900 items were missing. But what these were, they were fragments from excavations, bits of shell, shards of stone. There were fence posts in the mix with that, there were replica coins that were sent out to schools in the 1950s, so that schools would have a handling collection. But, of course, we don't know now where those coins in those schools are. So, under the strict definition of 'missing', those fence posts, those shards, those coins are missing, but there is nothing of value to the heritage of Wales, or of significance to Wales's collection, that has been lost. And if anything, I take great pride that the reporting is so strong in Amgueddfa Cymru that we can tell you that we've lost that many shards of shell and that many fence posts. So, we have very, very robust procedures, and, each time we meet as a board, there are reports on any missing items, aren't there, Kate?

So, we're very sighted on it. We monitor it really well, and we've probably been a little more assiduous than we needed to be in our reporting on that matter.

11:00

So, is there anything on that itinerary that is of any cultural significant value, or would you say that all of those missing items remain in that category that you've just spoken of? 

Yes, we would. 

And sometimes, people and organisations can be a victim of their own success in terms of being able to report, and so, if that is the case, then that is a plus not a negative. 

Thank you. 

Jest o ran diogelu'r casgliad, o ran y darlun ehangach, rydych chi wedi cyffwrdd ar hynna'n barod, ond oes yna beryglon i ddiogelwch y casgliad oherwydd pwysau cyfalaf sydd arnoch chi ar hyn o bryd o ran cynnal a chadw adeiladau, a beth yw'r gofyn, a dweud y gwir, er mwyn sicrhau nad oes yna ddim byd difrifol yn digwydd i'r casgliad? Efallai y gallwch chi, wrth ateb hynny, hefyd adlewyrchu ar brofiad y tân yn nho yr amgueddfa. Er enghraifft, beth yw'r goblygiadau ariannol sydd wedi deillio o hynny? Ond hefyd, edrych ymlaen i'r dyfodol, hynny yw, beth sydd ei angen arnoch chi er mwyn sicrhau bod chi yn medru diogelu'r casgliad yn iawn? 

In terms of protecting the collection and the wider picture, you've touched on that already, but are there risks to the security of the collection due to the capital pressures that you are facing currently in terms of maintenance of buildings, and what are the requirements to ensure that nothing serious happens to the collection? Perhaps, in answering that, you could also reflect on the experience of the fire in the museum's roof, and what financial implications have arisen from that. But also, looking forward to the future, what do you need to ensure that you can protect the collection properly?  

Diolch. I think that there are probably three risks to the collection in terms of the current financial situation. The first is around having adequate and appropriate storage. That is becoming an increasing pressure. Linked to that is that the condition of the buildings could put the collection at risk. So, for example, water ingress at National Museum Cardiff is a significant concern. We have had money from Welsh Government to address the most urgent leaks, but I saw the rain coming through the roof again this week. We have very strong people-led mitigation in place, so it's monitored all the time, and as soon as there's water ingress, if that's coming into a space that puts the collection at risk, we have trained people who will move that collection immediately. But, clearly, that's not an ideal or sustainable solution for the long term. 

So, it's storage, the condition of the buildings, and then, finally, resource. I think, to be able to understand our collection and care for it properly, you do need the experts on your team to do that, and depending on how challenging the financial situation becomes, that may become something that the team and I become concerned about as to whether we can resource our collection as much as ideally we would want to on behalf of the people of Wales. 

Rŷch chi hefyd yn rhan o'r trafodaethau, neu'n rhan o'r bartneriaeth sydd yn mynd i ddelifro oriel gelf gyfoes newydd i Gymru, ar ben popeth rŷch chi'n gwneud yn barod. Mae yna weledigaeth gyffrous i greu oriel gelf gyfoes, ond ble mae'r arian yn mynd i ddod ar gyfer hynny? A ydych chi wedi ffactorio hynny i mewn i'ch cynlluniau? Allwch chi ddweud rhywbeth am hynny? 

You are also part of the discussions or the partnership that is going to deliver a new contemporary art gallery for Wales, on top of everything that you are doing already. There's an exciting vision to create a contemporary art gallery, so where is the funding going to come from for that? Have you factored that into your plans, and could you tell us a bit more about that? 

Yes, of course. Do you want to take that one, Kate, or are you happy for me to? 

Happy for you to respond. 

So, the national contemporary art gallery is a very exciting model, because it's right at the heart of our ambition to make the collection truly national and accessible to all communities in Wales. And as somebody who is north Wales-based myself, that's a vision that is really, really important to me personally as well as to us corporately. The reality is that the Welsh Government have provided funding for that for particular programmes of work—the Celf ar y Cyd initiative, the digitisation of the collection, which has been enormously exciting and will significantly increase access. That funding lasts until 2025. Some of the funding that goes through a slightly different route is enabling the nine museums and galleries who are part of the dispersed model to be able to upgrade their facilities so they can take collections. So, once that work is done, clearly, that's not an ongoing cost. So, there are bits of the programme that, once they are done, they have been discharged, and therefore there's less concern long term. But the reality is that, if funding doesn't continue past 2025, it will be very difficult to realise the full vision of the contemporary art gallery dispersed model in this way. Even though it is so critical to us, it will need resource to deliver it. We would have to look at which bits we could still commit to, and that is likely to be limited to our lending—so, identifying the objects that we can share in the confidence that those galleries now have the conditions to display them. But the wider work around digitisation, et cetera, the engagement work, the support with the schools, and all of that very, very important and good activity would not be deliverable within our own budget, post 2025, without further funding.

11:05

Can I just ask, finally, a short question before we move on to the final sets of questions on this issue? Given the pressures on funding identified, what if any other proposals do you have for generating further income across all your sites?

Well, we're in the middle of refreshing and developing our income strategy and, within that, we're looking at our product—so, what it is we're actually able to monetise, if you like—and our processes, and also our people. So, there's a really strategic piece of work that's going on. There's what I think of as a pie chart of commercial activity that is available to a museum. Some of the slices of the pie are shrinking, as I said earlier about corporate hire, and others are improving. So, we've actually improved our food and beverage operation and our retail, thanks to recent investments, and we can probably do more on those. We're also exploring some new income opportunities, for example, around accommodation—so, people might have the opportunity to have a self-catering offer at St Fagans, which would be really exciting. We have some really good ambitions around growing current income and introducing some more income streams.

But I have to be really realistic, there is no magic bullet on this. With a sector like ours, with a collection of over 5 million items, with seven sites plus a collection centre, we're not going to solve the financial crisis purely through commercial income generation. We can do a bit, we can do more than we're doing now, but that is not going to be the answer. There's going to need to be some serious thinking about the financial resilience of our sector given the challenges that we know are coming.

Moving on to performance, which is probably the most important thing that you're being looked at on—how you are performing—how would you assess the organisation's performance against its targets for 2021-22?

Well, it's interesting because we've been, just this week, looking at our performance against targets in 2022-23, but I think what we're really proud of—and I'm really proud of our team, if I'm honest—is that during all that period, during 2021-22, the public visitor experience wasn't affected. We achieved all our KPIs, we continued to be the biggest provider of learning outside of the classroom, we continued to push on the 'Anti-racist Wales Action Plan' and delivered some really exciting new initiatives on inclusivity. Our visitor numbers have recovered post COVID to a degree that we are content with, and our commercial income has grown even beyond that. So, I think, in terms of performance for 2021-22, we are content, and I think we should be congratulating our team for delivering that in very difficult circumstances. 

So, just to come back on what you said, that you deliver more than anybody else outside the classroom, would you say that you deliver more than BBC Bitesize?

That's a very good question.

I don't know. I think what that refers to is actual site visits, et cetera, and I understand we're at about 200,000, are we, Kate—

—in terms of visits across the whole of Wales? We have an ambition to reach every school in Wales by 2030.

Okay, fine. I welcome that. Your KPIs, I believe—as in, I've been told—have changed for 2023-24 from the ones in 2022-23. Is what I've been told correct, and are you going to have any difficulty meeting the ones for 2023-24?

Yes, we continue to review our KPIs, because we reflect on the previous year's performance, so we're always monitoring against target, against last year and against the actual. So, they've been reflected to take account of the previous year's performance. The one where we have some concerns is commercial performance. The two areas of income that are really struggling for us are corporate hire but also filming fees. We did very well out of Sex Education coming to St Fagans, and there is not going to be another series. But, ironically, the writers' strike in Los Angeles has directly impacted our budget because there hasn't been that throughput of filming, and we are a beneficiary of filming income. So, that's the one area where I think that we have got a concern. We have currently got a cross-organisation piece of work to look at how we can mitigate that commercial struggle, really.

11:10

So, on that particular point, without going too off-piste, how is that being mitigated or marketed with our own Welsh film and drama sectors? Are we selling ourselves, because sometimes we don't see what's on our doorstep?

Yes, we are.

We have got a really great relationship with Creative Wales. My colleagues are meeting with their counterparts. I'm meeting with the head of Creative Wales. We are having really dynamic and good conversations. They are great supporters.

Thank you. Well, if I can move to the final question, in relation to staff, and the question is to the chair, if I may. In July, you told the Culture, Communications, Welsh Language, Sport, and International Relations Committee that you intended to be visible to staff, and to

'listen to them very carefully and to understand their experiences of what it feels like to be working in the museum at this time',

which was your quote.

Have you done this since and, if so, what has this told you about the impact of recent events on your staff and what steps you may need to take with them as a result? 

Yes, I've certainly started, Chair, that process of visibility and outreach to all of our staff. Jane and I have a programme of site visits over the coming months that will see us go to every single site and sit down with staff and have one-to-one or group sessions with those. I also have staff briefings put in for next week, where staff are welcome over a number of hours to just come and have discussions online and submit questions in advance or at the time with me, and that's something that I would like to continue on a monthly basis—just general 'ask the chair' questions.

On reflection, with the discussions that Jane and I have had with staff—and Jane has clearly had a lot of staff interaction on the publication of the report, in particular—we have been really heartened by the fact that, despite the really challenging times, the senior executive team and the trustees have managed to protect the rest of our staff from any of those difficulties. As a result, it was a surprise to our staff to hear and to read about those difficulties when the report was published. So, we are really proud of the way in which the team has handled that and has managed to keep the place going, as Jane says, to keep the visitor experience going through the past couple of years.

Fine. Do you have a staff satisfaction survey and, if so, what is it telling you?

It's about to be reissued. There hasn't been a staff survey undertaken for the past two years. I think that that is the cycle of it. It's going out in December, I understand. We do pulse surveys, and I was actually reading the data of the latest one last night. The thing with the staff is that this isn't a job like other jobs. People come and work for the museum because it's a passion and it's a vocation. They are just committed to heritage and culture. So, what our staff data are showing is that that commitment to the organisation is unwavering and really high, and that they are really hurt by seeing all of this in the press, because this is the cause that they really believe in, and it's very difficult for them. So, we are doing a lot to support our staff, listen to them, and hopefully build up that kind of culture for them.

I just wanted to say, to conclude, that it's been a hugely difficult time for the museum and its staff, and it's bound to affect morale. Obviously, we are where we are today. You are in post, there have been significant changes, and I personally want to wish you and the staff well in that future journey.

Thank you.

Kate Eden 11:14:36