National Assembly for Wales

I've made it before, but I ought to make it when we discuss staff. I chair the Public and Commercial Services Union cross-party group in the Senedd, for which I get no remuneration, but I think it needs to be repeated each time we have these meetings. 

Diolch, Mike—diolch yn fawr. Okey-dokes, we'll note that for the record, and thanks for bringing that to our attention. 

We'll move on, then, to the papers to note. Does anybody have any comments other than—? Rhianon. 

Just to state, on the letter to you from the finance Minister, which is the update from the Interministerial Standing Committee, that it's pleasing to note that it was raised in regard to the late timing of the budget, and to just put that on the record, that that's been raised as an issue for all of us. 

Diolch yn fawr, Rhianon. Yes, it's good to note that. With the other letters, I think we've seen them before as well, but we'll note those papers, and thanks for raising that as well, Rhianon. 

We'll move on to our substantive item today, which is the scrutiny of the Senedd Commission's draft budget for 2024-25. We have witnesses with us here.

Would you please introduce yourselves for the record—your names and what your roles are? Shall we start online with Ken?

Bore da, Chair, it's great to be with you. I'm Ken Skates, Member of the Senedd for Clwyd South, and I'm a Commissioner of the Senedd. I'm responsible for the finance portfolio. 

Kate Innes, and I'm the chief finance officer of the Senedd Commission. 

Croeso cynnes, a warm welcome to you all. Today we're going to be looking at the Commission's budget, and just for you to be aware, obviously you'll get a transcript of this session so that you can check for accuracy after the session.

There's a lot for us to cover, so I'm going to start, if I may. We want to examine the impact of the 2023-24 cost-of-living payment and Standing Order budget deadlines on the Commission, and that budget planning element. We had a letter from you, Manon, on 29 September relating to the cost of the cost-of-living payment for 2023-24. We also received one from you, Ken, on 3 October, relating to the cost-of-living support for 2024-25. Just for the record, your budget refers to the cost-of-living payments for staff in the current financial year, in line with that made to Welsh Government civil servants. Can you explain the process you've been through, and the impact of that? I don't know who—. Ken, do you want to go first, and then maybe Manon if there's anything—? Yes.

Thanks, Chair. If I begin by saying a lot of negotiation has taken place, obviously, with our trade union partners, in the spirit of social partnership. The total estimated cost of the payments, which are going to be made in October and in February, is around about £825,000. That's for two payments amounting to £1,500 for each member of staff below director level. The money is going to be found through in-year savings from spend that was not committed or required. That amounts to £280,000. There's also a targeted recruitment freeze, Chair, from which we're going to be saving around £415,000. So, £130,000 is yet to crystallise, but this will come through savings from projects, and also from smaller budget lines as well. As at the end of September, we required only a further £20,000 to be identified. I don't know whether Manon or Kate would like to add any more to that.

If you'd like me to describe the process, Chair.

Yes, please. 

When this first emerged in the beginning of the summer, we sought a steer from the Commission, who met in August to consider options. They asked us to go away and flesh out some options and look at the impact of various choices that we had to make. At that stage, as well, the Llywydd wrote to the First Minister to investigate options, including that of a supplementary in-year budget. When we reconvened in September, we had prepared some more in-depth analysis of the various options that we had for payments in the current year. We also had a letter from the First Minister underlining the fact that there was no additional funding coming from the UK Government for any part of the public sector, and that, therefore, there was an expectation that the Commission would bear that in mind in deciding how to manage the budget in-year. The Commission decided to undertake a quick consultation with groups; the commissioners all spoke to their party groups. The majority decision then was to press ahead and make the offer, with further work still to come on prioritising exactly which parts of the budgets the savings will be coming from. Those discussions are under way with other fora, such as the Chairs' Forum, and will carry on until the savings are crystallised.

Okay. Diolch yn fawr. Can you explain the knock-on effect that this might have on planned services to support the Senedd, and the impacts and the knock-on effects for 2024-25? Because, obviously, we're looking at that budget now.

Yes, sure. The impact is going to be felt right across the organisation, I think it is fair to say, due to reduced budgets and reduced staff and resources. But key priorities, including Senedd reform and ways of working, have been protected. The Commission, it must be said, has only agreed to savings that are specific to the current year's budget—so, no support services or activities have been permanently ceased. But it does mean that for the remainder of the year, there will be reduced travel opportunities, reduced events, and publications will not be purchased, as has happened in previous years—we'll be reducing the volume of publications that are purchased. Training is going to be provided predominantly in-house for the rest of the year, and projects that have not started have now been paused, with the exception of multi-year projects.

So, what about the knock-on effect, then? From April next year, you anticipate all of this going back to normal.

A lot of the projects will have to be prioritised for the next financial year, so it's not necessarily going to be the case that we're back to normal. A lot of projects and the spending that's being saved this year will see work that should have been taking place this year perhaps taking place in future years, as well. But it's our anticipation that those elements that I've just highlighted—so, reduced travel and so forth—will resume as normal next year.

Okay. Peter, did you want to come in?

I was just thinking, what if things weren't normal next year? What sort of contingency would you put in place to make sure that you could cover—? Because there are only going to be so many efficiencies you're going to be able to make. Have you had some further contingency thinking?

You're absolutely right, Peter, and, actually, we've been looking at how we can make further savings, which I pledged when I presented the draft budget, in-year, that we would be working on. So, we're still working on some of those suggestions, both in terms of savings and increasing revenue. So, we're factoring in the potential to make savings and the potential to make increasing revenue as part of the future years' budget planning. As you know, we don't carry a contingency fund at all, so we run a really tight ship when it comes to planning budgets, but it's our hope and expectation that we will be able to cover the cost of all of the essential work that needs to be carried out. But this year, because of the pressure of the cost-of-living payments, of course, it's meant that we've had to scale back on some of the projects and some of the spend in those areas that I've just outlined. I don't know whether Manon or Kate have anything to add.

I think it comes to the heart of what we'll be discussing in this session in terms of our preparation for a period of change in the Senedd's operation. We have tried to be as clear and transparent as we can by ring-fencing spending on certain projects, and then, we have tried to be realistic but prudent in terms of the business-as-usual costs, going forward. As you'll see, we have, within our medium-term planning, which is a feature that is reaching maturity this year, identified savings. So, we're not asking for a budget that covers all of the pressures that we can foresee; we're giving ourselves a saving target—which is something that most public organisations, I would imagine, are having to do at this time—and as we work through the budget, we will be making those savings. So, the Commission wasn't comfortable asking for a fully funded budget, but in recognition of the wider public sector pressures, we're looking for a budget that makes sensible provision, but gives us a gap to bridge as well.

You laid a supplementary budget back in June that reduced the available funding for this financial year by £435,000, with reductions in your project fund, accommodation and facilities and IT budgets. How have these reductions impacted on your service delivery in 2023-24 and then the project funding for 2024-25?

I'll ask Manon to come in on this first, if I may.

We looked carefully at the budget at the beginning of the year and we identified some ICT contract changes that we were able to claw back some funding from. We also looked at utility costs and usage of energy, which, because of the high cost of energy, obviously, at the moment, made a difference. But there's no getting away from the fact that, in making those savings at the beginning of the year, it did impact our ability to withstand further unexpected pressures later in the year, which is what we did face.

We have a dynamic method of project management, and this is part of the reason why we can't give you chapter and verse now on what our project fund is being spent on, because we are reprioritising at various points during the year to make sure that the projects we deliver are the ones that are most critical to the operation of business. And then, we will report back to you on the progress of that, as we go on. But the impact was a manageable one and we were able to ring-fence and protect services and capital investment at that point. We've had to go a little bit beyond that now to afford the cost-of-living payment.

I think, Chair, if I may, there were really hard choices for the supplementary budget, but the Commission prioritised protecting services and the vast majority of capital investment, as Manon has already said, through contract renegotiation. One hundred and seven thousand pounds was able to be saved through ICT and there was a more efficient use of client services as well and licence rationalisation. As you're aware, as all Members are aware, we were able to make savings through utility usage, such as controlling the heating systems that are used across Tŷ Hywel. The impact we're seeing on the number of projects we were able to deliver with less funding, but we have been able to protect those that were categorised as critical in 2023-24. The impact for next year, in respect of estate and facilities management, means that there'll be life-cycle replacement work where we've borne the risk this year, and we'll need to manage this in 2024-25 to ensure that works that were required this year are undertaken next year.

Thank you for that. Moving on a little around budget planning and the time table—this will probably be my last question for now, and then we'll move on to Mike—the lateness of this year's autumn statement means that you're presenting your draft budget almost two months before the Welsh Government budget is confirmed for next year. What impact does that lack of contextual funding information have on your ability to plan and present your draft budget by the 1 October Standing Order deadline?

I think it's fair to say, Chair, that our budgetary cycle is far from ideal, with the preparation taking place and the laying of the draft budget six months before the start of the financial year and the huge amount of change that can happen in that six-month period. Under the current timetable, we're able to use indicators that are not up to date, so we use gross domestic product deflator from March, and we have to rely on older financial indicators such as the consumer price index from July, rather than, potentially, from October, so the indexes are out of date, effectively. And they're used to consider pay awards and to guide our decision making for the budget. So, the cycle is just not very helpful, I think it's fair to say.

The UK Government's autumn Treasury statement hasn't taken place, as you said, and that means that the Commission isn't able to respond to the potential tax changes. We're not able to have an understanding of the Welsh block funding for the following year. Also, UK Government programmes of work, such as the triennial pension valuation timetable is set to report in time for the Government budgetary timetable, not the Parliament's, so we can't budget for changes, and we have to make greater use of a supplementary budget request to address them. So, with larger programmes of work, there's, I think it's fair to say, uncertainty on the level of availability of funds at the point at which we require decisions.

I suppose we've seen a little bit of that with the changes to national insurance and we've been through that in recent times with one decision being made and then changed, and that's a development. Would it be useful for you as Commissioners for, possibly, the Business Committee to relook at Standing Orders around the laying of your budget, because it might well be in the same area as other directly funded bodies—maybe looking again at, in the round, how budgets are put together and the constituent parts of the Welsh budget?

Chair, we'd be really grateful for that. If that's possible, we'd really appreciate it, because we actually go first, of course, in terms of the sponsored bodies. So, we're first out of the block. We'd really appreciate any help that the Business Committee could give in this regard.

I think we've—. One of the standing items that we are looking at as a committee is the budget protocol and the interactions between the different elements of the budget. So, that's something that's useful to have, an understanding of where you are as Commissioners and as the Commission, to see how that can be facilitated and a discussion that can be had then with the Government and with the Business Committee, and seeing what potential there is to relook at those rules. Thank you. That's it from me. I'll come over to Mike Hedges now with some further questions. If we could unmute Mike, please. There we are, lovely. Thank you. Go ahead, Mike.

Diolch, Cadeirydd. A lot of what I was going to ask has already been answered under your questions. Can I carry on with talking about utility costs? Every Member pays utility costs and they go through a whole process to get reimbursement or to get direct payment. If the Commission took charge of our utility charges—for those Members who wanted it—you'd have a 5 per cent, at least, saving by paying it by direct debit, you'd save Members a lot of time, those who wanted to join, and you could probably get a better deal than we can get individually. Have you considered things like that?

Yes, we have. We've discussed this both within the Commission and—as you're aware, Mike—we've discussed it in the Labour group as well, and there's a fine balance, I think, to be struck between enabling the individual Members to have the freedom to select providers of energy, and also, as you're aware for individual Members, the challenge that goes with not being able to pay in a certain way, and Members then having to pay bills on a monthly basis and then get reimbursed. So, there's a fine balance to be struck. We're always willing to listen to what Members would prefer, but, at the moment, it would appear that Members are more satisfied with the system that's in place than want it changed. But as I say, we're always open to discussion with Members.

I don't care who is my provider. In fact, I can't remember who it is; it was the cheapest at the time I did it. I don't do annual checks, never mind any more regular checks, on it. Can I just suggest that the Commission asks Members who would want to have it dealt with centrally, and those who wouldn't, and we'll see where we are?

Yes, absolutely. We've been doing a lot of engagement with Members, asking these sorts of questions. I don't have, to hand, the feedback from Members regarding this specific question. But, certainly, it is something that on a continuous basis we can ask Members, and invite feedback from groups as well.

Okay. Thank you very much, Ken. You used the original 2023-24 budget as a baseline when making year-on-year comparisons, rather than the reduced figure included in your supplementary budget. Why?

Well, that's standard practice. The prior year comparatives were laid with the laid budget in line with our process, and we hand back and receive additional funds most years, but we don't amend the comparative figures unless it's a permanent change, such as tax changes, and, indeed, as the Chair has already outlined, the example of the national insurance change for employers back in 2022-23. So, the savings achieved are delivered through delaying activity, rather than a permanent reduction to our cost baseline, and, as I said earlier, some of the projects that have been paused will be delivered in future years; they've not been cancelled. And so, the original laid budget comparisons for 2023-24 are the most appropriate numbers to use.

And what you're saying is that you're making these in your savings, but they're not recurrent?

Yes, absolutely, and some of the work that has been paused that we haven't been able to take forward this year still requires attention in future years.

Okay, thank you.

So—sorry, Mike—are any of them going to be recurrent next year, or not? Sorry.

So, I'll bring in Manon and Kate on this, on the details of the savings, if that's okay.

I think the one area, Chair, where there is a recurrent saving is in our reduction of fuel consumption, which we hope to take forward.

Okay, diolch. Diolch yn fawr. Thanks. Sorry, Mike. Carry on.

Thank you, Cadeirydd. This could well be my last question, but I'm loath to say that, because I might want a supplementary after it. But the budget planning: how is it going to be different under the medium-term resource framework, and are you looking for efficiencies in the way you process data, and the way that you produce information from that data?

Yes, I think that's part of the principles that we follow, to make efficiencies wherever possible. In terms of the medium-term resource framework, can I bring in Kate, perhaps, on this point?

Yes, of course. So, the budget preparation process itself will remain unchanged. The medium-term resource framework is a high-level planning mechanism tool, which is continuous, so, that will continually be going on in the background, looking at projects, prioritising, looking at resources, looking at the funding requirements of everything that we would potentially like to do. So, in the background, it will be creating a very rich source of information for us so that we have a much greater understanding. In particular, when we are in multi-year programmes, it is really important that we understand what the requirements in totality on those multi-year programmes are, but what they are in the individual years and how that will move and flex between the years. So, it creates really rich information for us to input into the budget process, so, our budgeting will become more accurate; our second- and third-year rolling estimates will become much more accurate. So, it's about enabling us to plan solutions in advance and we will become more strategic in budgeting and in how we deliver these multi-year projects.

So, I think a good example of that is actually what's happened this year. So, we've looked at—. We've been using the medium-term resource planning as a tool for this year and what we have identified is—. We've set the managed growth of 2.5 per cent of maximum funding. We've looked at our resources, we've budgeted for our resources and what we have is the saving. So, the £315,000 saving that we see as a line and a target for savings, we will then now, in the autumn, take that and work through our processes within the framework and identify how we address that. So, this year has been a good example of how the framework itself will work. But, as regards just simply preparing the numbers in the budgets, it doesn't change assumptions; it doesn't change the underlying principles with which we work.

I'm glad I can say this will be my final question. I've got no problem with any of that, but, as Peter will say, when he speaks just after me, local authorities have spent a lot of time trying to drive down fixed costs. Although the cost of something has to be paid, the amount you pay can be reduced by taking certain actions. Are you attacking fixed costs?

Yes, indeed, absolutely. For example, in the way that has been outlined on utility costs and renegotiation of contracts with ICT as well, where those fixed costs are not agreed on a multi-year basis. So, we are doing precisely that—we are driving down those fixed costs wherever we possibly can. Equally, though, some of those fixed costs—. In trying to reduce those fixed costs, we need to invest and, as a result of the budget being so tight this year, some investment will limit our ability to reduce those fixed costs, for example, the full roll-out of LED lights would reduce the amount of electricity that we would use, but that's a particular project that we're having to look to for savings. So, we're doing it, Mike, and I can assure you that, if we had greater resource, I'm sure that we could bring in those energy efficient schemes at a faster pace.

Thank you.

Manon, did you—?

I was just going to add to that. Because 71 per cent of our operational budget is staff-related, we have to look at our human resource when we're looking to make significant savings and that's shown by the process that we've had to undertake in-year this year. Savings to non-staff budgets, although we looked at them first, didn't get us to where we needed to be to afford that payment, and so we've had to have this targeted recruitment freeze. That is why within the workforce plan—. Sorry, within the medium-term resources plan we have a workforce plan, which looks at how we make sure that our capacity is correct in different areas. And with all of that, the Commission is very supportive of us considering staff welfare, because the human resource isn't infinitely extendable, and we need to make sure that our teams don't suffer from too much workplace stress and that the situation becomes unsustainable.

Mike, did you have anything further to ask? No. Based on that—I'll bring you in in just a second, Peter—in the letter from the unions that we had, they made a request about 2024-25, set out, I think it was, in the letter of 3 October. If those are agreed, would that require a supplementary budget next year?

At the level that's been requested, the cost would be way in excess of £1 million, which we simply wouldn't be able to find, and so we'd be in a position where we would have to request a supplementary budget. 

Because, going back to what Manon was saying about 71 per cent being the staffing costs, staff welfare and everything, it's good to understand the implications of that into further years. Thank you very much. Peter.

Just sticking on the staffing perspective, and I know you've got a workforce plan, you're taking targeted interventions at the moment to obviously manage this current situation. Does that cloud, or is there a possibility that that might cloud, your judgment on what staff you might need for further capacity, or does your workforce plan recognise all of those key things and the budget is aligned accordingly, so that you're not suddenly finding that you're short of capacity to take forward some of the projects in a better year but which you suddenly find you haven't budgeted for?

It doesn't cloud our judgment, because the workforce plan ensures that we're able to identify where need is greatest, but I think from the pulse survey—well, not just the pulse survey, from various surveys, you'll see that quite a significant number of staff are also carrying out additional duties because of the pressure, because of the capacity constraints within the Commission. So, we're acutely aware of the impact that our limited human resource has. But, as I say, we are able to assess where need is greatest and attribute the resource accordingly.

Yes. Thank you, Ken. Peredur, you've already touched a bit on my next question, which was really looking at—. We know the pay increase is about 3 per cent at the moment, and that's way below pay awards that we know are happening. I just wondered how you would be prepared to respond to some levels—we don't know what level it might be, and I recognise what you said about a supplementary budget if it was at a higher level, but how are you thinking about how you might budget for something different than where we currently are at 3 per cent?

So, the provision in our budget—budget ask, I should say—reflects the requirements of the current pay deal, which was agreed with trade unions and was reconfirmed with them through the full interim review of the pay deal that was undertaken back in, I think it was, May of 2022. So, the budget's staff costs have been calculated based on the current maximum cap of the existing agreement between the unions and the Commission, and that's 3 per cent.

The Office for Budget Responsibility's forecasts indicate that the consumer prices index level will reduce below 3 per cent during 2024-25, and that it will remain there. But the benefits of the peak in inflation will continue to be reflected in the annual survey of hours and earnings index, probably for the next three years. So, the purpose of the five-year pay deal was to smooth out pay awards, and it's done just that. It's also delivered, I think, improved transparency with staff, and it's given certainty to staff as well in terms of what they'll know for a period of five years.

But, we made the one-off cost-of-living payment of £600 to lower paid staff, and have also approved, as I've already said, a £1,500 payment to all staff below director level, recognising that there have been very acute difficulties in the past financial year, and indeed prior to that. So, the negotiations for the pay framework for Commission staff for the period from April 2025 onwards are now starting, and there have been discussions with PCS on its suggestion that the Commission provides another cost-of-living payment support for staff.

Okay, thanks, Ken. Obviously, the pressures that all organisations are facing, and your focus on well-being of your staff—. Have you got any concerns about retention of staff at the moment? How is the general feeling of staff?

I've already mentioned the pulse survey. We also conduct a Commission staff survey. Now, there's a lot of data in it, and I can write with a more comprehensive assessment of the data, if that helps, but the overall staff survey engagement score is 75 per cent, compared to the public sector average of 69 per cent. I think we've maintained that score throughout the pandemic. Surveys have been analysed, actions have been put in place to address issues identified. Now, in terms of turnover, in 2021-22 we saw a slight increase of turnover, with a 12-month rolling turnover of 7.2 per cent, and turnover has slightly increased again, in 2022-23, to 8.3 per cent.

Now, we participate in regular forums with the Welsh sponsored bodies, and have a good understanding across the wider section of pay, well-being and retention in the public sector. I think, in terms of our comparison with those other bodies, we're in a very strong position. We have a resilient workforce. Any indication that staff are under stress is something that is always causing us concern, but the staff survey found that overall well-being for the Commission is good, when compared to industry average. I accept that the results found that 21 per cent of staff are at risk of having poor well-being, but that compares to an industry average of 40 per cent, so we are again in a strong position. But we always try to find ways to improve staff well-being. And I think the outcome of the cost-of-living payments is a good indicator of how we've been able to assist staff in their well-being, because one of the most regularly fed back messages from staff with regard to the cost-of-living payment of £600 was that it reduced stress in terms of being able to plan for increases, particularly increases in utility costs at home.

Okay, thanks. We've heard from other people we've interviewed, other organisations, that getting hold of key staff is really hard. Are there areas of the Commission staff where you are struggling to recruit to? Is that a market forces issue—you know, just for interest? It relates to when we talked to the audit office, for instance, and the pressures they have in recruiting auditors and things like that.

I think I should ask, actually, Manon to answer this, because I don't familiarise myself with the specific pressures in terms of HR. That's not my direct field.

I would say, Peter, that we are in a very competitive field, and we never lose sight of that. The turnover figures have been a bit volatile during the lockdown. I think, to begin with, the turnover went right down. People were less inclined to move from employer to employer. Then they went up again and there was a bit of pent-up demand. They're levelling off now. So, I'm reasonably happy that we've got a good level of turnover overall, but that doesn't mean to say—. The changes in hybrid working, for example, have meant that specialist staff can work anywhere. There could be an advantage in that for us, because, of course, that means we can also access the expertise of people who might not live in what is traditionally thought of as the travel-to-work area in Cardiff, so there's an advantage to us in that as well. But for sure, we are aware of the need to remain competitive and continue to attract the very best professional skills to support you as a legislature.

I think Ken ran through some of the numbers there from our staff surveys, which we monitor closely. I am aware that there is a modest increase in the people who don't feel that they're fairly remunerated. So, that is something we need to keep an eye on, and, obviously, we work closely with the union representatives of the staff in determining that. There will be a lot of negotiation in the coming year about the successor to the pay deal that we have at the moment. It is something that we keep an eye on, but we have to, as you would expect us to, keep that within the context of what is affordable and reasonable for us to ask for as a responsible public body. 

Yes, thank you, Manon. I'll shoot on. Just looking at the estate, and, obviously, we're looking at your planning for the Cardiff Bay 2032 project. As that's being developed, how will we as Members be informed and engaged in that process, from outside of the Commission committee?

Well, it's absolutely essential that Members are fully engaged throughout the process, throughout the different stages. And it is a long-term project, the first stage of which is the development of the strategic outline case. The Llywydd has specifically raised this project already in discussions with party group leaders within the last few weeks, and that's the starting point of a greater degree of engagement that you'll see in the coming weeks and months. The process for agreeing and authorising—[Inaudible.]—will be in line with the standards required by the Treasury, and the Welsh Green Book for large projects, and future years costs will be included as part of the Commission operational budget, so you'll be able to scrutinise that fully.

Would the cost be the same irrespective of whether Senedd reform takes place as proposed?

Not necessarily. The Senedd reform is a key driver for our change programme and costs over the coming years. But it's not the only driver for change. Changes in the way that Members are working, as well as the Commission's strategic priorities, are also driving the change programme. So, we'd still have some ways of working costs, regardless of whether Senedd reform proceeded. And I can identify them if you like. Some of them would include the bay 2032 project, which has to proceed, due to the lease expiring on Tŷ Hywel; the regional work stream as well will have to proceed regardless of Senedd reform, the Pierhead review as well; and all Commission and Member costs associated with embedding new ways of working on a sustainable basis will have to proceed as well. 

Thank you for that. Just on Senedd reform, then, briefly, how do budgeted costs for Senedd reform in this financial year compare to those in your latest supplementary budget and the regulatory impact assessment for the Senedd Cymru Bill?

Can I bring in Manon for this question, if I may?

Yes, it's an interesting question, because what we're seeing is the difference between the high-level estimates that were prepared for inclusion in the regulatory impact assessment a good six months ago now and what happens when it comes to actual budgeting. So, there are some changes that are due to the methodology that is used in a regulatory impact assessment that will be normal in those cases, whether or not opportunity costs are included, for example, whether or not inflation is included. And then there are some changes that are due to the further work and clarification of needs that has happened in the six, seven months since those estimates were put together. So, the upshot is that our budget for 2024-25 has increased by £124,000. That includes a reduction in our expectation of staff use during the coming year by £241,000, and the capital budget up by £365,000. So, the net result of that is £124,000. And some of that capital expenditure has been advanced from future years, so will lead to commensurate savings later.

Yes. I accept that. So, given a likely date of the next Senedd election is May 2026, how would capital spending on Members' offices and ICT kit for new staff be spread across the 2024-25, 2025–26 and 2026–27 financial years?

Well—. Oh, sorry, Manon.

I was just going to suggest we ask Kate to address that.

So, the capital expenditure, the work that will be undertaken in 2024-25, and that is within the budget, is for the adaptations to the Members' offices and for the preparation of Siambr Hywel. So, that will include ICT equipment, which were some of the additional costs that came through. The 2024-25 [correction: 2025-26 cost] then is £1.966 million, and that is specifically for the adaptations that will take place with the Siambr itself. And then, at the very beginning of 2026-27, the fit-out of the ICT equipment et cetera will be put in, and that's the £652,000.

Okay. Okay. I think I'm covered, actually.

Great. Thank you, Peter. Over to Rhianon. Can we unmute Rhianon? There we are. Lovely. Go ahead, Rhianon.

Thank you very much, Chair. I'm going to move on to the project fund, the £1.5 million project fund. So, historically as a norm, this planned allocation of the project fund has been set out so that we can see the allocations. So, what are the allocations in terms of being earmarked for key projects, in terms of also the outputs and outcomes? And we've talked previously, haven't we, I think, about linking to business cases as principles. And also, why has there been a change in the presentation around the fund?

Chair, if I start with the three main projects that are going to be pursued, the estimates are replacement payroll systems, enhanced for learning and development, and pension administration of £190,000; £360,000, will be spent on Senedd business management system replacements; and a further £445,000 is anticipated to be spent on broadcast infrastructure updates. But, Chair, if it helps, we can provide a full briefing—

I think so. I think that would be really useful. Thank you.

Yes. Okay.

We would appreciate that. And is there any narrative around why that's not being presented to us as normal? That would be useful.

Yes, sure.

Okay. So, I'm going to move on—

Well, I don't—. Manon or Ken, did you want to address that point?

Go ahead, Manon.

It simply refers back to the point I mentioned earlier, which is that we have enhanced our strategic planning in preparation for these big changes. And we now have a portfolio management group, which is chaired by Kate and it is keeping under review our list of projects. We have a very long list of projects in any given year at the beginning of the year, which we are constantly reassessing against Commission priorities, and deciding which ones to put forward. So, there is more dynamic management, potentially, than there has been in previous years—more defined management. Therefore, we can certainly share with you the long list at this stage, but it comes with caveats in terms of there may be necessary changes to that in the course of the year, which we will be obviously sharing with the Commission for their approval as we go through. The amount of finance that is set aside for that is comparatively modest compared to the big ring-fenced budgets that we now have for the big change projects.

Diolch. Back to you, Rhianon.

Thank you. Thanks very much, Chair. In regard, then, to the remuneration fund, there seems to have been a trend for funding to support this increasing year on year over the past three budgets, and obviously we're all aware of the current context, however. So, with this current budget increasing by a further £80,000, can you just extrapolate the rationale for that?

Thanks, Rhianon. I know Members are aware of this—I’ll just restate it. The Commission is required to provide what is described as reasonable support for the independent remuneration board, and that’s set out in the National Assembly for Wales (Remuneration) Measure 2010. Since 2022-23, the cost of support for the remuneration board has been ring-fenced within the total Commission budget, and that’s to improve transparency. Now, the staffing costs reflect a static establishment head count in line with the Commission medium-term resourcing framework, but it will include, of course, staff pay awards, which will account for previous increases in budget. Ninety-thousand pounds is being allocated for remuneration projects for 2024-25 following discussions by the board at their July meeting, and it regards the external expert support that they require to deliver their strategic work programme in the next financial year. Their estimated needs and the requirements of the work programme will of course be kept under review by the board as its work programme evolves. 

Thank you for that, Commissioner. So, I've got here £80,000, but it's £90,000 there. Okay, thank you.

I'm going to move on. In terms of a sustainable—you sort of touched on this—level of support for the remuneration board, is it likely to require additional funding in readiness for additional Members in 2025 and 2026?

Well, a lot of discussion has taken place between the accounting officer and the independent remuneration board. I'll bring in Manon in a moment, but I should just stress that the board has no spend authority, and the board's budget falls within the Commission's operational budget and is therefore the responsibility of the accounting officer. The accounting officer is required, as I've already said, to provide reasonable resources so that the IRB can undertake its independent work. 

Now, the work will vary from year to work year, so there's no predicting that the budget will have to go up year on year, because the workload and the projects will vary in each financial year. And the board has brought forward three projects for 2024-25. Those projects are in preparation for the seventh Senedd term. So, guidance is being developed by the chair of the IRB and the accounting officer that will provide guidance and processes for, first of all, all resource requests from the independent remuneration board, and also, secondly, any requests for authority to spend project provision allocations. Manon, is there anything you'd like to add at all?

Yes, as accounting officer, it's my job to make a decision on the reasonableness, which is the criterion I'm allowed to use, of remuneration board requests, and I'm advised on that by a team led by Kate. We have an increasing focus on this as our resources become ever tighter, but, as Ken mentioned, the principle of independence is very important—that the remuneration board should make its own decision about its programme of work and what information it requires. It is undertaking, for example, a fairly major review of pay and grading of member support staff, which I believe Members have welcomed. Reviews like this are not—. They're quite resource-intensive to undertake, and in this case external experts are being used. So, there is a cost there, but of course it's an investment in the future good running of the Senedd, and it's the kind of information that the board thinks it needs to make good decisions on much larger sums, and so we support that.

Can I just clarify, before Rhianon asks her next question, the two figures that were—? Ken, you mentioned £90,000, and, Rhianon, I think you mentioned £80,000. I just wanted to make sure that we get that figure correct. 

The increase is £80,000. 

They're both correct.

And I think then the cost for projects is £90,000.

Right, okay. Thank you very much for that clarification. Diolch. Rhianon, over to you. 

But I believe we're going to be sent the project fund disaggregation, aren't we, in terms of allocations. So, moving on, then, in regard to recommendations regarding meeting the Commission's carbon impact and sustainability agenda, what improvements—because, obviously, these are all very much linked to our earlier narrative—what improvements are planned to reduce—we've sort of touched upon this, so forgive me for doing it again, but a little bit more detail perhaps—what improvements are planned to reduce, in detail, the electricity usage, it being one of the, outside of salaries, major issues in this financial year? And is there a way of measuring associated impacts, then, from that deduction on costs and savings? I don't know what the thinking is around that.

Yes, indeed, absolutely. Just as an example, actually, with our ability to zone the heating system, we were able to save, I think, £5,000 of gas last winter. And, indeed, we're planning on further reductions in the coming winter. We're going to reduce the set points again for temperature and we're going to carry on providing heating going into certain Commission staff areas in Tŷ Hywel on quieter days to make further savings. But given the higher prices that we'll be paying, we expect this to save an additional £11,000 this winter, or a total of £20,000 over the total amount that we were paying before we started to take action. So, the difference is £9,000 as a result of those higher prices that we're going to be paying.

In terms of electric consumption, you'll be aware that we introduced a—[Inaudible.]—system that was reduced during the summer. We plan to maintain these for future years. We're also reducing the provision of air conditioning in lower occupancy areas during recess. This summer, actually, was cooler than in previous years, so the demand for air conditioning was reduced in comparison to previous summers. So, the potential for savings was also consequentially reduced, but, by continuing this measure, if we find that we have a warmer summer next year, we'll achieve savings. They will be reduced, but we'll achieve savings and reduce electric usage again.

And that's all very interesting, but in regard, obviously, to expansions that we've been discussing, potentially, in the future, are there any larger scale schemes that we're thinking of in terms of heating and associated utility bills in terms of larger scale projects—for instance, wind, solar. Obviously, capital is involved, but is there any thinking around that because, outside of salaries, this will be a major issue for us?

Yes, and you're absolutely right. There's the rather exciting project in Cardiff of the heat exchange, which we're part and parcel of, which will start delivering benefits, I think, in 2026, but I stand to be corrected. But I believe that it's from 2026 onwards that we'll see savings as a result of that particular project. 

Yes, and I won't labour the point because I know the Chair's not got time. I was thinking more in terms of our own in-house ability, but that's something for another day. Perhaps we can park that. I'm briefly going to ask you, then, if there is any discussion or ongoing thinking in terms of the provision of free or subsidised car parking that there is currently. Obviously, that's subsumed into rent and rates. I don't know if you can quickly give me an answer on that, either Manon or Ken.

Yes, absolutely, I can. If it helps, I can provide the figures in writing for the costs of parking. We're continuing with the engagement with Members as well, and with staff. What we want to make sure we do is keep the lowest paid from any car parking charges, but, also, we want to make sure that we do raise revenue as much as possible to give us a little bit of headroom when it comes to investing in some of those projects that you just outlined—energy efficiency schemes, for example.

Absolutely, yes, and it's a double-edged sword isn't it, in regard to how much it disproportionately impacts—parking—in terms of the lower paid staff.

I'm going to move on to my final segment of questions. I think I have time to do so. Just in terms of—. Another important area that we sort of touched upon there is engagement with staff. Within the budget documentation, there doesn't seem to be any mention of this. So, why is that? Why are the costs for engagement no longer recorded separately?

So, it's actually quite a simple, straightforward answer, this—it's because we deemed that communications and engagement were so similar, we joined them together. So, it's a more streamlined—[Inaudible.]

Fine. Okay. I understand that fully, but that narrative, for us, is really important.

Sure.

Obviously, that could also be lost in terms of its importance, so, perhaps an explanation of that would be useful.

And, then, finally, if I may, Chair: the committee recommended the Commission sought Members' views to better understand the engagement work that they wish to take forward and provide an update on how these proposals can be delivered within the existing budget. So, can you update on the latest progress in this area? I don't know who wants to lead on that.

I—[Interruption.] Oh, sorry. Sorry, Chair.

Manon was nodding at me, but, if you want to go ahead, I'm sure she'll let you, Ken.

Defer to Ken.

This is largely down to the director of communications, actually. The director attended the Chairs' forum, has attended the political contact group, is seeking views from Members about the Commission's communications and engagement strategy, and also regularly attends the operations group to discuss emerging issues with chiefs of staff and the chair of the Labour group as well. So, overall, Members have been supportive of the approach of prioritising the work of committees and focusing on how the work in committees has an impact on the public. The director of communications and engagement has also met with several individual committee Chairs for more detailed discussions. And, as a result of those, two main themes have emerged: firstly, a request for additional work from the citizen engagement team, with a specific focus, actually, on underrepresented communities; and then also a review of how Members use the estate—and I think this was something that was raised in individual political groups as well.

Now, as a result of those requests—and also as a result of increasing demand from other committees—resources have been reallocated to the citizen engagement team to bolster capacity. And, throughout the last year, the engagement team has actively engaged with, I believe, more than 3,000 people across 40-odd different inquiries. Within those groups, about a fifth have represented people with disabilities, and a similar proportion represent various aspects of race and ethnicity.

Now, I should also add that we've been consulting Members on the future use of the estate over the past six months, and you will have seen Commission teams outside the Siambr inviting views from Members—and they've also been attending, as we're aware, Rhianon, the party groups as well—also conducting the one-on-one meetings and, as I say, the drop-in sessions outside of the Siambr.

So, an updated document on the use of the estate is going to be considered by Commissioners by the end of this year, and the document reflects the views expressed directly by Members and by other stakeholders during the consultation. And a follow-up response, if you like, may be appropriate, Chair. I don't know whether I'm talking beyond our allotted hour.

That's fine. I wasn't going to stop you mid flow there, Ken, so, thank you for that. But, yes, any update on that in the future, especially any impact it might have on spending and costs and cost savings, potentially, with the use of the estates, would be very interesting.

Was that your last question, Rhianon?

I have come to the end of my segment, thank you very much, Chair.

Diolch yn fawr. Thank you very much for your time this morning.

We'll send you the transcript so that you can check for accuracy and make sure that that's correct. The one request I would make—. I know, Ken, you've said that you'll follow up with a couple of points—could I ask for those as soon as possible? We, like yourselves, are under deadlines for reporting and need to report by the twentieth. So, if it's at all possible that we could get them this week—well, this week means tomorrow—or the early part of next, so that it helps to form our report, that would be very, very useful. We're in the same place as you when it comes to reporting deadlines and things. But thank you for your time this morning.

Now, under Standing Order 17.42, I'm going to resolve to exclude the public from the remainder of the meeting. So, I make that proposal. Is everybody in agreement? I can see nodding. Thank you very much. Okay, we'll go into private. Diolch yn fawr.