National Assembly for Wales

We'll go straight into questions, if that's okay. We have an hour and a half, so we'll cover as many bases as we can. Thank you, by the way, for supplying the paper for us to help with our consideration of the scrutiny today. You say in the paper that there are obviously many difficult choices that have had to be made to maintain programmes and services as far as possible. Which programmes and services have been reduced, and are any other commitments, do you think, at risk for next year?

Thank you, Chair. We're still working on the exact programmes that are most at risk, but this is part of a process, and the finance Minister has been very clear that the final budget that will be laid will be different to the draft budget. So, that work is ongoing, but obviously could be shaped, and I hope will be shaped, by potentially additional resource. It's on the revenue side, I think it's fair to say, that we've got the greatest pressures. Our objective is to maintain the bus network through to franchising. Perhaps the greatest threat is to bus services such as Traws and Fflecsi. They're the ones that we're seeking to protect, but also most conscious are at risk.

I think it's also safe to say that the impact of the draft budget on local government is important to factor in as well, given that bus services are so dependent on contributions from local authorities. They're non-statutory, so depending on the outcome of the discussions that are taking place over local government settlements, there'll be a change in terms of the bus services that are provided at a local level. So, we're potentially making difficult choices within transport, but we're also conscious that that's happening across in local government as well.

On the capital side, there's an additional allocation of £9 million as part of the move towards franchising, which I think is going to demonstrate our commitment to decarbonisation, improving depots, and preparing for bus franchising, but it is on the revenue side that we're facing the most pressure.

As you said, it is a starting point. There could be more money out of the £380 million coming your way, so are those areas that you've mentioned there the ones that you would prioritise if there was additional money, or is there something else?

Yes, absolutely—on buses, without a shadow of a doubt, on rail as well, making sure that we continue to enhance the network and protect services. That's our objective, so if any additional money was made available, we'd be able to do that.

Fine. We'll pursue those in greater detail—[Interruption.] Go on, then. 

Just a short question on that. Public transport is always a priority with young people, older people, our residents, and you see it with access to jobs, apprentices, everything. With the local growth fund, there's possibly capital coming forward, and a priority will be getting those people into jobs. If that capital comes forward and it could work with your transport fund, would that possibly release a bit more revenue, maybe, do you think, to help, or would you be able to shift money around, strategically, in all the grant pots?

Sure, yes. You're raising a really valuable point here, because it's also the investment zone money in certain areas as well that I think is worth factoring in as capital support. Peter.

Starting with the strategic point, as you'll be aware, we're moving to regional transport plans, and we want that to be a metaphorical shelf from which many funding streams can take, all consistent with the same plan. You're also correct that there's an interesting interaction between capital and revenue, especially on the bus side. If you think about a franchising world—not quite now, but in the future—the more capital we could have to take ownership of more fleet, the fewer running costs that private sector operators have for that fleet, which frees up scarce revenue funds for expansion of the network.

We've also got something in the region of 1,300 buses in Wales, which is a quite significant number, but we've got the oldest fleet. As we transition to electric buses, what we'll see is a significant reduction in the maintenance costs. Again, that releases revenue, potentially, for expanding the network. So, if we can draw down funding for enhancing the fleet, modernising the fleet from the local growth fund or any other source, then it certainly provides us with the potential to release revenue that could then be used to support the network itself.

Operators are saying that to increase the timetable, they sometimes need another bus, so it could be used in that way as well. Thank you.

We're going to delve into some of this in a minute. Just as a general question, again, from me before I move on to Julie, there's been a significant increase in the annually managed expenditure in your draft budget. Could you outline what each of the two AME budget expenditure lines fund and how they differ from non-cash BELs, please? 

I think there are the two. One relates to Transport for Wales, one relates to roads. One is £2 million, the other is, I think, just shy of £45 million. Peter do you want—? It's very volatile, this area

These actually are all non-cash amounts. They are in BELs that might not always be non-cash, but, for this particular year, the elements of these BELs are entirely non-cash. The vast majority reflect changes to road valuations, which is simply an accounting concept. We could provide more technical detail to the clerking team if that's useful.

That would be useful, yes. Just to help us, because we're wondering why they're called different things, basically. Diolch yn fawr iawn. Julie.

Bore da. Your paper says you've allocated £126 million to support regional transport priorities, including the regional transport fund. What will be the total value of the regional transport fund and how will the rest of the £126 million be spent? 

From the £126 million, £110 million is going to be distributed to the four regions on an existing funding formula that's been adopted for the regional transport fund. That's £110 million, of which the vast majority is capital—all but £2 million is capital. Then the balance of the £126 million will go towards Burns non-rail-related activities in south-east Wales, so that we can take forward some of the schemes that are not related to heavy rail. And then, also, there'll be an allocation to Transport for Wales for projects such as the active travel hub and Network North Wales. But it'll all go into regional transport.

Could you remind me what the Burns schemes would be?

Yes, sure. They're the five stations for rail, and then, on the non-rail-related activities, they're projects such as design and development of active travel, I think they call it the superhighway, and then also some local schemes in and around Newport to deal with congestion.

Thank you. The regional transport and active travel BEL totals £138.8 million, and we've talked about the £126 million. What else will the BEL fund?

The difference between the £126 million and the £138.8 million relates to the local government borrowing initiative for road maintenance, the fixing potholes and resurfacing roads. And then there's also a very small sum for small projects such as support for local government on 20 mph implementation, but that's a very small allocation.

Thank you. Do you think this £126 million will be sufficient? How will it be shared across the four regions?

I'll answer the second part of that question first, if I may. Existing funding formulas have been adopted for both revenue and capital allocations. There's the general road maintenance formula for capital, which reflects not just population density but also road lengths. I can provide, if you wish, detail of historic allocations and allocations under this formula and this distribution method. I can do that, that's no problem.

Insofar as whether it will be sufficient is concerned, I think it's important to relate back to what Peter was saying about the regional transport fund effectively being the go-to fund off the shelf, but not the only fund. I'd like this to be seen as the bedrock, the foundation of funding for schemes. It's not the only funding for schemes. So, there's local government borrowing, there's also the local growth initiative fund from UK Government, city growth deals, investment zones and, of course, local government contributions. So, there are multiple means of drawing down funding that can enhance the regional transport fund.

In some parts, I think the fund will be very significant in terms of some of the projects that would not be taken forward under the scheme that's been in operation to date, where we invite bids on a competitive basis and then allocate funding. For example, in this financial year, the largest allocation, the largest anywhere in Wales, was £6 million, but some of the priorities contained within the regional transport plans are far, far greater than that. I met with community representatives, for example, of Llanbedr yesterday; that's a major scheme that would not be funded under the methodology that we use at the moment, but could be funded by the region moving forward, because we're devolving the responsibility, we're allocating the funding, and if that project is deemed to be a priority within the region, then funding will be there to take it forward.

I think we're going to be questioning you about the Llanbedr scheme in a minute.

Okay.

This road length issue, could you explain that a bit more? In rural areas, they would gain by the road length, and in the urban areas, gain by population—is that it?

That's essentially it, yes. I can provide a note to committee on the general maintenance formula, if that's helpful.

Yes, we'd appreciate that.

Okay.

It's worth saying that most of the interventions that would come out of the regional transport fund would be related to road in some way, shape or form. So, that would be bus, cycling, walking and, indeed, road schemes. You wouldn't traditionally see any rail schemes coming out of that fund.

No.

And pavements.

And pavements, absolutely.

I've got a thing about pavements and cracks in them, and people tripping.

It's a really valid point, because that's something that's often missed when we talk about the local government borrowing initiative and fixing our roads. It also pays to fix bridges, pavements, kerbs.

The local—

Yes.

—infrastructure. Highway infrastructure that, normally, has been neglected in the past.

So, what would be the process of bringing forward proposals?

I can provide a note on the process, but in brief—and I'll try to be brief because it's a bit complicated—the regions themselves, corporate joint committees, will determine the priorities. They've already produced the regional transport plans, the regional transport action plans and delivery plans. They will then put together bids based on the priorities. The bids will then come to Welsh Ministers to be approved, and then the money will be distributed accordingly, based against the formula for each region. But if that's not sufficient, I can provide a more detailed explanation.

Yes, okay. Thank you.

Right. And what about monitoring and evaluation for the regional transport plans? 

That's already established.

That's established.

That's established at a CJC level.

Yes, and that'll be ready for the next financial year. 

Yes.

Yes, fine. Your response to the report also said that the framework

'will include how we track the detail of spending across modes and activities'.

So, will you be reporting annually on this—

We'll be doing that as well, yes.

—on the level of spending in each region by mode of transport?

Yes. On each area, yes, absolutely. We'll be able to do that as well. That's our intention.

Right. Thank you.

Okay. Diolch yn fawr iawn. Thank you. Joyce.

I'm going to ask about the funding for the Llanbedr bypass, since it's in my region, and the active travel. I'm interested that you met yesterday, so that's good news. And the bottom line is: will there be sufficient funding to secure the work of a £50 million estimation for that scheme?

Okay. If I may, I'll just reflect on where we are with that particular scheme. We've invested, through the local authority, just under £1.5 million in developing this particular scheme. I think it's fair to say, based on the engagement I've had with the community, that it has popular support. It is estimated cost, in terms of the actual construction costs; the delivery costs are around £39 million. North Wales, based on the capital formula, will be receiving next year £29 million. So, over a five-year period, you're looking at, if the numbers stay pretty static, £150 million. So, £39 million from £150 million is entirely reasonable, if the region wishes to pursue this project as a priority, but it's not the only funding as well, as I've said. The local growth fund will amount to a very significant sum. There's the north Wales growth deal, which could be a go-to contributor, and then also the local authority itself. I'm very confident to say that the scheme is far better placed to be funded now as a result of the transfer of money to the region than it would be if we were to pursue the same sort of allocation methodology that we've been operating for many years. As I say, this year, the largest allocation is £6 million, and that wouldn't be anywhere near sufficient to deliver that scheme. 

If you could send me details, I can report back. 

Sorry Joyce, do you mind if I just ask about that? The interplay in making these decisions between Government priorities and regional priorities—how do you square off that, maybe, on a national level, you feel, 'Well, actually, we do need this', but on a regional level, they say, 'Well, yes, but—'. And I know that's the nature of devolution, but there could be tensions there for future projects. 

There could be tensions—that's devolution, that's decision-making at the regional level. And if the region decides that it is a priority, then the region has determined that it is. I think it's important that the region is empowered to make decisions and has the funding to make decisions for the people that it serves. In terms of tensions, of course, the regional transport plans are set against the Wales transport strategy, and they've all been interrogated thoroughly on that basis. So, I'm content, whilst there may be some tensions, actually they're not going to be so severe as to cause us deep concern.

Okay. Fair comment.

And that's a good point, because that's what was going through my mind. What the local people in one area might want, somebody else might want something else in another region. But the example that you outlined and the extra fund that's available beyond this particular fund—do you think it's enough? 

In its own right, the regional transport fund does not meet the big ambitions that are contained within the four regional transport plans. I think the regions have done a magnificent job in identifying priorities right across Wales. What we'll be making available will not be sufficient in its own right, and that's why it's going to be really important that we examine all possibilities, including the local growth fund, city and growth deals, investment zone funding, where that's available, and local government contributions as well. And also there should be, in my view, a role for the private sector in this as well, in terms of conditionality of planning and contributions toward transport schemes. For example, if a large housing estate is built, then one would expect developers to contribute towards transport-related infrastructure. And so I don't think the regional transport fund should be seen in isolation, and as a result of that, I can say it won't be sufficient in its own right. But it does provide a very, very hefty base of funding now.

Janet, do you want to just come in on that?

Just on that point, at the moment, we know the Welsh Government has failed in its targets for house building. Now, the developers themselves just feel there's so much bureaucracy and red tape in Wales, not least of which is planning. When you say that developers might help towards this transport integration scheme, have you run that past the developers themselves?

Well, they already do in some areas. It's section—[Interruption.] Thank you. Section 106. I think we just need to bear in mind that section 106 will be in play for some of the regional transport priorities that are contained within each of the plans.

And you're not frightened that that might actually put developers off building homes here in Wales?

It hasn't to date, not with the section 106 agreements. I think the main concern has been with planning, as you say. 

And improved transport links could actually increase the value of a house.

Absolutely.

Of course it can, yes.

Absolutely. And also, in that area, you get a fairness, so that the bus routes—. If you talk about transport and connectedness to housing, for example, you get the routing of the buses and the public transport in the right area for the right people in the right place. 

I think it's also about placemaking as well. Transport infrastructure is so important to placemaking. If you think about New York, often you'll think about the transport system there. If you think about London, the underground, Paris and the Métro, San Francisco and the BART. And it's all about enhancing places as well.

And if I may, over the medium term we would want the regional transport plans to sit alongside the strategic development plans in each of the regions. We are hoping that, by going first on transport, that can provide an impetus to the wider strategic planning.

Yes, a foundation, almost.

Yes. It's interesting, if you look at somewhere like Copenhagen, what is the infrastructure that they put in first to develop? It's often the transport systems, and that then enables more sustainable development.

So, on average, £55 million was allocated to active travel between 2021-22 and 2024-25, and given this comprises about 44 per cent of the £126 million that we've been talking about allocated for regional transport for next year, how do you respond to the suggestion that, unless that active travel funding is ring-fenced, spending will inevitably reduce significantly, particularly when they have competing schemes like Llanbedr? 

It's for the regions, I say. This is democracy and devolution in action. However, the proof is in the pudding, and what we've determined is that, in the first year of devolving regional transport grants, allocations so far in the programmes that have been put forward in draft form amount in total to the same amount as historically has been allocated to active travel. So, the indication so far is that active travel expenditure and investment will be maintained.

Julie, you wanted to come in on this.

Yes, I've been approached about this in Cardiff, about a great deal of concern that active travel will be reduced, so that's very interesting, to hear that the plans are the same amount. Because what I was told was that Cardiff Council used to be able to apply for four major active travel projects a year, and that in future years it looks as if that will be limited to one.

So much administration, so much cost went nowhere associated with bidding. These bids are coming on a competitive basis, and obviously not all of them are going to be funded, but the time and the work has gone into all of them. So, in the future, by taking the direction that we've determined is right, we'll be cutting down on bureaucracy and administration and providing more surety for schemes. I hear within Cardiff that where the greatest concern is, I think, over allocations for active travel. One would expect it, but then it's for the region itself to ensure that active travel is promoted as the region wishes. It doesn't need to be dictated from the top all the time. I think it's really important the region determines where schemes should be prioritised and what schemes should be prioritised.

I could add that you, Cabinet Secretary, have maintained the funding for the Transport for Wales design hub to support the CJCs in maintaining the pipeline of schemes. So, that is not going anywhere.

I referenced that earlier with the funding to TfW's active travel hub within the regional transport fund.

Carolyn. [Interruption.] Sorry, Julie—yes, sure.

The other point that was made to me, as well as the active travel fund being dismantled, was the Safe Routes in Communities fund, which is provided for safe walking and cycling routes to schools—that that, obviously, is going as well. And—

It's not going. Sorry—it's not going.

The money is going to the CJCs—is that right?

The money is going for the same purpose, but what we're not doing is ring-fencing. So, actually more money may go into active travel one year in the Cardiff capital region than in another year, more money might go into Safer Routes in Communities one year than another year, but it's based on the region's priorities and the regional transport plans for each of the regions. We're not going to determine to each of the regions where we believe they should spend their money.

Carolyn.

As someone who represents north Wales, I'm happy to see this, because having designated cycle routes meeting the active travel criteria is very difficult for north Wales, where there are some routes where cycleways have stopped on the road and are not being used, whereas if you've got more flexibility to use it for old railway lines or whatever, linking up and being able to use it—. A lot of people will use the highway itself in north Wales. So, you need safe highways, with no potholes in them, basically, but also making sure there's that money for pavements, linking people to public bus transport as well.

When I come to Cardiff, and when I've been to Swansea, I understand having designated cycle routes, but it's more difficult in north Wales, and, as a representative, that's what's being said to me. I'm pleased it's been devolved to regions and that there's a little bit more flexibility, but I know there are people in places, where there are active travel plans in place—. So, some of those things will still continue going forward. They will do.

There's just a concern that we lose the development that has been there. So, that's my concern.

Only if the regions decide. But based on what I hear from Cardiff capital region, I doubt that that would be the case at all. The commitment is very clear to active travel. Whereas in other parts of Wales, we've heard that Llanbedr may be a priority scheme. I do think it's right that regions have the power and the funding to be able to make decisions and introduce infrastructure that's right for them.

Okay. Joyce. Thank you. 

Keeping on active travel, your response to the 2025-26 draft budget said the review of the Active Travel (Wales) Act 2013 would be completed by July and published shortly after. We'd be interested to know when that review will be published and also whether it will address the concerns that were outlined in the Audit Wales findings.

Okay, I'll bring in Peter, if I may. He might be able to provide us with precise dates. I understand that it'll be published early in the new year. It would have been published before, but we decided to prioritise modernisation of local transport grants so that they could be introduced from the start of 2026-27. And there was also work that was undertaken in other areas as well. And also, we've commissioned the national travel survey, which is going to be crucial in plugging the data gaps that we've got. Peter.

That's an excellent summary. We have prioritised implementing the regional transport fund because so much goes with that, and it's such a big thing. And we've found that we need to do more work internally to make sure that happens on time. One virtue of going slightly later on this review is that we'll be able to reflect on the recommendations of the Public Accounts and Public Administration Committee once they come out, which we're waiting for. We were in front of PAPAC in, I believe, July to talk about the active travel audit, and we'd like to reflect those recommendations as well.

Okay. So, you're hoping for when? 

Is it January? 

We're hoping for early next year. 

Early next year. Okay. So, beyond this, early next year. Yes, that's fine. Thank you. 

That said, just because a document doesn't come out until early next year, we have already started on implementing the improvements to the monitoring and evaluation of active travel, as recommended by Audit Wales. And as the Cabinet Secretary said, the most exciting part of this—if you're into evaluation, which we are—is the first results of the national travel survey, which will come through early next year. This will be the first time that we're able to properly calibrate the targets and the objectives that we are setting for these schemes. So, that's a really important moment for monitoring. 

When we talk about next year as well, we're talking about calendar year, just to clarify that. So, it will be within this Senedd term. 

Yes, from January.

I realised halfway through what I was going to say. [Laughter.] Okay.

Okay. Diolch, Joyce. Right, Janet. 

Diolch. Can you outline how the draft budget supports delivery of bus reform, specifically how you have satisfied yourselves that the allocations are sufficient to deliver what is required in 2026-27? 

Okay. So, if I just clarify that, in 2026-27, we won't have moved to franchising, so 2027 is the first year that franchising will take place in south-west Wales. But it's important that work is undertaken between now and then, or between Royal Assent and then, in advancing all of the infrastructure that's going to be required to make sure that franchising is a success, so, for example, new fleet, acquiring depots. So, all of that's capital related. That's why we've made available £9 million in extra capital within the draft budget. In terms of revenue, as I said at the start, what we're keen to do is to maintain the network, not to see any reductions to the network. So, it's on the revenue side that we've got the pressure.

Okay, thanks. And how is delivery of bus reform being considered in TfW's budget-setting process, both to ensure TfW has the capacity it requires and in terms of delivery of the reform programme itself?

Yes, absolutely, it's right at the heart of their budget-setting processes. I think we're very lucky that we've got great expertise now in TfW with regard—

Are you challenging it?

Oh, yes; always challenging, interrogating. Absolutely. But we're very lucky that we've built up, I think, in TfW, a lot of expertise in bus franchising, including with the appointment of Vernon Everitt as chair, who brings incredible experience.

And Lee Robinson.

And Lee Robinson, of course.

Honestly, I have every confidence in that individual, in particular having worked with him a lot to do with trains and things like that.

He will really value hearing that. He is outstanding.

Yes. Well, they need support as they're going along. It's a mighty task.

It's a huge task, yes. He and others are doing really well.

Your paper refers to investments in new buses and depot infrastructure. You just spoke about it there. How much has been—? Oh, is it £9 million, did you say? Did I get that figure right—£9 million?

So, it's £9 million extra in this draft budget, yes.

I don't need to ask any more, then.

Okay. I don't know what that's going to buy at the moment, because there's a lot of negotiating. We've got to get best value.

Everything's going up all the time as well.

Not a lot, I fear.

We want to get the best deal for that money.

I'm confident you can get the best deal.

Thank you.

Right. Okay. Peter.

Can I just make one quick point?

Yes, please.

As a rule of thumb, we would probably want to err towards spending money on depot capacity before greater fleet. There's a critical path to preparing for franchising.

Did you go to—? I think you did it, as a committee—you visited, was it, greater Manchester, one of the depots there?

Yes, greater Manchester. We came back—. It was quite a sobering visit, really, because I think, going there, we were a bit starry-eyed about franchising. Coming from there, we were really, really seriously concerned about the scale of the task ahead. We understand that a lot of the learning from Manchester has come across to TfW, in terms of knowing what needs to be done.

Chair, can I—?

Yes, please.

I get that, preparing those depots, you have to have the infrastructure before you have the fleet—that's obvious. In terms of where they're placed, that will be hugely important. We've got a situation now with climate change, where flooding is appearing where it never did before. That will take some perhaps significant rethinking and redrawing of what you were hoping for. On top of that, we're moving, we hope, to electrification of fleets. So, it's quite a major job in putting all these things together. There will be disappointment—where people thought they were going to have some infrastructure, but we know that weather patterns have changed so much that that's not going to happen. So, how are you managing those conversations?

It's a really good question. We're starting first with south-west Wales, obviously, because that's where franchising is going to take place first. So, the potential sites for depots are being examined against future resilience of the network—not just climate change, but also factors like where the staff are going to be, where the vehicles need to be to be maintained, availability of electric, because, obviously, they're going to be eating a lot of it. So, all of these factors come into play when determining where the depots should be based. I don't know whether there's anything else to add on that at all, is there, Alex?

No, other than to say that Transport for Wales are in the process of developing fleet and depot strategies, which will consider all of these things over a multi-year period. So, there's lots of work going into that at a strategic level, to work out where the best sites might be.

Peter.

If I could make two points. The first is that, if you look at the composition of the TfW board, and their bus expertise, it's very different from where we were, let's say, two to three years ago. In particular, there's the obvious link between the chair and Manchester, which was an important part of the appointment process, as you'll recall. The second point, and this is a difference between us and greater Manchester, is we have a rail authority that has, for example, significant infrastructure skills. They have been hard won; it's been hard yards, as you will really appreciate, but we have those skills now. So, our challenge is turning a rail institution into a multimodal institution, which is slightly different from the Manchester challenge of taking a planning institution into a bus operations institution. It's just a different type of hard.

Yes, okay. Lovely. Diolch yn fawr. Thank you. Julie. Oh, sorry, Carolyn, did you want to come in on this?

Yes. When we visited Manchester, they said, 'Don't rush into'—. I know we want electric buses, but not to rush into it, because it would be too much at once—having to have the downtime of buses to charge electric buses. Because I know we know we tried that in Flintshire, and we weren't able to take it forward. And we've got lots of hilly areas, so it's just taking it a step at a time.

Yes, absolutely right. I was told that as well, when I visited the Stagecoach depot, and this is why I think it's important to view low-carbon buses as part of the solution, not part of the problem.

Euro 6 buses.

Exactly, yes.

Diolch yn fawr iawn. Julie.

Thanks. I wanted to ask about the children and young people's £1 pilot. So, could you give us an update, please?

Yes, absolutely. I was with the Youth Parliament in this very room at the weekend, and we were discussing it. It was heartening, actually, to hear how it's changing quite a few lives within the Youth Parliament itself. Around 34,000 additional MyTravelPasses have been applied for and provided since the scheme was introduced. Of course, you don't need a MyTravelPass if you're aged five to 15, and so far, there have been no major issues with the introduction of the five-to-15 scheme. We will be, obviously, getting data from the operators, so we'll know how the scheme is going. It's going to be evaluated. But anecdotally, so far, from the operators that we've spoken with, there has been an increase, a notable increase, in patronage.

It's also interesting speaking with young people. It came out very clear on Saturday that having a £1 fare ensures that young people value the service. So, in contrast, in Scotland, where it was made free, there were big issues with anti-social behaviour. We were hearing that buses were being used as mobile youth clubs, for example, and that was impacting on other passengers, particularly the elderly. So far, what we're hearing is that there have been no instances of that sort of anti-social behaviour relating to the £1 fare scheme. Patronage is increasing. Young people like it, it's really popular. It's going to be for the next Government and Governments after that to decide what to do, but I'm really happy with how it's going so far.

Cathays High School—I visited Cathays High School, and they were absolutely thrilled, because they came to the Senedd to lobby for it to be brought down for schoolchildren as well. They feel that people listened, and they felt that they had a bit of power. So, it was very positive.

Yes. The Youth Parliament have been carrying out an inquiry into transport, public transport, so there were various recommendations that they made, which are really interesting. We're acting on them. But the £1 fare scheme, they were telling me, has changed perceptions of bus transport as well. Young people are now finding it kind of trendy, which is great, because that will ensure that there's behavioural change moving forward. And they were also insisting that by having that £1 fare in place, it still means that people don't take bus travel for granted and don't misuse it. So, I think we've hit the sweet spot right dead centre with this.

I mean, you said it's going to be evaluated. So, the criteria would be—?

For evaluation?

For evaluation, yes.

So, it will be things like patronage, increasing the number of young people using buses, how much the farebox has gone up by, the views of operators. But most importantly, it's going to be the views of young people. So, there will be surveys and so forth being undertaken as part of the evaluation. But I'll stress again, so far, everything has gone really well on it, and I'd urge all parties, regardless of what happens next May, to consider supporting it. But we're kind of now going into manifesto territory.

Carolyn would just like to come in on this before you go on to your next question.

Would you look to extend a flat-rate fare to other passengers going forward, even if it's a trial area such as north Wales? [Laughter.] And also for young people that might be using bus and then transferring to rail, which is happening, to give them that integrated transport. Having one pass, maybe—the MyTravelPass could be used on Transport for Wales rail services as well as bus, and having that link through.

Yes, ultimately, we'd like a fully integrated system. Of course, the fares are going to be different on rail than on bus, but an integrated system where you just have one card, if you like, and you don't have the complexities of all of the different fares that we've got at the moment across Wales. The flat fares idea—again, we're going towards manifesto territory here—what I would say is that fares are a key component that determine whether or not bus services are attractive and whether or not people are using them. The two most important factors are the network itself—the availability of buses, the routes—and then reliability. People won't use buses if they don't turn up, if they're late or if they don't even have a bus anyway. So, fares is not No. 1 when it comes to determining the success or failure of a bus network, albeit fares are really important to people, particularly in a cost-of-living challenge.

Okay. Thank you. Julie.

The pilot will end mid 2026-27, which, obviously, is after the next Senedd election, but would there be money available to continue it if parties decided to do that?

I would hope there would be money made available, whoever is making the decisions post May. It's not an expensive scheme, actually, in the grand scheme of things. It's £22 million for the entire cohort of people that are benefiting from it. In contrast, in Scotland, I think, it was £130 million, was it, back in 2023-24? Something like that. So, it's far, far less to operate this scheme. It's very affordable. And we'll know soon whether it's driving up the farebox and driving up passenger numbers. But it will be for the next Government to decide what happens later on.

But we're discussing the budget that could potentially facilitate that now. So, is that—

Could do.

—is that accounted for in what you proposed?

Only up until the pilot period ends.

Yes. So, effectively, the money to carry on that scheme would need to be found from within existing budgets. It hasn't been accounted for in the proposed budget.

Or allocated from the centre.

From somewhere else. Yes.

Yes.

Okay. Thank you.

We're giving free transport to older people and—. How do you measure—

Reconcile the difference.

—how do you measure those two things? You know, we're not giving free transport to young people—we're having this £1 bus fare, which is absolutely great—but we do continue that for older people, which I support, you know. But I wondered how you put those two against each other.

I actually like the idea of viewing this as part of life's journey itself. You start out as a child, you'll get free transport in certain circumstances as a toddler, then a £1 fare scheme as a young person, then a higher fare as an adult—working-age adult—and then, once you reach older age, it becomes free. I don't like comparing one to the other. I prefer to see this as—

I think that's a nice approach, actually.

And I've got no intention of changing the system.

And have you undertaken child rights impact assessments on the £1 bus fare pilot and on the 2026-27 draft transport budget as a whole?

There are policy elements to the draft budget that have been subject to the assessments—not the budget as a whole because that, I don't think, is achievable. And in terms of the £1 fare scheme, yes, I believe it was.

Yes.

Yes.

Right. Sorry, you said it wasn't achievable to do the whole—

It's not something that's done, is it? The draft budget is not subject itself to—

My understanding is that it's part of the broader strategic integrated impact assessment rather than a stand-alone for the budget as a whole. Is that correct?

Yes, that's correct. So, to avoid committees having a plethora of documents, the draft budget has one strategic integrated impact assessment. In the particular case of the £1 bus fare, there is a specific children's rights assessment because of the nature of that policy.

Thank you.

So, it probably would be achievable; it would just be incredibly onerous and not necessary, given that we've got the integrated one.

Right. As long as that children's rights are looked at in it. That's the main thing.

Yes.

Diolch, Cadeirydd. Can I apologise to you—and to all of you—that I was a few minutes late for the beginning of the session?

You're going to blame the trains now, are you? [Laughter.] 

I always feel less stressed when it's going to be a session about Transport for Wales. No, I'm a big fan of TfW.

What you were just talking about there, about the intergenerational element of this, but also about the perceptions you were talking about, about how young people are now seeing bus travel as trendy, I find that fascinating and really encouraging, actually, because it's something that has come up a lot previously in other sessions, both with you and with your predecessors, about perceptions about bus travel being one of the barriers. And you said that fares are not the only consideration. But some of the things I want to ask about are about some of the tensions that exists in this between rail subsidies and increased revenue from the farebox. But in the context of this, I think what you've just been saying is really encouraging, so thank you for that. On this tension, though, you've said previously that you see increasing farebox revenue as being central to ensuring that the rail subsidy will be reduced. You described the gap between 2023 and 2025-26 as being the difficult gap. So, that was something that you had envisaged. But looking at the situation now, passenger numbers have increased, revenue has increased, but the rail support allocation has also increased. Is that down to it being the difficult gap? When do you think that the time will come when the level of subsidy can come down?

Lots of very good questions. I'm going to start, first of all, just go back, with the points that you were making about bus travel and young people in particular. Another thing that came out of the Youth Parliament was a desire to see the bus network enhanced, and a recognition that if bus travel was free, you'd be far more limited in enhancing the network. So, at least with £1 fares, you're generating revenue that you wouldn't be generating with a free scheme, which can contribute to an enhanced network. So, there's a bit of a tension there as well. But, as I say, I think we've hit the sweet spot.

On rail subsidy, there's a simple reason why the subsidy is what it is and that we're seeing an increase in revenue as well. It's that we're putting on more services, we're acquiring more trains, better treatment of workers—it all costs money. And, in contrast, if we go back to the days of Arriva, they were operating on a no-growth contract, believe it or not. So, I can't believe that you'd be allowed to sign up to a no-growth contract, but they were signed up to a no-growth contract. Whereas what we're trying to do is drive up patronage in order to drive up the farebox, rather than have steep increases in fares. But, to do that, you've got to put on more services, you've got to have more trains, you've got to train more staff, and it all costs. Well, as we know, it's £800 million alone for the trains. It all costs money.

Presumably, that's why you had described this period as being 'the difficult gap'.

Yes, and also we had to stabilise the system, stabilise the whole network post COVID. Peter.

If I can just come in on that, what I would say is that we would argue that subsidy levels have stabilised now. So, in previous committee sessions, they were going up quite significantly and the gap was growing. They have stabilised. One of the reasons, as you say, Cabinet Secretary, that they have not come down is because the Welsh Government has chosen to instruct Transport for Wales to increase its services. So, you'll have seen, in the various timetable uplifts, that more services are being run.

So, I think there's an interesting question, not necessarily for me as an official to opine on, around whether the debate should be how many services the Government wants to run, because, rightly or wrongly, nearly every service in Wales runs at a subsidy. So, that is baked into the economic model, and that's no different from most other parts of England. But now that the rail service is operating effectively, and the performance metrics are so much stronger, what we've found is that there is demand for more services and, by definition, those services run at a subsidy, which is why subsidy levels are not coming down at this stage. If a decision was taken to reduce services to, let's say, the same levels that we had a few years ago, then I think you would see the subsidy fall.

Yes.

Just quickly—I know it's another supplementary—is there any other part of the UK where that is not the case, or where it's more acutely the case?

Larger urban areas would, possibly, have services running on less subsidy, per service. It stands to reason. I stand to be corrected, but there is one route that generates a profit, I believe, on the TfW network. All the rest attract a subsidy. And so the question really is: to what degree is a Government willing to subsidise a rail network? It's not whether you're willing to subsidise or not—you don't have a choice in it, largely—it's the degree to which you're willing to subsidise it, and the degree to which you are willing to put up fares in order to reduce that gap. It's a really careful calculation.  If you put up fares too steeply, you don't attract passengers; if you don't attract passengers, the subsidy goes up. So, what we're endeavouring to do is to drive up patronage by putting on more services that, ultimately, as Peter has outlined, will lead to a plateauing of the subsidy. But, a future Government could come in and decide, 'The subsidy is too high. We're going to cut services everywhere.' They could do that. 

Okay. Janet just wants to come in on this, and then—

I've raised it before, Cabinet Secretary, but in terms of your revenue input, the one thing that aggravates me when I'm on the train—. Yes, we do get times when the train is very much delayed, but they say, 'If it's over 15 minutes, then you can put in for compensation.' I think that's appalling. If a train is running a little late, 15 minutes doesn't really push you, whatever meeting you've got. And I've often asked, 'Why is that not raised to, say, half an hour?' When I've put in an FOI asking, 'How much have you paid out in compensation?', it's a lot of money. And I just don't feel that it's money—. I don't claim for it, and it's taxpayers' money—

It's a really good point. 

I just think that it should be a little bit more—if you're half an hour late. You're paying out money that I don't think you should be paying out, I'm sorry.

And arguably, with a metro system, where it's 'turn up and go', if one train is late, it doesn't really matter because the next one is around the corner anyway. 

Yes.

If I could just say that the amounts have gone down as rail performance has gone up. So, there is not—

I wouldn't mind a paper on that. 

So, there is certainly not as significant a trade-off as perhaps there may have been a few years ago. 

Aren't we getting into the realms of rail reform as well, here?

If TfW were here, they would make two points. One is that, because performance has increased, the saving is not as material as it once was. Secondly, they are conscious of their offer compared to other rail operating companies, and they wouldn't want to be an outlier in terms of what other operators are doing. So, yes, that does get you into rail reform because, increasingly, the UK Government will be the other operator. 

Yes, okay. I've got Joyce and Carolyn, and then we need to get cracking. 

I want to bring some reality to who is using the trains when we talk about subsidy. Is there travel data that would show, for example, that people are using it travel to work? So, those people, without the subsidy, you would know that, in times of great stress on personal budgets, they would have a problem. The wider context is what I'm after in terms of that travel data, because we're subsidising it, but who are we subsidising it for and what is the benefit to those individuals as well, and therefore the wider economy and well-being, because it's much bigger than just putting some money into a train, which you know people would perhaps in the future say, 'The company should do x, y and z for themselves' and then we've got a reduced service. But what does that really matter on the ground?

And it also contributes towards productivity improvements as well, having a fully integrated transport system, a modern transport system. It might be interesting for the committee to have a paper on this from TfW. We can ask for that for you.

Yes. Okay. Thank you

This is one of the reasons why TfW will be doing a significant evaluation of the south Wales metro and the core Valleys lines upgrades, because this will give us a very important evidence base that we can feed into other metro-style systems elsewhere in Wales.

One thing we were told by TfW is that, when they toughened up on the fare evasion scheme, it wasn't people who couldn't afford to go by train that were evading fares, often; it was people who could very well afford to pay the fares.

Yes. Interesting. Okay. Thank you. Carolyn.

I read a book on how to fix railways, and they've always been subsidised. And depending on how much Governments have put in over the years, they've failed or continued to do well. But, it's part of the economy.

It's a public service, in my view. 

It's a public service: access to work, access to health. And you've got to think about it in a holistic way. 

Yes.

My question, though, is: because we've looking at the franchising of buses and people have been saying that, for those that are working on a commercial level, such as Arriva, it's perceived that they're commercially sustainable without any subsidies, but is it right that they're all subsidised in one way or another? You subsidise concessionary passes, you subsidise fuel, to a certain extent—they get a subsidy on the fuel that they use. So, all buses are subsidised, in a way; they're not commercial and operating on their own steam. Is that right?

You're absolutely right—a concessionary card is blind to the route that it's on. So, it might be a very commercially viable route, but it's still a subsidised fare. It's still a free fare as a result of it being a concessionary fare.

Okay, thank you. Delyth.

Diolch. You've mentioned Arriva and comparisons with Arriva a number of times already. We wanted to ask about some analysis that's been undertaken that seems to suggest that, the level of subsidy that's provided to TFW as a percentage of revenue, that appears to be quite a lot higher than franchise payments that were made to Arriva as a percentage of turnover. Now, I take into account everything that you've already been saying about the differences, you know, the 0 per cent growth, and that there may be differences in accounting practice as well, but what would your response to that be?

Yes, that goes back to the point that pretty much every rail route attracts a subsidy, so the more services you're putting on, the greater the subsidy as a whole is. It's a fact of rail travel pretty much everywhere, but, Peter, have you got some—

I think the other big change is the rolling stock. 

Of course.

So, if you think about the types of trains and carriages that were being run under Arriva, we have next to none of those still operating on the network. And so you will often hear the Welsh Government talk in terms of a £800 million investment in new trains. That is spread over a number of years through lease payments, which will therefore feed into any calculations on subsidy per passenger.

Okay.

We did consider offering a Pacer to St Fagans. It might be interesting for them to have.

Interesting, gosh. Well, I was going to draw the comparison here with bus franchising—and, again, looking at some of the old stock that we used to have that were literally old buses as well, so maybe it's a fair comparison—but I do accept all of the points you've just made; I think that they're very fair. But in terms of the implications for this for bus franchising—and Carolyn has brought this up slightly already—we're often asked about affordability, or questions are raised with us about the affordability of that. What implications do you think we should or could be drawing from those lessons when it comes to bus franchising, taking on board what Carolyn's already said on this?

I think—I'll bring in Alex in a moment on this—but I think fair fares, ensuring that, again, you hit the sweet spot on fares, that you're attracting new passengers in part because of the fares, but also making sure that you've got an enhanced network, a network that's reliable and regular. If you can achieve those three things, then you're going to generate value for money, and you're going to grow the number of passengers, and, by and large, you're going to grow the number of passengers in the socioeconomic demographic that is most dependent on bus travel. Alex, did you have anything to add?

Did you want to come in?

No, I think Transport for Wales have learnt a lot about their experience over the last few years, which will be a massive help, I think, and, as the Cabinet Secretary's saying, that move to the sort of multimodal organisation looking across public transport, across integrated ticketing, across information provision for passengers, all of those things, will make a huge difference, I think. 

Thank you. And, of course, the points you were making earlier about the perception of bus travel as well, that there's no easy way of—. There's no easy metric of measuring something like that, but it is going to be crucial for that.

And also, I think, with franchising, with integration, what I'm hoping will happen is that perceptions of public transport will change insofar as there won't be the hierarchy, or the degree of hierarchy. So, people prefer rail options at the moment because they see them as permanent, because bus services can come and go, depending on the state of the economy, whereas rail services, because they're on fixed lines, they're perceived as being there for the long term, they're perceived as being, if you like, a higher quality, and we want to remove that and ensure that public transport as a whole is seen as a consistent, high-quality option.

So, are we likely to see an increase, then, in terms of bus funding, in the same way as we've seen for Transport for Wales for rail?

This will be for a future Government. I can offer my opinion, or my view. 

Please do. I mean, are you expecting it to be necessary? Because they're on a similar trajectory, aren't they? 

I think, in terms of capital, we're going to have to see a significant increase in money made available to modernise it. We've got the oldest bus fleet in the UK.

Yes, so there's a clear parallel there.

Yes, very much so. We had, I think, the oldest train fleet in the UK, so TfW have been through it before, but it will require money. And then there's a question about how much additional revenue might a future Government be willing to offer to enhance the network, because, as I say, it's not just about fares, and it's not just about reliability. It's actually about availability of services as well.

But, on that point, if we were to look at it—. I know we don't necessarily need to look at it as being zero-sum, but we, as a committee, in previous years, have been cautioned that, were anyone to seek to increase investment in the bus network at the expense of the train network, that would not be feasible because—. Is it still the case that significant cuts cannot be made to the train network that we have?

Unless—. Well, significant cuts could be made to reduce the subsidy, but I do not believe it would be desirable. You're absolutely right, in my view, that cutting one to pay for another is potentially disastrous in terms of public confidence in public transport as a whole. Sorry, Peter.

What we have often found is, in one technical sense, if, let's say, a bus is running next to a train at the bottom of a valley because it's the only flat space, you might look at that as an inefficiency. But, when we looked at it in more holistic transport planning terms, it turns out that people value the flexibility, and they have greater confidence to make a public transport journey because there's another option if, for any reason, their plans change, or if, for any reason, something goes wrong. So, if we are trying to, as I say, in a holistic sense, demonstrate to someone that they have a viable alternative to a car journey, then sometimes there can be a case for double running, even if, on the face of it, it appears inefficient.

I think key to that, then, is having that single point of truth for timetables and live information, and that's what TfW are developing.

Thank you. Do I have time for a final question, Chair?

Yes, please.

Well, just finally, then, I wanted to ask for an update, please, on the work to simplify rail fares, both in terms of what TfW are doing, but also the wider discussions with the UK Government. You've already alluded to the reforms that would be—well, not the reforms, but the changes—coming in were there. In terms of that tension between increased revenue, which is needed, versus affordability for passengers, how do you satisfy that tension, I suppose, if that's the right word?

It's all about growing the number of passengers. That's central to our considerations. Pay-as-you-go is one great example of simplification, and the introduction of a fair fare scheme, where, effectively, by using tap on, tap off, you are guaranteed the lowest fare. As a consequence of pay-as-you-go, I think TfW are about to, or may have, issued data. Passenger numbers have been incredibly impressive as a result of that, and that's being rolled out in north Wales next year as well. So, simplification and a fair fare regime are being pursued by TfW. They're also reducing the gap between the regions and between the routes, as well, in terms of fares. So, that's an ongoing piece of work. A dramatic change would affect, obviously, the subsidy level. It could affect the passenger numbers, as well, that are travelling. But they are on a pathway to evening out the fare regime across the network, and also simplifying it with things like pay-as-you-go.

Thank you.

Okay. We've seen the announcement, haven't we, that regulated fares are going to be frozen in England. Now, historically, we've tended to follow a similar path. Any thoughts on what the likelihood is that Wales will be, maybe, doing so again?

Well, it'll be a decision that will be made by Cabinet. I'm very much in favour of doing anything in our power to help people with the cost of living, and this is a lever that is firmly in our hands. However, we're waiting for the data from TfW, the numbers on the cost for this. And also, we're waiting for the budget today, where we expect the Chancellor to outline how it's going to be paid for in England, and, as a consequence, whether we'll get consequentials and the sum that we would likely attract. And then we'd measure that against what the cost would be, and then we'll make a decision. But I am very much in favour of using the levers that we have to help people with the cost of living.

Because there would be an impact on the fare box, and, potentially, then, an impact on revenue and the budget that's before us now.

That's correct. That's correct. And that's why we really need to know whether we'll be getting a consequential. I can offer my thoughts on what might happen—and this is very dangerous, I probably shouldn't do it—

Oh, go on.

I will, then. I'm not sure the DfT will be able to absorb the cost of freezing regulated fares, so I anticipate—and it's been trailled already—that the Chancellor will be saying about how it's going to be afforded, whether it'll be paid for from within the department's budget, or whether additional resource will be made available.

Okay. And then there's a whole debate about where that potential consequential goes within Welsh Government as well—

Yes, competing with lots of pressures—

—there are a number of hurdles to that.

—but this is one lever that's firmly within our hands where we can help people with the cost of living.

There we are. Okay. Diolch. Joyce.

I'm going to ask about investment in metro programmes, and, in your paper, it says that funding for the regional transport and active travel budget expenditure line will be used to develop plans for the Swansea bay and west Wales metro, and I have an interest in that. So, can you outline the details of that work and how much of this BEL is allocated for that work?

Okay. Yes, absolutely. I think it's fair to say—and it's pretty obvious, actually—that work on the Swansea bay and west Wales metro is less advanced than the south-east Wales metro, obviously, and less advanced than network north Wales. But progress is being made in the region, both in terms of developing the case for seven new stations, and, of course, alongside that and in parallel to that, the development of the network for bus franchising. So, quite a significant amount of work has been undertaken.

I met with local MSs, MPs and council leaders recently in Swansea bay, and we discussed the priorities within the vision for enhancing connectivity and how it was going to be paid for. And within the comprehensive spending review, we've got money for development work, which is vital in terms of being able to design and plan things like new stations. That, then, once that's been completed, can then attract further funding for the building of them from future comprehensive spending reviews. So, for the first time, we've actually got money that could be used for the development of these schemes rather than just having them sitting as artists' impressions. So, I'm quite excited about what we will see in this spending review period and subsequently in future ones.

But also, as I've mentioned in regard to regional transport plans, there is also the potential to accelerate the delivery of Swansea bay metro infrastructure through the local growth fund and, indeed, other funds that I've already mentioned on a number of occasions today. So, whilst it is less advanced, it is now moving at a pace and there are opportunities that were not available this time last year.

Of course, knowing that route really well, it is under threat from climate change. I know exactly where it's likely to flood—it always has in the past, and it will do, perhaps, more so in the future. So, is that being factored in? I mean, Ferryside is a real weak point, there are weak points around by Carmarthen as well, that I can think of immediately, and that will actually affect both rail and bus. It won't be either/or, it will be both. So, I keep bringing up climate change because it really is significant when we're talking about our rail infrastructure, because of the way it was originally designed to run along where the water is, let's be frank. But also, when we're looking at major rerouting, in some cases, it's going to be the case.

It's the norm now. It's pretty much the operating norm, climate-related disruption and the amount of severe storms that we're having is quite incredible compared to 10 years ago. I met with Network Rail on the Conwy valley line, which is often subject to disruption.

Regularly.

And the reality is that more money is going to have to be spent in the future on maintaining—. It's similar with roads as well. More money is going to have to be spent on maintaining our infrastructure as a consequence of severe climatic events.

Okay. Very briefly then, Joyce, because we're up against time now.

I'm going to come back to what I should be asking you, and that is, in terms of the Swansea bay and west Wales metro, you say it's being developed, so when is it likely to receive some investment? That's already happened in the metro programmes and the future spending reviews.

Rail-related infrastructure takes a while to develop and deliver. But, within this spending period, we've got an opportunity to develop the schemes that can then attract future spending-round allocations. There's also the local growth fund that could be utilised as well. I don't want to make promises about being able to accelerate any of this work, because rail-related infrastructure does take a long time. Planning and consenting alone can take a significant amount of time. We know with Cardiff Parkway, for example, that the planning process took years, not months. We will develop as fast as the systems allow us to develop, and then deliver them as fast as they can be delivered as well. But, in terms of allocations from the spending review, we've got development funding in the next round, I would hope that all those schemes, or at least some of those schemes, would be at the point of attracting the actual construction funding, what's described, if you like, as enhancement funding.

Okay, thank you very much. Diolch yn fawr. Right, we have about 20 minutes left, and there are two quite hefty areas that we still wish to cover. Janet, first of all.

Thank you. So, £302 million of the £445 million announced in the spending review will fund projects identified by the Wales rail board. How will this UK Government investment integrate with Welsh Government investment to ensure value for money? And, are these UK Government projects now fully funded?

Excellent questions. The Wales rail board is going to be vital in ensuring that there's value for money and that there is an integration of Welsh Government through TfW investment and UK Government through Network Rail. The CSR funding will be made available from the start of the next financial year, but that's not stopped us from putting money into some of the schemes that have been allocated funding in the next financial year this year. For example, work in Cardiff, Burns-related activity in south-east Wales, and the Wrexham-Liverpool line specifically at Padeswood, we've put money into early work within this financial year.

In terms of the £302 million allocation, I wouldn't view this as the end of the matter when it comes to the amount that could be put into heavy rail within this spending period, because I'm keen to look for all options and opportunities to draw down additional money. That's actually part of the remit of the Wales rail board as well, to look for other opportunities. So, whether it's from the local growth fund, whether it's from other DfT-related budget binds, whether it's from growth deals, city deals, contributions from elsewhere, that figure of £302 million is not the end of the matter—

And how much of that will you be spending in 2026-27?

We're still going through the profiling of how that money is going to be spent in the spending period. What I would say about rail-related investment is that the challenge sometimes is spending the money, because it takes a long time to deliver rail-related infrastructure. What we've got now is money. The UK Government's clearly committed to the Burns work in south-east Wales, they've repeatedly said that, so we've got the money to be able to take forward the schemes there. They're committed to Padeswood, and I stand to be corrected, but I think that's easily deliverable within the current spending round.

The profile of the spending is a matter for the UK Government. So, we seek to influence it through the Wales rail board, but it's not a Welsh Government decision.

And of course, work on the north Wales main line is taking place within this financial year. So, we'll see the increase in services of 50 per cent in May of next year. So, the work is taking place now, albeit the £302 million is going to be unlocked from 2026-27.

So, what are your initial priorities for the £302 million?

The UK Government has said what it intends to use the £302 million spend on. If you're interested in a rough sense of profile, the ones that I would expect to come relatively sooner would be Cardiff Central, the relief lines to facilitate the Burns stations, and Padeswood, as you referenced, Cabinet Secretary. The schemes that could come later in the spending review period, in terms of that profile that you mentioned, would be the Burns stations, because more development work is needed before you can get spades in the ground, and you would want the relief lines to be done first.

And when will the enhancement pipeline developed by the Wales rail board be published? And when will it be accompanied by a delivery plan?

Peter.

We are hoping to publish a pipeline by the end of this year. It's a matter for the UK Government—

Calendar year.

Calendar year. Apologies. Calendar year—so, before Christmas. It's a matter for the UK Government around what delivery plan they choose to publish. I suspect it will be part of the wider rail national enhancement plan, which I would expect to be published at some point. 

Okay. Your paper states that the decrease in capital allocation for rail is due to reduced Welsh Government expenditure on the core Valleys lines transformation programme. Can you clarify how the additional £12 million allocation for CVL enhancements from the UK Government spending review is reflected in the budget, and what will this fund? 

One for you, Gareth.

Diolch yn fawr. Bore da. The £12 million was a result of the negotiations that happened around the transfer of the core Valleys line, so it was baked into the process, really, that we were going to get some funding from UK Government, and that's £12 million over the next four years. The reason that overall funding for rail infrastructure is reducing next year is because, as you said, the core Valleys lines infrastructure transformation is coming towards an end, so it's tapering off next year. So, there is a reduction in the overall capital, but we are able to allocate that additional funding from UK Government into that budget, so we can fund other things, like the strategic road network and additional bus capital as well. 

Thank you.

Diolch yn fawr iawn. Carolyn.

I'm going to ask you some questions about highways now. The first one's about the strategic road network. The allocation has increased by £9.81 million, or 8.32 per cent, to £227.74 million. It's entirely in BEL 1884, the strategic road network contractual payments, which funds a number of contracts, including management of the A55 and sections 5 and 6 of the A465. I'm sure, a few years ago, there used to be a funding pot called the major assets fund, which used to be used for big structural funds such as the Dee crossing. And we used to have European funding as well. The Caernarfon bypass and the Abergwyngregyn infrastructure scheme were half funded by European funding as well. So, even though it's a lot of money going into the strategic road networks, are you concerned that there'll be enough to do all those important schemes we need? 

So, we've got the national transport delivery plan that we work against, and that's a pipeline of projects that are realistic, I think. Contained within that, for example, is the River Dee replacement—the bridge replacement in Queensferry. Over a period, it's affordable, but you're right, we don't have the funding that we once did, which paid for likes of the dualling the Heads of the Valleys road—really big infrastructure schemes. But we've taken a reality check on what is affordable, that's for sure, and the delivery plan contains, I think, achievable projects, maybe not of the magnitude of the Heads of the Valleys road, but it reflects the financial environment in which we're operating. 

If you take a long-term perspective, let's say, comparing this budget with five years ago, you would see relatively more on road five years ago and far less on rail capital. And the story of this Parliament has been finding a way to afford the CVL and seeing that through. As Gareth mentioned, that expenditure is now starting to taper, which is a welcome thing in terms of delivery and affordability. It does mean that there's an interesting question for the transport budget in the next Parliament about where the focus should be, and there are choices there, coming back to our discussion on bus capital and supporting franchising, and there are those also choices on roads, especially because we have an increasing number of projects we have to do for asset renewal purposes.

And this came out in the Lugg review—a really important piece of work. Maintaining the roads is vitally important. And it will be for future Governments, but I would urge any Minister in the future to take road maintenance very, very seriously indeed.

The A494 and the A55 were once classed as the European highway, going right across through to Anglesey, that bridge as well. We still need to keep everything moving along roads as well as rail, and if they fail, they've got to be repaired, so there needs to be funding there. Do you think, because it's so strategic, it should be something we should ask UK Government to help us with as well?

Well, it's devolved, and technically we’re provided through the block grant with funding to achieve what is required. But, as Peter said, the story of this Parliament has generally been rail related, how we deliver the CVL, but in the future, with costs trailing off on the metro, it could release that capital for road enhancements, and also for a mix of capital and revenue road maintenance. My personal view is that that has to be a priority, because, as you say, some of the work that's needing to be undertaken in the next couple of years is actually safety related.

It is, yes. I really welcome the pothole funds for the strategic road network as well as the local road network. There is an uplift in that funding, isn't there, I believe, in the budget? 

Yes, we're maintaining the extra £25 million, and that's been very well used by trunk road agencies. It's very well used. I think we've seen now about 100 km of road on the strategic road network resurfaced, and I can't remember now how many thousand potholes have been prevented or filled, but it's a lot. 

It's worth saying that £25 million, which, as you say, Cabinet Secretary, is being maintained for this financial year, is a pretty scalable number, so if more money was available, it could be spent, and similarly if we had to cut our cloth for other reasons then that is something that could be done. 

I think it was a £1 billion backlog, wasn’t it, for the strategic road network, and £1.6 billion for the local road network?

Yes. 

I'm really glad now there is funding for the local road network, because councils were really struggling to make capital available for that local road network.

I do know the numbers on the local road network. I think the First Minister mentioned in excess of 130,000 potholes fixed and prevented yesterday. I've checked the latest, the very latest data, and it's showing almost 150,000, and more than 400 km of local roads that have been addressed. Something that I'd just like to say about, particularly in regards to the local roads, is it's not just motorists that face issues with potholes and defective pavements. Obviously it's pedestrians on the pavements, but also one of the biggest claims that we've had in recent times was actually from a cyclist who was badly hurt as a result of a pothole. So, it benefits all road users and people who walk and wheel as well, and cycle. 

And with climate change, the impact on the local highway network, it keeps increasing as well, so if we're not investing in local bridges as well, roads and pavements. Can I just check that the budget going forward—? I'm just trying to find the note there. There was £120 million being made available over two years, but it was like a prudential borrowing scheme, so there was revenue funding allocated so that it was cost-neutral for councils.

That's right. Yes, that's right. That's £10 million pounds that's allocated for that over two years.

Over two years.

So, we're effectively paying off the debt. 

Okay. And it says here

'investing an additional £4m in this budget in the Highways Management Local Government Borrowing Initiative. This increases the total recurrent revenue support...to £10m'.

So, does that increase it or is that keeping it the same?

So, that was announced in March, but it is new money for the next financial year. 

Okay. Just to continue the programme.

Yes, to continue the programme. 

The same programme. Okay. And if the strategic road network fund is now going to be—. The local transport grants—.

Yes. Road resilience is included in that.

Road resilience is included in that. Okay. So, if we're having funding devolved to the CJCs for all sorts of schemes—

Yes, resilient roads, active travel, safety-related—

Safe Routes in Communities. So, will that allow more flexibility?

It will, yes.

So that if they want to do a cycle route to a school, the pavement, the road, they can do it all at the same time.

All in one.

And that will save money in the long run, because you've got the contractor there, and it's the drawing up of the scheme that costs the money as well. So they've got the flexibility. Okay, great. Thank you.

There we are. Okay, thank you. Joyce, the last word.

I'm going to put Brexit on the table, just because it's fairly obvious that that was a major source of funding for roads. Have you factored in what that has meant in terms of a reduced budget? My guess is it will be significant. I think when people are talking about the gains of it, I haven't seen them yet, personally. I think this is an area where, when budgets are being squeezed, we have to also acknowledge the loss of finance as the biggest harm we ever did to ourselves.

I'm not aware of those figures, but we can find out whether there's a think tank that has interrogated what's happened. I can't provide any detail today, but that would be very interesting. On Brexit, one of the areas that I think needs to be addressed—and actually, the UK Government is addressing it—concerns safety measures within vehicles. When we left the EU, a lot of safety measures that you cannot turn off in cars in Europe could be turned off in the UK. If you've got a car, for example, that will automatically brake or move the steering wheel slightly to avoid a pedestrian running out, you can turn it off in the UK, but there are safety measures that cannot be turned off in the EU. The UK Government is going to introduce those regulations to ensure that road safety is enhanced.

And one final thing, linking a few things here—finance, resilience, looking at investment that we've made to secure routes—with climate change, and that's the Dyfi bridge. If there's ever an example of putting all those things together, making a resilient community in the face of climate change, it really is the Dyfi bridge. And I just flag that up because I remember—

Used for active travel as well, as we know. 

Absolutely. I remember meeting you there a very long time ago, and I travel on it. It's made such a difference to connecting those communities, making sure that people can go to work or whatever it is they need to do, but making sure that the bus network can run as well. I just put that on the table, because I've talked a lot about climate change and resilience, but there are examples where we've been ahead of the game.

Yes, absolutely. 

And the Dyfi bridge reminds us of the cost of infrastructure as well, doesn't it? It's all the benefits, as you say, but there's a bill attached to that.

Okay. Can I thank you, Cabinet Secretary, and your officials for being with us this morning?