National Assembly for Wales

Good morning. Can I welcome Members and the public to this meeting of the Committee for the Scrutiny of the First Minister? Can I remind Members that the meeting is bilingual? If you require simultaneous translation from Welsh to English, that's available on our headsets, on channel 1; if you require amplification, that's also available on the headsets via channel 2. Can I please remind Members to put their mobile phones on silent or switch them off, or other devices that may interfere with our committee meeting this morning? There is no fire alarm scheduled for today, so if one does occur, please follow the directions of the ushers to a safe location. We have no apologies—everybody is here this morning, and everybody is here in person this morning, so we're not operating in hybrid format today. We will put on the record that Russell has to leave early because of train issues. It's nothing to do with him, but it's to do with Great Western Railway.

We will now move on to our sessions. For the public, today's evidence sessions are in two parts: the first will be looking at a particular theme of 'warm and fed this winter', and the second session, after a short break, will be on the co-operation agreement, where the leader of Plaid Cymru will join the First Minister. 

For the first session, we'll focus on 'warm and fed this winter', because obviously we are very concerned about the challenges facing many communities and families as the winter months are now upon us. With that in mind, First Minister, can I welcome you to the meeting today? Would you like to introduce your officials for us for the record, please?

Thank you. We'll now go into questions straight away and the first question will be from Llyr Gruffydd.

I remember saying on the floor of the Senedd that the money that was provided for individuals in the autumn statement went primarily to people in the top half of the income distribution—£46 out of every £100 going to people in the top part of the income distribution. We've had an analysis done of the investments that the Welsh Government has made in this field over the last financial year, and it shows that around 75 per cent of households in Wales benefited from one measure or another taken by the Welsh Government. But, of the money that we provided, twice as much went to people in the bottom half of the income distribution spectrum as in the top half, and when you compare those in the top fifth and the bottom fifth, three times as much of our help went to people in the bottom fifth of the income distribution compared to the top fifth of it. So, I think the figures do show that our money has been spent in that effective way, if by 'effective way' we mean aligning the help we provide with those who need it the most. 

It has been published. 

The picture is a mixed one, Chair. Dealing with the current Prime Minister is easier in some ways than dealing with his immediate predecessors, because he at least observes the basic courtesies of inter-governmental relations. But my experience of dealing with the UK Government is that it is a Government that knows it's in its dying days. Ministers come and go with an astonishing rapidity. No sooner do you feel you've got to know somebody and that they've begun to understand their brief than they are replaced by somebody where you have to start all over again. I'm trying not to make this point in a partisan sort of way. Even on the best terms, this is a Government entering its final year of its mandate, and the impression I have with Ministers is that there is not a great deal of fresh energy being invested in any governmental agenda. It's a Government running out of time and out of steam.

John, a short supplementary.

I hope so, Chair. I'm just looking at what the expert group said, Prif Weinidog, about maximising the benefit from expenditure, because there's so little resource around, as we know. In Newport, there was an event the other week where a supermarket was hosting a donation day for the foodbank, and the Trussell Trust were there. They mentioned a pilot where, as well as providing badly needed food, they also commissioned Citizens Advice to provide sessions of advice for people, and also some debt advice, which has resulted in some voluntary insolvency arrangements, which have been very important for people who felt overwhelmed by the debt that they had. I just wonder, is it that sort of joining up, really, that will deliver that maximum benefit from expenditure, where we think outside the box a little bit, and outside silos, and joining up organisations and services?

I certainly think all of that is very important. Nobody wants to have organisations that are competing with one another by doing the same thing, where by working together they could maximise their impact. I think we are incredibly lucky in Wales with the amount of voluntary third sector effort that goes into trying to find ways of helping people through these difficult times. Nevertheless, it is desperate, it seems to me, that we think foodbanks, and doing more through foodbanks, and improving the way that foodbanks operate, is the answer to finding just a basic decency in the lives of our fellow citizens. So, whenever I visit a foodbank—and, I'm sure, like all members of the committee, we've all done it—I'm always hugely impressed by the commitment that is shown, by the imagination that is shown by people wanting to do more. And I've never been to a foodbank where people don't tell you, 'We wish we weren't here. We wish we weren't needed.' And it seems to me that is where the long-term solution has to lie. 

I'll move on to some questions on energy, since we've already started talking about it. Jack. 

First Minister, residents in north Wales pay the highest standing charge rates in the UK. So, if we put that into the context of where it is, residents in my constituency in Alyn and Deeside pay more than Russian billionaires in the middle of London. I've called for standing charges to be scrapped; I think they're unfair, I think they're arbitrary. The Welsh Government has had positions on the fairness of standing charges in the past. I wonder, in light of the Ofgem consultation of their review into standing charges, will the Welsh Government be setting out its position, either responding to that consultation, or formally in other forums with Ofgem, and what is that view?

Well, Chair, we will be making a formal response to the Ofgem review. As a result of the campaigns that have been waged—and Jack Sargeant has been a leading voice in that here in Wales—some changes have already happened, and prepayment meter customers now have reduced standing charges, compared to what they were paying this time last year. So, I welcome that. 

My own view is that standing charges should simply be removed for certain categories of customer. I don't myself believe you can necessarily go to abolishing them altogether for everybody, but Jack and other colleagues will know very well the—. I've seldom seen people more angry than prepayment meter customers who scrape and save to be able to get a sum of money—£10, let's say—to feed their meter, to find that, before a single ounce of energy comes their way, they are being charged for all those days when they couldn't afford to feed the meter at all. So, that's the first thing that happens, that the money they've put in is reduced to pay the standing charge for all those days when they weren't able to use any electricity. And it's an irony, isn't it, that one of the rationales for a standing charge is that some of the money collected through it is meant to go to support the most vulnerable customers. Well, here are the most vulnerable customers paying the money in order to get a fraction of it back in help. 

So, my view is that, for the vulnerable customers, standing charges should simply be abolished. Ofgem says to me, 'Well, that means that it'll have to be paid in a different way, and it'll have to be put on bills in a different way.' And I said to them, 'I think it should come out of profits.' That's where I think it should come. I think that these are companies who can well afford—absolutely well afford—to absorb the costs that would be involved in doing so. And rather than thinking that it's every other customer who has to pick up the bill, I think it's time that the companies themselves measured up to some of those obligations. 

Can I thank the First Minister for his answer—it brings me nicely on to my next round of questions—and can I also agree with him about his comments around where the standing charges gap, if they were to be removed for some customers, should be paid, and paid through the profits of these companies? We saw, for example, British Gas and Scottish Power make record profits in the last year, the chief executives recording huge bonuses on top of quite nice salaries as well. 

First Minister, you mentioned prepayment meters. It brings me on to the report from the Senedd Petitions Committee. We launched an inquiry from a petition submitted by Climate Cymru, and the petition was that this Senedd should scrutinise the prepayment meter scandal in Wales. We've now reported, in the last couple of weeks, on that. It was Fuel Poverty Awareness Day, and the chair of the cross-party group on fuel poverty is with us this morning too. Recommendation 1 in our report calls for the Welsh Government to

'support the creation of a new social tariff for vulnerable people to provide greater support to those in the greatest need'.

How can the Welsh Government support such a creation, if it's minded to?

Well, first of all, Chair, we are absolutely aligned with those campaigns to introduce a social tariff, so we're definitely in favour of that. One of the things that we are doing at the moment is to pursue the announcement made by the Chancellor of the Exchequer in the autumn statement. He made a commitment to develop a new approach to consumer protection, including the option of a social tariff, and, if it can be done, the idea will be that it will be from April of next year. So, I think that's encouraging, and one of the things that we are doing is trying to get some more information from the Treasury as to how much work has been done on that and what the nature of such a social tariff might be, and what the realistic prospects are of it being in place by April of next year.

We've got some good experience to contribute in Wales, particularly in the water industry. Dŵr Cymru Welsh Water has the best social tariffs of any utility company, I think, in the energy or the water field, and there are things that we can contribute from that experience. So, we are both committed to a social tariff, trying to do the things that we can do to pursue ideas that are floated at the UK level, and then to talk to the companies themselves. I said that the Minister for Social Justice meets with the companies; she was with Ofgem on 16 November, and, again, pressing the regulators to do more to see what they can do to encourage both the development of social tariffs and the take-up of social tariffs, because you'll know that, in other parts of this poverty spectrum, there are social tariffs, but very, very few people get to know about them or take them up, so there's a job for the regulator there as well in making sure that what social tariff help is already available is properly known about and properly promoted.

I thank the First Minister. Chair, I have two questions left. The First Minister referenced the water industry, Dŵr Cymru in particular, in his last response, so I'll take one on that first. Again, the Petitions Committee, recommendation 3 in our report says

'Welsh Government should explore with utility providers whether it would be possible—within the limits of data protection rules—to ensure that where one organisation is aware that a customer is vulnerable, they are automatically given greater protection by other suppliers'.

In practical terms, that means that if a customer is presumed vulnerable in the water industry, then they should be presumed vulnerable in the energy sector, whoever the supplier is, as well. Could the Welsh Government seek to support and facilitate such conversations between utility companies to see if that is possible, and, if it is, to take action to make sure it does?

Well, Chair, first of all, I think it's a straightforwardly good idea, isn't it, and I sometimes think that data sharing is made more of a barrier than it needs to be because this is data sharing directly for the advantage of the customer, isn't it? It's to make sure that someone who asks for and gets help in one part of the spectrum, that other parts of the spectrum get to know about that and align the help that they can offer as well. So, I think there is a responsibility on the regulators here, as well as the companies, to help them to make sure that data sharing does not become an unnecessary barrier to doing what Jack Sargeant has said. Members of the committee will know that we have a cost-of-living sub-committee of the Cabinet, and, in our meeting in November, we heard from all the regulators. This was one of the issues that we discussed directly there with them: how can they share more with one another, and how can they help companies to share more with one another, so that the—. This is all about just making sure, as I said in my last answer, Chair, that the help that is already available gets known about and taken up. Because, as well as wanting more help through social tariffs and other mechanisms in the future, the help that's there already often doesn't reach the people that it needs to reach, and there's a job of work for the regulators to assist in that and to make sure that data sharing doesn't become an unnecessary obstacle to doing so.

Thank you, First Minister. Chair, a final question from me. I recognise I can't talk through all of my report; I'm incredibly proud to have chaired this particular inquiry. It comes from the petition from Climate Cymru, who lead the Warm This Winter Wales campaign, mentioned by Llyr Gruffydd earlier. I'm grateful to those who gave evidence as well, particularly National Energy Action Cymru. One of our other recommendations in that report is something the Welsh Government can do positively, and do do positively—we're calling for further action on how Welsh Government can enhance the advice services they already offer this winter, particularly aimed at those vulnerable residents in society. Funding is really difficult at the moment, and we recognise that, but perhaps a more visible advertising campaign, signposting people to that important advice, which is out there, but we need higher take-up.

Well, Chair, I suspect that a number of times during this conversation I'm going to end up making this point, so I'll make it now and maybe won't need to keep making it, but the Welsh Government's budget this year and next year is the most difficult we've ever seen. One of the things we're having to ask ourselves as a Government is: to what extent are we able to go on spending Welsh Government money for purposes that are not our responsibility? Now, we provide £11 million a year to the single advice service, which is the single biggest piece of practical help we offer in that area, but, other than debt advice, which is just a fraction of it, all the rest of it is a responsibility that lies at Westminster and where the Welsh Government has stepped in to fill the many gaps that there are here in Wales. And in the very difficult business of trying to find the budget for this year and next year, one of the questions all my colleagues have had to ask themselves is: to what extent can the Welsh Government go on using money that comes to us for the core things for which we are responsible—how much can we divert any of that money for responsibilities that are not devolved to Wales? And advice services is one of those.

The Conservative Party, at the last election, said that they wouldn't spend any money on non-devolved matters. Well, that's not our position, but the chances that we will find more to do even more, in an area that is not funded—. You know, no money comes to us to provide advice services, because they're not a devolved responsibility. Nevertheless, the point that Jack Sargeant makes is a very important one, and we have done some things to try to make sure that people get the advice that they need. The Nest advice service, which is directly in the home energy area, we increased its budget last year, so they could do more over the winter, and we are keeping its budget at that enhanced level for this winter as well.

There is a campaign at the moment—the 'Here to help with the cost of living' campaign; it's the fourth iteration of that campaign. It does have advertising in tv, I think, as well as radio, to reach people, and the results are always what you'd expect. When people come forward for that help, every £1 we spend generates far more than that in the pockets of people who get benefits to which they were entitled but weren't claiming and so on. Pension credit, as you will all know, is the least well-claimed benefit in the whole of Wales. So, often we are helping people who are vulnerable not simply because of the circumstances they live in, but vulnerable through age as well. This winter, there is an additional source of help for people on the Climate Action website. So, we've been trying to get some attention for that recently, for Climate Action Week, and so on. The website now contains quite a large variety of advice for people as to actions that they are able to take and sources of help that they can pursue in order to keep warm over the winter.

Thank you. 

We'll move on now to Mark Isherwood. 

Could I start with a supplementary on that, if I may? Advice services are provided formally by a number of organisations—you mentioned Citizens Advice, Shelter Cymru and others. But there are many, many others, particularly through disabled people's organisations, for example, who, amongst the services they provide to their networks and members are advice and support services, applications for benefits—all sorts of things. And yet they're seeing reductions that could prevent those services being provided, and we're talking about cuts in thousands that save public services millions. People in crisis, as you know, will then move on to statutory services, crisis services in local authorities and health boards. What consideration have you given to investing those thousands in order to save those millions for public services?

Well, it's a genuine dilemma, Chair, because when your budget is under the pressure that the Welsh Government’s budget is under, one of the things you find yourself driven to—although you’re conscious of it and so try to avoid it—is reducing those preventative services because you need the money to deal with the here and now. And that example that Mark Isherwood has given is an example of that. I’m afraid the era that we are in is an era in which there will be less for us to be able to do the things we want to do—£1.3 billion-worth less in purchasing power for the Welsh Government next year than this year. And inevitably in that, some of the things we’ve been able to do we will not be able to do. You hope not to do the things that prevent costs later in the system, but it’s not always possible, I’m afraid.

I wasn't referring to more money. I was referring, for example, to replacing a tyre on your car rather than having to replace the whole car after a car crash. 

However, Jack Sargeant referred to the cross-party group on fuel poverty and energy efficiency, and, obviously, we are also in correspondence with the UK Government regarding the social tariff and consumer protection otherwise, and I think Jack referred to this, that we put the questions you raised to Ofgem last week in relation to the matters you highlighted, and we also encouraged people to make submissions to the evidence calls they've issued on standing charges and social tariffs. But in terms of north Wales, normally—and I'm sure you're aware of this—in most areas there's a trade-off between standing charges and unit prices. So, where unit prices are higher, standing charges tend to be lower, and vice versa. But in north Wales, it appears, that's not working. I'm wondering what specific discussions you have had or will be having with the primary energy companies operating in the region over why that's the case.

Chair, I think it must be absolutely frustrating for residents of north Wales, because, as well as paying the highest standing charges and not seeing the trade-off with the unit cost, north Wales is a huge exporter of energy, isn’t it? The renewable energy that is created in north Wales flows out across the border and is sold more cheaply to people elsewhere than energy is sold to people who live in north Wales itself. So, I can easily see why it is such a cause of concern to local residents. On the differentials, we raised them directly with the regulators in the meeting of the cost-of-living sub-committee. The answer we get back is the answer that I relayed to Jack Sargeant, really—that this is all important money, it has all got to be raised somehow, and if you take it off that part, you’ll have to find it in a different way. But I don’t think that’s an adequate answer, because it doesn't take the system in the round, does it? It doesn't look at all of the other ways in which money is spent within the industry.

May I make one general point here, too? The UK Government did indicate about a year or so ago that it was going to publish some documents on the rebalancing of energy prices, which we are yet to see. I think that's a very important piece of work, because energy prices have gone up hugely, as we know, and we know the reasons why in terms of conflicts in Ukraine and so on, but the cost of renewable energy hasn't gone up. The cost of the sun and the cost of the wind—they are not charging us any more. And yet the costs that consumers are being charged for—that part of energy—have gone up as though it was part of the Ukrainian—. So, the rebalancing suggestion was that the UK was going to look at the way energy pricing is currently carried out, and it really isn't satisfactory at all. It's not fair, either. So, I think that when that piece of work emerges, it might have some helpful things to say for customers in north Wales, because I think that they will be beneficiaries of a rebalancing of energy pricing of that sort.

I'd better get back quickly to the suggested—

Before you go back, one quick question on that. You said that the UK Government was looking to do it, and that you haven't seen it yet. Are you aware that the work has been completed or not, and that it's ready for publication? Or, is it still ongoing?

Well, I think that it's ongoing. The European Union has carried out this exercise as well. This is all very complex stuff and well beyond what I claim to understand thoroughly. But you know that the cost of electricity on a spot price day-by-day basis is the cost of the most expensive therm of gas that was sold at the close of play on the day before. This is not a sensible way of organising energy pricing, particularly in the world that energy prices have inhabited post the invasion of Ukraine. So, that piece of work has been done within the European Union. The UK Government was going to do a piece of work here too. I think that it will be a useful piece of work when it does emerge. 

Thank you. Mark.

Moving back to the script, what plans, if any, do you have for funding warm hubs in Wales this winter? And if you are proposing this, how would it be distributed?

There is no plan to replicate what we did last year. Chair, as you know, we provided £1 million last year to support warm hubs. In a way that I think is encouraging, what we are seeing this winter is that that seedcorn money is producing warm hub activity by a whole range of other organisations, particularly local authorities, which I think have done very well, actually, to continue to invest in this area. So, the Swansea local authority, for example, has announced £0.5 million, which is half of what we offered for the whole of Wales last year. Part of that is to sustain a network of warm hubs in its locality. Pembrokeshire council has done something similar, and I am sure that there are local authorities in other parts of Wales doing the same. Then, we know that some of the faith organisations, particularly, which stepped into this space last year, continue to do it this year, and some other organisations.

One of the things that I think we learned from last year that will be different this year is that there will be more of an emphasis on using facilities that are open to the public for all sorts of other reasons. I think that one of the things that we learned last year was that people were more likely to go to somewhere where they didn't think that there was a sign hung on the door that said, 'You must be poor to come in here, because this is a warm hub for people who can't afford to keep warm.' People were more likely to go to places like sports clubs, where you could be there for any reason; libraries, where you could be going to borrow a book, as much as anything else. Those are universal, non-stigmatised places. I think that, last year, the evidence was that they were more successful, in people feeling comfortable to go and use them, than some of the more opened particularly for this purpose places, where people were more anxious about using them. So, there will be, I think, a significant range of places across Wales this winter. There won't be the Welsh Government money, but I think the Welsh Government money has seeded lots of that activity.

I've also seen it, for example, with Building Communities Trust projects I've visited.

Moving on, and I suspect we're going to get a similar answer, but what, if any, support for community-based, energy-intensive provisions, such as swimming pools and leisure facilities, will the Welsh Government provide to help them cope with rising energy bills?

Well, Chair, there will not be a specific additional stream of revenue to support those uses this winter. But there are, in this field, a string of things that will be available, and some of those are the result of Welsh Government investment. Of course, these are primarily responsibilities of local authorities, and this year, at least, local authorities in Wales saw a significant step-up in the level of support from the Welsh Government. So, there will be some things that local authorities can help to do.

The Welsh energy service does provide both advice and budgets for energy-saving measures, and those are available to some of those community organisations and sports organisations. The Welsh funding programme provides interest-free loans to the public sector, so that they can install energy-saving measures and then pay back the loan from the revenue that they save, and some local authorities have used that for the sorts of facilities that Mark Isherwood refers to. This year, and unusually, Sport Wales has used some of the money that it gets from the Welsh Government to provide grants to clubs for the installation of energy-saving measures, such as solar panel installations. Clubs could have up to £25,000 to help them with that, and the idea was that that goes on yielding a benefit to you in the long term. That was a new programme available to clubs this year.

And then, finally, we know that the Our Communities Together cost-of-living fund does work in this sort of area. The Welsh Government provided £1 million to the fund at the end of the last financial year, and it can be used to support grass-roots voluntary activity in the sort of areas that Mark Isherwood referred to. So, it's not that there's no help out there, but the Welsh Government is not in a position to provide a specific revenue stream just designed to help those sorts of organisations with the energy costs that they face. John.  

Go on. 

Could I just add to what the First Minister said? I think we do face some really difficult choices in relation to what you might describe as energy-intensive community facilities, like swimming pools, where there has been a temptation since what's happened to energy prices to believe that the answer is to turn the gas up, whereas, in the longer run, that's not going to be the solution that delivers net-zero benefits. And so, the work that the Welsh Government energy service is doing in support of local authorities right across Wales to think in different ways about how you might sustain your energy needs in a locality, including the use of solar panels, as the Sport Wales grant provided last year, I think, generates a new way of thinking about how we sustain these facilities and what's the link between the facilities and energy generation in the locality. And the work that we're doing not just through the energy service, but the grants that we're providing through Ynni Cymru and, we hope, the work of Trydan Gwyrdd Cymru, are going to, I think, promote different ways of thinking about how you sustain these crucial local services, not simply by cranking up the gas.

Can I ask an additional question, then? You've highlighted that these are, in a sense, local authority responsibilities in one aspect, but there's a lot of social prescribing now being used by GPs that will use these facilities. So, is there guidance from the Welsh Government to health boards, for example, to make sure that they collaborate with local authorities with funding in this area, so that the social prescribing agenda is also part and parcel of how we support these types of organisations?

Yes, Chair. I remember that the health Minister published a social prescribing framework earlier in the year. It does encourage local health boards to make sure that they are making their contribution to sustaining those facilities, where offering somebody a chance to use a leisure centre or some other community facility is preferable to relying on a straightforward medical intervention.

I'll move on, because I know that time is short. Last year, 2022-23, the take-up of the Welsh Government's fuel voucher scheme supporting households on prepayment meters or off-grid households was unfortunately lower than anticipated. Has take-up improved since and what is being done to maximise take-up over this winter?

Thanks to Mark Isherwood for that question. Take-up was slower in the beginning than what it became, but that is because at the very outset there were only six referral partners to the Fuel Bank Foundation, and a lot of their effort in the very beginning was directed at recruiting more referral partners and training them to be able to make those referrals successfully. We now have 116 referral partners to the scheme in Wales, so uptake, as a result, has accelerated because there are more people able to make the scheme known to people. We budgeted for a full take-up across the whole of the year, which, in a demand-led budget, I think is the sensible way to do it. But over 100,000 people have benefited from that scheme now, 42,000 of those were children, and the rate of referral to the scheme is very different now than it was when there were only six partners involved.

Russell George.

Thank you, Chair. First Minister, has the contract for the new Warm Homes programme been awarded and mobilised as planned?

We're in the very final stages. I'll probably ask John to give you the detail of it. I've seen advice in the last couple of weeks about the very final stages of letting the contract. It is a very big contract, it's somewhere between £225 million and £250 million, so there's an awful lot of public money involved in it. So, as well as making sure that we are getting the maximum value for the public out of the contract, we also have to be very aware of the fact that these contracts are often challenged. So, you've got to make sure that the procurement exercise is watertight against people with very legitimate commercial interests who find that they weren't the successful bidder. And we've had experience of this in Wales in recent times. It is a more litigious area—procurement—than it used to be, where people see large sums of money going elsewhere and feel that something didn't go well for them in the process. So, that's the stage we're at: making sure that those very final things are put in place. Then, the contract will be let. We remain confident that we are able to do that for 1 April and that there will be continued provision to the public without there being a break in it.

Before John comes in, can I just ask—? As I'd understood it, the new programme was due to start, I think, last April, but then, I can see that the Minister, Julie James, had written to the Climate Change, Environment and Infrastructure Committee in August, stating that the mobilisation of the new programme would start at the end of November 2023. So, just to understand, has there been slippage? It looks like there has. Could you explain why there was that slippage and what the consequences of that are?

I'll give you one sentence and then John will know the detail more. There is slippage; it didn't happen by the end of November. It is because of these final stages of issuing the contract and making sure that everything is as watertight as it needs to be. The scheme will be there for the start of the next financial year, and because we've rolled the current scheme forward, there should be uninterrupted energy efficiency support for low-income households in Wales.

I think the Minister had announced that we had intended that the new scheme should be ready to go by November 2023, but we did not quite hit that target. We are still engaged in the technical assessment that's needed to lead to contract award. I'm part of the team that's had to take tough decisions about the timing of that decision. The really important thing that we're aware of is that we've been able to extend Nest until the end of March next year. We remain confident that the new Warm Homes scheme will be up and running by 1 April next year so that there's continuity of delivery. It will be a different type of scheme, which is one of the reasons why it's really important that we need to get it right. We want this to last for a number of years, and we want it to be technically correct and commercially astute, so we're just going through the fine detail that we need to do to get that sorted. 

Jenny wanted to ask a short supplementary.

I just want to add to the complexity by asking how we maximise the take-up of money being offered by the UK Government, as well. We've had a little bit of a mention of ECO4, which is for anybody who has E or F-rated homes, on low incomes, obviously, and also ECO Flex, which actually speeds up the process of reducing the bureaucracy. It's just that companies based in Cardiff tell me that Swansea has approved ECO Flex, but Cardiff, on the other hand, is trying to do a whole Cardiff capital region system, and meanwhile lots of work is going on in Bristol, in London and other places. My fear is that we'll never get it together to even draw down this money available from the UK Government, because all the money will have been spent by the time we have our ducks in a row.

It is complicated, but the work that we're doing to support all Welsh authorities to access the ECO Flex funding is already under way, alongside the existing Nest scheme. Whilst there is a different approach being taken by some of the authorities, we are working with all authorities to maximise the draw-down of the ECO funding under various headings, including new things that have been announced over the last few months. So, the new scheme isn't holding up the challenge of maximising Wales's take. But we're not doing well enough yet.

How long have you known about ECO Flex, and why has it taken so long to get to the point where people actually are going to get some benefit from it?

ECO Flex and its predecessors have been part of the scene for some time, and for at least the last 12 months we've been actively engaged with Welsh local authorities to make sure that, working on a cross-Wales basis, we're maximising drawdown. Whilst I think there's growing awareness of these schemes, the team that's been leading on this work have been engaging with local authorities on that aspect for some time.

There's not a single beneficiary that I know of in Cardiff.

Mark Isherwood.

The Welsh Government's fuel poverty strategy said you would consult on the new programme between June and December 2021, with implementation of findings to start in April 2023. Why was the consultation not then launched until December 2021 and responded to until June 2023?

That whole preparatory phase took longer than we expected. We did not deliver on our commitment to Ministers to do it by last April. We then decided that we'd extend Nest by one more year. We're now engaged in the technical assessment that's required to get us to the point where the new programme can kick in from next April. We weren't able to meet the original April 2023 target.

That's because the consultation and response were later than stated in the strategy. 

The whole of the preparatory work took longer than expected, for a whole variety of technical reasons.

We'll go back to Russell.

Thank you. I appreciate the complexities you've talked about with the new programme, but, of course, the concern is that the new programme now will start after the coldest months of the year, and I want to understand the consequences of that. But I suppose the question is how the new Warm Homes programme is going to differ from the Nest programme. 

The important thing as far as the winter is concerned is that Nest is up and running and will continue to run until April. So, we're not withdrawing the support that's currently available, including the advice services, which have grown significantly since the increase in energy costs.

So how does the new programme differ?

The new programme is going to be a different type of programme, because the Nest service has traditionally focused on installing new gas boilers, and in an important discussion that we had with the whole of the Cabinet, we provoked a debate about whether it was right to continue to support simply replacing people's gas boilers or to move into the more complicated way of delivering low-carbon heating solutions in all parts of Wales, usually using heat pumps.

What I wanted to get to is what the consequences are of the new scheme being delayed. Because it sounds like you've had a view that replacing gas boilers is the wrong approach, but that's now going to take place for an additional year, other than what was originally anticipated.

The Nest scheme does now include the provision of heat pumps, although it's traditionally been a replacement of gas boilers. That does generate some carbon benefits, but we're anxious that the new scheme should take us into a different type of activity, so there will be a different offer to householders from April onwards.

And how is the new scheme going to support rural communities in particular?

It will support people in all communities around Wales if they qualify for the support.

But people in rural communities have different needs to those in urban areas.

Yes, and so the challenge of replacing oil-based systems in rural Wales will be part of the challenge that the new scheme takes on.

And what about support for households perhaps in private rented or owner-occupied premises? How is the new scheme going to support those people?

The new scheme doesn't support those people in that direct way, because it will be focused on those households that are currently within the ambit of the scheme. I should just be clear, Chair, that the new post-April scheme will continue to offer some help with gas boilers. It isn't a switch 100 per cent out of gas boilers into something else. There will be a period where we will continue to offer some households help with what they've already got, to make it more efficient, and to make it last longer, while we switch the emphasis in favour of more carbon-helpful ways.

For people who are not within the programme, the people that Russell has mentioned, there will be a number of things we will still be able to do for them. They will be entitled to all the advice services that are available in this area. We are working on a new idea; it's not completely there yet. Colleagues will be aware of financial transaction capital, which is not conventional capital and we can only use it for certain purposes, and it has to be on a loan basis. But we are developing the idea of such a package for householders, people who already own their own homes, and who are in the end going to have to use some of the equity that they have in their homes in order to improve their energy efficiency. The public purse is not going to be able to pick up the costs of doing this for everybody, but some homeowners will find that more challenging than others, and a loan scheme using financial transaction capital is being worked up at the moment.

And then finally, there are all the things that Jenny mentioned, all the Flex schemes, the UK-wide schemes, where we do definitely need to do better to persuade local authorities in Wales to maximise their draw-down. Those are available to anybody. They're not—as our schemes are—targeted at the least well-off. Anybody who qualifies for that help is limited by income—

I've got time for one last question. I suppose the concern is that the new scheme is being delayed by a year. I understand the Nest scheme has been extended, so I appreciate that, but there are elements about the new scheme that you would say, 'Look, this is the right approach, and we've moved away from the Nest scheme', so now, the Nest scheme that was effectively, perhaps, outdated is extending for another 12 months. So, as a result of that, have adaptions been made to the current Nest scheme, to reflect what your new ambitions are?

Yes. The current Nest scheme is different to the Nest scheme two years ago, and there'll be another iteration—

How is it different? Just, how is it different?

Because there's provision for heat pumps in the existing Nest scheme in a way that there wasn't two years ago.

Okay.

Can I bring Mark Isherwood in for a short supplementary? And then we'll move on to John.

How will you address the deficiency where the Welsh Government's tackling fuel poverty plan 2021-35 does not meet the Welsh Government's statutory obligations to specific interim objectives to be achieved and target dates for achieving them?

I'm not sure I'm completely following the question. Apologies. If maybe I could hear it one more time and then I'll—.

The Welsh Government's tackling fuel poverty plan 2021-35 has overarching objectives, but it doesn't have interim targets. However, the Welsh Government has statutory obligations to provide specific,

'interim objectives to be achieved and target dates for achieving them.'

I'm quoting. How will you fill that gap?

Well, we debated this on the floor of the Senedd, I think only last week, didn’t we, when there was a motion in this area. The Welsh Government has not turned our back on setting those targets. We’re not in a position yet where we think we’re sensibly able to do so. The context for energy has changed so rapidly over the last 18 months that it is hard to find the right moment, the right landing spot where things are stable enough for you to be able to set those targets in a way that is meaningful and real. So, we’re not saying we’re not going to do it, but we want to do it when things are in a sufficiently steady state that those sorts of targets would actually have some genuine meaning.

John Griffiths.

Diolch yn fawr, Cadeirydd. First Minister, if we could go back to what you were saying earlier about Welsh Government spend and the extent to which it reaches those most in need. Obviously, we're in the context of 13 years of austerity and the effects of inflation, and it's extremely difficult to take forward public spending in a way that we would all like, but, nonetheless, quite a large sum of money gets spent and the question of how it's spent is legitimate. But the Wales expert group on the cost-of-living crisis recommended introducing targeted payments to support low-income households with children, and low-income households including at least one person with a disability. So, as I say, I know the context is very, very difficult, but will the Welsh Government, do you think, be able to take forward that recommendation to support those particular groups?

I don't see any immediate prospect, Chair, of us being able to do that. The expert group said it would cost £28 million more than the schemes we have currently in place, and we do not have more money; we have less money. What I think we are keen to do is to continue to learn the lessons from the schemes they have in Scotland in this area, but, to be clear, Scotland is funded for those schemes. The cut of the devolution responsibility means that money comes to Scotland that they have chosen to use in this way—that is a choice they have made and the Scottish Government often refers to their child payment as one of the big success stories of their anti-poverty strategy. So, we are very keen to continue to learn the lessons of that and to see what they’ve done, but we have neither the powers nor the money to do that in Wales.

The Joseph Rowntree Foundation, First Minister, and, indeed, the Bevan Foundation here in Wales have done some useful work, I think, in terms of providing a little bit more clarity on the basics of addressing need and helping vulnerable families and people in terms of maximising income and reducing outgoings. So, there is quite a lot that can be done around that. And one area of concern is rising rents and, indeed, eviction rates in the private rented sector and what measures the Welsh Government might take to protect private tenants from potentially ever-rising rents and, indeed, worries about eviction. What would you say about what the Welsh Government might do in those terms?

Well, I think, Chair, we’ve done the big things already here through the Renting Homes (Wales) Act 2016, which is now in operation in Wales. So, in terms of evictions, the minimum notice period for no-fault evictions is six months in Wales. Obviously, evictions are a real concern over the winter, but that would mean that for anybody who was served an eviction notice in those circumstances today, it would be the end of May at the earliest before such a notice could be effective. And that's a really big change. It used to be two months and now it's six months. It's a really very considerable step forward in the security that people in the private rented sector have.

And, as far as rents are concerned, now in Wales, if a landlord proposes to increase an existing tenant's rent, they have to give two months' notice of that, rather than one month, as was previously the case, and they can only do that once in any 12-month period. So, rents in the private sector are rising, there's no doubt about that, and that is mostly a supply problem. There are fewer houses to rent and, as a result, the price of what is left is going up. But, in Wales, that can only happen to you once in any 12-month period, and you will have double the notice of that than you used to before the renting homes Act came into force.

If we move on to advice and the funding of advice, I heard what you said earlier on that matter, but, nonetheless, I wonder what Welsh Government's counter-analysis is in terms of the single advice fund and the sufficiency of funding available, given the tremendous demand that we know about.

Well, first of all, Chair, I think the single advice fund has been a significant success story. You will remember—I know that John Griffiths will remember—that it was controversial at the time because it meant that, instead of spreading the money we had relatively thinly amongst a lot of organisations, many of them, as Mark Isherwood said, doing very important work, the decision was to gather that money into a single pot and let a single contract—and the CAB is the contract holder of that, and I think they're very well able to demonstrate the success they've had with that. Because of that success, the Minister for Social Justice has been able to find some additional funding for the 'Claim what's yours' adviser posts. I think there was an earlier question, wasn't there, about how we maximise the draw-down for Welsh citizens of the help that's available to them, well, the 'Claim what's yours' advisers are on the front line of that, and funding has been found for them to continue in post throughout this coming winter. 

What I can't do, John, is promise that there is a lot more money in an area for which the Welsh Government is not funded and for which we hold no responsibility. But, the money that is there is significant. It's £11 million every year, and we are very, very alert to the way that every £1 that we put up turns into a multiple of that in the pockets of people who then get help to claim the help to which they are entitled.

Okay. Thank you, again, for that. Just finally from me, Chair, if we move on to the discretionary advice fund, we saw record demand last winter, and I think we probably all expect to see even greater demand this time around. So, what can you say in terms of the sufficiency of funding available in that particular support and help that's so important to people?

Well, Chair, I do think that the discretionary assistance fund is the most practical demonstration of the commitment that the Welsh Government has to helping those who are the very least well-off. You will remember that this used to be known as the social fund, and it was administered by the UK Government. The responsibility came to the Welsh Government unasked for, and, indeed, we wish it hadn't been devolved. It was a decision by George Osborne when he broke up the national council tax benefit scheme and the national social fund scheme, and provided those responsibilities to the Welsh Government, Scottish Government and local authorities in England, and gave us the budget with a 10 per cent cut in it. When we first had that responsibility, we decided not to devolve it further to local authorities, because we thought it was important to have a national scheme in Wales, with national rules and national standards, and the decision that would be made in Newport would be broadly the same, whether Newport was in Gwent or in Pembrokeshire. When it first came our way, it was a handful of millions of pounds. This year, it will be £38 million, and that's an £18 million uplift in a single year. And that is because of the enormous pressures that the fund is under. It is the welfare state of the last resort. It's where people go when everything else has run out, and because you know that, by definition, that money is going to the hands of those people who have absolutely the least, we have made it a priority, even in these very, very difficult times. This is part of our budget that we have worked really hard to go on protecting and, where we can, to go on investing in it.

Llyr Gruffydd has a supplementary.

Okay. We'll move on to Jenny Rathbone. 

Thank you. First Minister, I want to move on to food in this depressing landscape. So, the Equality and Social Justice Committee did a report on unsustainable debt fuelled by the cost of living back in May. Clearly, the problems have got a lot more difficult during that time. So, one of our recommendations was around trying to make our response to ensuring everybody was well fed done in a more sustainable and preventative way, including improving people's cookery skills, providing healthy meals, rather than what happens to be donated by supermarkets to the foodbanks. So, that was accepted by the Government, and, particularly, the important thing is the mapping exercise that's needed to ensure that everybody has access to something to enable them to help themselves, with the more consistent support that comes through the pantries, the clubs, rather than people who turn up maybe once or twice at a foodbank. 

So, Chair, I want to agree with almost everything, and I'm going to put one cautionary note in my answer. So, on the community food strategy, part of the work that's been done on that in this calendar year has been a survey to find out where the gaps are and what provision is already on the ground, together with a set of focus groups that we conducted as part of our commitment to co-production in the way that we find solutions to these challenging issues. And that's been published now, so we have a better understanding, I think, of where there is provision and where there are gaps. There is advice that is with the Minister—so, in this case, that's Lesley Griffiths—and with the designated Member as well, because this is part of the co-operation agreement, and, in this case, that's Cefin Campbell. They've both got that advice at the moment, and I'm expecting to hear from them when they've met and resolved some of the issues that are there. So, I think quite a lot of the work that is going on is very much consistent with the question that Jenny Rathbone asked me, Chair. 

I want to just add this small, cautionary note. It's very important that we do provide people with the skills that they need and the practical facilities that they need and so on. But what poor people need most of all is money. Myself, I'm always determined to be very careful not to allow this sort of discussion to topple over into what is sometimes said: 'The reason that poor people are poor is because they don't know how to budget, they don't know how to cook, they don't know how to do this. What we need to do is to give them the skills they need.' I'm not denying the importance of the skills, but what people who are poor need is money; they're the best managers you'll ever meet, because they have to manage every single day and every single week. It's not that they lack skills; it's not that they lack commitment. What they lack is the most basic thing of all to be able to do the things that everybody else are able to take for granted.

Indeed. But going back to the conversation we had earlier about people who are trying to get some electricity in order to be able to cook something, and then finding that they've just got to pay service charges before they can get anything, means that people are not eating properly. So, they're handing back food that requires cooking. So, they're either eating a very random diet of cold food or they're relying on takeaways, which, obviously, are much more expensive and also not very nourishing. So, the Can Cook Well-Fed methodology up in Flintshire is to provide free meals for three weeks, then another three weeks at a subsidised rate, followed by, 'Here are the ingredients for the meals that people like to eat', provided in local shops, and then you have everything you need to make that pot of food for your family. So, how much is the community food strategy looking at that sort of thing, both in the community and also in our schools?

Well, the community food strategy will certainly be looking at those issues. It will be a co-ordinating strategy. It will look at, as a result of the mapping exercise, all the fantastic work that does go on already, but is often not as co-ordinated as it should be. I could give the committee this morning a series of individual strands: the £80,000 that we give FareShare, for example, which has allowed them to purchase portable cooking equipment, which they then take to places where they provide cookery advice and lessons on the spot in communities and so on; the fact that the school holiday enrichment programme during the summer always involves parents as part of the nutrition and the dietary advice that goes alongside it. There's an awful lot that goes on. What the survey shows is that it doesn't come together enough, and that's what the strategy will try to do.

But the point that Jenny Rathbone makes, Chair, is an utterly sobering one, isn't it? We have foodbanks who provide cold-food packages for families because those families aren't able to cook; they can't afford to turn on the electricity. So, in an organised way, foodbanks provide food for families that doesn't need to be cooked, and that is extraordinary, isn't it, that we should be doing that, not on an exceptional basis—how extraordinary that somebody should be in this position—but in a way that is now being organised to meet those sets of circumstances, and the journey from that to doing the things that the committee focused on in its report is a pretty long one.

Okay. And building on your remarks earlier about having warm hubs that are not stigmatising people—and I completely agree with that—how do we ensure that those who most need food are getting it without stigmatising people? For example, the Wales expert group has recommended that children in years 7 to 11 whose parents are on universal credit should be able to get free school meals, and because you don't any longer have tickets for free school mealers, in theory, nobody knows who's in this dreadful situation.

Well, two points, I guess, Chair. First of all, one of the major investments during this Senedd term will be to achieve universal free school meals in primary schools. So, we didn't have that at the start of this term, and as a result of the co-operation agreement, by September of next year we will have implemented that in every school, in every part of Wales, and I think we have already served nearly 20 million more meals in schools in Wales as a result of that policy. It's absolutely extraordinary what has been done. So, in this term, that has been our focus—children of primary age.

We will do the preparatory work to see what it would need in order to extend that further up the age range. The circumstances we're in, I don't see any immediate prospect of that happening. But even if there was money, there would still need to be a huge amount of preparatory work. Almost all primary schools will be offering the full range by April of next year. The few authorities that are left, it will not be because of money, it will be because the facilities, the amount of capital investment that you need in order be able to do it—they've had to do more of that than some other local authorities. And if you're doing that at secondary school, then it would be an even bigger challenge, to make sure that the capacity of the system was sufficient to do what we wanted to do, even if money were available. But a huge amount has happened this year, this term, at that younger age range.

Okay. We're going to come back, in the second section of our discussions around the co-operation agreement, on the take-up of free school meals in the primary sector. I just wanted to ask you about the free school breakfast pilot for year 7 children, which finished at the end of last summer. I've heard from providers that a lot of them were providing free porridge in the morning, which is a very cost-effective way of ensuring people are getting a nourishing start to the day. I just wondered if there's anything you can tell us about the effectiveness of that programme and whether we could get the caterers to engage in it as part of their social justice principles.

Well, it'd be great if we could, Chair. So, for colleagues who don't know, this was a scheme that added £1 to the sum of money that children had, in year 7, to take account of the fact that in primary school they would've been eligible for a free breakfast, and when they moved to secondary school that entitlement ended. I think the scheme was a success. I think it did mean that there were children not having to choose between using the money they had for breakfast or for lunch. At this point, I'm afraid that we're not going to be in a position to extend it. I'm very disappointed with that, because I thought it was both a very good thing to do and I think that the success of it was demonstrable. And it was—. Sorry, this was a point I was going to make, again in terms of things that have changed: when I first used to be involved in things in the Senedd, back at the start of devolution, we worried all the time about the fact that children who had free school meals were the subject of stigma and discrimination, because they were sent to stand in the free-school-meals queue or they had a ticket that was a different colour to every other child. And that's something else—we sometimes just need to remember some of the things that are better now than they were then. And the fact that that doesn't happen now and that those children are better protected from that has been an advance over the devolution period.

Okay.

Go on, Llyr.

Not on this particular subject.

Can I close—? Go on, Jenny. 

I just wanted to say, however, that we had £11 million that was taken out of the universal free school meals budget in 2022-23 and £11.5 million in 2023-24, because of the shortfall in the uptake of free school meals. Could this not have been redirected to something that you think has been successful in ensuring that people who are struggling are getting to eat, both at breakfast and lunch time?

Well, it's a demand-led budget, as we were discussing earlier, and what the Welsh Government did was to set our budget at the top end of what we thought the take-up would be. We were assuming a take-up rate of about 85 per cent; the actual take-up rate so far has been 70 per cent, but it's rising, as you would expect with a scheme that people become more familiar with. In that first part of the programme, where there was money that we had set aside for it that wasn't needed for that, then of course the discussions are with our co-operation agreement partners as to what we could do with that, and we did exactly what Jenny Rathbone suggested with some of it. That's how we funded free school meals during the school holidays for a period beyond the time we'd had any money for it. Where there is money like that that emerges in the co-operation agreement, the discussions as to how to use it are necessarily with our co-operation agreement partners.

I will now close the first session today with one final question, First Minister. You've often referred today to the challenging times facing the Government with funding, because the spending powers of the Government have been reduced as a consequence, and you've said, for example, just now, that you can't continue the £1 extra for the school breakfast for year 7s. When you consider your budgets, do you take into account the long-term consequences of the inability to continue such programmes? Because clearly this has a major impact upon people's education and their learning, and other aspects of how people live their lives. So, how does your budget thinking work out to ensure that, whilst you take the difficult, tough decisions, you're not creating larger, huger problems the following year or the year after that as a consequence of your actions?

I can tell you that it is a constant dilemma in trying to set the budget. It is the point exactly that Mark Isherwood raised with me earlier, about us not being able to go on providing funding to small voluntary organisations who do things that prevent costs further down the line. When your budget is under the pressure that ours is under, the single greatest pressure is to go on finding money so that services that are currently there go on being funded, and sometimes that does mean that you're not able to invest in those longer term preventative things because it would mean—. There's only one sum of money. It would mean taking money away from services that people actually need in the here and now. Of course we want to, of course we want to invest in those things that will prevent problems from happening, that will save money because those problems are avoided, and that question is asked by all my Cabinet colleagues against every budget line that they look at. But the tension is real. The tension is between taking money out of things that people need today in order to be able to attend to the long run, and that judgment has to be made against every budget line, and it will be made differently against different aspects of the budget.

I will bring this session to a close. Can I thank you for this session? For your colleagues who will not be joining us in the second session, just to let you know, as usual you'll get a copy of the transcript. If you see any factual inaccuracies relating to yourselves in particular, please let the clerking teams know so we can have it corrected. The First Minister will know the situation because he'll have the same message afterwards as well. We'll take a 10-minute break and reconvene at 11:40.

Good morning. Can I welcome Members back to this morning's evidence session of the Committee for the Scrutiny of the First Minister? In this session, we welcome the leader of Plaid Cymru, because the session will focus on the co-operation agreement. First Minister, can I ask you to introduce your officials for this session, please? 

Can I welcome Rhun ap Iorwerth to his first session? Obviously, your predecessor attended these sessions before. We look forward to scrutinising both of you in this session. Perhaps I'll start off with a very simple one. We have just received the second year report and we're now into the third year. Your original document had 46 commitments between the two signatories—that's the Welsh Government and Plaid Cymru. Have you reviewed those 46? Do you think that, in light of circumstances that have since happened—? We've seen various things happen since you originally came up with that agreement. Have you had chance to reprioritise those, in a sense, because the financial outlook is far more challenging in the year ahead? Where are you, now, in your thinking on that agreement?

The agreement was a three-year agreement and its fundamentals remain intact. In terms of the 46 items, it was never our intention to add to or subtract from them, unless there were very compelling reasons for doing so. So, the 46 items that we agreed remain the focus of the co-operation agreement. For some of them, we've now done all the policy work and we're in the implementation phase. Universal free school meals, as we discussed briefly in the last session, is part of the agreement, of course—a very important part. The policy work is done and we'll continue to implement it in the third year. There are some items where the policy work is more or less completed and we'll now be moving into the implementation phase fully—Unnos would be an example, I guess, of that. And there will be items that will be third-year business—that was inevitable; it's a three-year programme and some things were intended to be the focus of activity in the third year. So, the White Paper we promised on rent issues and rent controls will appear during the third year and there'll be a lot of work still going on in the background to get ready for that publication. So, the co-operation agreement, essentially, is as it was originally envisaged and being implemented in that way over the full time period of the agreement.

Can I ask, then, in addition to that—? You've indicated your priorities, but there are financial implications for some of those priorities, and that will also mean financial implications for other Welsh Government decisions, because if you're prioritising some areas, there'll be funding allocated to those, which means you may have to find funding from elsewhere. In light of that, is there still no consideration of the change of priorities? Because it does mean that you might have to take funding from some other aspects of your programme for government, for example.

When we are setting the budget, the sums of money set aside for the co-operation agreement are regarded as ring-fenced for the co-operation agreement. Where there are underspends, which occasionally occur, then it is a matter of discussion between the partners as to how those underspends should be deployed. In the considerable majority of cases, they are deployed within the co-operation agreement matters, but it doesn't preclude us agreeing that there might be something outside the co-operation agreement that we would regard as a joint priority and we would use money in that way. But the starting point is that the sums of money that were agreed for the co-operation agreement remain with the co-operation agreement, and any change within or beyond can only be carried out by our joint agreement.

Rhun, do you want to add anything to that?

I'll come back to some of those areas, but I want to give Russell an opportunity now.

Thank you, Chair. I note that 78 per cent of respondents to the Welsh Government's consultation on the introduction of a tourism tax or levy disagreed that local authorities should have discretionary visitor levy powers. To what extent was the disagreement expressed not so much about the principle of the levy but the discretion that local authorities should have on how that's applied?

I suppose what I wanted to understand is the degree to which local authorities will have the discretion, and how that could work in principle.

And if I can ask about the 182-day self-catering holiday let threshold, perhaps to the First Minister, I wonder if you can update us on any further discussions you've had with the tourism industry about potential exemptions. 

We continue to be in discussions with the industry, of course. I think we are seeing more providers meeting the threshold than we were told in the beginning might be the case, and the threshold has in that way acted as an incentive to make sure that properties are let for as many days as possible. We've already agreed some exemptions to it, where there are properties that are harder to let for that length of time, and we continue to engage with the sector in all of that. This is the first year of this new threshold, and the Welsh Government will want to make sure that we are responsive to the emerging evidence of how it is working on the ground. But the purpose of it is clear: it's to distinguish between genuine businesses who are then able to claim an exemption, for example, from business rates, and those people who can continue to let their properties, but for fewer days, but who must make a contribution through the council tax like anybody else.

But for me, there are still very genuine businesses—although we might have a different interpretation of 'a business', I suppose—that are not able to meet that threshold because the markets are very different in different parts of Wales. So, can you give us any insight into what further exemptions there could be, or what further specific considerations there are in terms of exemptions that you might bring forward?

No, I don't think I can. I don't think I'm close enough to the detail to be able to give you an accurate account of where that discussion is happening. But we remain open to the evidence from the sector, and where there is evidence that they can produce—and now we've got actual experience, we can see evidence on where there are things that are beyond the control of the individual business—then we remain open to discussing that with them.

I want to go back now to the co-operation agreement and the annual report we've received. On that report, we're obviously now looking forward to the final year of the agreement, and I'll come on to explore perhaps what your priorities would be in the final year. But before I do, the report gives an update on 43 out of the 46. There were three areas that were not given an update on, for example Unnos, the construction company that was part of it. You've done Ynni Cymru, the energy one. Where are we in those three areas that are yet to be given an update on?

Let me give you the Unnos update, and then you can tell me which of the others we need to help fill in. Good progress is now being made with Unnos. As I said, in my mind, it's in that middle category of somewhere where the policy thinking is now more or less consolidated and we now need to be pressing ahead with the practical work. We've agreed core objectives for Unnos. That will include improving supply chains, because we know that that is one of the major bottlenecks in the building industries, having people with the skills to do the jobs we need and the supply chains that we need to be reliable and not volatile in the way that they have been in the prices that they charge. It's going to have a special responsibility for using modern methods of construction, and making sure that we've got the best information and that we're promoting those across the sector. Assisting to bring empty homes back into use is going to be part of Unnos's remit, and that is an area that we particularly wanted to focus on over the next few months. We've had a lot of success through the different schemes we've had—part of what Rhun was saying in terms of protecting local communities and making sure there are places for people to live. But we want Unnos to put its weight behind that effort as well. And then we'll also look to it to help us to find solutions to some of the—I don't want to say the word 'barriers'; that wouldn't quite be it—some of the barriers that are there to social housing development. For example, there's the whole phosphate debate that we focused on in the summit that Julie James chaired the week before last. 

So, the remit of Unnos is agreed. A programme of research has been agreed to help it with the remit that we've given, and I'm looking forward now, in the months ahead, to see it getting on with the jobs that we've agreed that will be the core of its responsibilities.

Thank you for that. Just to give clarification on the other two, they are the national care service, but we'll come on to that later on, and also the ongoing work to provide sustainable public services.

Well, in a way, that covers anything that's in here. That isn't a specific thing in the way that many other things in the agreement are. That is a general shared commitment to go on working together to sustain the public services on which people rely. So, part of the agreement is that Plaid Cymru has an opportunity to influence the wider budget of the Welsh Government beyond the 46 issues in the agreement. And we've recently received a helpful document from Plaid Cymru setting out some of their thinking for the budget for the next financial year, and the commitment to sustainable public services is part of that wider influence that the co-operation agreement provides for.

Mark.

Thank you. Well, you refer to those 46 commitments, and you've previously referred to protecting budgets for them and said that that funding has been allocated to 13 specific areas within the agreement. What are those 13 areas and will they continue to be protected in the 2024-25 budget?

Chair, I'm not sure that I can recite them all, admittedly, from memory, but they're not a secret. I think the finance Minister is happy to share them, but they would include—just to give you some immediate ones—of course, childcare and universal free school meals in primary schools, which are two of the big revenue commitments. There is a commitment to capital investment in flood defences, there is the commitment to a national school of government, there is a commitment to the Arfor scheme. There we are, I'm beginning to run out now—

I have a list in front of me here, if you want the full list. It is: free school meals; childcare for two-year-olds; Unnos; building safety; Ynni Cymru; flood capital investment; public transport feasibility studies; broadcasting; culture strategy; media financial support; Arfor; Coleg Cymraeg Cenedlaethol and the National Centre for Learning Welsh; and mental health. So, I believe those are the 13 that you're referring to there, and they remain a core part of what we are trying to deliver together through this co-operation agreement.

So, is the budget for them protected, in next year's budget?

It is protected, Chair, in the way that I described. The funding for the agreement is ring-fenced within the Welsh Government's overall budget. As Rhun said earlier, people shouldn't forget that, in the broader scheme of the £20 billion, this is a relatively small amount of money in the wider context, but that's how we treat it. We treat it as money set aside for these purposes, and where there is—as there will be because circumstances change in any year—a need to flex around the margins of it, that is done through the mechanisms that we've set up for continual engagement over the funding of the programme.

Further to the Chancellor's autumn statement, what, if any, further prioritisation between the commitments in the agreement has there been?

Again, what the autumn statement told us was that it was a confirmation of how difficult the overall financial situation is, but, as we've already stated, we are talking here about a very small part of overall spending that, even if used to its maximum, would not address the state of the public finances that have been created by the public spending settlement of the UK Government currently. 

Well, the question wasn't so much that as whether you've considered reprioritising commitments in that context.

Again, at the risk of repeating, we look at the 46 commitments as a whole and as commitments that deliver for Wales, either acutely or as an investment in the long term, that we are looking to continue to deliver within the three-year programme of this co-operation agreement, as has always been the case. Within the small overall budget that we have for the co-operation agreement, we will absolutely, yes, look at means of spending money more effectively, more efficiently, as those opportunities arise. 

Well, again, a question for Rhun ap Iorwerth, if I may: does Plaid Cymru see any of the commitments as more of a priority than any other? And have you seen any progress towards any of the three areas your March 2023 joint paper with the Welsh Government identified as your priority for any future available funding?

It's a fair question to ask, but, as I said, they're priorities for different reasons. Issues around free meals for schoolchildren relate to an acute problem that we have of a cost-of-living crisis and the relief that has been provided to families, communities throughout Wales because of that. So, clearly those are priorities. There are other priorities that will set us up for the better running of public services in Wales in the future. I could talk about the work that's being done on the national governance centre [correction: national school for government], which I'm very excited about and very eager to talk about. So, they're priorities that we are still determined to deliver together. 

On the three elements that you mentioned, the increase in education maintenance allowance was the first of those, and, yes, we achieved not quite the level that we wanted but an increase to £40, which is something that was very, very important to deliver. On extending the eligibility to free school meals in secondary schools, we know that the expansion of free school meals is something that will stand us in good stead for many, many reasons for years to come, and we continue to discuss that. And extending the bus emergency scheme, well, yes, that was done. I could put my cap on here as a leader of a party in opposition and say that we will keep holding the Government to account on that, because that is the relationship that is between us because it's outwith the co-operation agreement. So, I think that's the full response to that question. But, yes, the priorities remain to deliver on this agreement.

Okay. Where there have been differences in opinion over applying the co-operation agreement policy areas, such as funding the provision of universal free school meals over school holidays, how would you each describe the level of communication between you ahead of those decisions? And, Rhun, specifically, could you also expand a little bit more on the extent to which you feel that your party's input has been taken into consideration on areas such as that?

School meals in school holidays, of course, lie outside, again, the co-operation agreement. So, it's up to you how much you want to look at that. It's not something that we can discuss in relation to the co-operation agreement because it's not in it. It was through our role in opposition that we engaged with the Government on the school holidays issue. 

In terms of the engagement between us in general on elements of how to deliver free school meals, I'm not sure specifically what you're referring to, but, through the co-operation agreement mechanisms, we have those discussions very regularly on budgetary matters, on policy development, on legislation development, where necessary, and it's a system that works well. But, it does not impact on our ability to engage with each other politically on all of those issues outside the co-operation agreement.

Can I, before Mark comes in—? It's back to my first question, in a sense. You've highlighted the fact that meals during the Christmas holidays, for example, was outside of the co-operation agreement, but the question is: would you rethink the co-operation agreement to add things like this into the co-operation agreement, because where do your priorities lie, in that sense?

It's an interesting question and, of course, a decision was made—again, outside the co-operation agreement—that because of the acute problem of the removal of those vouchers for meals in school holidays, we considered it appropriate to use an underspend at the time within the free school meals budget to deliver that.

Again, we settled on the 46 because these were areas that we could agree to deliver on as priorities. There are many, many other areas outside those 46 that we didn't agree to deliver, for whatever reason.

So, what I'm saying is, you didn't look at including it, or look if you could add it into the agreement?

The agreement is the agreement that was settled two years ago.

Mark.

Again, if I may ask a question to Rhun, to what extent have you and Plaid Cymru been kept in the loop regarding situations surrounding the Senedd Cymru (Electoral Candidate Lists) Bill, and to what extent do you support the Welsh Government decision to delay that key component of your co-operation agreement?

It's not so much a keeping in the loop; this is something that we are developing and proposing to put forward together. Let's strip this right back to what we're trying to achieve here, and there is agreement between us that this is something that should be delivered through legislation. We remain determined to do that, and a decision on the precise date on which we would proceed now reflects on the fact that work is continuing to make sure that we move towards being able to deliver what we want to deliver together.

Again, a question to you very briefly: reflecting on the overall direction of the agreement, looking back, would you, given the chance, have pushed harder for health to be included?

It's an interesting question. This is a specific set of policy delivery areas that does not relate to the core work of the Government, which I am not in. I continue to hold the Welsh Government to account on the delivery of health, on improving standards in education and all those areas that lie outside this co-operation agreement. Whilst some, understandably, try to portray perhaps the agreement as something that it is not, I will concentrate, as I think will the First Minister, on what it is, which is, I think, a means to work maturely and positively on delivering a set of objectives that can make a difference to the people of Wales, in an innovative way, yes, but in a way that means that, during our time in the Senedd here, we are able to make a difference to people's lives.

Well, arguably, the 46 commitments all lie within the Welsh Government's remit and powers. But, my final questions: how would each of you sum up how effective your working arrangements and collaboration have been between Ministers and designated Members during the two years of the agreement so far? Have there been any points of frustration, tension or disagreement, and have both parties to the agreement kept the joint aim of a 'no surprises' relationship in relation to statements and comments made in relation to it?

And I appreciate that Rhun ap Iorwerth, obviously, has been involved in this only for the last six months and not the whole two-year period.

Well, Chair, there's a long back history to this, isn't there? The Labour Party has never won a majority in an election to the Senedd, and we've always had to find working arrangements with other parties in order to be able to deliver a programme for government, and, one way or another, I have been involved in every one of them since the partnership agreement of the year 2000. I think what this agreement has is that it does benefit from that experience in this way, in that I have come very much to believe that you have to have two strands in an agreement: you have to have a policy agreement—that's what those 46 areas are—but you have to have an explicit document that sets out the working arrangements that underpin that. And we agreed, as part of the co-operation agreement, that there would be designated Members for Plaid Cymru, a set of formal meetings that culminates in an oversight board that Rhun and I both sit on, and that machinery is designed to make sure that where there are challenging issues, as there always are, that there is a mechanism that allows those challenging issues to be explored and an agreement reached. And I actually think that the two years have been a remarkable vindication of that, because it's hard work. It takes an awful lot of time. You have to spend a lot of time talking, exploring, making sure everybody has all the information they need and all the opportunity they need to be able to explore solutions that they would bring. But, because we've had an explicit mechanisms document alongside that policy document, I think that has stood us in very good stead. We're not marriage guidance counsellors, so I can't promise that people don't occasionally take a different view to other people, but the fact that we've got a way of resolving those issues I think has worked really well over the two years.

Have you kept to the joint aim of a 'no surprises' relationship?

Yes, I think so. Yes.

I can't think of any surprises that strike me immediately. You're going to give us one, now, Mark—you're going to say, 'Well, what about this?' [Laughter.]

No, from your perspective, are there things that have occurred—perhaps an announcement made or a press release issued or a comment on social media about any of the content of the agreement—that the other party wasn't already appraised of, even if they were in agreement with it?

Not at the level of the agreement itself. I'm not saying to you that there have not been some days when a member of my group has said to me, 'Have you seen the press release that was put out?' in some ward in their area, which they maybe didn't feel was an entirely fair reflection. I'm quite sure that Rhun has been shown leaflets of the same sort. But, at the level of the agreement itself, the designated Members, the oversight board, I can't think of anything that we've had to resolve because I didn't know what Rhun had said or he wouldn't have known what the Government was about to do.

Moving on now, we'll go on to John Griffiths.

Diolch yn fawr, Cadeirydd. I wonder if we could move on to the commitment to end homelessness, that it should be brief, rare and unrepeated. It's that time of year now, I think, when the weather is bad, that it's even more concerning to see people sleeping rough, at the more extreme end of the problems of homelessness. We know that the housing support grant is very significant in terms of the policy to make progress, and that it's frozen at £167 million in the indicative budget for the forthcoming financial year and that many of those in the sector are very concerned at that and the consequences, given inflation and demand. So, I just wonder what you would say in terms of your aims to end homelessness, and how the freezing of that vital housing support grant, which is obviously about prevention and supporting independent living, how that will impact.

Well, it's just important to say, Chair, isn't it, that, yes, it is frozen at that level, but that level is a considerably higher level than it was the year before, so there was a very significant uplift in the housing support grant, and the struggle has been to make sure that it stays at that new elevated level, and I think we've succeeded in doing that. The grant is a reflection of our commitment in the homelessness field to focus on prevention, isn't it? That's what we want to do. We want to stop homelessness from happening in the first place, and a great deal of work goes on to try to help families who are in danger of break-up and so on to be able to stay together and to improve their circumstances.

The White Paper, I think, is very ambitious. It has a series of policy proposals in there that are not going to be achieved just in one year, and they rest hugely on us being able to increase the supply of property, because that's another one of the features of homelessness, that, when people are accepted as homeless by local authorities—and the numbers in Wales are scarily high every single month of people presenting as homeless, legitimately—the local authorities don't have the properties they need to be able to find people long-term, decent places to live. So, it's a combination of prevention on the one hand and improving the supply of properties on the other, in order to be able to bring the system back into balance. I think there are some—I don't want to overstate this at all—mildly encouraging things in the statistics in the last four to five months: the rise in presentations has stabilised—it's stabilised at the higher level, but it has stopped going up—and the number of children living in temporary accommodation has also stabilised and just begun to turn down. So, as I say, I don't want to overstate that, Chair, because those patterns could change again over the winter. But, compared with what we were facing earlier in the year, the position has stabilised a bit, and now we will try and bring these twin solutions to bear. 

I hear what you say about the uplift, First Minister, which, obviously, was very welcome. Cymorth Cymru and Community Housing Cymru conducted a survey that found that 75 per cent of housing support providers are running at a deficit, and 77 per cent are likely to reduce their service capacity if housing support grant remains frozen. They say that the freeze amounts to a £24 million cut in real terms since 2011-12. So, obviously, there is going to be considerable pressure on those tasked with delivering these vital services.

In terms of what you say about the White Paper, First Minister, the draft regulatory impact assessment states that there's an expectation that implementation of the reforms will require significant investment. So, what could you say to us today in terms of that significant investment that will be required if what that White Paper aims to do is to come about?

Well, it will depend, crucially, upon future budgets available to the Welsh Government. What we mustn't do, I think—and I talk to my colleagues about this a bit—is we mustn't talk ourselves into a belief that the current, very difficult position is typical. The typical position for the Welsh Government, certainly over the first decade of devolution, was budgets that rose every year, and, even beyond that, when budgets were much more static, their real value wasn't being eroded every year. The real—. The unique combination of circumstances of the last 18 months are budgets that are not going up, but where the real value has been eroded by inflation of a level that we didn't see at all for the first 20 years. We managed during the decade of 2010 to 2020, because, while we didn't have much more money any year, the money we did have went as far as it did the year before. This year, and next year, are different to that, but we shouldn't talk ourselves into believing that this is somehow a new normal. The norm is that budgets do allow you some extra scope to invest in your top priorities.

The White Paper makes a case for homelessness prevention being a top priority for a future Government when that tap of investment in public services begins to be turned on again. It'll be a tough competition, because the case that John has made in relation to the homelessness grant could be repeated, and will be repeated, in almost every aspect of the Welsh Government's responsibilities. But we shouldn't turn off our ambition to do things better in the future because of the short-term—as I hope they will be—difficulties, however acute they are this year and next. 

Llyr Gruffydd. 

I'm moving on then to Jenny Rathbone.

Thank you. I want to look at sustainable school meals as part of sustainable public services. I've noticed that Carmarthenshire public services board did a study of Welsh suppliers for school meals and found that only 6 per cent of 261 products or ingredients used in schools in Wales have a Welsh provenance. Obviously, that means money going outside of Wales to suppliers who then keep the profits elsewhere. So, I just wondered what work has been done on increasing the number of Welsh suppliers and, at the same time, reducing the reliance on ultra-processed food, which, unfortunately, is being bought in at considerable volumes because of the shortage of people in school catering services who have the ability to cook from scratch.   

Well, the agreement, in relation to free school meals, wasn't simply an agreement over volume. It was also an agreement over quality, and making sure that the quality of the meals that are provided in our primary schools meet some of those tests of local sustainability and supporting the wider Welsh food industry. We're pursuing that in a number of different ways. I don't think there's any doubt, if you just listen to what you're told on the ground, the fact that, as we were saying in the earlier session, millions more meals have been provided, that that has created local markets for suppliers that weren't there before, and I think that evidence will emerge more strongly as we collect it.

But the legal framework for standards in schools lies in the 2013 regulations. The Minister has committed to a review of the regulations, particularly to focus within the review on those hyper-processed foods, to see whether we can do more to reduce the presence of them on the menu. So, these are to do with the nutritional standards of school meals. The standards have stood us in good stead, I think, but they're 10 years old, so we're committed to reviewing them in this new context and then to focus on some of the things that Jenny has mentioned. 

Okay. Because obviously a lot has changed in 10 years. The ubiquitous ham sandwich contains 15 ingredients that you wouldn't find in a normal kitchen, and that is something that children who are a bit picky about what's being served in the hot meal offer will go to, something like that, as an alternative. So, is this something that you think that we can do, given that food only forms 1 per cent of the £7 billion spent on public procurement?

Well, it's not the dominant part in public procurement, but it is an important part, isn't it? When we were talking about our free-school-meals ambitions, there are a range of different things that we're trying to achieve through a single policy. Rhun has already focused on one of the major ones, its contribution to family budgets in a very difficult time, but we also had ambitions for the socialising experience that children have by sitting down together to eat. It's why we started with the very youngest children in the system, because we were very keen indeed to be able to offer that as part of it. But the quality of food, its impact on local supply chains, the way we can use procurement, that was also part of that wider conversation. So, it may be marginal in the big scheme of things, but it is nevertheless an integral part of that wider policy strategy.

And I would add, if I could, the health aspect too. I was reading a paper last night making the case for free school lunches in general—in England, I believe, the report was—and looking at the savings made for the health service through the element of tackling obesity in children and changing eating habits in children through the introduction of free, healthy school meals. Having that locally procured then adds the economic well-being of our communities too.

So, is this something that you expect to be pursued in both the community food strategy and the focus of officials, really, in Welsh Government, who are looking at food matters?

Well, as I said, I think it will be pursued in a number of different contexts. It will be pursued in the review of the regulations of school meals themselves—that will be the most powerful way—but it will be also pursued through the reform of our procurement approach, where we are putting more value rather than simply cost into the calculations that procuring authorities have to bear in mind. And the community food strategy, I'm sure it will have a contribution to make. So, it won't be pursued in simply one place; there are a range of different things that we will do. The ambition will be the same, as Jenny has set out.

Thank you. Just moving on then to childcare, which I know that the Government has ambitious targets for, but there's been an underspend there that has been quite significant, and I wondered how much of that is to do with the workforce and capacity challenges. Particularly, expanding the Flying Start childcare offer to two-year-olds is very welcome, but I wondered how much consideration has been given to using spare capacity in our primary schools, to ensure that we have a seamless offer, because I think parents find it quite difficult to navigate between one aspect of what is eligible and another [correction: what they are eligible for and another.]

Well, Chair, there's no underspend in the co-operation agreement childcare commitments. The underspend is in the childcare offer, which is not part of the co-operation agreement. That is part of the Government's wider childcare provision, which has been there now since, I think, 2016. The underspends there are a combination of take-up, because you have to make—. Again, it's a demand-led budget, so we have to make an assumption about take-up. I think the latest survey shows that nine out of 10 parents who took part in the survey were aware of the childcare offer, and the single biggest reason that people gave for not taking it up was that they didn't need it. So, not every family wants the childcare.

The bigger reason of all, though, is in the things that Jenny mentioned. Childcare is not just a money problem; it's a problem of facilities and it's a problem of staffing, and those are real challenges in the field. And we tackle those in different ways by the business rate relief we offer for childcare businesses in Wales, and the capital investment that we have made in private businesses, essentially, to allow them to improve premises and to be able to offer more facilities.

Within the co-operation agreement, there is a specific childcare commitment, and that is in the Flying Start area. That is oversubscribed not undersubscribed in the first round: 127 per cent take-up compared to what we had anticipated. And we're into stage 2 with, I think, 9,000 more places, altogether, provided by the time we've completed that. I'm not close enough to it to know the extent to which we are exploring locating those Flying Start activities in primary schools themselves. I honestly don't know what the issues would be, although I do definitely recognise the point that Jenny makes, of parents who find themselves having to ferry children from one setting to another in a single working day, and the challenges that that poses for them.

I need to move on, because time is getting shorter and I've got a couple of areas I do want to cover. John Griffiths on public transport.

Yes, on public transport, in terms of the west Wales corridor innovation study, carried out by Transport for Wales, is that going to be published shortly, and do you agree with the findings?

The work is completed [correction: nearly completed]. It hasn't come to Rhun or myself; it's being pursued between the designated Member and the Minister. What I have seen of it, the Welsh Government is broadly supportive of the conclusions of that work. I don't have, Chair, in my head, a timetable for the publication of it, but the work is complete [correction: nearly complete], and the practical things that will flow from it are being resolved between the designated Member and the Minister, in the way that the document I referred to, the mechanisms document—that's exactly what you would expect to happen.

And in addition, my understanding also is that the work that has been done highlights what I certainly have long believed is that we have a major problem, especially on that west corridor, of linking Wales together, and this is part of that. It's a priority body of work that sets future Governments up for making decisions that are absolutely vital in terms of reaching net zero, getting people onto public transport, linking us up economically, socially as a nation, and I look forward to seeing this work published.

Okay. Just very quickly, if I might, Chair: at this stage, then, is there anything you could say about timing and resource for implementing the findings of this study?

Well, the study is linked to the Burns commission work in north Wales as well. That, I think, will be published—. It's for the commission to decide, not me, but I think they are hoping to publish before Christmas, their north Wales final study, so we will have to look at the two things together.

On rail infrastructure, that's not our decision to make. There will be things, I'm sure, that will be said about bus services, and the bus Bill that we will bring in front of the Senedd will be pivotal to us in being able to make those investments in the public interest in a way that the current system doesn't allow us to do.

And of course the money would be forthcoming were HS2 consequential funds to be given to Wales, then we could make those investments, of course.

Jack.

Diolch yn fawr, Cadeirydd. I want to talk about one of the commitments of the net-zero energy company, Ynni Cymru, and the creation of Ynni Cymru. The First Minister has already mentioned this briefly in response in our earlier evidence session this morning, so perhaps I can direct questions to the leader of Plaid Cymru. The establishment of Ynni Cymru was announced in August. The announcement said the organisation was being established to, and I quote, Chair, 

'expand community-owned renewable energy generation across Wales'. 

It went on to say that £750,000 had been allocated to the 11 projects. We're aware of the detail of those 11 projects from a freedom of information response from Welsh Government. Can I go beyond the 11 projects here and specifically ask what's the scale of the ambition of Ynni Cymru? What is the future target likely to be? How will it be funded?

Thank you for the question. I'm, again, particularly excited that Ynni Cymru was established as promised under the co-operation agreement. You've mentioned that there are 11 schemes currently committed. I think that we see this as just the beginning, and that is the key. Ynni Cymru is the seed of something that I have no doubt will develop into something much greater, and that will require further funding decisions by future Governments. I see it also in the context of the other energy body that has been established, which was established just prior to the co-operation agreement. I would take some credit for that given my party's pressing for a number of years for the establishment of that kind of company. But what is key to me now is that we now also have, through Ynni Cymru, the community side covered, and if we're serious about net zero, serious about the economic benefits that can flow from energy generation in Wales, we have to look at bringing all that suite together, co-operating, building on very much the foundations that I see the work with these 11 companies to be currently.

Thank you for that. Just touching in one final point on the comments you raised around the other energy company, the large-scale renewable energy company, what does that work look like in practice between Ynni Cymru and that, and how will that develop?

This is a view rather than something that is within the co-operation agreement, and the First Minister might have a different take, but to me, the closer those two bodies work together—because it is essentially a single mission for us on net zero and energy for Wales—the closer they work together, the better. Where that co-operation leads to in future, well, we'll wait and see. But I'll certainly be encouraging that close working.

Okay. The Minister for Climate Change said to the climate change committee that they are very different organisations, so there will need to be some collaboration there. Perhaps I will invite the First Minister to add additional comments, given the comments from Rhun.

Yes, they are different organisations, but they're complementary organisations, because they are both, in the end, about community ownership of our natural resources. Trydan Gwyrdd will be in the more commercial space. It will do things as a public developer that in the past we've relied on large private companies to do. Ynni Cymru is at the community end of that, but they are absolutely complementary to one another. They both occupy that same space of renewable energy developments being run for the benefit of the community.

If I can press one final question, Chair. Just on the development of these companies, I think they are exciting opportunities, and I wonder if the First Minister could comment: are these the types of opportunities where perhaps public sector pension funds could be diverted away from fossil fuels into the streams that they seek to achieve?

Public sector pension funds are there for the long haul. They want to invest in things that will give them a return over 40 years, and I think there is a growing recognition by those pension funds that the people whose funds are invested in them want to do things that will benefit their grandchildren. What better area can there be than to invest in that long-term future of renewable energy? Because we're going to be needing it, aren't we? We're not going to be turning it off. 

Thank you. I can see, I think, agreement.

Absolutely.

We've come to the end of the time allocated. I'm going to take the Chair's privilege and ask the two last questions. My colleagues on the Senedd Reform Bill Committee would be disappointed with me if I didn't raise that particular point. As we saw in the agreement, it actually talks about a reform that is going to have a voting system that is as proportional or better than the current one. I'm sure that you're keeping up to date with the work of the committee—I hope you are—but clearly, there are some issues being raised there. I suppose what I want to find out is what type of engagement you will have, as partners in the agreement, to consider possible amendments that you might wish to be put forward, or the committee might decide to suggest you might want to think about, as we move forward with that particular reform Bill.

Of course, we will attend carefully to any proposals that come out of the committee and any amendments that are laid during the passage of the Bill. We will take those as seriously as you would expect, and then we will discuss together what our response to that might be. I do just want to emphasise that Senedd reform is a package deal. It isn't just a series of unconnected individual strands; it comes as a package. And what we will need to look at on any proposals for change is not just how that particular idea might alter Senedd reform, but how any change would impact the whole package. So, those are the things I'm sure we will be attending to when we see any ideas that emerge.

The reason I ask is that clearly, in your response to the committee, you highlighted the fact that—. A supermajority will be required to succeed in any reform, and that is one of the things you put forward in your consultation response to the previous committee—how you believed a supermajority could be achieved. So, I suppose what I'm trying to find out is the discussions you would engage in to ensure that, if there was an amendment coming forward, you would achieve a supermajority in those situations.

Myself, I will continue to make the case with my own colleagues that the only way we will achieve Senedd reform is if we are prepared to be half-a-loafers. If anybody thinks that they're going to get everything exactly as they would prefer it, they're going to be disappointed. But what we have to be prepared to do is to recognise that, if we can find a package where people get something of what they wanted, but nobody will get everything, then that supermajority is there to be had. If we are purist about any aspect of Senedd reform, what you will find is that there will be somebody else who takes a diametrically opposed view. We have to find a way of bringing that supermajority together. That's why it is a package. The package delivers the key things—the most fundamental things—and the only way we do it is by being prepared to make those compromises and find that common ground.

There are elements of these discussions where it is on public record that there is disagreement on where we would precisely like to be, but there has to be an element of compromise in this. Why? Because Wales is currently democratically short-changed and we have to find a means of addressing that. We are short-changed compared with legislatures in other nations in the United Kingdom and it's time that we put that right with a Senedd that can meet the aspirations of Wales. We need to get to that point through the reform Bill, and that, inevitably, at times, requires compromise with a view to this not being static and for us to be continuing to address the question of how we can make our Senedd and our electoral system more and more engaging for the people of Wales, and more effective.

A final question from me. It's nothing to do with Senedd reform, but back to financial issues. You've said this morning that everything is ring-fenced within the agreement. Therefore, I'm going to ask a simple question: when you do find underspends in areas that are ring-fenced, such as free school meals, do you have discussions as to whether that should be spent within those ring-fenced areas, or is that a Welsh Government position to decide?

No, it's for agreement, because there are sums of money set aside to support the co-operation agreement. As you say, inevitably, it isn't an exact match and you get it right on the very first day. When you have to move away from that, that is done by agreement between the two parties.

Thank you. We have gone beyond the time, so I'm going to call a halt there. Can I thank you both for your attendance this morning? As you both will understand, you will get a copy of the transcript. If there are any factual inaccuracies, can you please let the clerking teams know as soon as possible, and we'll have them corrected? So, once again, thank you for your time.

I now propose under Standing Order 17.42 to exclude the public for the remainder of today's meeting. Are Members content to do so? Therefore, we will now move into private session for the remainder of the meeting.