National Assembly for Wales

Bore da, croeso, good morning and welcome to this morning's meeting of the Public Accounts and Public Administration Committee. I'm pleased to see that all committee members are present and therefore no apologies have been received. Do Members have any declarations of registrable interests that they would like to declare? I see heads shaking for the negative, so we'll move on.

We have a series of papers to note, beginning with a letter from the Wales Cancer Alliance to myself as Chair, regarding the publication of the Audit Wales report on NHS Wales’s strategic approach to improving the timeliness of cancer diagnoses and treatment. They provide their reflections on the report. The committee will hear from representatives of the alliance on 26 March, which will allow the committee to examine the issues outlined in their letter in more detail and to explore any other areas of interest as part of our inquiry in this area. Do Members have any comments regarding the letter, or are you content to note? You seem to indicate that you're content to note.

In which case, we'll move on to our second paper to note, which is a response from the Chief Executive and Clerk to our report on the scrutiny of accounts 2023-24 of, obviously, the Senedd Commission. Five of the six recommendations we made have been accepted by the Commission, and accompanying information has been provided in response to some of these. The Commission has also provided some restricted enclosures relating to recommendation 5, which we will review later in this meeting. The Commission has noted our recommendation on reviewing the scrutiny of the Independent Remuneration Board of the Senedd. The response explains that the Commission is limited by the legislative framework that underpins the board's operations and functions. They explain the Chief Executive and Clerk's role, as the responsible accounting officer, for considering additional funding to support the board, with advice provided by the chief finance officer. The board also holds regular meetings with the Member representative group and the support staff representative group. The Commission's response goes on to say, and I quote,

'The Board and Commission are undertaking a structured dialogue which will help address some of the recommendations which relate to both the Commission and Remuneration Board’s remit, including engagement on simplification of the Determination which provides an additional avenue for establishing an understanding of the Board’s work.'

So, Members, do you have any comments, or are you again content to note this correspondence?   

Just very briefly, Chair, can somebody outline to me—it's just terminology—what a 'structured dialogue' is? Or is it just a dialogue? 

But with a structure. [Laughter.] I can only surmise, unless Owain knows better or Adrian knows better, that this is a formal dialogue rather than an informal—

Unstructured dialogue, okay. [Laughter.]

Would that be correct? Does that match your understanding, Owain or Adrian? 

I don't know anything specifically more than that, no. 

Okay. So, my comment—

Me neither, I'm afraid. 

Yes, my comment is just that—. I understand in terms of accepting the majority of those recommendations and the limitations in terms of the framework around the remuneration board's remit, but it would just be interesting to know a little more about that and when that would feed back to us in terms of the understanding of the board's work, et cetera. That's my comment, Chair. 

Okay, thank you. Yes, the good old terminological inexactitude that populates much of the responses we receive. Could you seek the clarity proposed, Owain? I think Owain's frozen.

Of course.

Yes, thank you. Any other comments or are we otherwise content to note, Members? Okay, thank you.

Then we move on to out third paper to note, which is a letter from Tim Moss, the director general and chief operating officer of the Welsh Government, to myself as Chair regarding public appointments. His letter outlines data gathered by the Welsh Government on the Welsh language skills of public appointees. This provides a breakdown of proficiency in four areas: listening, reading, speaking and writing. The committee's report is due to be published imminently and therefore these issues will be reflected in our follow-up work, which will include hearing the Welsh Government's response to our report, as well as a request for a Plenary debate on the subject. Again, do Members have any comments or are you content to note the letter? 

Chair, I'm content to note the letter and, obviously, the context behind this is all of our momentum in terms of our targets on Welsh language within our public bodies. My only comment would be, as a non-Welsh speaker, I still would—. If I didn't speak Welsh at all, I would be reluctant to be filling in any forms like this. So, it's very difficult to really ascertain the true situation. I just think that's a comment to make. Thank you.

Okay. I think the objective—and I know Members have raised this during our consideration of these matters—is to ensure equality of access. So, the options would be available according to the first language that people use, rather than further confusing matters for English-only speakers. Does that accord with other people's understanding? No comments.

Okay. Well, perhaps—

Chair, if I can just come back in—I think that's probably the best way forward. I just think there may have been some sort of apprehension from those that were unable to state that they've got even basic Welsh. And my point behind that is that it may have affected the way people filled this form in. I think we have to always be very sensitive to people's concerns about feeling that they're going to be treated differently, whether they speak Welsh or not. I think it's always about the skills that we are looking for in terms of public bodies, and people's preparedness to say they're going to learn, if they need to learn, and wish to learn. So, it's a delicate issue, but I take Adam's point—I think data is important on these matters, but we should always be encouraging people, from across Wales, and beyond, to work with us if they are the best of the best. Thank you.

Thank you. Well, perhaps we can capture this in the follow-up work we will be doing and any further correspondence or responses that that generates. So, Owain, again, can we note those points made and revisit them when we do the follow-up? Thank you. Are Members, on that basis, otherwise content to note? Thank you very much indeed.

The next item, item 2.4 of the papers to note, is from the Auditor General for Wales to myself as Chair, regarding the Sector Development Wales Partnership. Again, I don't know whether you wish to speak to that, Adrian.

If I may, please, Mark, yes. Thank you. This is quite an unusual situation, and I felt I ought to write to the committee to draw it to your attention. Because this is the first time, certainly in my time as auditor general—I think the first time since there's been an independent audit office in Wales—that I've given a disclaimed audit opinion on a set of accounts. What does that mean? Well, you'll be familiar with the concept of a qualified audit opinion, which I issue when I have concerns about an aspect of the financial statements or the governance of a given entity. A disclaimed audit opinion goes one step beyond that. So, it is the most serious form of qualification that I can give. In layman's terms, it's me saying, 'I simply cannot give you an opinion on this organisation's financial statements.' In this particular case, the issues that underlie that are quite technical; they relate to how the organisation has accounted for assets on its balance sheet. I won't go into those technical details now in open session, but if the committee wishes to understand them more fully, of course I'm very happy to arrange either a written or oral briefing to run you through that.

But if I might suggest, I think, potentially, it does open up a couple of lines of inquiry that the committee may wish to consider. Less about the organisation itself, which, as you'll see from my letter, is a very small one—it has a turnover of just over £1 million—but more to do with its relationship to the Welsh Government—two areas in particular for me. The committee has previously followed some lines of inquiry related to the Government's support for business, so I'm thinking of the letter I wrote to you just before Christmas about the investments made in TVR, the work you initiated last year around the local partnerships arrangements, the investment made in Gilestone Farm, the life sciences fund, the airport, et cetera, and this seems another example where you might want to test the Welsh Government's strategic approach to business support and how this example fits with that.

The second theme, for me, that falls from this is the line of sight and the grip that the Welsh Government has over its arm's-length bodies and companies, and, again, that's a theme that's come up repeatedly in your work, as you know. This is another example—in this case, where an organisation had its accounts qualified by me last year, for failing to follow proper procurement processes, and now this year, as you see, a fully disclaimed audit opinion. So, what was the Welsh Government's grip on that situation?

So, as I said, if you would like to pursue either of those aspects, I'm very happy to arrange a fuller briefing on the specific issues around SDWP, or to work with Owain and Fay to help craft a few questions for you to put to the Welsh Government. Thank you.

I know you've also written to Peredur Owen Griffiths as the Chair of the Finance Committee. Have they responded, or are they also considering this?

No, I've not heard from Peredur. As you know, Mark, I first wrote to Peredur, copied to you, last year, to signal that there would be some delay in the accounts. So, that falls out of the recommendations that both committees have made to me, to keep you appraised, if opinions are delayed. I felt I ought to flip that around for this issue, because this is an issue that has happened; the accounts are now complete. It's not a matter of the delay that I'm trying to draw to your attention. So, this feels to me as though it fits more naturally within your remit rather than Peredur's committee.

Can I also just clarify, before I open this up—? You refer to material assets. Are they fixed assets or current assets?

They're fixed assets. The issues around the valuation that the partnership has made of an investment that it made in a packaging line, in a company in the food and drink sector, and how it is valuing that on its balance sheet.

Okay. Thank you. Members, any comments? Rhianon.

Just a very, very basic comment. In terms of the determination on this account, what is the process in terms of getting it back in order?

For the partnership?

Yes. I mean, in terms of your qualification of the—[Inaudible.]

So, this is the end of it in respect of 2023-24. What I hope the partnership will be doing is arranging for an independent valuation of the assets that it's disclosed on its balance sheet, and if it does that and presents those to us, and we're comfortable with that, then we'll be able to move forward in subsequent years from a firmer base.

Thank you.

Thank you. 

Chair, if I may, can I just confirm that both PTN 4 and PTN 6 are being noted as part of this discussion? Can I just confirm that everyone's content with that?

Is everyone content with that? Nobody's—

Sorry, can you just clarify what you said, Owain?

Sorry. There were two letters—one is paper to note 4 and one is paper to note 6—which were issued as part of a supplementary pack of papers for you. So, just to confirm that you're happy to note both. The subsequent paper to note, paper to note 6, was the letter to the Chair of the Finance Committee, which has been alluded to as part of the discussion.

Sorry. Yes, I hadn't got on to PTN 6, but of course I should. It's directly related to this. So, I think Adrian's proposal is related to the two together. Am I correct, Adrian?

That's right, Mark. I think the second paper to note, paper to note 6, is that letter that I wrote last year that I mentioned just now to you. So, yes, there are no specific issues that flow from that, so it makes sense just to note the two together.

So, the 4 March letter of this year refers to a previous letter dated 10 February 2024 sent to the Chair of the Finance Committee regarding the late audit of the Sector Development Wales Partnership Ltd's 2023-24 accounts. The 4 March letter this year explains that, as of 19 February this year, the auditor general has disclaimed his audit opinions on these accounts. This is a highly unusual situation whereby the auditor general cannot provide either a true and fair or regularity opinion on the accounts because he has not been provided with sufficient appropriate evidence over material assets, which I referred to earlier. So, it's very much what we've already focused upon.

Just to note, Chair.

Thank you. And otherwise we'll proceed as proposed. Thank you. 

The next item, or paper to note, is a letter from the Chair of the Culture, Communications, Welsh Language, Sport and International Relations Committee to me as Chair regarding a newsletter received from the journalist Will Hayward. The Chair of the Culture, Communications, Welsh Language, Sport and International Relations Committee has written to this committee to highlight concerns raised by Will Hayward, highlighting concerns raised in a leaked internal report about the management and governance of the Welsh Government's culture division. The letter encloses Mr Hayward's newsletter article on the subject. The letter notes our potential interest in this matter.

The committee raised questions about this leaked report at our session with the Permanent Secretary and officials on 19 February. We will publish this report in due course, and the evidence heard will be reflected in this report. Members, do you have any comments or are you content to note?

Have you set a timeline for chasing that? 

The Welsh Government is still within the deadline we provided in terms of responding, so we haven't chased it yet, no. 

Which is the 17 working days for response. Okay. Any other comments or are Members otherwise content to note until we receive that response? I think that's 'content'.

In which case, I propose that, in accordance with Standing Order 17.42(ix), we resolve to meet in private for the remainder of today's meeting. Are all Members content? 

Yes. 

Thank you. All Members are content, so I'd be grateful if the clerks could take us into private session.