National Assembly for Wales

Good morning, everyone, and welcome to the Economy, Trade and Rural Affairs Committee, where we will be scrutinising the Cabinet Secretary for for Economy, Energy and Planning. And in our later session, we'll also be joined by Jack Sargeant, Minister for Culture, Skills and Social Partnership. Before I ask the Minister and her official to introduce themselves for the record, I'll just do a few housekeeping rules, if I may. Could I call for apologies? We have apologies from Jenny Rathbone and we have Mick Antoniw on the panel with us instead. There are no other apologies that I can see; every other committee member is here. I call for declarations of interest. There are no declarations of interest from anyone. Just to confirm that the meeting is fully bilingual and the headsets have the translation facilities should they be required. 

Minister, could I ask you and the official that you've brought with you to introduce yourselves for the record, please? Then we will go into questions.

Rebecca Evans, Cabinet Secretary for Economy, Energy and Planning.

Good morning. Liz Lalley, director for economic strategy and policy.

Thank you very much. Cabinet Secretary, we've undertaken two pieces of work in the last 12 months looking at the city and growth deals and the local growth fund that's been announced. The mode of delivery of these projects has been put into the corporate joint committees, in many instances, other than in the mid Wales growth deal. We had serious concerns over their delivery and the way they undertake the roles that they are tasked with. You wrote back saying you shared some of our concerns. Can you update the committee on what you have done, along with UK Government colleagues, to make sure that these growth deals, in particular north Wales, get back on track?

Yes, certainly. I'll start with the point that you raised about the local growth funds. I won't repeat too much of what I said in the Chamber yesterday when I made a statement updating on the Welsh Government's investment plan for local growth funds. But I absolutely recognise the points that were made in our consultation around whether or not the CJCs were the correct bodies to deliver the programmes underneath the local growth fund.

On consideration, I think as the CJCs already have in place the regional transport plans, the regional strategic plans for the economy and so on, and have a range of other responsibilities, they are still the right vehicles to deliver that. But crucially, we do have now this transitional year that we have agreed to, which will be set out in the investment plan. That will allow us to work on some of those points that were raised in that consultation, for example around strengthening the CJCs, making sure that we do have those correct monitoring and evaluation points in. I said in the statement yesterday that we'll be publishing more information about that approach as well.

I think CJCs are the right bodies for the local growth fund. We're working with CJCs on the city and growth deals, and actually, that's another reason why they would be the right body for the local growth funds in the sense that they've got those responsibilities around city and growth deals. It is the case that the performance has been raised by you in committee and others. We also work with the city and growth deals in terms of ensuring that we have regular engagement. Regular engagement takes place with officials, both in person and in writing. There's also a joint Government board that meets quarterly to assess the progress of the growth deals as well.

We do also have an annual assurance review that's undertaken by the Welsh Government's integrated assurance hub, and that includes evidence of performance to date against the outcomes for each of the four deals. We've talked previously with committee about how the deals are at different stages, but we are now seeing some particular progress in each of them. I don't know, Liz, if you want to add anything more about that engagement that we have.

I think only to reinforce the point that it is in everyone's interest to make this work. We, at an official level, will continue to work very closely with the CJCs to make sure that they are able to deliver the local growth fund in a way that maximises the benefit to people. We're very cognisant of the feedback and very committed to working with them to ensure that we are all doing the very best we can.

But the issue is how can we gain that confidence. It's all well and good saying that you have meetings and you have assessments coming in. Are those meetings just, 'Pass the chocolate hobnobs'? What is actually coming out of those meetings? We saw last summer, for example, in north Wales, only 35 jobs had been created as a total in that particular growth deal, and £1.8 million-worth of private capital had been brought in. And then, down in the south here, we'd obviously had the Aberthaw tendering process that was called into question and ended up costing in excess of £6 million. So, I hear what you say about having meetings,  benchmarking it, but clearly they weren't working in the first five or six years of those growth deals. How can we have confidence going into the local growth fund that you're talking about that we're going to get more rigour and more scrutiny of these corporate joint committees that are charged with doing the really important job of regenerating some of our most deprived communities?

They are charged with doing a really important job, and I am pleased now that you can see, for example, in north Wales that there is some real momentum building around delivery. Over £100 million of the £240 million growth deal money has now been committed, and the most recent external integrated assurance annual review, which was in November, did show a significant improvement, with the deal moving from a red to an amber rating in north Wales. So, we are seeing progress and improvement. Those assurance reviews are more than meetings, I would say. They are more detailed monitoring and evaluation of progress. But we are seeing significant improvement now, I think, in terms of the situation and delivery in north Wales particularly.

On the local growth fund specifically, as we take this forward now, we will look at monitoring and evaluation and agree how we will assess performance as part of the work now as we take it forward to deliver. So, we will be looking for measurable outcomes and how we can keep an eye on them going forward.

If I could follow up on that point about measurable outcomes, were there measurable outcomes before? Because you're talking as if this is a eureka moment and you've discovered measurable outcomes.

There were measurable outcomes before, but I'm talking about the local growth fund and something that is new that we will be putting in place to go forward. So, there were measurable outcomes before, but I am just concentrating on what we will be doing in terms of local growth funds.

The local growth fund will have outcome-focused key performance indicators. We'll be able to say a bit more about that in due course as well. And, of course, the Wales-wide advisory board will be a really important part of the ongoing oversight of the fund, a place to share best practice and ensure that progress is monitored as well. And, of course, we are providing funding for CJCs to strengthen their ability to deliver, and that's through the local growth fund moneys that have been received from the UK Government.

Okay, thank you. Hannah.

Diolch, Cadeirydd. Good morning, Cabinet Secretary, and apologies for not being there in person. I want to turn to the relatively still recent announcements with regard to investment in north Wales at the back end of last year and early this year—from Wylfa, Awel y Môr and the artificial intelligence growth zone. Just on Wylfa, first of all, if you could provide an update to the committee. I understand that there was the assertion that 3,000 good jobs in the local community will be delivered at peak construction. Would you be able to perhaps give an update on the role the Welsh Government will play in making that happen and how that will perhaps link to the supply chain and making sure those benefits are felt across as much of north Wales as possible? Diolch.

These are really exciting times, obviously, for nuclear on Anglesey. Just this week, we had a presentation from the chair of Great British Energy—Nuclear. He came to our Cabinet meeting, which was held in Wrexham University in north Wales. We were able to explore how we maximise the benefits of this particular huge investment. Very much our focus is around supply chains and skills, because we see those as areas where the Welsh Government can particularly add value.

On the same day, I visited, alongside Jack Sargeant, Bangor University, and we were able to talk to experts from the Nuclear Futures Institute, again, about exploring how we maximise the opportunities for innovation to happen in Wales, how we maximise the supply chains, particularly around small and medium-sized enterprises in Wales. All of that work is taking place so that we're in the best possible place to make the most of the opportunities.

Our concern now is that we really want to see that deal signed, the contract signed, between Great British Energy—Nuclear, the UK Government and Rolls-Royce. We hope it'll be in the coming weeks. I certainly would love to see that happen now before the end of this Senedd term. And then, of course, it's moving into the delivery phase. So, lots of work going on at the moment, but absolutely recognise that supply chains and skills are the areas where we think that we can add the most value.

I should also add that there's a cross-Government project board that has been introduced as well, because despite those being particular areas where we can really make a difference, it will have an impact on all parts of Government, so even when you think about the housing that will be required, for example. So, we've got a board that is exploring all of those aspects to make sure that we're ready for the opportunities ahead, and also thinking about how the investment at Wylfa and the workforce that will be needed to deliver it and so on, and supply chains, are thinking about the other investments that are happening in the area at the same time—so, those exciting developments around renewable energy and so on.

It's just making sure that, actually, we understand what's happening when, so that we're able to maximize each of those opportunities. What we don't want is to be in a position where you need an awful lot of welders, for example, you also need them in offshore wind, and you also need them in other areas, so just making sure that we're ready and understand the cumulative needs of all of the opportunities. 

That's reassuring to hear, Cabinet Secretary. Whilst I recognise where we are on the electoral cycle, and this is maybe for the next Government, perhaps you could give a bit of an insight today in terms of—. I think you touched on there the kind of holistic and cumulative impact and needing to prepare for that. Perhaps thinking as somebody who grew up in north Wales and serves in north Wales, at first glance, perhaps I wouldn't look at an announcement on Wylfa as an opportunity for somebody like me. What can the Welsh Government do, moving to the future, and hopefully that contract is signed and things move forward, to promote those different opportunities that may come as a consequence of Wylfa? It's not all engineering-type jobs; there will be other roles as well as part of that.

Very recently, Vikki Howells, Jack Sargeant and I were in north Wales again having a round-table looking specifically at skills, and that was one of the things that came through really strongly there—the skills opportunities are not just in engineering and welding. We talk every day about the need for more welders, that gets raised all of the time, but actually, there are a huge range of project management skills, for example, which will be required, and a huge range of opportunities. It was really wonderful to be alongside the Prime Minister and others when the announcement was made, and it was made surrounded by college apprentices, and just to see the realisation, actually, that huge opportunities now were coming in terms of what that might mean for their own careers was really fantastic. But absolutely, this has to be about making sure that, first and foremost, Welsh people, Welsh supply chains benefit from what is an incredible opportunity.

What sort of timeline do you think we are anticipating for these opportunities to come on stream as well? 

It will be some time when we're talking about nuclear, but in earlier time, we'll be seeing the investments around the recent announcements in relation to renewable energy, offshore wind, and so on. So, that's part of the challenge in terms of staggering those investments, if you like, to make sure that we don't find ourselves overstretched in terms of the people that we're able to provide to deliver those brilliant projects.

I just wanted to add that one of the reasons we've set up the internal board is because we recognise this is a long-term project, but actually, if we can corral our efforts early, then we can maximise the benefits as early as possible and see it through from now till the end of delivery. So, we are very much working to bring together what we can in the immediate, even in this longer term project. 

My final question, Chair, if I may, is just for an update on the AI growth zone in respect of north Wales, and particularly identifying an investment partner for that.

We might have to write to you in terms of identifying the investment partner. 

My understanding is—

It's commercially sensitive.

It's commercially sensitive, so we can take away, if you're happy, a commitment to write, but we just have to be careful about, obviously, what we say in a commercially sensitive environment. So, we will follow up offline, if that's okay.

Okay.

We are, though, working to bring together stakeholders to again maximise those opportunities. So, there's a session in Cardiff tomorrow, and that's involving a range of organisations including infrastructure providers, prime technology players and academia. So, that will be looking at the development of the growth zone, particularly in south Wales, but then we're hosting a similar event in north Wales, again to bring together all of the players who will be required to make a success of it.

Hannah, is that it?

Yes, thank you.

Okay. Luke.

Diolch, Gadeirydd. I just want to pick up on something we touched on in Hannah's set of questions around the scale of opportunity that is potentially coming down the line now for young people and those who are looking to do apprenticeships. And we've had a number of conversations and exchanges on this topic, either in committee or in the Chamber, specifically on some of the investment that's needed within the renewables energy sector and the ports as well, and this prevailing feeling at least that we're behind on investment in ports, meaning that we're behind on the ability to take advantage of some of these opportunities that will be coming in the Celtic sea.

So, I'm conscious that we're coming to the end of this Senedd now and there'll be a new Government in May, what do you think that new Government will need to focus on then to take full advantage of the opportunities coming down the line?

So, there's the £80 million that was announced by the UK Government in respect of Port Talbot, so working with the UK Government to make sure that that investment delivers what's needed to make that port as attractive as possible, but then also working with the ports themselves. So, one of the things that we've tried to do is de-risk things as far as possible, so I think the UK Government's funding assists with that. But then also the fact now that we do have a clearer line of sight, in terms of where the investment will be coming in future years, should, I hope, give ports more confidence to be able to invest.

And, again, I would encourage a future Government to continue to promote our ports prospectus. So, that's being promoted internationally through our international offices, to ensure that people who are looking to invest are well aware of the opportunities, the potential, the capacity and the capabilities that we have already in our ports, but the fact that they could certainly do more in future. So, I think that the ports prospectus has been really well received, and continuing to promote that, but ultimately I think it's about giving the ports themselves the ability to have that confidence to invest. And then also continuing to encourage those discussions with the National Wealth Fund, for example, to see if there's support that could be provided through that body.

Where are we at now with the Celtic Freeport and progressing that?

Yes, so, the Celtic Freeport is progressing alongside the north Wales free port. The final business case was formally approved by the UK Government and us in June, so now the work is ongoing in relation to getting to the point where we're able to sign that memorandum of understanding and release the £25 million seed capital. I know that the free port's considering options for a third tax site as well, so work is ongoing in terms of potentially expanding that, which I think could potentially be positive.

Just on the MOU then for a second, what have been the stumbling blocks with getting that MOU signed off?

So, I think it's just about getting to the level of detail that all partners are comfortable with. Again, this is something I'd love to get over the line before the end of this Senedd term. I think we're certainly slightly ahead in north Wales in the free port in terms of being much closer to agreeing the MOU.

I think that's right.

Okay, let's focus on energy for a second then. The sector deal has been something that we've been talking about now for almost two years, maybe a little over two years. Where are we at with getting that over the line? Do you think we can get that over the line before the end of this Senedd?

We're very close on the sector deal. So, on Monday, I met with the sector deal group, which has been working to develop the sector deal itself, and they were meeting to finalise their report. So, there were some small suggestions for further improvements that could be made to the sector deal, and I think that everybody within that meeting agreed that those changes would be practical and sensible. So, we're in a very good place. What we need to do now is to allow the organisations who are part of that group, developing the sector deal, to go back to their boards and, hopefully, be in a position for them to sign it off very shortly. But I'm really, really pleased with the work that's been done and it's going to be really helpful in terms of setting out what Welsh Government needs to do, what industry needs to do and then what we need to do together, with a range of short, medium and longer term actions as well. I don't want to say too much about the deal because, obviously, it hasn't gone through the full sign-off processes by all parties, but I hope that it will be warmly welcomed because I think that it is a really exciting piece of work.

Can I just check—? Sorry, Luke. Can I just check, because you touched on the north Wales growth deal hopefully getting over the line, you talked about the free ports getting over the line, and now we've talked about the sector growth deals getting over the line? There's going to be a lot of good news in the next month, I assume. So, can I just clarify when these have to be done by? Is it on the dissolution date, because you go into the purdah period between dissolution and the election, or can those agreements still be signed during that period of dissolution, because obviously you are still a Cabinet Secretary at that stage? So, can you just confirm the timelines, because you've talked about three very important economic drivers that are waiting to be or will imminently be signed?

So, the contract in relation to Wylfa is out of our hands. We're not party to that contract. Nonetheless, I would really like to see that happening very soon, because it's such a significant moment and it will give certainty, I think, to everyone. So, that's out of our hands.

On the sector deal, as I said, the group met to agree the final report on Monday. Again, I would hope that that would happen in the weeks before the Senedd dissolves. As I say, that depends on organisations taking it to their boards and their boards being happy to sign up to it. There are lots of partners party to it. So, I can't say it definitely will be happening, but I don't see that there are any points of controversy within the sector deal now that need to be ironed out. Hopefully, it will be smooth sailing. So, again, hopefully that's before the end of the Senedd term.

And the MOU, again, I hope that that will be before dissolution.

So, it's all dissolution. Dissolution is the key date, it is then. In the purdah period, these agreements cannot be signed and—

We will absolutely stick to the normal processes and protocols for dissolution, and—

I just wanted to clarify that. 

Yes. No, there's no intention to do anything that we shouldn't be doing in purdah. I know that colleagues will hold us to account on all of that. 

Luke. Sorry. 

No, that's an important clarification. Just coming back to that sector deal, at the moment, the thorny issues or the things that we need to see get over the line have been quite well aired over the last two years, with the sector consistently talking about the need for timely responses, for example, to applications and the need for targets in particular technology types on energy generation. So, is that something that the Government has moved on with in the sector deal, those being two of the things that have been raised consistently, with me at least, by the sector?

In relation to timely responses, we've been doing work outside of the sector deal that we can build on. So, the increased investment in Planning and Environment Decisions Wales, in planning departments within local government, and then also our own planning directorate, and also the work that we've done moving to full cost recovery, the work that we've done delegating decisions to PEDW inspectors up to 50 MW. So, all of that is seeing an increase in the speed at which we're able to take decisions.

Equally, being a sector deal, there's work for the sector to do as well. So, almost every application that goes to PEDW is incomplete or isn't of a quality that they're able to immediately start the formal work on. So, there's back and forth, and so on. So, from the industry side, there's greater work ahead of submitting those applications and submitting them in a way in which they're able to go straight into the system because all of the information is available. I think that's something that the sector can do as well.

So, I think that's a really good example, actually, of something that both parties need to bring to the table. We can speed up. We can invest more. We can increase capacity. Then the sector itself has to provide the full information and deliver quality applications as well. So, a really good example of both of us needing to improve. 

I'm just conscious that my section is coming to an end pretty quickly, but I wanted to touch on hydrogen and the Government's hydrogen strategy. Many people out there are talking about hydrogen being in this situation where it's very much a chicken-and-egg scenario. The investment is needed to get it off the ground, but the investment isn't coming from Government or the private sector. 

Granted, Welsh Government are limited in how much it can invest in this particular technology, but, of course, conversations with the UK Government could be quite fruitful in this area, given that they have an interest as well in hydrogen; we're looking to the UK Government's hydrogen strategy. What conversations have been happening between Welsh and UK Governments around getting some of this stuff off the ground?

Well, we were really pleased to publish our own hydrogen strategy very recently. The final policy was published—'policy' rather than 'strategy', sorry—on 19 January. And we've been really clear that we want to support and encourage a development and deployment of hydrogen where it meets the requirements of the UK low-carbon hydrogen standard, where hydrogen makes a clear measurable and sustained contribution to decarbonisation targets and objectives, where it contributes to a growing, sustainable economy, and where it doesn't contribute to unsustainable levels of fossil fuel use or impede our transition to net zero. So, that mirrors, in a way, our approach to carbon capture usage and storage as well, in terms of it being a tool for decarbonisation. So, we think it absolutely is a really important tool. 

We're working through officials at the moment to reinforce the critical importance of Wales projects receiving funding for industrial hydrogen projects through hydrogen allocation rounds, the UK Government's hydrogen strategy, and also through the UK Government spending review. So, that work is going on at the moment to impress upon the Department for Energy Security and Net Zero the opportunities we have in Wales. 

And then, work has also been completed to identify, develop and build an understanding of how fuel switching to hydrogen could be commercially and economically viable to the Welsh industrial sector, so work going on with industry to identify where the opportunities are. And, as a result of all of that, officials are preparing a detailed regulatory route map. So, that would outline and identify all of the regulatory controls and consenting applicable to Wales, to ensure that the wider ecosystem is fit for purpose as well, to allow the deployment. And, of course, working closely with the hydrogen sector itself in Wales, developing those relationships, and working through industrial clusters to identify what it is that industry needs. 

Okay. Diolch. 

Mick, please. 

Just a couple of questions. Obviously, Welsh Government has a heat strategy for Wales, but it does seem that it's a very marginal strategy, that most of the work and investment that's taken place has been local authority oriented, particularly around Cardiff. How serious is Welsh Government about this strategy, and what progress is actually being made?

So, one of the areas that we're putting some focus on is ensuring that we have the right regulation in place to ensure that there is a reliable and fair service. So, we're working with the UK Government on the regulation of heat networks. There's some phasing of regulations that started in January of this year, and then, also, continuing to work with the UK Government to ensure the right support structure is in place to enable and encourage development and successful operation. 

I think it is right that local authorities do take the lead, because when we look at the local area energy plans, which are developed by local authorities, I think that they are well placed to understand where the future opportunities are in terms of heat networks. Obviously, we've got the great example of the Cardiff heat network that had support from the UK Government, and a loan from the Welsh Government, totalling over £15 million in capital funding. And our Welsh Government energy service is continuing to support Cardiff with its heat energy programme as it continues to grow that network. So, there's a good example. There's definitely scope to do more in this space, but making sure that local authorities identify those opportunities in those local plans is a key priority.

Well, the Cardiff project is, obviously, one that's wholly owned and operated by Cardiff. It sounds as though, effectively, the strategy's almost totally focused on that as being an area where there's actually some progress.

But what progress is actually made? To what extent is that project successful? Because it's one thing talking about having regulations in this area in order to encourage development of energy retention, but it's another thing to actually have a strategy that actually ties in with the actual development of energy retention projects. And it sounds to me that this is really very much in its infancy, and Welsh Government involvement is, to some extent, very marginal. Is that a fair assessment as to where we are?

I think making sure that we have the right regulation in place and working with the UK Government to do that is an important step, but it's not just something that's happening in Cardiff. So, Swansea and Newport have both had funding to look at the feasibility of heat networks. They've had that funding from the UK Government, but they're also, again, being supported by the Welsh Government's energy service as they move into the second phase of that funding. So, they're looking at what initial designs might look like for heat networks. And then Tanygrisiau in north Wales also has a project looking to deliver a heat network in a rural area. So, that's a significant opportunity to support the decarbonisation of an existing industrial operation, as well as linking to the hydropower resource, which is located next to the village. So, there are developments happening in different parts of Wales, but we do see this as an area of potential increased activity in future. But those local plans will be critical to that.

So, it's an area where there is potential for the future at the moment, setting a regulatory framework within which that can develop. I notice, of course, places like Taff's Well in my constituency, in fact, where the thermal spring is being used to heat a local school.

But, of course, one of the areas that has been referred to by Welsh Government in the past, and I think you've raised this as well, is the issue of mine water, in terms of thermal energy and energy retention. Now, that's something that's been talked about for 40 to 50 years. Obviously there's a little bit of work and investment taking place in respect of work in Ammanford, of course, being a big mining area. But this is an area that is absolutely fraught with geological and technical problems. As well as where the former mines are located, the access to that—. What progress is actually being made in that particular area as well? And is the regulatory framework you're talking about also something that would cover the development of the thermal energy from former coal mines?

So, we've developed mine water maps. The Welsh Government commissioned the development of those to explore the potential uses of mine water, and we're able to support public bodies, again through our Welsh Government energy service, who are interested in exploring further if there are opportunities to use that mine water heat. And we're also continuing to work with the Mining Remediation Authority, working with them to identify new projects. So, we worked closely with them in relation to the Ammanford project, which was referred to, and exploring the feasibility of several projects in the south Wales coalfield. So, those will vary from new build to retrofit of existing properties, if we're able to use that heat. So, again, really, this is about exploring the feasibility of projects and we're providing support to do that.

Mick, any more questions?

Just to summarise, really—. Just to summarise very quickly on that—so, the reality is that this is really about exploring options and potential for the future. In terms of actual practical development, it is still really, almost, right at the very, very early stage. Is that a fair representation—just to have an understanding?

Yes, that's fair to say. We are at an early stage in deployment, but having done really important ground work as well in terms of those mine water maps, which will be really important, and, again, the work that we're doing identifying potential future projects through the Mining Remediation Authority. We have the Ammanford project, which is a really, really good project, but it's a single project at the moment, with scope for more in the future.

Okay, Mick?

That concludes the areas I wanted to explore, Chair.

Thank you very much. Alun.

Thank you. We started this session with the Chair asking you some questions on the role of CJCs and all the rest of it, and we had a similar conversation in the Chamber yesterday. I'm interested to understand some of the rationale behind your decision making. Again, we explored some of these issues in December; I recognise that. But if you look at where I'm looking at economic policy from, in the Heads of the Valleys, you've got local authorities that don't have the capacity to deliver economic development at scale, you've got a CJC that's disinterested in doing so, but hasn't really delivered anything in, certainly, the last four years, and a Welsh Government that's failed to spend the money on Tech Valleys and failed to plan for the completion of the A465. So, that doesn't paint a very rosy picture of delivery, does it?

So, I was hoping to be able to give you some good news on some additional funding that I'll be allocating through the Tech Valleys—

But funding is only the first step; I'm interested in spending it as well. I stood with Ken Skates in 2017 announcing £100 million of commitments and we've failed to spend half of it.

Okay. Money that—? I'm seeking some advice at the moment on some further spend that we can make in the Tech Valleys area. Again, I was hoping to be able to have that good news to bring to you today, but we haven't been able to complete that. But just to reassure colleagues, that remains an area of particular focus for me between now and the end of this Senedd term, over the coming weeks. Because I recognise the challenge that there is and the announcement in relation to the funding that had been, as you say, allocated to that. And like everybody else, I want to see that making a difference on the ground, both in terms of tech skills, so that people are able to access those good careers that we want for them, but, then, also small and medium-sized enterprise development to improve the ecosystem to support new developments in the area as well, particularly between Merthyr and Ebbw Vale.

I don't disagree with any of that, but it doesn't answer the question. You know, we all share those aspirations. Even Andrew shares those aspirations across the other side of the Chamber. But the fact is, I'm interested in delivery, and the Welsh Government has failed to deliver on the commitments that it has made. And my interest is not simply in registering that failure, but trying to understand why, so that we can deliver in the future. And it seems to me that what the Welsh Government doesn't have is a vehicle that is able to deliver the aspirations that you have outlined in answer to my first question and outlined in previous sessions, which I don't disagree with.

So, at this point in the Senedd term, clearly, we're not going to be able to develop a new vehicle for that, but, clearly—

But you can learn the lessons.

And I'm sure that we're all very keen to do that as we have our discussions outside of committee in terms of what the future might look like. But in terms of learning the lessons, I think that taking this time through the transitional year to bolster CJCs, to make sure that they are able to deliver, and make sure that we take seriously all of those points that came forward through that consultation, which did question whether CJCs were the right vehicle to deliver—. I think taking up those challenges, making those changes, working alongside partners in local government to bolster their delivery ability, I think, will be—

So, you recognise my fundamental analysis of failure, and I appreciate and accept that, but my concern is that in recognising that there's been this failure to plan and deliver, the Welsh Government is now repeating the errors of the past rather than learning the lessons.

So, I wouldn't recognise the characterisation in the same way, however I do recognise the points that were made in the consultation, which we take very seriously, around whether CJCs are the right vehicles to deliver on the local growth fund. Local growth funding—that will start in April. We need a vehicle to be able to deliver that funding. So, in this first year, we're using the existing lead bodies under the shared prosperity fund arrangements, because that's what local authorities actually asked us to do. They made a compelling case for that, and we're using the same methodology for the funding. But equally, there are things that CJCs have, in terms of their statutory functions around economic development, regional transport planning, land use planning, which do, I think, lend themselves very well to the delivery of projects such as local growth funds.

Okay. I don't want this session to be too valedictory in tone, but none of us can escape the tyranny of time. So, I suppose we are where we are. But you've been in post now for some years, so I'm interested in the advice that perhaps you would give to a successor in post. Why do you think these failures have occurred? What do you think Welsh Government should be doing to address both the failure to plan and the failure to deliver?

So, I think I've been in this role about 18 months, but it feels longer because it has been a whirlwind. Again, I would push back on the failure narrative. I think there's been an awful lot of good work, an awful lot of really important investment. And also, let's remember that that good work and investment took place through a period of austerity, when we had less opportunity to invest, and particularly a period of austerity that included reducing capital funding every year. And we all know how important capital funding is when we talk about commercial premises and things that we want to invest in, which, actually, ironically, with the increased capital in terms of the local growth fund, will allow a greater focus to go on things such as research, development and innovation and commercial premises and so on, which I know we've talked about being developed around the Heads of the Valleys road, to make the most of that funding.

Austerity doesn't go any way to describing the failure to deliver Tech Valleys. That was a Welsh Government project, with Welsh Government funding, so I don't think you can say it's a failure because of austerity—it's a failure of Welsh Government. So, how would you characterise the Tech Valleys scheme in terms of delivery?

Clearly, we would want to deliver more. I always want to deliver everything that we have promised to deliver, and that's why I'm putting such a focus on what more we can be doing in this particular space to look at—particularly around the skills piece, because there's an awful lot of good work already going on in that, and then also around the investment to support SMEs to develop in the area.

But we've had the opportunity to do that, of course, and it hasn't occurred. This is why I'm trying to press you hard on delivery, because you and I, I would've assumed, share almost 100 per cent of that vision. I've got no criticism to make of the vision of Welsh Government and no criticism to make of the ambition either. My concern is how do we actually make it a reality. And I look at examples in other parts of, say, western Europe, where they have made it a reality. As you know, I was in Flanders last June looking at what's been done there by the Flanders Government in the Flanders coalfield, and I'm seeing a world of difference between there and here. That can only be explained in terms of delivery vehicles, the mechanisms by which we deliver policy, and the way in which we plan to deliver policy. I see that as really lacking in Welsh Government, because we seem to want to sort of manage the present rather than plan the future.

So, I'd say in planning the future and looking ahead, the investment plan, which we talked about yesterday around the local growth fund, will be critical and a really important opportunity. I won't repeat it all, but there was no question that the right priorities have been identified in terms of productivity and reducing economic inequalities, which is essentially what we're talking about. So, having that investment plan right, making sure we've got the right arrangements around monitoring and evaluating delivery on the ground, will be important, but then also working through the CJCs to make sure that those regional investment plans that they are delivering also hit the mark in terms of the delivery of support for SMEs and so forth.

Yes, the same CJCs that have failed to deliver for the south Wales Valleys and for Blaenau Gwent over the last four years, and that is my concern.

We haven't got much time, and I want to just ask you one question very quickly, about defence. I was very pleased to see the agreement signed with the UK Government last week on support for defence. I want you to, if you could, Cabinet Secretary, outline to the committee how you see the Welsh Government structuring its support for the defence sector. One of the concerns I have about Welsh Government is that it's too process-orientated, not agile enough, doesn't deliver on some of the ambitions that we share—doesn't have the machinery in place to do so, or perhaps the culture to do so. We are entering a very critical phase in terms of support for defence industries at the moment, where agility, ability to meet demanding deadlines and, actually, give Wales a competitive advantage are going to be crucial in the coming months, and you and I have spoken about different projects privately where that hasn't been the case. So, how will this agreement signed with the UK Government change fundamentally the support offered to the defence sector in coming years?

So, I think that we do have already a competitive advantage in terms of being early, as an announcement and an agreement with the UK Government, as compared to other potential growth deals across the UK. Also, we've got a competitive advantage in terms of some of the things that we have here in Wales that just aren't available elsewhere. So, some of the testing ranges that we have, the training ranges and so on, it does put us in a different and better position than other parts of the UK.

Something else, though, that I think that we do have and do really well here in Wales is that partnership working. So, the work that we've done on the defence growth deal was done in partnership with the armed forces, with SMEs, with the primes, to make sure that we do have the right focus. So, I think that we are in a really, really good place on this. At the launch of the defence growth deal we had lots of businesses with a footprint in Wales and SMEs in Wales, all of them really excited about the opportunities and what it means for potential growth in the sector in Wales. And then, also, a lot of this has to—. You talked about needing to be agile and so on; it really does need to have a strong industry voice as well. So, we're developing a defence cluster, which I'll be able to say more about shortly as well, to have those, to have industry working collaboratively together to identify opportunities and make the most of potential funding. So, I do think we're in a really good place on this to be able to maximise the opportunities.

It would be useful, perhaps, if the Cabinet Secretary were to write to the committee on that cluster concept and how you expect that to work. I was always very taken with the structures that were put in place to support automotive and aviation industries in the past. They seem to me to be a very effective mechanism of bringing both the industry and Government together in order to agree the sort of support that the public sector in its widest sense can deliver to support economic development. I'd be concerned that we're able to deliver a similar sort of mechanism and structure to support and sustain the defence industry as we move forward into this critical phase.

Okay. I'm happy to write to the committee with more detail.

Your grid on announcements for March is going to be very busy, isn't it, Cabinet Secretary? I can't think why. Sam.

Thank you very much, Chair. Good morning, Cabinet Secretary, and Liz as well. At the beginning of the year we had some good announcements around the Erebus project and, of course, the Awel y Môr offshore wind project. Can you talk us through getting those two projects across the line? What was the Welsh Government's involvement in getting those two projects greenlit?

So, this is part of the work that we've been doing, really to create what we call an enabling environment. So, actually, this is going to be an important part of the sector deal as well. It's about ensuring that we're using the powers that we have—so, around the consenting process, around the Infrastructure (Wales) Act 2024 and so on—trying to make sure that what we're doing is very much about creating an open place for investment and to identify Wales as a place where people can do business in these particular fields. So, I think that the other relationships that we've developed, the work that we did collaboratively with the UK Government, are really important as well, and the work that, more widely, we're doing with the industry to establish those relationships and to highlight the special opportunities that exist around Wales. So, building on that, then, we had the investment summit that identified particular areas—clean energy and so on—that are ripe for further growth.

Do you do you think it's all timely, the process?

In terms of taking—

Its speed. 

So, again, this is something that we've been trying to do in terms of speeding up what we have control over in terms of the consenting process. We've made changes through the Infrastructure (Wales) Act 2024, for example, to ensure that the correct information is available upfront, whilst also ensuring that there's proper engagement with local communities and so forth. So, we always want to make things happen more quickly, which, again, is why we've put additional funding into Natural Resources Wales so that they can undertake their work more swiftly. Part of the sector deal, really, is about trying to ensure that decisions are able to be taken more quickly, but, again, it requires both sides to bring forward—.

I understand. It's a tango, isn't it? Both sides have got to play their part in bringing these projects forward. I've been fortunate enough to be doing this for five years, and I mentioned the Erebus project in the first year I was elected. Previous to that, I was a county councillor, where the Erebus project was well known in the community. We're now in 2026. It's really slow, isn't it? To be able to get projects like this off the ground, delivered in Wales, is slow. Is that why we're losing some of our first-mover advantage, because we just can't do things quickly in Wales?

I don't think this is a reflection on Wales and the time it takes to do things here, as compared to other places, by any stretch of the imagination. We're working to try and get things done as quickly as we can in Wales. In lots of cases, you're relying on other parties, you're relying on developers themselves, you're relying on, potentially, UK Government, you're relying on various funding cycles and so forth.

So, again, I appreciate some projects have been in the pipeline for a very long time, but I also hope that people have seen over recent times that things have been happening much more quickly. And you've seen a spate of really exciting announcements in this space recently, but the point now is about getting them to delivery as quickly as possible.

Because then the other point is: how do we maximise the benefit of these projects when they are eventually, hopefully—fingers crossed—built? And with that lag time you'd expect—and you've mentioned it previously about welders and the ability of transferable skills from one sector to another—but, in terms of infrastructure to deliver some of these projects, we're not on the field in Wales, are we? 

So, I've said before that we're not going to be able to deliver every single aspect of a project.

But what can we deliver? 

But what we can deliver is we can deliver really, really highly skilled people who are going to be taking home wages as a result of those jobs.

Okay. In which part of the project then? Because the project is vast, isn't it? If you're looking at floating offshore wind, it's not just the construction element of it; it's the installation, it's the operations and maintenance, it's the backroom human resources department—it's a vast industry. Where do you see jobs in Wales being in that sector? 

We can do all of those things in Wales, and we can do all of those things really well. Some of the manufacturing is going to be more challenging. So, what we've been doing is working to identify where the gaps might be in the supply chain and where we can fill those gaps. Because, obviously, we're already dealing with well-established global supply chains in some of these parts. So, there are things that we can do and, using the Crown Estate's multi-hundred million pound funding for supply chains, we can make sure that, when we identify those gaps, supply chains can pivot their work to fill those gaps. So, I think there are big opportunities to use that funding. And the funding is already finding its way to SMEs in Wales.

Okay, and the opportunities are well known and the arguments rehearsed. I've met with organisations, businesses, who are too small on their own, but, collectively, they are able to bid for some of these projects—Celtico being the example. But, in south Wales, we've got Port Talbot and the Associated British Ports docks there, we've got the port of Milford Haven, the UK's largest energy port—20 per cent of the UK's energy comes through that port. Surely, those two are strategically placed to be at the forefront of delivering these projects, yet Avonmouth is moving far quicker. Why?

So, they are absolutely at the forefront of being able to deliver on those projects. Ports, as I said before, today need confidence to be able to invest in those ports so what we do have now, I think, is a greater pipeline of activity, a greater visibility of the work that's going to be coming through in future years, and that should give greater confidence, I think, to ports to be able to invest.

Okay. And then you didn't mention the floating offshore wind task and finish group, as part of my first question. But how is that group? How did that group work? Was it a successful collaboration, taskforce, of bringing these people together?

Yes, I believe it was a successful model, and actually we've leant on some of that for the sector deal more widely, because we looked at the themes, which I think read across to energy more widely than floating offshore wind. The enabling environment was one of those key areas that we looked at through the floating offshore wind task and finish group, but then also those supply chain skills and consenting and other streams of work, actually they were a really good fit as well for the sector deal. So, as a model of working it was good, and I think having sector leads who were experts in skills or supply chain and other things really helped as well in terms of handing over to them to lead on that work, and for them to use their really good networks to access information, advice and so on. 

Okay. And when I challenged you in spokesperson's questions earlier this year, one of the recommendations of the group was the implementation of an implementation group, which, after recommendations last summer, in January hadn't been set up. Has it been set up now?

So, we don't have a specific implementation group with those partners on it, but what we are doing is implementing the recommendations through the various streams of work that I was able to update on at the last committee. Again, I'm more than happy to provide a more detailed written update on all of the various different workstreams.

Yes, please, because it sounds like the task and finish group worked really, really well, gave us some good recommendations, but actually we're not going to take one of those recommendations forward because we're doing it differently, and it just feels that the process is very slow and lethargic and not—. And this isn't a criticism of individuals; this is more of a systemic problem, I think. In trying to deliver massive projects like this in Wales, and the UK as a whole, it's just becoming really difficult, and I can see why there's more investment going overseas to areas that are able to green light projects, provide support, get out of the way of businesses far quicker than sometimes here in Wales. And I think floating offshore wind is a prime example where we should have been at the forefront of this, given the opportunities in the Celtic sea. Our ports should have been there right at the beginning, and they have been, but we're most probably going to be seeing the shipping in of product from other ports in continental Europe, maybe Harland and Wolff in Belfast, and our domestic ports are going to be picking up operations and maintenance rather than the construction element of it, where the main value is. That's going to be a failure in the delivery of these projects, is it not?

I think, actually, it's not the case that we're seeing floating offshore wind projects taking off in other parts of the world. What you're seeing, actually, is a withdrawal by industry from other parts of the world in terms of offshore wind and floating offshore wind, but actually we're bucking the trend at the moment in Wales in terms of the announcements that have been made recently. And also we've identified that additional 15 GW off the coast of Wales, which is a huge opportunity as well. So, the announcements that we've had recently I think are, actually, going against the grain of where we're seeing projects being cancelled elsewhere in the world.

Which will raise the cost of the projects, because it all comes off the back of Donald Trump saying, ‘Drill, baby, drill’, and then a lot of these big organisations and companies said, ‘Well, we'll continue in hydrocarbons rather than in renewables.' There was a scaling back of floating offshore wind, which we've seen, but then, if we're continuing in that avenue, which is to be welcomed, because we need to bring new jobs and new opportunities and prosperity into these areas, the cost of delivering those projects, because of economies of scale, is going to be far greater, isn't it?

These are already economies of scale, when we're talking about some of these projects. They are huge-scale projects. I do think it should be welcomed that, actually, Wales is staying the course in terms of being able to attract this kind of investment. Even closer to us in Europe we've seen projects being cancelled, but there is still a real recognition that opportunities around the Welsh coast are the best opportunities there are.

Okay. Thank you, Chair.

Thank you. Thank you, Cabinet Secretary. Thank you, Liz, for attending this section of the scrutiny. We'll now break for a commercial break for five minutes, while the lifeboat comes in in the form of Jack Sargeant, and we'll continue at 10:35. We'll go into private session.

Good morning and welcome back to the second evidence this morning of the ETRA committee, taking evidence from Rebecca Evans, the Cabinet Secretary, and the Minister Jack Sargeant, and their officials. As we have just come out of private session and are going back into public session, I will ask the panel of witnesses to introduce themselves for the record, please. I'll start with you first, Jo, if I may, and then go down the line accordingly. 

Hello. I'm Jo Salway, director of social partnership, employability and fair work.

Jack Sargeant. Bore da. Minister for Culture, Skills and Social Partnership. 

Rebecca Evans, Cabinet Secretary for Economy, Energy and Planning.

Liz Lalley, director of economic strategy and policy.

Thank you all very much. Minister, could I focus on those not in employment, education or training and the increase in the number of NEETs in Wales? In the last year, that figure has gone up by 9.5 per cent to 16.3 per cent of all young people between the ages of 16 and 24, as opposed to a UK figure of 13.5 per cent. Especially when you look at the gender balance as well, it's far more pronounced amongst boys than it is girls. You're talking 18.3 per cent, and that's up from 11.2 and 13.8. That's up 7.5 per cent. Those figures are quite damning, to be honest with you. What is your remit as Minister of skills doing to address such an uptick in those figures amongst NEETs in Wales?

Thank you, Chair. Firstly, can I start by recognising the NEETs issue in Wales? I think it's important that we do recognise and we do work towards trying to drive the level of NEETs down. I think it's an issue not just in Wales, as you point to, but I do recognise what you've said. There are a number of challenges that have happened across the last few years that have been a cause for this, and I think, particularly in young people, it's not because of unemployment but it's their disengagement with the employment market and the labour market as it is.

So, what are we doing about that? Well, we've got our young person's guarantee, which focuses, through Jobs Growth Wales+, on giving them employment support to get them ready for industry and employment. But what are we doing further to make sure we respond to the challenges that you've said? You will have seen and you've heard me say before about the employment support programme that we're currently in the process of developing, and we're learning all of those lessons, recognising what you've said already, learning the good lessons from the young person's guarantee in shaping the new delivery, which will help respond to some of the NEET challenges in front of us. So, we're taking action now through the young person's guarantee, which has seen success for young people in that area, and we're looking to the future as well, strengthening and enhancing the programme offer to support young people into the workplace.

But it is a fact—and you've focused there, Minister, on the young person's guarantee, a specific Government policy—that the numbers in Wales have gone up dramatically as opposed to other parts of the United Kingdom, and, in particular, that gender split where there's a real problem amongst young men, young boys, if you like, 16 to 24. So, the young person's guarantee hasn't worked has it, really, when you look at these figures?

Well, no, I think the young person's guarantee has been successful for lots of people, thousands of people, across Wales where we have seen successes. The young person's guarantee was set up in a different time. We've seen real challenges over this period. We expected, when we created the young person's guarantee, to focus more on unemployment rather than inactivity in the employment market and the labour market. 

What we're trying to do now with the new employability support programme and the programme that we're developing is to create a better model that works on the strengths of the young person's guarantee, but also allows for flexibility in the trends of the labour market. So, I don't take the point that it hasn't been successful; it's supported lots of people across Wales, and we should be proud of that and celebrate that fact. There is more to do in this space, and we're committed to doing that. I think the work that we'll look to do through the employability support programme will go some way towards helping further enhance the offer.

I take your point on young men in the market. It's something that we've heard as well through the evidence-gathering sessions that we've seen, and we'll want to put that right. I hear clearly what you're saying, but I do think the young person's guarantee has been a real success for lots of people across Wales. There is more to do in this space, and we're committed to doing that.

So, this new offer that you're bringing forward, what will it do to specifically arrest that huge jump, and also the big gender imbalance that we're seeing as well, then? I mean, you don't accept my point that the previous scheme has failed, but you're saying the new scheme will learn the lessons and be able to address these issues.

I'm not in a place today to tell you what the new scheme will do, because it's being developed as we speak. What we've done so far is engaged with lots of stakeholders in this space. It's going through the procurement stage now. So, I'm not in a space to tell you exactly what the programme will do. What I'm keen for it to do is take the lessons from where the young person's guarantee has worked well for people, but then look at those particular areas like young men, like those young NEETs, where we can do more. So, I think there'll be a number of things that it will look to do. One of them might be more supported employment, the job-coaching type element, but I can't tell you exactly what they will do, because we're going through that procurement phase and there are procurement rules around what we can say and can't say to make that a fair procurement.

So, the successor scheme might not even get off the ground if there's a change of Government come May, or is the successor scheme going to be in place and contracted prior to dissolution, which is only five weeks away?

We're going through the procurement stage now. Taking the delivery forward will be for a future Government to do. I'm keen to make sure that, when this Senedd term ends, it's in a position where the next Government—and I hope I'm part of that Government—can take forward the scheme and it's in a good place where a future Minister can carry on with that work and it will be a good, evidence-based programme whereby they can make the decision to support the people of Wales. It'll build on the successes that have gone, but it'll go further in the future as well. But, as we say, it's going through procurement now, and it will be for a future Government to respond to.

Okay, thank you. Mick.

A couple of questions to you, Minister. I'd just like to ask you a little bit about devolution of employment support, something that's been discussed in the Senedd many, many times. I know the discussions are limited at the moment to the devolution of non-Jobcentre Plus employment support. Could you just clarify what it is you are discussing at the moment? Could you clarify what those non-Jobcentre Plus items are that you're looking to devolve? Just for the record. Then, I'd like to follow on a little bit.

Thank you, Mick, for that. The commitment from the UK Labour Government is to devolve non-jobcentre employment support funding. We're having those conversations with Ministers now around the devolution of the funding of non-jobcentre employment support.

Could we just have a bit more information about what are those areas of non-Jobcentre Plus funding? Where are they at the moment? What do they actually relate to that we are looking to potentially take responsibility for?

They're UK Government schemes at the moment, and the commitment from the Government is to devolve the funding for that. Where I want to get to when that commitment is with us is to be able to be in a position where the employability support programme, which I've just referred to to the Chair, is able to respond. So, we'll have the devolution of the funding, and it's my ambition that the Welsh Government creates its own programme using that funding, not a repeat of what's happening in the UK Government at the moment. So, I'm meeting with the Minister for Transformation a week on Monday to further that conversation, where the devolution of the commitment for that funding to be devolved will be of discussion. The exact programme, Mick, once that commitment has been committed to and delivered, I want that to be for Welsh Ministers to decide, and we'll design that alongside the employability support programme, which is going through. So, I can't tell you what exactly that will look like. It will focus on some of the good things that I've referred to—Jobs Growth Wales+ is in scope, Communities for Work Plus is in scope, ReAct+ is in scope—but also the new area where we're going through procurement now.

Are you able to give an indication what is the amount of funding that we're actually talking about? What does it add up to, sort of, in total? 

We've got that figure. I can't remember that figure off the top of my head, I'll just see if officials do know that.

It depends a lot on which programmes. There's actually a lot of change going on at the Department for Work and Pensions level as well, so it all depends on where the line is drawn and it's subject to the negotiations.

We can provide a further note, Mick, on funding following our meeting with the Minister.

I think that would be helpful. It would be helpful to understand what the various programmes are and what they actually amount to, because that's obviously relevant to consistency in funding into the future if these areas are devolved. Because unless they are tied into specific consequential funding, if they are things that are continually changing or supplemented to consequential funding, then it's about understanding the certainty of what it is you've got to plan ahead with in the future.

Can I ask what are your concerns about how this might interlink with the fact that Jobcentre Plus is not being devolved? Because it seems to me that the two are so integrated that there isn't a logic there, and to some extent, it's partly self-defeating if one part is devolved and the other part isn't, because of the nature of that integration. What discussions have you had with the UK Government about concerns around that, or is this really a first stage?

I think it's a first and an important stage. I want to see the commitment that the UK Government committed to being delivered and that funding coming across so that we can help shape our own programmes with the work we're doing on employability support.

As we've said, those negotiations continue with Ministers. I have my meeting with the Minister for Transformation a week on Monday and will happily come back to you, Mick, with what more we can say on where those negotiations get to. Look, I take the view that the best route where employability support is offered is that closest to home. We've seen that, I think, in the employability support that we do offer now. We need to do more and we are looking to strengthen that through the employability support programme. Of course, we will have continued conversations with Ministers in the UK Government around that, but we're very keen for the commitment from the UK Government to be delivered and that's what my main focus is on in these final weeks of the Senedd term.

Thank you. I'm glad you used the word 'commitment', because I take it, then, that the understanding is that this is something that will happen; it's purely the mechanics as to how it is done and the precise timescale for it to be done. But it is something that is definitely happening, as opposed to ongoing discussions that, sometimes in the past, have gone on without end.

Can I ask you just a little bit about some of the comments that have been made by the Learning and Work Institute Wales and the Institute of Directors? They've really talked about the issue of tackling economic inactivity and views that this is an area where there is a real need for strategic investment. What are your thoughts about that? You've partly started talking about it, but this is an area that there's real concern about, particularly with the high youth unemployment levels. These are things that apply across the UK, and, obviously, there's a lot of progress in terms of things like apprenticeships and so on—they're achieving close to the 100,000 mark—but this is, clearly, an area for strategic investment in the future. What are your thoughts on that and to what extent is strategy being developed around that to take on board those points that have been made by the institutes, and so on? 

Thanks, Mick. I think I partly answered some of that in relation to the questions from the Chair, recognising where we are with NEETs and the work that we need to do, but also recognising the work that we have already done in the Government through programmes like the young person's guarantee, through programmes like the apprenticeship programme as well. I'm pleased that you mentioned that.

I think that the response to all of this comes through the employability support programme, and, as I've said, that will take forward the positive things and the good experiences that we've had across a range of programmes for people across Wales. We'll look to strengthen that and enhance that in the future, responding to some of the comments that the Member has referred to and others. We've done this to date in partnership and it will carry on in partnership. So, we've had a range of stakeholder sessions with people from across Wales, and organisations and individuals as well, to help us shape the future of our employability support programmes, going forward. I hope that once the procurement goes through, we will be in a better space not only to respond to those challenges now, but also to give us the flexibility in the offer where, if future events occur or labour market challenges arise, then we'll have the flexibility within the employability support programme to respond to them. I think that's one of the big differences that we'll have in this programme in the future from the ones, perhaps, we've had in the past.

We are going to have to move on, Mick. The clock, sadly, has beaten us on that.

Thank you, Chair.

Hannah.

Thank you, Chair. Before I turn more broadly to the topic of apprenticeships, I just wanted to pick up where we left off in the previous session with the Cabinet Secretary around those recent announcements of investment in north Wales, predominantly around Wylfa and renewable energy at the likes of Awel y Môr, and, obviously, now we've got things like one of the new train stations at Deeside industrial park. I just want to pick on, Minister, if I can, actually—. We touched in the earlier session on the skills part of that, ensuring that communities and people across north Wales benefit from these investments when they come onstream, and we talked about the construction phase. So, I know there was a recent announcement about the new construction apprenticeship, so I wonder, Minister, if you could perhaps expand on actually how that will fit in and align with these announcements and the projects in the pipeline, but also how we can expand on what's already there. I use the example of the RWE-supported course at Coleg Llandrillo in Rhyl, which links with the renewable energy sector. If you could provide an update of actually how that could link with that pipeline of proposed projects and how communities and individuals can benefit right across north Wales, I'd be grateful. Thank you.

Diolch, Hannah. There have been some major, major announcements in north Wales. I didn't watch the Cabinet Secretary's evidence session. Unfortunately, I was in the social partnership council, but I'll take a look at that later on, so, hopefully, I complement the Cabinet Secretary in what—

It's blockbuster stuff. 

I'm sure it is, Chair. But there have been some major announcements from both the Welsh and UK Governments. Wylfa's one of them and the AI growth zone is another. You mentioned the offshore wind announcements, and, of course, we have the investment zone in Wrexham and Flintshire that will benefit advanced manufacturing companies there.

Chair, the Member mentioned the RWE apprenticeship programme. It was great to be in the offshore wind operations base in the Port of Mostyn and, I think, the Member's constituency, during apprenticeship week to meet apprentices there to see their gold-standard approach to that programme. I met one apprentice there who's also in the Skills Competition Wales, and I've worked alongside these people in the industry. This is the very best training that we're offering people in Wales, and we should be proud of that. It was pleasing to note that they had openings for further apprentices in the future because of announcements like the ones that have been made, which I'm sure will benefit Hannah's constituents and other people across north Wales.

On the broader point, we hosted a north Wales skills summit with the Cabinet Secretary, me and Vikki Howells, the Minister for Further and Higher Education, in January, which was focused on all of the major announcements that have been happening so far. They're all in different phases, and they all have different skills needs, but one of the needs that they will all have, I think, is the construction phase of these major projects. And we heard in the room about the importance of a level 2 construction apprenticeship. We announced the level 2 construction apprenticeship returning in certain areas, with more to come when Medr complete their framework review, responding directly to industry's needs. So, we were very keen to make sure local people in north Wales benefit from those announcements, and I think the skills system, I hope, will be set up to enable that to happen. Just to make sure that we're lining all of the announcements up, I've asked officials this week to appoint a Welsh Government lead to respond to the skills needs of north Wales and work with major stakeholders who have an interest in this, and I'm hoping that will be done very soon.

Thanks for that update. Just more broadly, then, Minister, will you provide an update to the committee on the Welsh Government's target for 100,000 apprenticeship starts this term? I know there's been some discussion around it, but perhaps it's an opportunity just to update this committee today on that.

Yes, thank you. I made the announcement in the Senedd during apprenticeship week. We've made and hit the programme for government commitment of creating 100,000 apprenticeship starts this Senedd term, and I'm proud that we've done that—that's thousands of people across the whole of Wales. And I'm particularly proud to have made that announcement during apprenticeship week, because I've met and seen the benefit of that type of programme going forward. The management information from Medr is out there and we've achieved that target.

I've got two supplementaries on this, if I can just butt in for a minute, Hannah, please. Luke first, and then Alun.

Diolch, Cadeirydd. I'm really struggling to understand the discourse around Government saying that it's hit the 100,000 target on apprenticeships, and I'm just looking at the timeline now. On 22 January, Medr published figures showing just over 91,000 apprenticeships were delivered during the Senedd term. A couple of weeks later, as you've already highlighted, you made the announcement on 10 February in the Chamber that the Government had met the 100,000 target. Now, my understanding, and the understanding of the sector, is that the Government changed the metrics it was using to measure its target to a non-rigorous measure that included those apprenticeship starts that ended within the first eight weeks of that start. So, to me—and that's considering, by the way, that the Government was using the most rigorous measure throughout the Senedd term and the previous Senedd term—that looks like the goalposts have been changed.

No, the—

So, the sector's wrong on that point, then.

I think I should be allowed to answer the question, Chair. We are using Medr's management information, real-time information that shows the start of apprenticeships. I think that is a good measure to use when looking at monitoring figures across the Government. It's really important that we use real-time information. It allows us to invest and make decisions further, like the repurposing of £4 million in the apprenticeship programme to the budget that we discussed in one of the previous sessions. And the management information is there to be seen, where we've met the target and I made that announcement during apprenticeship week.

But Medr's data said just over 91,000 apprenticeship starts had been reached, and the sector's and, as I said, my understanding was that the Government changed the metric by which it measures those apprenticeship starts. The point here is that by changing to the non-rigorous measure, it looks like you've achieved your apprenticeship target. By the rigorous measure that the Government has been using throughout the Senedd term and the previous one, it doesn't look like you've reached the apprenticeship target. So, there's a bit of clarity that's needed here, because there's a number of people—not just me, but as I said, the sector—that are casting doubt on whether or not the Government has actually reached that 100,000 target.

I'm very proud to have reached the 100,000 target. The management information is there. It's there to be seen for everyone. There were the two figures that Medr has published, and one of them was on management information. We gave this opportunity to lots of people across Wales. These are life-changing opportunities that we've supported with huge sums of money across this term of Government and the previous terms of Government as well. I think that's something that should be celebrated, Chair, and the management information will show at the end of this Senedd term that we've not only met the target, we've exceeded the target.

So, the sector's completely wrong, then. The people who are who are delivering these apprenticeships are wrong when they say that the Government have changed the way in which they measure.

I'm not going into the politicking of the issue, Chair.

It's not politicking. There are two measures that have been used to measure this—that's not politicking. If anything, if the Government are changing the measure by which they're measuring whether or not they've hit that target, the politicking is happening from the Government side.

I don't think so. The programme for government commitment was to create 100,000 apprenticeship starts and I think we've achieved that. We have achieved that, and I'm proud to make that announcement.

Okay. Can I just ask: did the matrix change the way you measure apprenticeships to hit that target?

Well, there are two measures.

Did the matrix change—yes or no—during this Senedd term?

No, there are two ways in which Medr published their data: their long-standing way of doing that, and their way of releasing management information, which is real-time data. And I think it's really important that we do use that real-time data there, and that's what they've published and that's what we've made the announcement on.

And so, that's based on the measurements that were used at the start of the Senedd term to the end of the Senedd term—there's been no change.

No. They've published real-time management information data that shows that we've met the programme for government target. That is a new published figure that they've released, but it's the right published figure that they've released—it shows us in real time what's happening, and I think that's a good way of monitoring data and responding to the challenges that we see, and the opportunities.

So, there is a new measurement that has been released and we can agree that, we can. 

There are two figures that have been released by Medr, yes.

Alun Davies.

Diolch, Alun, for the question. His assumption is right: I think it is because of the coleg and the work that they have done. It's very pleasing to see apprenticeship provision and education provision being taught in the medium of Welsh, and we want to see more of that in the future, responding to Welsh communities' needs.

I think the important role that Medr has in this with the framework review and the new apprenticeship programme, but also the work that the coleg will go on to do—. And you're right, it's not through me, but it's through the Minister for Further and Higher Education, where she's further supported their work in the future to build on what we've seen, which I think is progress, but there's certainly more to do in that space.

We've been clear with Medr and we'll continue to be clear with Medr, when they're responding to the apprenticeship framework review and the new frameworks that they'll bring forward, that the Welsh language must play an important and vital role in that. I can stress to the committee and put on record again today that that's what I want to see, and I'll continue to ask Medr to make the case, to make sure that they respond to the needs of Welsh language communities in that way, and it will be alongside the work that Vikki Howells does with the coleg. 

The Cabinet Secretary wanted to come in on this, and then I'll go back to the Hannah, who was the principal questioner on this point. 

Just on that broader point about the Welsh language and the economy, Mark Drakeford and I look forward to giving evidence on Arfor to another Senedd committee next week. We did have a meeting with the leaders from the Arfor area and also the officer lead just yesterday to get the very latest on the pause and review work that is going on at the moment, and I was really pleased to hear it referred to as a roaring success. So, I'm looking forward to appearing before the committee next week to talk about it in a bit more detail.

Excellent. I look forward to it next week.

Hannah. 

Thanks, Chair, for returning to my questions. We saw evidence during National Apprenticeship Week of successful investment in apprenticeships, and obviously new apprenticeship opportunities coming on stream, and that is to be recognised and welcomed. I think the challenge we have in politics, as in life, is that when you demonstrate something that is making a difference and is successful, you leave the crowd and the population wanting more and asking what comes next. 

If I can turn, for the last bit of my questioning, to higher level apprenticeships and actually what plans—. I don't know whether it falls into the Minister's area, or whether that's the Minister for higher education and Medr, but constituents have raised with me, and there's been evidence to this committee when we did our apprenticeships inquiry, too, around whether gaps exist, perhaps where there aren't those opportunities to pursue certain courses or apprenticeships within Wales.

Specifically, a constituent got in touch with me and they had done a higher apprenticeship. They are an example of where that's been successful. They work, now, remotely in north-east Wales for a company based in eastern England, but essentially they are spending their money and they're investing their time in north Wales. They'd like to build on those skills and enhance them so that they can continue to do that, but they can't access those level 7 apprenticeships where they are. And, similarly, we've had that raised in other areas, perhaps in engineering as well. So, perhaps the Minister might be able to potentially just reflect on where we are on that in Wales and, hopefully, offer some insight as to where we go next. Thank you.

Thanks, Hannah, for raising the importance of higher apprenticeships and routes into industry in that way. I want apprenticeship programmes and the provision that we provide from what we call, traditionally, foundation level to the higher level to be able to respond to the needs of the economy. The investments that we make through the apprenticeship programme and future apprenticeship programme should reflect where the economy needs to go. Where it does add value to the economy more broadly, then hopefully there should be provision in the future. What we're doing at the moment is that Medr are going through their framework review to the 2027 apprenticeship programme. I hope they'll be listening to all of the needs of the people of Wales, particularly industry, when they tell us what they need for the future.

Just an offer, Chair, I don't know the particular circumstance of the evidence Hannah has had, or the constituent of hers, but if the Member wanted to write to me, then I would certainly ask Medr to consider the constituents or the evidence that you've heard as part of their review and take that forward as they go on through their work on the apprenticeship programme.

Thank you. Hannah, the time has beaten us on this section. If you don't mind, I'll call Alun Davies now to ask his questions.

More broadly speaking, the number of people in employment in Wales in the year ending September 2025 is actually close to an all-time high. So, I think that there is some success to be recognised there. The employment rate remains relatively close to an all-time high as well—3 percentage points higher than it was in 2004. And unemployment in Wales remains relatively low, at 4.5 per cent. I do think that that underscores the strength and stability of the Labour market in Wales. 

No, I'm just sharing with you the latest figures that we have. 

It would be good to know the source of the figures that you describe, because I spend an awful lot of time taking my Conservative colleagues to task in the Chamber about using data that the Office for National Statistics doesn't recognise as being national statistics anymore; they are statistics in development. That's because of the low number of respondees, and so on. We've always said that it's better to use a basket of data, and, actually, you do get a less gloomy picture when you look at the basket of data. 

That said, obviously, tackling unemployment is a key priority for us, and some of the work that Jack set out around the employability work is absolutely critical in that space, as is the work that we're doing alongside the UK Government about identifying, developing and growing those particular sectors of the economy through the industrial strategy and the particular focus that we've put on a range of areas that we see as having potential for high growth, but also those areas where we can create well-paid jobs, working, of course, through the skills, to make sure that people are ready to access those jobs. 

We talked earlier, again, about productivity and how important that is as a longer term driver of economic prosperity. Actually, over a period—almost the period of devolution, in fact—Wales has seen stronger productivity growth than the UK as a whole. I think that's positive, although the gap still is too big, and it's still a key challenge that we have, which is, again, going back to the local growth fund, why we've identified that as a particular area that we need to do more in. If you look across the work we did through the economic mission, the things that we identified there as particular areas for focus have been really helpful. So, the focus on skills, the focus on the foundational economy—I don't think we talk enough about the importance of the foundational economy and how, particularly in some parts of Wales, the foundational economy, local government, health service, colleges and so on, it is a really, really significant part of the economy. So, we need to do more to support that. But I think that there has been some important work going on, particularly around procurement, to try and ensure that the huge spend that you do get through public services is retained in Wales.

Just to support the Cabinet Secretary in the response to some of the questions that the Member has raised, I think one of the good investments that the Government has made, and we've increased that investment in the last year and into the budget in the future, is around the flexible skills programme. When you talk about productivity or where we're making investments, we've heard directly from businesses around the country how successful that is. Some businesses have told me, because of the programme, they've taken on apprenticeships, another real investments into the economy and to businesses across the country. I think that is one of the investments that any future Government will want to see carry on in that space.

And then to the further point, Alun, you raised around NEETs, I think it's important to look at the NEETs through the lens of economic inactivity, and we've seen the investments in your own constituency, through the trailblazer programme in Blaenau Gwent, which is making a real difference to that. And we'll want, again, through the employability support programme, into the future, Governments to make more effort in that space and to address some of the problems that Members have identified.

Thinking of the local growth fund, the fact is that 60 per cent of the weighting, in terms of the measure that we'll use for allocating funding, will be based on the Welsh index of multiple deprivation. I think that's really important in terms of being able to try and target the funding to where it's needed most. Alongside that, there'll be funding that recognises productivity, again to try and bridge those gaps, and funding that recognises rurality and the additional challenges there are in terms of delivering within rural areas. But that overwhelming focus on the Welsh index of multiple deprivation, I think, is really important.

Within communities just miles from each other we see differences, and we also see differences across the regions as well. In many ways, data shows north Wales performing above the UK average because of the advanced manufacturing, the really high-skilled, well-paid, important jobs that we have there. So I think that where there is good success we need to replicate that and celebrate it.

Thank you. Sam.

Thank you, Chair. After the closure of Holyhead port in December 2024, was there any support provided to businesses on the island impacted by that?

Following the closure of the port, we worked with the council in Anglesey to identify the support that they required. The support that they required from us, which we did provide, related to town-centre improvements, so 20 businesses supported for activities such as painting, street improvements, shop window displays and so on, to just try and boost the economy on the high street there. And then cruise welcome activities and events; that's something that the council, again, identified as being important for providing that positive first impression for visitors and encouraging them to explore the local area. There's a towns project that was funded, which enabled volunteers to complete 20 more activities that enhanced the town's attractiveness to tourists and residents. And then there was work around branding and marketing to review the existing 'Holy Island' brand, focusing on town-centre exploring, incorporating old-town elements for inclusion in the heritage trail as well. So, those were the things that the council identified and that we were happy to support them with. And we have received some really positive feedback on the impact of the funding, and we do expect a monitoring and evaluation report on that in the coming weeks.

In the coming weeks. So, that would be before dissolution?

I hope so, but 'the coming weeks' is what I have.

Okay. Thank you.

As I say, the feedback has been good.

Okay. Good. And then—. Forgive me. I'm always a little bit confused as to the responsibility of ports between yourself and the Cabinet Secretary for transport. I just don't think it's fully clear who is in charge of port policy. And I was disappointed that, on the Irish sea resilience taskforce publication, the ports of Pembrokeshire weren't mentioned; Fishguard and Pembroke ports weren't mentioned. And it comes back to previous questions I raised around, 'Are we at the races with this?' This is a really integral part of the land bridge—the southern corridor, Pembrokeshire, Pembroke Dock and Fishguard. Yes, the closure of Holyhead had a huge impact. But the ability to continue to have that land bridge connection through Pembrokeshire ports, and for those ports to then, therefore, not be mentioned—it's a missed opportunity, isn't it?

So, in terms of where responsibilities lie, clearly, Ken has significant responsibilities in relation to ports as transport hubs and as means of moving people and goods and so on. And then, obviously, I've got responsibilities and interests in terms of ports as an economic development vehicle as well. So, Ken and I have committed now to publishing a maritime and logistics plan. That will set out a list of recommended priorities for those industries involved there—again, before the end of this Senedd term, so it's going to be burning the midnight oil as we move through the next weeks. So, that will be, then, in preparation for the next Government. It will be a useful tool, I hope, to help the next Government think about how it can support the logistics and maritime sector more widely, including all of our ports.

Okay. I take the point that the Cabinet Secretary for transport looks at the transportation element of ports and you look at the economic driver elements of ports, and freight and haulage is one of the key economic drivers that ports are part of. They help transport these goods back and forth via the Irish sea, on to the continent et cetera, and across our country. This committee has previously released a report—and this may be straying into the Cabinet Secretary for transport's portfolio, but I'd appreciate your perspective on it—around facilities for road hauliers, and us in Wales again not being at the races in comparison to other areas with facilities for haulage companies and drivers. Has there been any work, or have you had discussions with the Cabinet Secretary for transport on this, which is, actually, an area where recruitment is often difficult, in haulage? Improving the facilities is one way of creating a more welcoming working environment to drive the economy. Have you had any discussions with the Cabinet Secretary for transport on those?

So, Ken Skates is leading on that, and I think it was a recommendation from this committee, actually, that asked us to conduct an audit of rest facilities for heavy goods vehicle drivers. So, I understand that was accelerated as a priority action, alongside developing the maritime and logistics plan—

Sorry to cut across you there, Cabinet Secretary. When was it decided to accelerate that?

I'd have to check that with Ken Skates.

If you could write to the committee and let us know, because if that comes after—. It depends on timings. If that comes after the closure of Holyhead, then it's reactive; if it comes after our work as a committee, then it's proactive. And it just would determine how the Government perceives it, that's all.

Right. I'd have to check that with Ken because I'm not well sighted on that, sorry.

That's fine. Any further points on working with the Cabinet Secretary for transport on that?

So, as I say, we'll set out a joint maritime and logistics plan. I think that it became apparent that stakeholders would prefer that plan to be joint. So, I know that, previously, there've been calls for a freight and logistics plan, and then a port and maritime strategy, but, actually, I think the debate that we had in the Senedd, and also feedback from stakeholders, is that they wanted the one. So, we are developing that, with the aim to publish it as soon as possible.

Thank you. Thank you, Chair.

Okay. A lovely double-page spread of the Cabinet Secretary for transport in the paper today. Anyone would think there's a promotional activity going on—just drawing Members' attention to that. [Laughter.] 'Operation Thunderball' I think it's called. Luke. 

Diolch, Gadeirydd. I'd like to just move to the global centre of rail excellence. The Government highlighted that it was one of those main projects that it was pushing within the investment summit. What level of interest was there at the investment summit for GCRE?

So, again, GCRE sits in Ken Skates's portfolio, but, of course, we work together, and I've got a strong interest because of the economic development potential. So, GCRE, as you know, attended the summit, and it was one of our featured projects that we promoted to potential investors. Obviously, for reasons of commercial confidentiality, I can't go into details of the conversations, but it was part of a wider pitch to capital investors. Sorry, I can't give a detailed answer on that, but you'll have seen the written statement that Ken Skates published at the end of last year, and that did set out that commercial momentum continues to grow. More than 200 companies expressed an interest in using the facility. We have yet to, obviously, have a partner to deliver the build of that facility, but that's where the focus is at the moment.

Obviously, it's a really attractive proposition. We understand that feedback from the market is that it remains a viable project and it can be progressed. I think there's also an awful lot of potential of the site more widely—you know, renewable energy potential, there's potential to develop a major data centre, for example. So, I think that GCRE is a project that's obviously very important and attractive, but, actually, the site is—. I think the committee has visited the site; you'll have seen there's an awful lot of additional potential there as well.

So, what are the barriers to getting  some of those investments on the cards, then? I mean, UK Government have said that the case on GCRE needs to be strengthened. Is that something that you would agree with, and how would you propose that that case would be strengthened, if that is the case?

So, I know the board is working really hard to make sure the case is as strong as it possibly can be. Something that would, potentially, really strengthen the case, of course, would be if the UK Government determined that all new rail rolling stock should be tested in the UK. I think that would really make the case crystal clear for that, then. I know that, as I say, the board continues to have discussions, but I can't really go into any more detail than that today, I'm afraid.

Can I just ask, if it's so attractive, why has not a single penny of private money gone into it? You say it's a very attractive project. This has been announced since 2017, 2018, I think it was, eight years ago. The project has burned through the £70 million that UK Government and Welsh Government have put on the table. I think it was your good self who told us that that money would be gone by the end of 2026. We keep getting this figure that 200 companies have expressed an interest, but not one company has put their hand in their pocket and put money on the table. It is a vast project—the committee did go down there—but all that's onsite at the moment is a huge brownfield remediation site, and a couple of second-hand trains and a couple of second-hand bits of track, and that's what £70 million has bought.

I know that there was a market review over the summer, and it did make it clear that, to secure investment, the company would need to provide greater certainty about the financial construction costs, and confidence about investment viability in the early years of commercial operation of the business. So, I know that they've been working to do that, which I think speaks also to the point about strengthening the business case for it.

My concern is that we've had Circuit of Wales, we've got this particular project, and we have a large project in the Vale of Glamorgan at Aberthaw proceeding as well. They're all being built or predicated on public money, and very little private money, if any private money, is going in. So, has the Welsh Government got the ability to bring these projects to market, albeit you're setting up arm's-length companies to deliver them?

The Circuit of Wales was paid for by the private sector, not the Welsh Government.

I take that point, but £7.5 million went in from the Welsh Government to it. So, there is an issue, is there not, Cabinet Secretary, about these large projects actually coming to fruition?

Well, I think that GCRE is exactly the kind of project that could make a real difference in terms of the issues we've been discussing today, about productivity, about bringing investment to areas of Wales where it's most needed, which is why the Welsh Government has been so keen to back and promote the project, because of its potential transformational impact. But that said, it does have to be delivered by the private sector. It's not something I think that the Welsh Government, because of the scale of the funding required and the trade-offs that would be needed in other areas of Welsh Government spend, across health and so on—. Although a final investment decision on GCRE could be made by a future Welsh Government.

Okay. Luke, any other points on this or—? One final point before we say 'au revoir', Cabinet Secretary: Gilestone Farm in mid Wales was purchased by your predecessor for a specific project. I asked you in your last scrutiny session what the ambition was of the Welsh Government for this investment now, as, obviously, the original investment is not going to come into fruition. Can you give us an update on what is happening with Gilestone Farm?

So, I'll write to the committee—I just want to check the information I give you is absolutely correct. I think that's safest; I don't want to misremember.

I wait in anticipation. Thank you, Cabinet Secretary, thank you, Minister, thank you, officials. A transcript of the record will be sent to your good selves so you can look at it. That will form the official record of the meeting. If there are any issues, please inform the clerking team. Cabinet Secretary, just to thank you for your time that you've spent during your portfolio responsibilities coming to this committee; you've always obliged our requests and we're very grateful for that—and Minister as well. As this is the last time that you'll be before us—pending, obviously, no national emergency or anything—I wish you the best for the future, both of you. Thank you very much.

Thank you.

Thank you, Chair.

Papers to note, committee members. Everyone content with the papers to note? Right.

I now propose, in accordance with Standing Order 17.42(ix), that the committee resolve to exclude the public for the remainder of today's meeting, and, under Standing Order 17.42(vi), for item 1 of the meeting on 5 March. Are Members content? We'll now go into private session.