Y Pwyllgor Cyfrifon Cyhoeddus a Gweinyddiaeth Gyhoeddus

Public Accounts and Public Administration Committee

20/03/2024

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

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

Y rhai eraill a oedd yn bresennol

Others in Attendance

Adrian Crompton Archwilydd Cyffredinol Cymru
Auditor General for Wales
Dominic Houlihan Cyfarwyddwr Pobl a Lleoedd, Llywodraeth Cymru
Director of People and Places, Welsh Government
Dr Andrew Goodall Ysgrifennydd Parhaol a Phrif Swyddog Cyfrifyddu, Llywodraeth Cymru
Permanent Secretary and Principal Accounting Officer, Welsh Government
Gawain Evans Cyfarwyddwr Cyllid, Llywodraeth Cymru
Director of Finance, Welsh Government
Richard Harries Archwilio Cymru
Audit Wales
Tim Moss Prif Swyddog Gweithredu, Llywodraeth Cymru
Chief Operating Officer, Welsh Government

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Fay Bowen Clerc
Clerk
Joanne McCarthy Ymchwilydd
Researcher
Owain Davies Ail Glerc
Second Clerk

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

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

Rhag-gyfarfod preifat
Private pre-meeting

[Inaudible.]—in formal session. It's now published it—

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

Dechreuodd y cyfarfod am 09:18.

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

The meeting began at 09:18.

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

Bore da. Croeso, bawb. Good morning. Welcome, everybody, to this meeting of the Public Accounts and Public Administration Committee. You just heard the end of a question on a technical matter, which will be addressed in public session later on.

We've only received apologies today from committee member Rhianon Passmore. Do Members have any declarations of registrable interest they wish to share, which aren't already on the public record? I see no indications from Members, so thank you for that.

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

We have a number of items to note. The first being a letter from the director general of the climate change and rural affairs group in response to our report on town-centre regeneration. As Members will be aware, the Welsh Government formally responded to our report, accepting all our recommendations. Our Plenary debate on the report's contents, as well as the Welsh Government's response, took place, as I'm sure you recall, only last week, on 13 March. While it's encouraging that all the recommendations were accepted, I noted in my submission that the responses will need to be monitored closely by the committee. Do Members have any comments on the letter, or do they just wish to note it?

No, I only wish to comment that we had very good publicity on it within the media.

Great. Thank you. I haven't seen that, so that would be helpful to see.

Oh, right. Our next paper to note is a letter from the chief executive and chair of Digital Health and Care Wales, providing an update following our joint scrutiny with the Health and Social Care Committee of their report. The letter we've received contains an update on a further three recommendations from the committee's joint report, which required an update by the end of February this year. The letter provides an update on recommendations 3, 10 and 15, which concern the delivery of the Welsh community care information system, the human resources systems and capacity around recruitment and retention, and an evaluation of its existing approaches to collaboration with partner organisations respectively. Do Members have any comments or are you content to note the letter? Yes, content?

09:20

Thank you. In that case, I'll move on to our third paper—. Sorry, did you have a comment?

Just briefly, Mark. Just clicking through the information that was linked in the response, just to flag to the committee—you've probably seen it yourselves—that DHCW are now progressing a fresh procurement for a replacement of the platform. I think that's one that both committees will want to keep an eye on.

Okay, thank you very much indeed. In that case, we'll move on to our third paper to note, a letter from the Welsh Government following our evidence session on covering teachers' absence. This provides further information on our work on the Auditor General for Wales's follow-up report, which provided an update following previous reports in 2013 and 2020. The letter addresses questions on agency fees, the framework review, the average cost of agency fees per local authority, the ability to switch from the agency model to a directly employed model, and on data arising from NASUWT's survey of supply teachers and professional development for supply teachers. The contents of the letter will be reflected in this committee's forthcoming report on these matters. Do Members have any comments or are they content to note the letter?

No. I think this is one to weave into the committee's report rather than to go into ping-pong about specific points, but we'll liaise with the team.

Thank you very much indeed. Our final paper to note is a letter from the Welsh Government on the committee's inquiry into public appointments. I believe Members may wish also to seek the opportunity to raise this later when we're in evidence session with relevant Welsh Government officials. But the Welsh Government's chief operating officer has responded to us, following our letter of 26 February, confirming that they do collect the applicant's address and Welsh language information as part of the appointment process, but they do not currently collate or analyse that information. They explain that their recruitment system has changed and they commit to providing this information after a full year of the system being in place. Do Members have any comments about the letter that they wish to raise, if the opportunity arises later, or are you otherwise, at this point, content to note the letter?

Content to note it. It's just important information.

Gan fod y prif swyddog gweithredu o'n blaen ni y bore yma, bydd yna gyfle i ni ymateb i'r llythyr diweddaraf.

Given that the chief operating officer is going to appear before us this morning, there will be an opportunity for us to respond to the latest letter.

Certainly, we'll hopefully have an opportunity to do so at the conclusion of our evidence session with our witnesses later.

3. Cynnig o dan Reol Sefydlog 17.42 i benderfynu gwahardd y cyhoedd ar gyfer eitemau 4, 7 ac 8 o'r cyfarfod heddiw
3. Motion under Standing Order 17.42 to resolve to exclude the public from items 4, 7 and 8 of today's meeting

Cynnig:

bod y pwyllgor yn penderfynu gwahardd y cyhoedd ar gyfer eitemau 4, 7 ac 8 o'r cyfarfod heddiw yn unol â Rheol Sefydlog 17.42(ix).

Motion:

that the committee resolves to exclude the public from items 4, 7 and 8 of today's meeting in accordance with Standing Order 17.42(ix).

Cynigiwyd y cynnig.

Motion moved.

At this point, then, I propose that, in accordance with Standing Order 17.42(ix), the committee resolves to meet in private for items 4, 7 and 8 of today's meeting. Are Members content? I see Members are content. In which case, I'd be grateful if we could go back into private session.

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 09:24.

Motion agreed.

The public part of the meeting ended at 09:24.

09:35

Ailymgynullodd y pwyllgor yn gyhoeddus am 09:38.

The committee reconvened in public at 09:38.

5. Sesiwn dystiolaeth: Craffu ar Gyfrifon ac Adroddiad Blynyddol Llywodraeth Cymru 2022-23 (Rhan 1)
5. Evidence Session: Scrutiny of the Welsh Government's Annual Report and Accounts 2022-23 (Part 1)

Croeso, bawb. Good morning and welcome to witnesses who have joined us for the meeting. I'd be grateful if each of you could state your name and role for the record.

Bore da, Cadeirydd. Andrew Goodall. Dwi'n Ysgrifennydd Parhaol i Lywodraeth Cymru.

Good morning, Chair. I'm Andrew Goodall, Permanent Secretary, Welsh Government.

Bore da. Tim Moss, chief operating officer and director general, Welsh Government.

Bore da. Gawain Evans, I'm the director of finance.

Bore da. I'm Dominic Houlihan, director of people and places.

Diolch yn fawr. Thanks for attending. As you'd expect, we have several questions and I'd be grateful if Members and yourselves could be as succinct as possible so that we can cover as wide a range of these as we can fit in. We intend to take a short break at approximately 10.30 a.m., before resuming for the second part of the public scrutiny session. I'll begin with the questions and then bring in my colleagues, as we progress. So, if I can start with the following: you completed the 2022-23 accounts last November, a few weeks earlier than the 2021-22 accounts; what, in your view, were the main challenges in completing the accounts to this timetable and how did you overcome them?

Diolch, Cadeirydd. I'll start, but I suggest it would be helpful if Gawain gives just some technical reflections, as well. First of all to say that I'm really pleased that we're able to deliver the accounts to the timetable. We've, obviously, been in front of the committee over the last couple of years and we worked very closely—and I'm very grateful to Audit Wales colleagues for their support in discharging this as well—to ensure that we're able to deliver them within the statutory timetables and to hit that end-of-November timetable. If I could just say for the record, Chair, we often don't really focus on this, but we did balance within our budget and we did break even. We have done so, obviously, over recent years and, I know, with the interest of the committee. But it's just worth recording that we were able to manage within the money that we were allocated and achieve that position. But the accounts do become more complex each year. There are a range of areas that we need to focus on. We have had the inclusion of new standards. We have, obviously, had to cover a range of different organisations, as well, including some of our arm's-length bodies. Areas like Transport for Wales were included here as well. So, there are 17 organisations who we are covering in our budget arrangements; it's not simply Welsh Government sitting in a room by itself and producing them for your behalf or for our own use as well.

We do some tracking of how those timetables look compared with other departments across the UK. We tend to be on the better end on our timetable for delivering those, as well. But I do think that, on an ongoing basis, the technicalities that we're now expected to cover off will become something that is quite difficult. The audit process has almost doubled in time, so whilst we're squeezing a lot of analysis into that and sharing information with Audit Wales, it does put a pressure on all of us to do that. Of course, we are very reliant on individual organisations, such as NHS organisations, the arm's-length bodies, to actually complete their accounts on time, as well. But, Gawain, I just wondered whether you wanted to outline a couple of the more technical issues that affect the timings of this and make it a very complex process.

09:40

Thank you. As the Permanent Secretary says, we have quite a complex set of accounts in any case, given the fact that we consolidate other Government bodies and two groups. We have Transport for Wales and the development bank. But just as some specific examples, I think the first I'd go for is the introduction of the new leasing accounting standard, international financial reporting standard 16. That created a lot of work for the Welsh Government and for health bodies in that we needed to review all our lease arrangements. We then had to report back to Treasury. The reason we had to report back to Treasury is there were budget changes arising as of this accounting standard. So, if I could very quickly cover it, previously, leases were split by operating leases and finance leases, so, essentially, some were charged to revenue budgets, some were charged to capital and non-cash. So, you had a divide there. The new standard means that most leases, or practically all leases, will fall to the balance sheet and therefore be charged to capital. So, we had to agree with Treasury what the balance of the budget changes would need to be.

In terms of complications, it's not just about sorting the budget. We then have to think, if something is on the balance sheet, that we have to get our future liabilities information right, the depreciation, the interest unwinding and all of these things. And then, because of the standard being introduced now, going forward, we have to do these things every year. We have to revalue leases every year, going forward. And if that wasn't enough, Treasury have also decided that if you have an inter-Government arrangement—so, say, for example, you're sharing an office building with another Government organisation—you have to treat that arrangement as a lease as well. So, a huge amount of work went into that from our point of view and from the auditors' point of view, just to get that right this year. As I say, it was a key thing because there was a budget implication, as well.

A couple of other things, if I could quickly mention them, obviously, Audit Wales were working to the new auditing standard—international standard on auditing 315—which created a lot of work for the audit team, but, obviously, that meant more work for us as well. In particular, for example, we had a new approach to the audit of grants, and we had to provide a lot more information this year to make sure that we satisfied our colleagues in Audit Wales.

The last one, just to mention very briefly, was on the NHS account. We consolidated the NHS account into the Welsh Government account. This year, we decided, in order to meet the timescale for November, we'd use the draft account. That worked well to some extent, in that we actually got to sign the accounts off in November, but it did cause a lot more work in terms of queries and issues when we finally then saw the final account this year, because of complications and, obviously, post COVID, we saw the NHS accounts go from usually about July or August to November. We received the final audit account in November, so, of course, we then had to check that and correct everything that we'd had to do from the draft account. So, those are just a few examples of some of the complexities we had to deal with this year and, as I say, from an audit perspective as well, they were dealing with the same issues.

09:45

Thank you. I think it’s a further question for you: last year, you told us that the Welsh Government had agreed a three-year plan with Audit Wales to bring the accounts sign-off to September. What progress have you made against that plan and what, if any, milestones can you share with the committee?

The timetable for the accounts is, obviously, linked to all the other bodies we consolidate—we’ve already mentioned the 17 groups and bodies that we consolidate. Timescales for audit have also moved out significantly because of the additional complexities, so whereas the Welsh Government final account would be audited in about seven weeks, it’s now to 13 weeks. I know from audit colleagues that also they’ve been struggling, I think, with the resource implications within the organisation, and I believe the auditor general wrote to say that although things would be a bit better this year, we certainly won’t be back at the timescales we were pre COVID. So, what I’m leading to is we had the discussion with Audit Wales colleagues and, at the moment, we’ve decided that we’re not really able to bring forward the signing this year. We’ve decided we need another year to consolidate all the changes that have taken place and, obviously, to address some of the resourcing issues there. It’s not to say we’ve forgotten about it; we are meeting with Audit Wales as part of this year’s plan to look ahead for those three years, and we actually have a session with our audit and risk committee at the end of April again to talk about how we’re going to take this forward for the next three years.

So, obviously, I did update committee last week. As I say, it’s been another year of a difficult set of accounts, so we’ve decided, yes, we will push ahead, but we will be looking forward now to the next three years.

So, it's a four-year period now you're anticipating.

Essentially, yes—a four-year period, yes.

Okay, thank you. And have you agreed with Audit Wales a timetable to sign off the 2023-24 accounts, and, if you have, when do you anticipate publishing that?

Yes, we have. We’re going for sign-off on 30 November, so that’ll still mean we’re four months ahead of the statutory requirements for when the auditor general needs to lay the accounts. Worst case, that would be the end of March. We have a high-level plan we’re taking to the audit and risk committee tomorrow, so provided they’re satisfied with, obviously, what Richard and I say, then we will be proposing to take that forward, and then, after that, we’ll be putting key dates onto the Government website so that everyone is aware of that.

I think, Chair, there’s a difficulty sometimes in it, in seeing it as a guarantee, because, inevitably, the accounts are as complex as the issues that are highlighted in any one year. But I think, actually, the practice over this last year seems to have worked really well. Not everything about the timetable was completely smooth, but we seem to have been able to pick up some of the issues and problems along the way and working closely with Audit Wales as well. So, hopefully, with the confidence of this last year to restore the timetable, we’ll still be able to keep that achievable by the time we’re approaching the next year’s annual accounts.

Thank you, yes. With my background, I always believe targets are something you should never be afraid of, provided they are realistic, achievable, reviewable and, if necessary, adaptable. But you should still have the goal.

The former Permanent Secretary told our predecessor committee that the Welsh Government’s accounts preparation process was reliant on complex spreadsheets to consolidate large volumes of data, which it needed to address. To what extent has this been resolved, and what assurance can you provide us with about the systems and processes you use to prepare the accounts and the extent to which they’re up to the job?

I’m afraid there is still some complexity in how we pull the information together, but I think a small team does a really good job to do that. So, to some extent, as long as we’re able to publish the accounts and deliver to the timetable, I think that’s probably for us to work through, but we are going to have to look at better alternative systems to be more efficient, if I could put it in that way. But do you want to explain to the committee, Gawain? Thank you.

Yes. For 2022-23, we were still using the same approach we’ve had for the last—I’ve been with the Welsh Government almost 12 years now—12 years, certainly, since I’ve been there. I do feel that we have a very, very strong team in the Welsh Government, ably led by our chief accountant, but, as the Permanent Secretary said last year, we are using very complex spreadsheets. We are moving ahead on this, though, because of obsolescence issues with our finance systems more generally. So, our finance systems have been in place since 2010, and every organisation goes through obsolescence because the companies that provide these tools are constantly upgrading and, actually, remove support from older systems. So, we’re looking at replacing our finance system over the next few years and, as part of that, we will be looking at the consolidation aspects of that for the accounts. Obviously, that's an investment for the Welsh Government. We need to put together a solid business case for that. We're hoping to be in the position, certainly later this year, to have that business case and, hopefully, if that's approved, then we will move forward with the replacement of those tools. It will take another year or two beyond that— obviously, we're refreshing the entire finance system—and I'll make sure we get it right, but the consolidation tool will be part of that new finance system, going forward.

09:50

And by that you mean administrative process, technology, or both?

It'll be both. It's part of the work in looking at our corporate services in terms of the processes and procedures, but also it will be technology. We have a drop-dead date—I think it's now 2026 or 2027—where, effectively, with the software we're using, we'll be forced to upgrade by the suppliers, because, obviously, it's moved on in the last 14 years. So, that's really been a trigger for us to take a look at not only the technology we have, but how we do things within the organisation, particularly when it comes to the accounts.

When I started in my previous career, we were using printer-sized adding machines, so we should have moved on from that. [Laughter.] 

In your response to our report on the 2021-22 accounts, you say that you will review the content of the accounts and make amendments to ensure they properly 'tell the story' about Welsh Government expenditure. What, if any, plan do you have for this review and how are you ensuring that contributors from across the Welsh Government will have sufficient time and resources to complete this work, as well as implement changes for the 2023-24 accounts?

Chair, if we compare and contrast annual accounts over the years, I think that probably would be a long session that we would have together if we were doing that, but I hope that Members will see that we have actually changed the way in which we try to describe the functions and the responsibilities of the Welsh Government. There are some constraints on us, of course, because, particularly, parts 2 and 3 are very technical amendments, and simply there is a template that we have to follow and make sure that we are providing the relevant information, but we have tried to put a different attention on part 1 in particular.

There are some aspects of the arrangements that will apply to other UK departments that don't quite fit with Wales, so it does afford us some discretion to describe those areas, but we are trying to just give an insight into levels of spend and responsibilities in a different way. I hope the committee will have seen some change around some of the visual approaches that we’ve been using within the report to try and bring that to life a little bit more. There are other reports, of course, that the Welsh Government issues that help to colour in some of that information as well, but it's really about trying to make sure that there are some standout areas of functions and achievements that we have delivered in the year as well. And I hope that would have been helpful in some of my upfront comments as well as some of the areas that we’ve highlighted in terms of teams really delivering really well.

It's really important that we try to demonstrate some areas about the overall performance of the Welsh Government, and I think, again, we've tried to strengthen that more recently. But we should never forget, I think, that the purpose of the annual accounts is to make sure that we can handle the finances and the budget arrangements. But, of course, it’s also done through a governance lens and I think it’s really important that we do retain that assurance for you, but, of course, for the public more generally as well. But we are, every year, trying to adapt and improve it. Of course, the committee itself makes recommendation that I hope we’ve been able to reflect on generally positively over the years and incorporate as well. But I hope the change is actually visible to you over these recent years. If you went back six years, it would be quite a different report.

Okay, thank you. During 2022-23, you implemented a new structure for the Welsh Government senior civil service, creating the role of chief operating officer, who is with us today. What difference has this made in terms of the day-to-day running of the organisation and in enabling you to focus on other matters whilst using resources more effectively?

Thank you, Chair. I'm aware we did spend some time describing the change of our structures, and, as I was coming into post two and a half years ago, I was able to take advantage of conversations that my predecessor had started about introducing the director general chief operating officer role, who, of course, is Tim. I'm really mindful of not trying to do an end-of-year performance review with Tim in front of the committee, sort of spontaneously in front of you all. [Laughter.] But I think it was an important recognition of a role that makes sense to me in terms of my previous experiences in the NHS, where those chief operating officer roles have been really important around functions, but, actually, it's a pretty common feature of UK Government departments and other devolved administrations in respect of their own structures as well.

So, from my perspective, it's allowed Tim to have a really supportive and leadership role within the organisation on the core functions of responsibilities, particularly of our corporate services, his oversight of finance and of workforce, but actually a number of the other corporate responsibilities that we have, for example, our data services, which are held in the organisation. It's allowed me to draw my time out more to focus on that adviser role to the First Minister and Cabinet, particularly on some of the trickier policy areas that Cabinet would expect advice on. I've been able to apply more leadership on examples such as the legislative programme that Welsh Government discharges, which does require a lot of time and attention, and it has allowed me, I hope, to think about the strategic outlook of Welsh Government as an organisation, not just as a mechanism that supports Ministers. 

I think I should say it's a collective endeavour. It's not either of us working individually or independently of each other; we are a collective team working with our directors general across the organisation as well. But, I'm really pleased that what Tim has been able to do is also to continue to push on the Welsh Government 2025 expectations, which is our description of the change expectations for the organisation. I'd started that very personally in my first year, but since Tim arrived some 18 months ago, he's been able to apply his own approach and also put in very clear programme arrangements on that. I think it is helpful in terms of some of the pressures that we're facing into the future, not least the way in which we need to reorganise the organisation, recognising the budget challenges that we're facing as well, and it gives some time for that.

At a more personal level, if I could just say that, over the last 18 months, it has acted to give some personal support, because as you would imagine, with the COVID inquiry, I've had to also act to lead that approach and response from Welsh Government over recent months. So, that function is something that I oversee personally, to make sure that we are discharging all of the requirements for the public inquiry. And, of course, there have been times over the least year, not least with my own attendances, where I've had to focus on the preparation and submissions to that inquiry. And I have to say, it's been very helpful to have Tim acting in support of me in that role as well, because I've been able to leave him capably looking after that oversight of the corporate part of the organisation as well.

Tim, of course, would have his own reflections, but that would give you the other perspective on a performance review, if we were doing it right in front of you, I guess, but from my take, it's really worked to cement it. And, finally, just the advantage that Tim has had to access the chief operating officer's network for the civil service; that's a strong group of colleagues grappling with the same issues about making their organisations sustainable.

09:55

Thank you. Clearly, an annual performance review or appraisal should have no surprises, so no doubt he has heard this before. Do you have anything to add? Do you have any red letter days or bad experiences from which you've learned that you could share with us?

I think, in every role, you have good days and bad days and you learn from experience in every role that I've been in. I think, in addition to some of the work that Andrew has outlined around the key functional pieces, there are probably three key areas that I think are a real focus for the role. One is very much that change agenda and looking across the organisation through Welsh Government 2025 into the budget challenges we're facing, but also some of the other cross-organisational pieces, the work that Gawain's just talked about in terms of the future strategy for our corporate systems. And what that means is it's not just about systems, actually, it's much more about the way that we operate as an organisation and looking at that strategic change agenda, as well as some of the things around the work we're doing on net zero and anti-racism as well—those cross-cutting themes. It's also been really useful to take that, again, cross-organisational view around resourcing, risk, finances through the priority resourcing panel and the finance and corporate services sub-committee. And I think the other, third, area that I see as really key in the role is how we build the networks across the organisation, but also with our partner organisations. And we're developing through the chief executives network that we have, trying to build a much stronger network with the partner organisations that we have, to deliver common agendas.

Okay. Thank you. Welsh Government recently advertised the role of director of finance. When do you expect to appoint a person to this post, and is the post likely to be vacant before a successful candidate takes up the role? If it is, what interim arrangements do you expect to make to cover that period? 

There will be some very big shoes to fill when Gawain does leave us in a couple of months' time, and I expect to make an announcement in a couple of weeks' time, and I also anticipate that there'll be no gap between Gawain leaving and a new person taking up the role. But, as I said, there are some big shoes to fill. 

I'm sure we all send you our best wishes for your future, wherever it may take you. No doubt you have plans, but this isn't the place to share them. Any further questions, Members, on that? No.

Will you provide an update about planned improvements to the framework of delegations for decisions relating to the employment of senior civil servants, in light of the auditor general's public interest report about the payments to the former Permanent Secretary?

10:00

Yes. So, I know I've also corresponded with the committee on these recommendations as well. I gave a commitment, not least to Audit Wales, but, of course, to yourselves, about making sure that we put in place a whole range of actions. I can confirm that, working with our remuneration committee, we have been able to oversee a number of actions that we had set out in writing to you. They are confirmed, we've overseen them through the remuneration committee that brings one of our Welsh Government board members, of course, to chair that oversight mechanism as well. There are mechanisms that we've put in place, and you may recall us describing last year the protocol that is now in place should there be any requests for part-time working from senior civil service members. We're very clear; there's a pathway to follow in order to decide if that is a decision that makes sense for the organisation alongside the individual. So, those mechanisms are in place.

We've also put in other delegation framework mechanisms, also in place across the senior civil service, just to try and balance the central oversight on the one hand, but also to try and give permission for our structures to make decisions as well. I think if we're not careful, everything will be done via a committee mechanism and, of course, we do need our line managers to feel that they are able to discharge, with their significant experience, decisions on behalf of the organisation as well. And we have continued to oversee those arrangements, including the links across with the Cabinet Office as well, so, areas like framework arrangements in place. The senior civil service arrangements continue to be overseen by the Cabinet Office on those arrangements.

There is still, you know, a lot of assurance that the committee would take from the civil service commissioner arrangements that oversee our appointments and recruitment approach as well. And, Chair, I'd be very happy to give you a written update, just to make sure that you have that on the record, but I think the remuneration committee has done a good job and helped us to satisfy the expectations and the discipline.

Okay. Thank you. Moving on, last year, you told us that senior officials withholding consent for information to be reported in the remuneration report would be exceptional events, yet, for 2022-23, two senior civil servants have done so. Why was this, and what assurance can you provide that it was appropriate for them to act on this basis?

Yes, indeed, and it will still be an exceptional event. If I could just confirm, obviously, we'd rather not discuss individuals themselves, but one happens to be the same individual, because, whilst they continue to work for us, it will be a recurrent declaration. So, I just wanted to say that.

We have a process in place to make sure that we are able to respond from a general data protection regulation perspective—the data protection issues—about what it means for individuals. I should say that we are complying with the requirements that are set for us in terms of what is declared, but individuals do have a right to confidentiality. None of the areas that have been withheld actually relate to anything about their employment within Welsh Government per se, or the remuneration that they receive, so that's why it is a more personal and confidential issue for those individuals.

As you would expect, when the request is made for us to withhold it, we work it through a very clear protocol and process. It involves our audit and risk colleagues, who assess that, and also our data responsible owners, and they give a recommendation on the back of that, and their recommendation was that the—. They were perfectly able to not declare on the basis because they had clear personal reasons why that was the case. And I know, again, last year, we did, I think, walk through the process that we had put in place for that process; I'm satisfied that that was correct on this occasion. But we do, obviously, declare the other remuneration issues within the annual report as normal, so there's nothing affected in terms of the standard approach to the annual report.

I guess, Chair, it's exceptional up until the basis that somebody asks and we have to work through the process, but, certainly, one of the cases was simply a recurrence of the same individual, and that's likely to occur in next year's annual accounts and the annual accounts after, if they continue to be employed by us.

Okay. In the accounts, you report that two senior officials have applied for and have had approved partial retirement. How many of your senior team are currently partially retired? How are you managing the reduction in capacity and ensuring parity of treatment with other members of the senior team, particularly in the context of, perhaps, additional hours accrued?

Yes. Again, as I'm aware we've reflected over the last couple of years in providing evidence and responding to you here, we are trying to describe a changing trend for both part-time working and partial retirement that is happening over public services, but is also happening in respect of the civil service more generally as well. So, I just want to say that I don't think we're seeing anything that is unusual for us. We are just seeing a trend as people get older and work later, not least around revised pension arrangements that are in place.

We have nine senior civil servants out of our senior civil servant body who are partially retired. So, I think that's out of 217 people who we have in the senior civil service, so it's a small percentage. We have looked at the arrangements elsewhere, not least within the UK civil service, and there seem to be very similar arrangements in place. We obviously have part-time working arrangements for senior civil servants as well, which is different from partial retirement. But, in direct answer to your question, it's nine.

For the organisation more generally, in terms of partial retirement requests—so, this is across all of our staff groups—it's 144, so again there is a general trend. I think, as the years come, I think we will just see more of this, because people are able to make these kinds of choices. They are able to access pension arrangements earlier and stay working. I think there are positives about it, because it means that we provide flexibility on the one hand, but we do retain knowledge and experience.

I think I might have said this in previous sessions before; it's actually been a pretty normal arrangement for the NHS over many years, particularly in respect of how we've tried to hold on to senior clinicians with many years of experience who've wanted to stay in practice within the NHS. So, from a different sector experience, I've come in feeling that that's routine, and obviously I see the civil service probably catching up with that arrangement as well. But we do have smart working arrangements in place, and importantly it's something that our staff can access generally, albeit through a process, as well as the civil service more generally.

10:05

And in terms of parity of treatment, which is my closing section of my questions, if current full-time senior officials work in excess of their contracted hours on a regularised basis, can they also accrue additional leave in the way a part-time contracted employee can?

Yes, indeed. So, part-time arrangements would apply, because we can't discriminate against our senior civil service colleagues, and our smart working policy works across all of our staff. Obviously, it's something that we need to keep an eye on and make sure that that is not inappropriate. There will inevitably be times when—. For individuals in their work, there may well be times where they need to provide some flexibility to the organisation because of their particular roles. It is very closely monitored. It is overseen by line managers. That would include myself in respect of arrangements that are clear, and it's really important to make sure that we find the balance of the expectations for work to be discharged, alongside making sure that we're able to oversee the well-being of individuals at the same time. I'm satisfied that we do do that properly. As more colleagues move into part-time roles more generally and beyond just partial retirement, I think it's really important to recognise that we can't put an expectation on those who work part time to simply end up feeling that they're exposed to an expectation for full-time working. In fact, that would potentially breach some of our legal responsibilities to them as well. I think there's a well-being perspective, but I think it's also important to make sure that we do have at least the flexibility that it can be agreed both ways.

And my final question in this section. The committee previously recommended that you publish your pay policy statement well in advance, which we understood you had accepted, to enable necessary processes to be gone through at this end before we're in a position of questioning you around that or other related matters. Why was it therefore not published until Monday of this week?

Yes. My apologies, Chair, because I thought I had actually cleared it for publication a few weeks ago, and I'll describe the technical reason for that. I did make sure that it was available to you. Most of the information in there is something that is overseen by the remuneration report anyway. But I think, actually, what the report helpfully does is show, actually, some of our ongoing progress in some of the pay gaps that we have within the organisation. So, it does show improvement on gender pay gaps and improvement in respect of race, and also in respect of disability. It was a shame that that wasn't something that was available to the committee to just see, because we've seen a real improvement in that trend.

Because we had a remuneration committee chair stand down in year, and the remuneration committee was technically taken over by one of the non-executive members, there was just some confusion about who could act as the chair of the committee to sign it off on their behalf, because it has to be signed off by the remuneration committee chair. I stepped into that a few weeks ago, just to say that I felt that I could make that decision myself as the principal accounting officer, because, irrespective of confusion, it was a document that needed to be in the public domain, and I'm afraid, in preparation for the committee, I'd only discovered at the end of last week that we hadn't actually put it into the public domain as I thought I had directed a few weeks ago. So, if you could accept my apologies on that.

Our intention is to try and get as close as possible to, if not the same—to try to have it issued, actually, at the same time as the annual accounts. And just to say, in an attempt to do that for this year, we've already been liaising with our workforce team, so that, the 2023-24 accounts, we'll try and aim to have that done actually at the same time, which will be the first time that we've achieved that as well, but at least well within the current timetable that we delivered it this year as well. 

But I think it's easier for me to say what I think happened, Chair, rather than you feel that was inappropriate. It was just the confusion of that swap over of chairs in-year and who should sign that off. 

10:10

Diolch, Gadeirydd. Bore da i chi. 

Thank you, Chair, and good morning to you. 

Bore da. 

Good morning.

Rwyf am ofyn nifer o gwestiynau sydd yn ymwneud â gweithlu y gwasanaeth sifil Cymreig, neu gwasanaeth sifil Llywodraeth Cymru. Yn gyntaf, oes yna broblem capasiti o ran gwasanaeth sifil Llywodraeth Cymru? 

I'm going to ask you a number of questions relating to the workforce in the Welsh civil service, or the Welsh Government civil service. First of all, is there a capacity problem in terms of the civil service for the Welsh Government?

I was mindful I was nodding then as you were asking the question, but I think we are a compact organisation. We have 5,800 staff, with a range of functions and responsibilities that we discharge in Welsh Government. I think, sometimes, I have the impression that Welsh Government is seen to be just a group of policy civil servants, but, in fact, we are closer to a delivery organisation in many respects, with a number of areas and functions that wouldn't naturally fit within a typical or traditional civil service department. So, we actually have a very high proportion of colleagues who are in what I'd describe as delivery functions, rather than that traditional civil service policy side. 

But we are a compact organisation. I think we try to work in different ways. I think we do reach out to other public services in Wales, to help us with some of the co-production that we can do on policies, and to use their expertise in the most difficult of times. I think that was a feature of the way in which we responded during the COVID pandemic, because we were able to enhance, I think, the civil service response through that. 

But we are a comparatively small organisation of civil servants. To give you a glimpse of it, with my old hat on, once you've removed the family justice service from the health and social services group, there are around 400 civil servants who work in the health and social services group for example. They are discharging duties and responsibilities that are carried out by about 5,000 civil servants and public servants in NHS England and the Department of Health and Social Care, but we actually are covering the same breadth of responsibilities, of course, given that health is a devolved function. 

So, we are compact. And I think, sometimes, that will create capacity problems, because we have to prioritise different areas within the organisation at different times. 

So, ble mae'r problemau capasiti ar hyn o bryd, felly?

So, where are the capacity problems at present?

So, there can be problems in a number of areas. Firstly, we have to look at a pretty intense and packed legislative programme within the organisation. And that is a priority for Government, to ensure that it's discharging its law-making powers. But it's important that we are constantly flexing the experience within the organisation of doing legislation, as well as the individual timetables for any one year. The legislative programme is not just a group of individual legislative expectations. It's a package that impacts if any timetables slip along the way. And we've had examples, I think, of areas of where, with experience in the organisation, we've had to redeploy to the greatest area of profile.

As an example, I think we've done some really good work on Senedd reform, to make sure that we kept up with all of the different expectations on that timetable over this recent year, and I think we were able to resource that team very well and with good experience. Inevitably, it shows that what you start to do is to take, however, some of the expertise from elsewhere in the organisation as well. 

I think that we need to recognise that, over the years, Welsh Government has adopted new functions and responsibilities. So, I think some of the capacity constraints at the moment probably are because we're still coming to terms with some of the revised responsibilities that we have after EU exit. So, there are some areas that historically would have probably had capacity and balance, but some of the climate change and rural affairs areas will feel that they've got some additional responsibilities arising from some of the new expectations because of EU exit. And I think it would be right to say that, at times, they feel quite pressurised. But, again, we try to lean into those responses. 

And then, sometimes, we have a capacity constraint when new problems and issues arise. Again, I think we've handled them quite professionally. But, in approaching the budget for this year, we've tried to make it a collective exercise rather than just about individual teams, and I think that worked well in that respect. But, of course, even if you look over the last couple of years at an example like the Ukraine response and accommodating those arriving into our country, there was no team at all that existed there. And, again, in terms of a capacity constraint, we didn't have a team available to do that. We had to invest in it and recognise that it was going to be a priority as well. But I think, as I said earlier, given we're a compact organisation, it probably feels that we're often juggling those different priorities right across the organisation, and sometimes having to choose the one that is right in front of us.

10:15

Rŷch chi'n cyfeirio at yr head count, y cyfanswm o ryw 5,800, sef y ffigur diweddaraf. Mae hynny'n gynnydd sylweddol, yntefe, o ryw 700, 800 ers 2017. Ar unrhyw adeg yn ystod y cyfnod hwnnw, oes yna unrhyw beth fyddech chi’n gallu ei ddisgrifio fel cap wedi cael ei osod ar yr head count ar unrhyw adeg?

You referred to the head count, a total of about 5,800, at least that's the latest figure. That's a significant increase of about 700 or 800 since 2017. At any period, during that time, has there been anything that you could describe as a cap imposed on the head count at any time?

Firstly, on the numbers that have increased, if you go back about a decade or so, it will actually show you that we're a smaller organisation than we were, but I think there has been a reason for needing to grow the organisation. Some of that was a recognition, and that was a recognition that happened at the Cabinet level, of needing to invest and secure resources for new responsibilities, or preparing for EU exit and translating them into responsibilities that came after. So, there was a growth in the organisation, which, I think, from memory at the moment, would have been somewhere between 200 and 300 individual members of staff, where we had to enhance the organisation because we were both preparing and responding to those new responsibilities.

Some of the growth in our staff numbers is actually for positive reasons of managing our money better. So, we have repatriated, for example, information technology support and brought it back into the organisation, because it means actually we can have our own staff recruited and actually save money on the original budgets that were spent. And even over the last 18 months, we've discovered that we've been able to do the same thing with a significant expansion of lawyers in the system. Rather than using external lawyers for advice, we've been able, again, to grow our own and recruit our own staff as well.

But, inevitably, there are caps on our size as an organisation. There is a cap in respect of the budget that is set for us each year through the budget process, and we have a responsibility to manage, as an organisation, within that funding outlook that we have. Obviously, there is discretion to agree with Ministers whether they want to expand, but—

—all public service organisations need to work within their budget arrangements.

Dwi'n ddiolchgar am yr esboniad ynglŷn â dod â phethau yn ôl i mewn i'r gwasanaeth sifil, ond, jest o ran deall polisi, doedd dim unrhyw bolisi cyffredinol i gadw lefel y gweision sifil o dan ryw ffigur penodol yn ystod y cyfnod yna.

I'm grateful for the explanation about bringing things back in-house to the civil service, but, just in terms of understanding the policy, there was no general policy to cap the level of civil servants under a certain figure during that period.

No. We have had, in the past, concerns where our numbers have grown beyond our budget. So, there would be a concern from Ministers, generally, about us managing within that budget. But, in respect of the UK civil service arrangements, which we are part of, we did not have any head-count reductions applied to us, because, of course, Welsh Government Ministers set our budget and, irrespective of the UK civil service arrangements, we were put to the side of those expectations from UK Government that were being set for their own UK Government departments as well. But, in terms of expanding our staff numbers, there still has to be a negotiation about priorities and securing the confidence of Ministers, particularly if they wanted to give us additional money, for example, to expand. But the UK Government didn't apply any head-count basis to us in Wales.

A doedd y Prif Weinidog—blaenorol erbyn hyn—ddim wedi gosod unrhyw gap ar recriwtio, felly.

And the First Minister—the former First Minister by now—he didn't impose any cap on recruitment.

So, in the past, to manage within budgets, there would have been, absolutely, levels to expect that we would manage within our budget, and that would come with some head-count limits, because we would have to manage within the money that we were set at this time. So, whether it's a head-count limit or whether it's a budget, inevitably, there is a constraint on how we can organise ourselves.

Ac felly, oedd y cyfyngiad cyllidol hwnnw, yn hytrach na head count, felly, wedi bwydo i mewn i rai o'r problemau mewn meysydd penodol rŷch chi newydd gyfeirio atyn nhw o ran nifer y cyfreithwyr? Mae'r Gweinidog Newid Hinsawdd wedi dweud—i ategu at yr hyn roeddech chi'n ei ddweud—yn ei thystiolaeth hi yn y Pwyllgor Deddfwriaeth, Cyfiawnder a'r Cyfansoddiad, un o'r rhesymau am gytuno â chynigion cydsyniad deddfwriaethol, yn hytrach na deddfu fel Llywodraeth Cymru, yw'r diffyg cyfreithwyr ac, a dweud y gwir, gweision sifil polisi, er mwyn mynd i'r afael â'r gwaith hwnnw. Felly, oedd y cyfyngiadau cyllidol yma wedi bwydo i mewn i'r problemau capasiti rŷch chi wedi cyfeirio atyn nhw?

So, did the budgetary limit, rather than head count limit, therefore, did that feed into some of the problems in specific areas you referred to in terms of the number of lawyers? The Minister for Climate Change has said—to endorse what you've said—in her evidence to the Legislation, Justice and Constitution Committee, that one of the reasons to agree to legislative consent motions, rather than legislating as a Welsh Government, is the lack of lawyers and civil service policy experts to tackle that work. So, did those budgetary constraints feed into the capacity problems that you refer to?

10:20

I think they would have had an influence on some of that. Obviously, when we manage within our budget, we make choices. I think the lawyer example, for me, was trying to make sure that we were sensibly using the public money that we have available and just trying to use it to better effect. So, rather than feeling that it was suppressing it, I just thought that there was another route that we could take here, which is that we didn't need to rely on some of the more specialist external advice; we could translate it, actually, into public service areas. But, inevitably, the constraints that we operate in will have an implication and a knock-on effect in some of those areas as well.

One area that I've really tried to make feel different over the last two years, but certainly 18 months, is making sure that some of the constraints that were affecting the legislative programme and its ability to keep up with some of the expectations—. But we have actually, genuinely, invested in teams there, and that does include deploying some of the legal requirements and expertise that was required as well.

Un o'r elfennau yn y twf sydd wedi bod yn y head count—yn y ffigurau sydd gyda fi, mae jest o dan hanner y twf yn y cyfanswm dros, dyweder, y pump i chwe blynedd diwethaf, yn cael ei nodi fel 'staff eraill', felly dŷn nhw ddim yn cael eu cyflogi yn barhaol. Beth sydd yn gyrru hwnna? Oes yna unrhyw reswm pam mae yna gymaint o dwf wedi bod yn y staff sydd ar gytundebau tymor byr, dwi'n cymryd, os nad ydyn nhw'n barhaol? Ac ydych chi hefyd—? Roeddwn i wedi dod ar draws cyfeiriad at gwmni o'r enw Local Partnerships, sydd yn gwmni ar y cyd gyda Llywodraeth Prydain a'r LGA, sydd â swyddfa yng Nghaerdydd. A ydych chi, weithiau, yn hytrach na phenodi pobl yn barhaol yn y gwasanaeth sifil, yn defnyddio cwmni fel Local Partnerships, neu ffurfiau eraill sydd ddim yn dod â phobl yn rhan o'r gwasanaeth sifil, er mwyn dod dros, efallai, rai o'r cyfyngiadau sydd arnoch chi o ran cyllido yn barhaol?

One element in the growth that there has been in the head count—in the figures that I have, just under half of the growth in the total over the last five or six years is identified as 'other staff', so they are not permanently employed. What is driving that? Is there any reason why there has been such a growth in staff on short-term contracts, I assume, if they're not permanent staff? And do you—? I came across a reference to a company called Local Partnerships, which is a joint venture between the UK Government and the Local Government Association, which has an office in Cardiff. Rather than appointing people permanently to the civil service, do you use a company like Local Partnerships, or other forms that don't bring people into the civil service, in order to overcome some of those limits that you have in terms of budgeting permanently?

Diolch yn fawr. If I speak generally, and, Dom, if you could just pick up our general approach to temporary staff and maybe just think about the organisation that the Member has described.

I think it's a natural part of any organisation, including the civil service, that we build in some flexibility in our workforce arrangements to have temporary staff in place. They can discharge a really important role for us. They allow us to recognise that we have time-limited programmes in place. So, Welsh Government is not always delivering substantive roles. A programme for government may give an expectation that we do have a team in place only for a year or two years, and I think it does give us an opportunity to bring some new experience into the organisation. I think our temporary staff arrangements have also helped us to handle some of the diversity representation within the organisation as well, so I think some of those approaches can be helpful, again, to bring different experiences around the table. There is a difference, though, in respect of our use of some of our temporary staff. I think some of them—well, many of them—just do fantastic jobs to deliver all of our expectations. I think one of my worries, as we look at some of the particular challenges that we're facing right now as an organisation, is that there are temporary staff in what feels as though they are substantive roles that will still be required in three years', in five years' time. So, irrespective of the underlying flexibility, I do think we need to take a look at that, but some of the growth has just been that we have been able to step in more quickly with some of our temporary staff arrangements. But, Dom, do you want to just give a general view, and perhaps if you could just think about that company or equivalent arrangements?

Thank you, Andrew. So, we operate a range of different temporary contracts. So, we have fixed-term appointments, where we would bring people in to do something on a time-bound specific process—so, a 12-month, 24-month operation. We operate secondments and loan agreements between different organisations and different entities, and we also use, for short placements, agency contracts. I'm not aware of that specific company, but I can take that away and have a look at it. But we do have some—

10:25

I'm not aware if we use it to fund some of our agency placements, but I will take a look at where we do place agency staff with us. But where we do use that, they should only be for 12-week temporary placements. We have, as of February, around about 474 temporary contracts, covering fixed terms through to agencies, loans and secondments. And of that number, about 50 per cent are fixed term, and, as the Permanent Secretary has said, they are roles that may potentially otherwise be permanent, and that's something I'm exploring at the moment. The other 50 per cent cover short-term agency issues.

Gan droi at y tymor hir, a chan feddwl am y problemau a'r heriau dŷch chi wedi cyfeirio atyn nhw—a hefyd, mae'r Pwyllgor Plant, Pobl Ifanc ac Addysg eu hunain wedi ysgrifennu at y pwyllgor yma i rannu eu pryderon nhw—ynglŷn â chapasiti, sut mae'r cynllun dŷch chi wedi cyfeirio ato fe yn gynharach, Llywodraeth Cymru 2025, a hefyd y system adnoddau dynol newydd dŷch chi'n ei datblygu, yn mynd i fynd i'r afael â'r materion yma yn ymwneud â chapasiti a sgiliau?

Allwch chi gyfeirio hefyd at y fast stream? Achos mae yna bryder ar lefel Brydeinig, onid oes, ynglŷn â'r dirywiad yn y ceisiadau a'r niferoedd sy'n cymryd rhan yn y fast stream. O ran y dimensiwn Cymreig, dwi'n deall ei bod hi'n bosib o'r blaen i wneud rhaglen neu leoliad fast stream yn gyfan gwbl yng Nghymru—hynny yw, dod mewn a gweithio dim ond yng Nghymru. Erbyn hyn, dŷch chi ond yn gwneud chwe mis yng Nghymru, fel pe bai Cymru jest yn rhyw adran arall, a wedyn dŷch chi'n symud ymlaen i Lundain, i fynd o gwmpas adrannau dros gyfnod o dair blynedd. Mae hwnna i'w weld i fi yn anfoddhaol. Ydych chi wedi ystyried creu cynllun fast stream Cymreig eich hunain, er mwyn gwneud yr hyn roeddem ni yn ei wneud o'r blaen, sef denu pobl a'u cadw nhw yma yng Nghymru?

Turning to the long term, and thinking about the problems and the challenges that you referred to—and also, the Children, Young People and Education Committee themselves have written to this committee to share their concerns—about capacity how is the plan that you referred to earlier, the Welsh Government 2025 plan, and also the new HR system that you're developing, going to tackle these issues relating to capacity and skills?

And could you make reference also to the fast stream? Because there is a concern at a UK level, isn't there, about the deterioration in the applications and the numbers taking part in the fast stream. In terms of the Welsh dimension, I understand that it was possible previously to undertake a fast stream programme or placement entirely in Wales—that is, come in and work only in Wales. By now, you only do six months in Wales, as though Wales was just another department, and then you move on to London and go around the other departments for a period of three years. That seems to me to be unsatisfactory. Have you considered creating a Welsh fast stream programme yourselves, in order to do what we used to do, namely to attract people and retain them here in Wales?

I'll pick up the fast stream issue, but, Tim, if you could then subsequently pick up Welsh Government 2025 and also the HR information system, if that's okay.

From a fast stream perspective, firstly, I'd say I think we've had really excellent colleagues who've passed through that. I think it's really important to have that as a leadership scheme available for the civil service, and to have the benefit of that experience. I'm saying this now from my own experience and memory: we have had colleagues who've stayed with us for longer than just six-month placements, even in my time as a director general, where they have seen through most of their time with us in the Welsh Government. But I don't think it takes away the general point of—

I think that these are recent changes—that's my impression. But if that's not the case, then—.

Certainly we've had a real advantage of it. And it does give us that chance, of course, to demonstrate the devolved Government responsibilities in action, and hopefully to attract good colleagues into the future as well. Partly tying it to your question previously as well, what I'd really like to do is to find a way of pushing into some further, more practical mechanisms around the 'one Welsh public service' concept, which would allow us more to think about exchanges that are more specific to Wales in the round—possibly not just the Welsh Government as an institution, but actually more generally across our public services. I think that actually for me would work more as a fast-stream-type offer if we could align it to that as a mechanism, because I think that would give us some inherent flexibility of how people would move around Wales more generally.

And possibly linked to the proposed national school of government.

Yes. The national school of government as well will be part of that thinking too. Shall I let Tim just answer on Welsh Government 2025 and the system? Thank you.

Central to the programme on Welsh Government 2025, we had five work streams—one about one Welsh public service, which we've just been referring to; one around continuous improvement; one around digital; and then workforce was fundamental to it, something I think we described the last time we came here. And that was very much focused on everything from the skills, capability, resources, but also the culture and values that we have as an organisation. There were a number of pieces of work we did around that. A key piece of work that was developed was around the policy capability framework. We've also done some work more recently around digital skills and a digital pay framework, as well as a capability plan for our staff. So, there are a number of pieces of work within that programme focused on skills and capability within the organisation. 

Having said that, as part of, obviously, looking at the budget challenges that we're facing, we have refocused the Welsh Government 2025 programme and simplified it now into three work streams. One of those is called 'reshape', and it's there to really look at the skills, the capability, the priorities within the organisation, and making sure that as an organisation we are focused in the right areas, in light of what are significant budget challenges that we are facing. There's a real focus on the skills and capability in the organisation, and that's central to that programme. I think in every organisation I've worked in there have definitely been skills and capability issues—as within any public sector organisation. But it's then looking at how we can make the best use of the resources that we do have and focus them in the right way. That's at the heart of the Welsh Government 2025 programme, and we're shifting it into a new phase under the 'reshape' element of that. 

10:30

Yn olaf, hoffwn i jest ofyn ynglŷn â'r diwrnodau salwch sydd yn y flwyddyn dan sylw, yr uchaf ers 2014-15. Yn ôl eich dadansoddiad chi, beth yw'r rheswm dros hynny? Beth ŷch chi'n ei wneud i fynd i'r afael â hynny?

A jest cyn i chi ateb hwnna, i fynd nôl at Local Partnerships, a fyddem ni, trwy lythyr, jest yn gallu cael cadarnhad bod unrhyw benodiadau ymgynghorol neu beth bynnag ar gyfer Llywodraeth Cymru sydd wedi cael eu gwneud trwy'r ffynhonnell yna yn cael eu hadlewyrchu yn y ffigurau headcount sydd wedi eu rhoi yn y cyfrifon, a'u bod nhw'n gynwysiedig? 

Finally, I'd like to just ask about sickness days in the reporting year, which are the highest since 2014-15. According to your analysis, what is the reason for that? What are you doing to tackle it?

And just before you answer that, returning to Local Partnerships, could we have, through a letter, confirmation that any consultancy appointments or whatever for the Welsh Government that have been done through that source are reflected in the headcount figures in the accounts, and that they are included?

We will send you that and confirm. Obviously, we do have secondments, loan arrangements that come in from a range of different organisations, but I'm very happy to give you the traditional civil service number alongside those that make up those secondments and contractor arrangements as well. Perhaps I could follow through just with a note that confirms that, just so it's there for record, if that's okay. 

Dom, do you want to pick up the question? Thank you. 

I'm very happy to do so. The number of sickness days lost in 2022-23 was an average of eight days, or 7.9 days per person. That tracks with the civil service average; it's actually just a little bit lower than the civil service average. The trends that we are seeing are very similar to the trends that we see elsewhere across the civil service, and, indeed, the public sector. There are two reasons behind it, I believe. The first is around the long-term sickness absence, and, in particular, around mental health, and the second, and particularly in relation to this year, is short-term sickness relating to COVID-19.

If we were to take COVID-19 figures out—and bearing in mind 2022-23 was a transitional year for sickness reporting where people may have taken tests, they may not have taken tests, they may have reported it as COVID, they may have reported it under respiratory or other issues—just the people who particularly reported as COVID, then our average working days lost would have dropped to 2018-19 figures. So, we would have seen a reduction in the number of average working days lost in the Welsh Government.

Clearly, the well-being of our workforce is absolutely of paramount importance, so there are a number of proactive measures that we're seeking to introduce. First of all, we've adopted a new health and well-being and safety strategy that was published last year, and that helps guide the variety of measures that we've got under way across the Welsh Government. We've adopted and are running mental health and well-being surgeries. We have proactive case advice support from the HR team. We have an established occupational health and employee assistance programme—all the things that you'd expect an organisation like us to do. One of the things that I'll be establishing is a health and well-being and safety assurance board, so that we can look at a more proactive measure across the Welsh Government of our health, safety and well-being risks. As part of that, we'll also be looking to benchmark with the Health and Safety Executive's organisational stress risk assessment.

So, there's a lot more that we can do and will be doing in this space, but the figures that are presented for 2022-23 reflect the national trend that you'd see in respect of COVID and, indeed, mental health and well-being concerns.

10:35

Chair, if I could just add to that, it's really important to describe that strategy and the actions being done in social partnership in the organisation. Clearly, working closely with our union colleagues is really important, and I’ve been really pleased to see how that’s been really co-produced alongside them as well.

I’m just mindful, Chair, that we probably haven’t given you the answer to the HR system question, so I just wondered whether we could respond to you and Mr Price, and allow Tim to say that. Thank you.

We deployed the new HR system back in July, both the recruitment system and the HR system, and so they're now in operation. Just to recap, the previous systems were past their sell-by date and out of support, so there was a clear business risk that we needed to implement those systems. As with any system, I've done enough implementation in my career, and these things never run quite as smoothly as you'd anticipate, but they are now in and working. We had a few teething troubles, but that does give us now a more resilient platform going forward around that. Having said that, there’s also a longer term strategy that ties in to the work that Gawain was talking about around our corporate systems. It’s not just looking at the finance, but it’s actually looking at the whole corporate systems strategy, which would include HR, finance and associated systems, to say, ‘How do we have an integrated approach for the future?’ looking at the Welsh Government, but potentially with options to look wider across other organisations as well for the future.

Thank you very much indeed. Could we break until 10:45? And then, again, I would remind people to please be as succinct as possible, because we do have a lot more questions to get through. Thank you. 

Gohiriwyd y cyfarfod rhwng 10:36 a 10:45.

The meeting adjourned between 10:36 and 10:45.

10:45
6. Sesiwn dystiolaeth: Craffu ar Gyfrifon ac Adroddiad Blynyddol Llywodraeth Cymru 2022-23 (Rhan 2)
6. Evidence Session: Scrutiny of the Welsh Government's Annual Report and Accounts 2022-23 (Part 2)

Croeso. Welcome back to this morning's meeting of the Public Accounts and Public Administration Committee in the Senedd. Could I invite Natasha Asghar to take up our questions to Welsh Government officials regarding the 2022-23 Welsh Government report and accounts?  

Yes. Thank you so much, Chair. Morning, gentlemen. So, I'd like to know what is the scale of the challenge facing the Welsh Government administration, given the financial pressures for 2024-25, and how, actually, are you physically going to be responding to them? And how are you planning to focus your resources, and which particular areas are you planning to target the most? 

Tim, I know you were talking about Welsh Government 2025 earlier, and I think it's important how we've taken that overall approach to change and linked it to our budget, but perhaps you could just give a view to the committee members. Thank you.

Certainly. As I said, we recognise there's a massive challenge facing Welsh Government, and the purpose of Welsh Government 2025 is to look at how we ensure the organisation is fit for the future, and so it's naturally right to refocus the programme in light of the budget challenges that we're facing. And, as I said, we've refocused that into three work streams. So, resize, which Dominic is leading, is very much saying, 'How do we ensure that we're the right size in terms of the numbers of staff linked to that?' The budget challenge is significant, and we have a high fixed cost linked to the number of staff we've got in the organisation and our estate and IT systems. So, resize is saying, 'Actually, we do need to be a smaller organisation, and how do we manage that?'

We then have another work stream, which is respace, which says, 'Actually, we have a significant physical infrastructure and estate spread around Wales, are we making the best use of it?', and looking at ways in which we can reduce the costs associated with the estate that we have, whether that's through the work we're doing to increase the number of tenants we have and create more public sector hubs. We've been particularly successful in LLJ—Llandudno Junction—and also in developing in Cathays Park, where we've managed to, actually, vacate a whole floor and a number of new tenants are coming in, as well as then looking at things we can do to actually just reduce the running costs associated with that.

And then, the third one is around reshape, which I was just referring to, which, really, is saying, 'Actually, how can we work in better ways as an organisation?', looking at the way we're structured, our operating model, but also looking at whether our resources are really focused on the priorities that we have, whether they be around the programme for government, statutory functions, organisation functions or some of the direct services that we supply. So, really making sure that we're focused in the right way. So, we've reorientated the programme to do that and, as I said, a number of pieces of work are associated with that, which include, on resize, we've launched this week a voluntary exit scheme, asking staff—those who may want to leave the organisation—to apply, and that's running over the next month, to understand that, and that should be for in the region of maybe around 150 staff.

I think, in response to the financial pressures as well, it's important to recognise that everything that every organisation is experiencing, because of the last two years of inflationary pressures and pay awards and how that translates into costs, Welsh Government, of course, experiences that itself in terms of its own operating costs. So, whilst over the years budgets have remained pretty stable, when our budget is staying the same obviously we have to now do more within less funding available, because we have to compensate for those inflationary pressures as well. So, I think, what we wanted to do in the organisation is make sure that there is a clear offer and expectation in the organisation about working on how we can be different as a result of these pressures. 

Okay. I appreciate differences, and I appreciate changes and contractual agreements and everything else that you've just mentioned. If there's one term that I've learnt probably more so from your department, it's probably the term 'partial retirement'. It's one that we've spoken about many a time, and I just wanted to ask, obviously you have a lot of full-time staff, part-time staff, so how do you ensure that there is fairness, because ultimately we are aware of the stories? I'm not going to go back into it, because I know we've spent many in-depth sessions talking about it previously, but how are you going to go forward and ensure that those people who are in full-time roles, in part-time roles, are treated equally and fairly as well?

Dom, do you want to just give an answer on that? And maybe I'll come back to it, just to give a feel for some of the UK figures as well for the civil service more generally. That might help. 

Our workforce is split: around about 80 per cent are full time and 20 per cent are part time in Welsh Government. In whatever capacity colleagues choose to reduce their hours or work alternative working arrangements, we seek to adapt job roles and responsibilities to ensure that they're fair and proportionate. So, colleagues within HR, within my team, are responsible for providing role design, job design and adaptation guidance. We look to make sure that there is parity and consistency across grades, so we do a lot of work around job evaluation and grading, and we work very closely with our trade union colleagues, social partners, to make sure that we've got consistent processes and measures in place.

We try to track and monitor assurance through mechanisms like our civil service people survey. The civil service people survey, for example, indicated—. If I allow Welsh Government, for a moment, to celebrate some successes, our engagement score last year was one of the best in the UK out of all civil service departments; I think we were ranked third, just behind the Treasury and the Department for Culture, Media and Sport. So, there are some positive elements there that demonstrate that we have a good offer, whether you are part time or whether you are full time.

However, I will face into the challenge that some of our part-time colleagues absolutely feel as though there is more work that could be done there and we're working with our staff networks, and in particular our disability awareness and support group, DAAS, to address some areas where we could strengthen support for people who are part time and who have disabilities and other arrangements. So, it's not a final picture, but I think the mechanisms we have in HR around role design, adaptation and grading help to make sure that we've got some parity and consistency, and that any impact on team members of capacity or resource is managed carefully and focused on health and well-being, on a case-by-case basis.  

10:50

Just on some numbers about that, one in five of our staff are part-time, and I think that's a healthy offer in the organisation. It means that we do have flexibility, it means that we are attracting in knowledge and skills and adapting to people who have other life experiences as well. So, I think that is a good offer to make. You tend to see fewer part-time workers from a senior civil service perspective, although the same expectations can apply there. But across the UK civil service in terms of the senior civil service, one in 10 senior civil servants work on a part-time basis. So, it's a normal arrangement for the UK civil service.

Okay. I do like to go a bit rogue, and I'm sorry, Chair, I am going to ask a question that's been pressing on my brain for quite some time, rather than follow the chain of command of questions I already have lined up for you. But, I remember, previously, the director of finance said that you have a three-year plan to get back to the pre-pandemic levels that we had previously. No milestones were actually shared with us, or perhaps stated. So, could you please kindly share what they are, going forward, now, and what you're planning to put in place to make sure that we get back to those levels, so that there aren't any delays or issues when it comes to submissions?

I'm sorry, what levels are you talking about there?

The three-year plan. So, the finance director said that you had a three-year plan to get to pre-pandemic levels, particularly when it came to submissions, timings, time frames—that sort of thing. So, we just want to know what exactly are those milestones. I know that you've obviously submitted everything in time, but you want to try and get things back to the way things were. So, what exactly—?

My apologies, I thought it was on staffing for a moment. But on the actual budget timetable, Gawain, do you want to lay out how we practically oversee it? What I should say is that, irrespective of the conversations we have with Audit Wales and operationally with colleagues in the organisation, we have now really good oversight from our audit and risk committee as well, so that oversees some of those timetables that we lay out. But, Gawain, thank you.

In terms of the three-year plan, I mentioned earlier that, unfortunately, because of some of the complexities of the issues I mentioned earlier, we won't be starting that plan this year. So, what we're doing—. I think the Chair said—. So, it's a four-year plan, now. But what we're doing at the moment is working with Audit Wales particularly, because we need to work on this very, very closely. We need to work with other bodies, because we are dependent on receiving accounts and things from other bodies, and then we have a workshop with Audit Wales colleagues and the audit and risk committee at the end of April, because our audit and risk committee are very interested in where we're going to take this. And that's the stage when we're hoping to plot out how we can get back.

I think in terms of the deadline itself, from a statutory point of view, from a Government of Wales Act 2006 point of view, the deadline for laying the accounts is actually 31 March the year after the accounts. So, at the moment, we're at 30 November—roughly there—which means that we're about four months ahead of that. Whether we ever get back to, perhaps—I think, maybe five or six years ago, we did manage August, whether we ever get back to that, I honestly couldn't tell you, and it's probably unlikely at this moment. We're getting bigger as an organisation, we've got more Government bodies and groups to account for, and obviously there are additional complexities, for example, we've got new standards coming up on how you account for plant equipment and machinery. We don't know how that's going to affect us in terms of what we need to review. So, yes, we will be putting a plan in place, one that we'll agree with the audit and risk committee, but whether we get back to the August deadlines we used to work to when we were consolidating maybe one or two organisations is probably very unlikely. But we certainly will try and bring the date forward when we can.

10:55

Okay. I'll go back to the Welsh Government 2025 now, if that's okay, the plans for that. What is the likely impact of the financial pressures on the Welsh Government workforce, which I know has increased in full-time equivalent terms, year on year since 2017-18? And what exactly are you going to be doing, going forward, to make sure that you hit those markers?

Tim, do you want to, again, comment? Thank you.

As I mentioned, the work we're doing in Welsh Government 2025 around resize is making sure that the size of the organisation fits within the budget, and the budget being challenging, we will be a smaller organisation. We're working through all the implications of that, because there are a number of aspects that make up the budget, whether it be looking at our physical estate, looks at some of the underlying costs we have, but also recognition that, for the running costs of the organisation, 80 per cent of those are staff, and so we are going to be a smaller organisation. That's why we've launched this voluntary exit scheme for around about 150 staff.

We're also, linked to the previous conversation around staff who are on temporary contracts, doing a full analysis of all those, looking at which ones of those are of a temporary nature and coming to an end and so won't need to be replaced, as opposed to those where maybe the work is ongoing and, actually, there's an ongoing requirement there. That work is still being carried out, so we will be at least 150 smaller going forward. There will be a number of the temporary contracts that also will come to an end, so the number will be larger than that, but we're still working through how we fully balance the budget over the next year, but also looking at potential implications into the year beyond, as well, because it's looking at the long-term sustainability of the organisation. That's what WG2025 is about, and so, saying, 'Actually, what do we need to do?' Where we're looking at things like the cost of our estate, making changes to that takes quite a while to implement, and so, again, it's looking at what's the sustainable position over the next two to three years for the organisation.

All sectors are affected by the budget outlook, and the civil service isn't immune from that in itself, so we have to make sure that we are able to translate that into the organisation. Of course, when we are given a budget, we have a responsibility to manage within it and make the choices that are appropriate. I hope what we can do through this exercise, though—it is a chance for us to just stand back a bit and reset some of the expectations for the organisation on the spread of functions and activities that we discharge and deliver. To some extent, Welsh Government has developed organically over the years, in respect of new responsibilities on the one hand, but, actually, new areas where perhaps we have moved from a policy role into more of a hands-on or even an intervention role.

I think we're still learning as an organisation from some of the pandemic experience, because, obviously, we were supporting Ministers to lead a range of decisions and choices, and that probably put us more alongside public services in the system in Wales, but it may mean that we need to take a few steps back from that, as well, to adjust. But I think that will be quite a healthy conversation for the organisation, because it has grown very significantly in its responsibilities from 25 years ago.

Okay. So, we know that the residual risk for the well-being of staff has increased from 2022 to 2023 to 'very high'. That's what the actual status has been, and it's also critical. It's also been noted that it was the highest rate in 10 years. So, can you explain a little bit more as to why this is the case and how you're going be addressing it as well as—particularly given the financial pressures that the organisation's facing, that everyone's facing—how you are going to be dealing with that in the best way possible?

Dom, do you want to pick that up directly? Thank you.

Yes, very happy to. So, the risk was increased to reflect a number of different elements that came together. First of all, the cost-of-living crisis and the challenge that colleagues felt in relation to that. Responses from our staff survey where circa 20 per cent of our staff felt as though there were workload pressures, et cetera. So, when you take into consideration that kind of context, Welsh Government felt it was right at that time to increase the residual risk back to a level it was previously.

Now, there are a number of things that we're doing to try and look at the well-being of staff, so I highlighted some of the issues earlier on in terms of the health and well-being strategy, a new approach in terms of how we look at assurance, the way that we look at acceptable workloads through reshape, and looking at how we prioritise activity across the organisation through Welsh Government 2025. I would also point to the civil service people survey for 2023, where, in terms of the well-being of our staff, we asked specific questions around how people felt, how well they felt, in terms of the provision of health and well-being support. We had a 72 per cent favourable response rate. Now, that still tells me there's more work to do, but to put that in context, the civil service average was around about 60 per cent. So, we're not starting from a terribly low base, but there's clearly more that we need to do here. Similarly, the civil service people survey highlights various indices, so a proxy stress index score, so how much stress our organisation feel that they're under. Our score was lower than the civil service average—again, around about 24 per cent compared to 27 per cent. It also includes something called the positive emotion, engagement, relationships, meaning and accomplishment index. The PERMA index looks at a range of issues around positive emotion, meaning, engagement, relationships, et cetera, and, again, our engagement score there was significantly higher than other areas of the civil service. So, there's a lot more that we can do.

Part of the challenge is explaining to staff the support that's available and that's on offer, and that we'd like them to take up that support that's available. So, there's a combination of operational factors, but I think the eye on the prize for myself is around looking at reshape and how do we make sure that the organisation responds to the priorities and challenges that it's facing and make sure that the resource is allocated there accordingly.

11:00

Okay, thank you so much. I have one final question about the assurances that the accounts will be done, and you've actually covered that previously in a question, but just one personal question that I'd like to know: as Members, we are obviously connected to each other, whether it be parties, politically, even personally. I know that we also have links with our devolved colleagues, for example in Scotland, and I just wanted to know—I'm sure in the civil service you have the same; you have interactions with your counterparts in Scotland et cetera—do they have the same sort of issues and delays when it comes to the accounts? Are they on track as well to be on time when it comes to those submissions, or are we the ones who are lagging behind?

I think we're actually one of the better performers. I know it may not seem like that sometimes around the committee table. [Laughter.] But, actually, our timetable we're delivering well in time, and there are many departments who really struggle to issue their reports.

Scotland actually beat us by two weeks—I think it was two weeks—this year. Funnily enough, I was looking at the accounts a couple of weeks ago with the chief accountant. Sometimes, we've been ahead of them, sometimes we've been slightly behind them. So, it was a couple of weeks this time. This year as well, there were 19 Whitehall departments that signed between September and, actually, January 2024, and there was a circular around the other day from one of the committees in the Treasury saying that none of the departments were looking to bring their timetables back to the pre-recess-type dates that we used to see many years ago.

So, we're there or thereabouts. As I said, strictly speaking, the auditor general would have until the end of March to lay the accounts. We're four months ahead of that, but, as I say, it does vary year on year, depending on the complexities. But we're certainly, as I say, a couple of weeks, if you compare us to Scotland this year. Sometimes, it's been the other way, for example.

The thing we were highlighting earlier, though, is that if the standards just continue to increase and expand, for good reasons, and if the number of organisations that we continue to incorporate into our accounts increases, the task becomes so time-intensive that I just think it's impossible to probably deliver the early targets that we did. When we were meeting these thresholds beforehand, it was simply a more straightforward set of accounts. That's why we were able to do it so quickly.

If we could continue with the—[Inaudible.]—for example, we're up to the 17 that was mentioned earlier; we could be over 30 bodies, plus the two groups within the next couple of years. That's obviously a far bigger task, but then it comes back to the question earlier about the consolidation tools and where we move with that in the next few years.

Can I just follow on from what Natasha asked? Your accounts have to be completed substantially later than other public bodies such as local government, don't they?

Not from local government at the moment, no.

Local government are after us.

Yes, local government are after us.

Local government have got March as the date each year—. I'll check that with the auditor general, because my knowledge was that they had to complete theirs by September, but local government have got, for one year, until March the next year to complete them. If you're saying that, I'll speak to the auditor general about that outside this meeting, but my understanding was they had to complete them by September, and if they didn't, you'd come down on them. But if you're saying, for accounts finishing in April, they've got 11 months to complete them, the question I was going to ask is now obsolete.

The next question is: in your response to the committee’s report on the 2021-22 accounts, you note the Welsh Government is reviewing its performance framework. What do you see as the limitations of the current framework in giving the organisation the information it needs to assess its performance?

Tim, you're leading on this for me at the moment. Do you want to just give a response? Thank you.

I think the current performance framework is a really comprehensive review of the organisation's performance and it covers 23 specific areas, and it certainly gives an excellent overview of the organisation. I think the downside to it is the comprehensive nature of it, and the resource it takes to do that, and the fact that it tends to be a backward-looking framework, so reporting on the performance of the organisation over the previous year. And so that limits its ability to help us drive performance in the organisation. It's useful and does do it, and it certainly does lead to improvements, but it's not as agile as maybe it could be. And so, just at the executive committee last week, we had a paper to review the performance framework and to look at other options going forward and we agreed that, actually, what we want to do is move to have more of a balanced scorecard-type approach, which would be probably on a quarterly basis coming to ExCo throughout the year, looking at key performance indicators across a number of different elements of the balanced scorecard.

What we'd look to do is ensure that, for the 2023-24 accounts, we use the performance framework, but we do what is required for the accounts and develop, then, the balanced scorecard for next year. There's still some work to be done to define exactly what sits within that, but, obviously, traditional areas, and certainly in terms of the scorecards I've used in the past: a key people section, a key element on finance, another one around our internal processes, but also our project and programme delivery and stakeholders would be key areas we'd want to look at. So, we want to develop the performance framework so that, actually, we can use it to drive performance in the organisation even more than the current one has.

11:05

How many key performance indicators do you have? And do they have different weightings?

The current performance framework, as I said, had 23 elements to it, of which 13 of those were functions, so they covered core deliverable areas for the organisation, and 10 of those covered what we referred to as 'attributes', so looking more at the culture and the values we have in the organisation. Within each function, there will be a number of different measures, so whether that will be things like payment of suppliers, freedom-of-information performance, some of the measures that we have within the staff survey. So, each area would have a number of elements within it. And I think that's part of the issue—it's very, very comprehensive and so, actually, being more focused in what are the key performance indicators that we need to improve is part of the balanced scorecard discussions.

You mentioned performance—how many key performance indicators have you got? It's a number.

It's a number—I don't have that, because, as I say, within the framework, there are very large numbers of indicators for each one of those functions and attributes. So, I don't have that to hand.

Through the Chair, can you write to us and tell us how many key performance indicators you've got? And can you also tell us if they've got weightings?

Yes, we tend not to do the weightings on it, because they're all individual areas, but when Tim was describing taking a scorecard approach, the point of that is to try and introduce more of a weighting and a more focused set of areas.

Okay. We'll discuss that next year, if we're all still here. [Laughter.]

If I could say also, Mr Hedges, I think one of the benefits that we'd anticipated from having the range of measures that we went for—. You may recall that we've done it in line with international civil service comparisons and some of the benchmarking information just hasn't been available since 2019, so we've not been able to really draw in the comparative aspects of what we wanted in that framework as well. So, hopefully, that will change at some point in the future as well. 

I think it'll be much more difficult to get comparative data. It's always difficult to get comparative data, and organisations that are not performing as well as they think they are don't like to provide comparative data, or they provide it in such a complicated manner that you can't compare. And as you know, the Welsh Government moves things around their budget headings, which you would say is for good reasons, but I would say is to obfuscate the expenditure. 

Right—[Laughter.]

Thank you very much indeed. In that case, can I bring Natasha Asghar back in?

Thank you so much. I'm going to be talking about losses and special payments. So, there has been a report of an overpayment of £1.9 million to local authorities for administering the holiday free school meals grant scheme, since payments were made at a higher rate than intended. So, can you disclose as to how this happened, please?

Sorry, yes—

That was a very nice silence with a smile. [Laughter.]

I was trying to come up with a number for Mr Hedges—I was doing an indicator calculation, but we'll come back with a note on that. Gawain, do you want to respond to the special losses? Thank you.

In this particular case, that was an error in the administration. The local authorities were told that they could claim £10 instead of £5 per pupil for the holiday or period. So, as I say, that was an error from the officials' point of view.

When we looked at it in terms of potential recovery, the local authorities had actually obviously complied with the grant's terms and conditions. But also, when we looked at the administrative fee in terms of the work that was needed, it was actually felt that probably the higher figure was probably more realistic than the original figure. Because the original figure was set at the £5, not the £10, we felt that it was important to be transparent and report that through our losses statement. 

We did take action because of that. So, at the time that this was put in place, responsibilities were split across two directorates, and that's been changed now; it's all focused in one directorate. And we have strengthened the governance arrangements. One thing when this did come to light that I did check on is that, recently, the Welsh Government has introduced a grant assurance panel. So, when we're looking at new schemes like this, or any other schemes across the Welsh Government, the panel is there to advise policy officials when they're putting grants in place, but they're also there to challenge certain issues. And one of the things that we have come to learn how to challenge is the administrative cost. We always ask about the administrative costs, as well as the other terms and conditions.

That panel has worked really well. We've had some really good feedback from across the Welsh Government. I think in part because we get all the people in one room to discuss. So, we've got a lawyer, we've got someone from the grants team, we've got someone from internal audit, we have someone from Cabinet office all around that table, so when people are putting grants in place, they're able now to come to almost a one-stop shop. But as I said, going forward, certainly one of the things we do press on when we're looking at these schemes is, 'Okay, what about the administrative cost? Why is it what it is?' 

11:10

Okay. So, my next question is probably the one that disturbed me slightly the most. You noted that the Welsh Government has agreed a compensation package, including costs, of £1.3 million for a third party claim due to a road traffic incident. And I quote now, it's been said that further disclosures were not made on the grounds of legal privilege. I can understand and appreciate the legal privilege. It is, unfortunately—or fortunately—in the public domain. It's visible to everyone to see about the particular case itself. So, I'd like to know how was the Welsh Government even exposed to such a thing, to this particular financial risk? And could it have been avoided, when it comes to liability? And what lessons have you learned from it? There are a few sub-questions as well, but if you can answer, for now, on these ones I'd be really grateful, please.

If I could say that we've just got legal constraints placed on us through the legal process around this case that means that we're not able to explore any of the individual circumstances. But just to take your question, one of the reasons that we were exposed to it is because, of course, Welsh Government owns and is responsible for the strategic road network in Wales. So, again, going back to my earlier description of the functions that we oversee, these are delivery responsibilities for Welsh Government, rather than just about policy that we hold on to in the centre. 

And the circumstances that are connected with the claim, they have been reviewed and considered. We've ensured that the lessons have been learned, and that's been fed back into the network maintenance programme. You were asking about how we are involved in it: because we are responsible for the road network. 

Okay. May I ask, have payments like this gone out previously, because we haven't been privy to them before, in such a breakdown form? So, if they have gone out, have they gone out in excess of £300,000, £1 million? I'd be very grateful, and I'm sure the committee would really appreciate, if they have gone out previously, if you would share them with us so that at least we're aware that, if we're making a loss because of poor road networks, then we need to do something about them quickly. 

Well, we obviously, aside from claim issues, have responsibilities for the maintenance of roads and have to use our budgets and make decisions, of course, linked to the road oversight mechanisms. I'm not personally aware, but you may be able to track that over the years, Gawain.

As far as I'm aware—I will double-check—anything of this nature is put in through the losses statement within the accounts. From memory, I believe there was one payment made that was featured in the accounts a few years ago, but if you'd like further information, then obviously I can double-check. But I do recall one a number of years ago, pre COVID, that was in relation to the road networks. But, as I say, I'm 99.9 per cent certain that was in the accounts at the time, because we do have quite a rigorous process to make sure that everyone does disclose anything that goes in the losses as special payments. 

Just for clarification, you mean every single one is noted in this; if it was a £5,000 claim, it would be in the accounts.

What we do is that we have a in terms of individual items that we put in, but everything goes in. Even if it is below the threshold, it is included in the total for the losses and special payments for that year. And it is, I know, something that audit colleagues do look at. It's Part 2, so it's one of the statutory areas that we have to comply with. 

It's £300,000.

Mewn ymateb i argymhelliad gan bwyllgor blaenorol, dŷch chi wedi ymrwymo yn barod i gyhoeddi o leiaf agenda a chrynodeb o gyfarfodydd y pwyllgor archwilio a sicrwydd risg. Pryd ydych chi'n bwriadu gwneud hynny?

In response to a recommendation by a previous committee, you've already committed to publishing at least an agenda and summary of meetings of the audit and risk assurance committee. When do you intend to do that?

Yes, so we will be putting the first committee report—which would have been our meeting, I think, at the end of January—on 24 March, and then there is a cycle to follow through that fits in with the clearance of meetings. So, the reason that we're waiting for that is that the audit and risk committee meeting that validates the minutes is meeting tomorrow. So, immediately after that meeting has taken place, we'll be putting them in there. And there is then a routine that has been established so that they will always be in the public domain to respond to the recommendations of the committee.

11:15

Pryd ŷch chi'n meddwl y byddwch chi mewn sefyllfa i gyhoeddi fersiwn ddiwygiedig o 'Rheoli Arian Cyhoeddus Cymru'?

When do you believe that you'll be in a situation to publish the amended version of 'Managing Welsh Public Money'?

Yes, it's something that we've committed to for some time. I have to say it was put on pause, particularly during the COVID response, for obvious reasons, but we need to commit to reviewing it, although the framework itself does allow us to support governance and assurance for the organisation. Gawain, do you just want to outline our expectations at the moment, because it is a small team who's involved with this?

Yes. So, 'Managing Welsh Public Money' comes under our corporate governance team, which is part of my team. So, they lead on a number of things across the organisation, as the Permanent Secretary was saying. I think it's important to say that, where possible, there is obviously an underlying document that we work with, which is 'Managing Public Money'. So, we do provide advice where we're able to on any particular changes there, and, also, the team are very proactive more generally in terms of providing advice and guidance on governance issues across the organisation. We've actually started it a couple of times, the rewrite of 'Managing Welsh Public Money', but, unfortunately, with the work that's needed for it, other things have come along that the team have focused on in its place. The one that springs to mind is, over the last 12 to 18 months, we've had a complete change in the subsidy rules for the UK. The governance team actually looks after that, so they've been very focused on providing guidance for the Welsh Government, and, more broadly, we've been trying to upskill, which involved training people within the organisation but also other public sector bodies, and, obviously, supporting people in their subsidy submissions as they go forward. So, as I say, we've made a start a couple of times; it's tended to be that then, you know, other priorities have come in and we've had to refocus the team.

Oes gyda chi nod neu amserlen bosib ar hyn o bryd ar gyfer cwblhau'r gwaith a'i gyhoeddi?

Do you have an objective or a timetable in mind at present for the completion and publication of that work?

At the moment, I couldn't give you a date by which we will be able to complete that work.

Ocê. Yn ystod 2022-23, rŷch chi, fel Llywodraeth, wedi cynyddu'r risg gweddilliol ar gyfer prosiectau mawr a rhaglenni i 'uchel iawn' a 'chritigol', a hefyd mae cyfarwyddwyr Llywodraeth Cymru wedi cofnodi 29 y cant o ostyngiad yn eu lefel hyder nhw ar gyfer cyflawni prosiectau o gymharu gyda'r flwyddyn flaenorol. Sut ddylen ni ddehongli hyn?

Okay. During 2022-23, you have, as a Government, increased the residual risk for major projects and programmes to 'very high' and 'critical', and Welsh Government directors have recorded a 29 per cent reduction in their confidence level for project delivery as compared to the previous financial year. How should we interpret that?

I hope it's a reflection that our risk register has a purpose, because we are meant to use it to highlight risks and then to respond to it and mitigate those risks and hopefully see the scores go down. But, Tim, do you want to just describe where we are at the moment on that?

Yes. It followed from—. The office for project delivery carried out a review into project and programme management in the organisation back in 2022. They also commissioned an internal audit because they had some questions they wanted answering around that, and on the back of that was then the increase in the risk from some of the review findings that came out of that, which also then influenced the internal control questionnaire, which then went out to all directors, and we amended some of the questions around that to get better information about project and programme delivery. On the back of that, obviously, that highlighted evidence from directors that the confidence levels had gone down. So, it was all part of that governance process working in terms of doing a review actually to try and understand some of the issues associated with our approach to project and programme delivery.

We reviewed things against what is known as the 'continuous improvement assessment framework', and also there's a Government functional standard around project and programme delivery. So, it was against those standards that we were reviewing ourselves, and that led to the changes in scores with directors. It also led to a paper coming to the finance and corporate services committee on the back of both the audit and that review, to highlight the issue, but, more importantly, to say, 'Okay, what are some of the key actions that need to take place?' As part of that, the committee agreed some actions, but also, given some of the findings there, escalated the matter to the executive committee and agreed some really key actions around changing our approach to project and programme delivery, which included looking to appoint a head of profession. We have now a senior director, who is one of our directors general, as head of profession for project and programme delivery, and a programme of work to look at strengthening our approach throughout the organisation, starting in one of the groups and developing. So, in some respects, it's an example of governance working, in terms of carrying out a review, understanding that, actually, the risks that we're facing are higher than we first thought, changing the risk register, getting further information through the ICQ process, and then actually putting a programme of work in place. The team came back to the corporate services sub-committee just last month. There has been progress made, but we're not on track where we wanted to be, so we then put some additional actions in place in the meeting I was having just last week, and we'll come back to the executive committee. So, I think it's an example of actually how we can use the governance and the risk register to really drive change in the organisation.

11:20

Rwy'n ddiolchgar am yr ateb cyflawn hynny. Roedd barn sicrwydd cyffredinol y pennaeth archwilio mewnol ar saith adroddiad archwilio yn 2022-23 yn rhoi sicrwydd cyfyngedig ar gyfer saith adroddiad, felly, a dim sicrwydd o gwbl ar gyfer un. Ydych chi'n gallu dweud wrthym ni mwy am yr enghreifftiau yma, a pha sicrwydd allwch chi roi i ni fod y gwendidau sydd wrth wraidd yr asesiadau yma wedi cael sylw?

I'm grateful for that comprehensive response. The overall assurance opinion given by the head of internal audit on seven audit reports in 2022-23 provided limited assurance for seven reports and no assurance at all for one report. Could you tell us more about these particular examples, and what assurance can you give to us that the weaknesses that have been identified in these assessments have been addressed?

I'd just start off answering by saying that I think this is, again, a good example of how we use internal audit within the organisation, because whilst, on the one hand, it can give us assurance and confidence on a range of corporate systems, the advantage of an internal audit service is for us to actually use it to point towards problems and issues in the organisation. From a limited assurance perspective, I'd almost be more worried if we had everything with 'substantial assurance' and 'reasonable', because I think it would mean that we're not looking for areas. So, this is a really important part of giving me assurance in my principal accounting officer role.

From the areas that were highlighted in the report, there were 18 recommendations that were made. I can say that 12 of those have now been put in place and confirmed, and internal audit are very happy with that aspect. They may need to touch base just to make sure they can do a revised opinion on those areas, but they've been implemented and hopefully that will mitigate the concerns. The six actions that remain are more complicated in some respects, because, Tim, they relate to the sustainable procurement area, and one of the things that we've got to work our way through there, in an organisation that is now budget constrained and with an inability to just appoint because we want to, because we have to manage within the money, if we want to meet some of the criteria that internal audit have highlighted on procurement, then we need to commit to be investing in the resources that they need from a very specialist base, which may not be only resources that we're looking to use ourselves as an organisation, but actually quite a precious resource across Wales, and I do wonder whether there are some other advantages of us looking at that more broadly, even outside the Welsh Government itself.

On the 'no assurance' report, it ties a little into the areas that Tim was highlighting on project delivery and our approach to recognising that there was a risk and problem there. It was a technical assessment of the framework that we had in place, and was saying that we needed to do more with it. What it wasn't a reflection of was the operational delivery of projects and whether we were maintaining those on time and within the budget. That would have been a very different exercise. Again, I'm satisfied with the areas that Tim has highlighted, that we will be able to make an opinion on that. I hope that helps.

Jest ar y cwestiwn cyffredinol o ran tryloywder a bod yn agored ynglŷn â'r materion dan sylw yn ymwneud â'r adroddiadau archwilio mewnol yma, ydych chi'n meddwl y gallech chi roi mwy o wybodaeth yn y pau cyhoeddus, fel ein bod ni o leiaf yn gwybod yn fras neu'n thematig, neu beth bynnag sydd yn bosib, beth ydyn ni'n sôn amdano fe, yn hytrach na jest y ffeithiau moel bod yna sicrwydd cyfyngedig neu ddim sicrwydd wedi digwydd?

Just on that general point in terms of transparency and being open in terms of the issues in regard to these internal audit reports, do you believe that you could provide additional information in the public domain, so that we know in thematic terms or in general terms what we are talking about here in these reports, rather than just those bare facts that there is limited assurance or no assurance at all?

I'm sure there is a way for us to find some way of satisfying the committee on its recommendations. At the moment, on our internal audit reporting and the way in which we've approached it in the Welsh Government accounts, we probably provide more information than other departments. There are other departments in the UK that will simply give you the overall assurance score from the internal auditor and that's it. And I think, over these recent years, we have been trying to provide more information from just those kind of one-word answers, to give a bit of the colour that's here. There's partly a protective approach to the internal audit function itself. It needs to go looking for issues, and what I want to do, not least respecting its professional standard, is to allow them to feel that they can openly and transparently do those things internally in the organisation, without feeling that it's always about the kind of external understanding, because they have a role and a job to do for us differently from our external auditors, for example.

But I think we have already progressed it as well. I do agree with you that if you could have some satisfaction on under the label, what was the nub of it, and, therefore, can there be reassurance that the recommendation is going to make the difference, I'm sure we can continue to evolve and develop that. But, I think, if you were looking at a comparison alongside a lot of the other department reports, you'd find that we've got much more content than probably most of the UK departments. But if we're not doing it as effectively as possible for you right now, we'll see if we can just develop it a bit further again.

11:25

Ocê. Diolch yn fawr. 

Okay. Thank you very much.

The former Permanent Secretary told our predecessor committee that the Welsh Government sets its budget income high to avoid losing the income for Wales. And we know that that hasn't always worked. However, the Welsh Government income for 2022-23 exceeded its budget, but it did not result in funds being surrendered to the Welsh consolidated fund. Why was this, and was any money paid out late in the year to ensure that didn't happen?

Okay, thank you. It's a more technical question, Chair, so I'm going to ask Gawain to answer, if that's okay.

Thank you. I know I've mentioned Audit Wales before, but this was quite a strange situation, and we did work quite closely with Richard and the team on this. So, no cash was returned in this particular case to the Welsh consolidated fund. The surplus was actually driven by non-cash income, and particularly in the areas of student loan. Now, the student loan model estimates the interest that we're due, going forward, and it tracks against the retail price index. So, what happened here was, when we were looking at the model, in terms of the non-cash interest that we had to accrue, going forward, we did see in that particular year quite a large increase in the interest rates during the year. I think they went from about 1.5 per cent to 9 per cent. So, that meant, in the latter half of the year, we saw this large increase in the potential interest that we had to accrue within the accounts, going forward. 

So, as I say, it wasn't actually a cash situation; it was non-cash, but, unfortunately, within the total income ambit, we do have to include cash and non-cash. So, this was quite an unusual event, which we certainly won't see every year, and I hope we won't see for a very long time. It was just that sudden increase in interest rates that hit us towards the second half of the year.

Okay, thank you for that. If student loans were run by anybody but Government it would be called a Ponzi. But the question I asked you was: was any money paid out late in the year—of cash?

No, this wasn't to do with any money paid in or out; it was all a non-cash accounting transaction in the year. 

The question is: was any money paid out late in the year? Is the answer 'no'?

In terms of student loans, or more generally?

No, in terms of the Welsh Government—. We've dealt with the student loans part of it, but was any money paid out late in the year to avoid paying it back?

No, certainly not. From a cash point of view, no. 

Thank you very much. Back to me for concluding questions. If you're able to, we'd like also to conclude by asking a couple of questions following receipt from Mr Moss of a letter regarding public appointments, which we, I think, received earlier this week. Before that, in terms of this session, the committee's noted improvements to the Welsh Government's accounts over the last five years or so, but how can the committee work with you to drive further changes to your accounts, and, to this end, how helpful are our recommendations?

Well, Chair, firstly, we take very seriously the scrutiny and the contact with your committee. I've personally been coming to the committee for almost two decades now in different roles, and, obviously, I've looked to discharge all of those and respond to you. We take very seriously the sessions, take very seriously the reflections, and, hopefully, even in our responses, you can see the judgments we're making about continuing to try and develop it. 

I'm trying to recall whether I was in the session at the time, but I think there was a colleague—and it possibly could be a current member—who thought that the accounts were impenetrable at one point, and I think we've done quite a lot to respond to that particular ask, because that wasn't a label that we wanted to be applied to the annual accounts. 

I think the particular area that we've picked up from committee recommendations and your own thoughts has just been to make it more visual and to try and bring it to life a little bit. That's not because I feel it's perfect at this stage, and it will continue to develop, but we'll await your next committee recommendations with interest, and, as always, we will reflect on them very seriously and see what we can do with that to make it a better document.

11:30

And what do you consider to be your priorities for further improvements in future accounts?

I think, for me, in general terms, it's to find some way to give that insight into the functions and responsibilities of the Welsh Government—obviously, understandably, through a financial lens, but I think showing where that impact occurs on behalf of Wales feels really important. There are probably some technical issues, Gawain, that are probably worth throwing in, that we look to continue to address. I don't know if you have any thoughts.

I think the first thing, obviously, is going back to the three-year plan—that's something that we need to discuss with Audit Wales and the audit and risk committee this year. It was my very first committee, I think, where a Member said the accounts are impenetrable, and I think that's going to haunt me forever now, because I've never forgotten it. As the Permanent Secretary said, we've certainly been on a journey trying to make it an easier read and trying to get over, perhaps, the importance of the Welsh Government and what it delivers, what it does for the country, but also trying to make it a good read. Another Member actually said a few years ago that it would be great if you could almost tear off the first few pages of the accounts and that could give you the summary of what the Welsh Government is all about. Again, we try and reflect on that each year and look at the topics we put in. So, as I say, it's a balance between trying to make it a good read, in a sense—. We're not looking at a novel here, but trying to make it a good read, easy to read for someone, but also getting over everything that the Welsh Government does and delivers. So, I think it's really just focusing on that, taking everybody's comments into account, obviously the committee, other stakeholders who we speak to about this, and just trying to move ahead with that gradually. I think we've been on a really good journey with the committee in trying to make it more understandable. If there are improvements we can make, then obviously we'll look to do that.

And I think, Chair, parts 2 and 3 are simply more technical, of course. They're not necessarily there for it to be a good read, but they are there to give assurance, and I think we just need to recognise that that is a fundamental part of it as well.

I think if it was a good read, we'd have a concern of another type.

Are you content to answer a couple of questions that Members may have regarding the letter that we received from Tim Moss dated 15 March? I think we had it earlier this week, if I'm correct. You confirm that the Welsh Government does collect applicants' address and Welsh language skill information as part of the appointments process, but don't currently collate or analyse that information, and I think Members had some additional questions they'd like to put to you regarding this whilst you're here. So, Members. 

I'll kick off. This originally arose, Tim, in an exchange in the oral evidence between ourselves. The first question is could we have the information collated, please, and over the period of 'Reflecting Wales in Running Wales'. That would seem appropriate, given there were specific actions in that strategy that were about geographic location and the Welsh language. So, is it possible to have that data now collated and analysed for language and geography?

Can I just add something on geography? All we want is the first part of the postcode. We don't want SA6 6RR. I wouldn't want my full postcode, but SA6 covers almost 30,000 households, so in no way does that individually identify me.

The intention has been to do that, and certainly, as I was indicating, the aim we'd had was to use the new system, which also collected some of the socioeconomic data as well, and understand it. So, all those aspects under 'Reflecting Wales in Running Wales', we were going to pull that together for the first year. But I take the point; we will look back at how easy it is to access some of the historic data pre the new system to see what we can do in terms of the specific aspects on the Welsh language. But that was the aim. Having implemented the system, as I mentioned earlier, there were one or two teething issues around that in some of the reporting. Naturally, our focus had been on what are the statutory requirements we need in terms of the commissioner, but the intention is to use and collate and analyse that data. But we'll look to do some of the things that have just been requested.