National Assembly for Wales

Good morning and welcome, everybody, to this meeting of the Public Accounts and Public Administration Committee. No apologies for absence have been received. Do Members have any declarations of registrable interests that they wish to disclose? Not that I can see. Thank you very much indeed.

Our first item is papers to note. The first paper we have is a letter from the chief executive of the Welsh European Funding Office and the Welsh Government's head of rural payments division on maximising EU funding. We wrote to the respondents on 24 October asking for further information following our session on 14 September on the Auditor General for Wales's 'Maximising EU Funding' report. The letter answers questions that were not reached in the session, including on the structural fund programme, the rural development programme and other miscellaneous matters. Can I invite the auditor general to comment?

At this stage, Chair, I think I'd say a very helpful and full response, but there are some points there that I think it would be helpful for the committee to get a little more clarity on before it proceeds. I believe we have a discussion item later on the agenda on the forward work programme, so I suggest that we pick up those points of detail and then also questions of timing for any committee scrutiny when we get to that piece.

Members, any comments? Rhianon.

Just that it would be very opportune for us to be able to drill down, a little bit later on in the agenda, into this paper, rather than just gloss over it. I tend to agree with the auditor general that we should do that later on in the agenda.

Okay, thank you. Well, we'll revisit that when we discuss the forward work programme later.

The second item to note is a letter from the Minister for Health and Social Services on Betsi Cadwaladr University Health Board. The Minister has written to us, as well as the Health and Social Care Committee, following her letter of 10 May, to provide a further update about their work in relation to this health board. The letter encloses a report for November of this year, this month, on the health board's progress in relation to special measures, with a series of actions outlined in relation to the special measures framework. These actions include, but are not limited to, the appointment of Carol Shillabeer as the permanent chief executive, significant appointments to the executive team, including the health board's chief of staff, an interim appointment of the director of finance, board secretary and executive director of operations positions. It also outlines a series of appointments to the board as well as the work of the independent advisers. It provides an update in relation to performance, with updates on mental health services and vascular services, and it also provides further information about the annual accounts for 2022-23, which have been qualified by the auditor general, relating to issues arising from the 2021-22 accounts. The letter goes on to provide an update on the work of the ministerial task and finish group, as well as the intervention and escalation framework.

The committee will be discussing its forward work programme for spring of 2024 later in today's meeting, as already referenced, and we'll consider our future work on this health board during that item. Can I invite Members to comment on the letter? Any thoughts or comments?

Sorry, Chair, I just want to acknowledge that I'm sure the health committee is equally looking into the progress of what's happening with Betsi. Are they going to be doing some work on it, going forward? Is it something that we'll be revisiting later on in the year—I say 'in the year', but next year, per se? Is it something that we're going to be going back to, or are we giving it to them to keep an eye on, because a lot of it is about procedures and changes that they've made since the new heads have come into place?

We discussed this on Monday, and I think the clerks are going to speak with the clerks of that committee and clarify, following their meeting with Betsi last Thursday, when we were elsewhere, what they've covered, what they will be covering and what areas falling within our remit would still be requiring attention. That will then, presumably, be discussed in our forward work programme later.

I'm happy to do that. That's fine.

The only comment that I've got, and it's fairly clearly set out—. In terms of the board effectiveness follow-up review undertaken by Audit Wales, have we seen that yet, or is that in process?

I've not seen anything.

It's in process, Rhianon. We've recently just completed the field work, so we'll be synthesising it and writing that up. We hope to have it available in the early part of next year in time to inform whatever the committee decides to do.

Okay. It's just a very difficult situation when you're trying to attract people into these positions, to have this level of scrutiny, but we are where we are with it, and let's see where it goes.

Indeed. Thank you. Well, I'll move on to the next item to note: a letter from the director general for the climate change and rural affairs group on Cardiff Airport. The director general has written to us with a six-monthly update on operations at the airport. She refers to the recent letters of 18 September and 26 October, which we have previously considered. The letter provides an update on the recruitment and pending appointment of the new chair of Holdco. It also sets out the appointment process for new non-executive board members. The committee may wish to write to the Welsh Government to clarify the interim arrangements following the end of the previous non-executive directors' terms, given that Welsh Ministers have not yet appointed new non-executive members to the Holdco board. We may also wish to ask why the Welsh Ministers have not yet completed the appointments process for new non-executive directors. Rather than wait for the next six-monthly update, we could request the Welsh Government provide information as soon as Welsh Ministers make those appointments. The letter goes on to set out information about the Welsh Government's equity investment of £6.6 million in Cardiff Airport to—quote—

'address the cost challenges and meet this compulsory regulatory requirement',

in relation to new-generation security scanners. The committee may wish to seek further information about the Welsh Government's additional allocation of £6.6 million to the airport for that purpose. We may wish to clarify why the Welsh Government has provided additional funding for new scanners since. In its announcement, it suggests the investment was included in the rescue and restructuring plan it agreed with the airport and for which it provided a financial support package announced in March 2021, which included a grant of £42.6 million. We may also wish to ask the Welsh Government how it derived the amount of support to provide, and whether it covered the total cost and why it provided it as an equity investment rather than as a grant or loan. Finally, we may wish to ask more broadly about the capital programme including details about the requests for capital expenditure of over £1 million, two of which the Welsh Government has approved.

As noted earlier in the meeting, this committee will consider its forward work programme later today, and we will then have the opportunity to discuss these issues and potential future work in this area. So, I invite Members to comment, or otherwise note this letter. So, any comments? Natasha.

Chair, I read the letter and I don't think I've violently highlighted any letter in my life as much as I've done this one. I totally agree with you, I'd very much like clarification on the £6 million-plus that's being spent on the scanners. I understand it's a UK Government requirement for all airports to have it, however I, and I think this committee, was under the impression that the £42 million that had been given to the airport was going to be spent, or a proportion of that was going to be spent on these scanners. Clearly, that isn't the case, so I'd like clarification if that is going to come out of that £42 million; is it a separate £6 million? Where is that coming from?

I also want to get some clarification: in the first page it says the total passenger numbers were lower previously than forecasted when it was perhaps the busiest time of the year. How is this airport still making a loss when airports across the country—and I know we constantly in the Chamber have compared it to Teeside—? Having spoken to the mayor of Teeside, they're making a profit; how is this the only airport that seems to be making a loss and using COVID constantly as an excuse?

I do also want to bring one point back: the point of earnings before interest, taxes, depreciation and amortisation, which is what they use as the measurement of everything. According to the EBITDA sort of scale, the airport is yet to reach a level of profitability measured by EBITDA, which they love, by 31 March 2029. What happens after 2029? Because once the funding from here stops, the airport's on its own, and right now, I don't see it making a profit. So, I'd really like them to clarify what's the plan. So, those are my points so far. I hope that's okay for everybody.

Thank you. Any other Members wish to comment?

Just in terms of one of the points that you made, Chair, in terms of clarification, in terms of the envelopes of the agreed £42.6 million and the capital, which is mentioned after that particular point. So, it would be useful for us to understand how that figure was arrived at, because, obviously, there must have been a projection moving forward, and for clarity, it would be useful for us to work out how they got to that point. Because, obviously, if you've been given an envelope, then you will work up to that envelope. Now, it may be that—it would be useful for this committee to understand that particular point.

In regard to the scanners, I'm not so sure that we would need to know why that couldn't come out of here. I would suggest if we find clarity on what is in that total envelope, then that point I think would have been something that was perhaps not anticipated at the time, but we don't know that yet. So, it would be useful for us as a committee to understand.

One other point if I may, Chair—I did forget. And they'd made an appointment of a gentleman called Reg Kilpatrick as the director general for the COVID recovery and local government group as the new director and chair of the WGC Holdco Ltd board. It would be interesting to know what exactly is his role, because we often have spoken about experience being key, particularly in certain roles within the Welsh Government-held organisations, so aviation background, aviation knowledge—what he'll be bringing to the table would be really interesting to hear, particularly for this committee going forward, because we ultimately do want to see value for money.

Thank you. Mike or Adam, do you have any comments to add? No, okay, thank you. We'll note the letter for now, and as indicated, we'll discuss that and I'll follow up correspondence or otherwise later.

If we can now go into a short five-minute break, and then we'll resume our next item, which is with the Welsh Government taking evidence on Museum Wales—Amgueddfa Cymru. Thank you.

Croeso. Welcome to this section of the Public Accounts and Public Administration Committee meeting, where we're taking evidence from Welsh Government officials on Amgueddfa Cymru—Museum Wales. Can I welcome the witnesses, who have now joined us? I'd be grateful if you could state your names and roles for the Record.

So, I'm Andrew Slade, I'm the director general for economy, treasury and constitution for the Welsh Government, and my colleague—.

Bore da. I'm Jason Thomas and I'm director, culture, sport and tourism in the Welsh Government.

Thank you very much, both of you. As you'll expect, we have a number of questions, and, again, I would be grateful if Members and yourselves could be as succinct as possible in asking and answering those questions and enable us to get through as wide a range of those topics that we wish to cover as possible. As convention has it, I will begin with the questions, focusing on the tailored review programme. Has the Welsh Government completed its consultation on the tailored review programme, which it delayed to early 2023, and, if so, are you able to share the findings?

Well, Chair, you'll probably want to pick this up with my colleague Tim Moss when he comes to talk to you, I think in a week or two's time, as the director general answerable for public bodies and the review programme, but my understanding was that that consultation progress did conclude earlier in the year. We had a range of responses back from the parties involved, which were mainly, I think, the executive non-departmental public bodies, but there were some others involved as well. Some favoured moving ahead with reviews, others said, 'Let's hang fire for a bit because either we've got changes in personnel or governance arrangements'—or whatever—'there are better times to get going with some of these reviews.' We've undertaken our own review processes within Welsh Government of the approach to tailored reviews, learning lessons from the two that we've done so far. We might want to explore some of those in the context of the bodies that we are the partnership and sponsorship arrangement parts of Welsh Government for, to wit the library and the museum, but I think one of the things that we found is that the tailored review process takes a long time, it needs a lot of care and preparation and attention in the design of the thing, and I think we're moving to a much more risk-based approach to how we go about these reviews. That risk-based approach is partly informed by responses—or will be increasingly, I think—from the bodies themselves, but also how we view, in the thematic bits of Welsh Government facing into those bodies, the performance of the organisations in question, and that will then inform a set of judgments about the balance of the programme. I believe there was a distinct review—or an internal review—of the review process itself, the tailored review process itself, over the summer, and that's led to a number of recommendations as well. Tim chairs a body that I think is called the public bodies reference group within Welsh Government, which picks up a number of key officials with an interest, thematic teams that have an interest, and also I think there's some non-executive representation on that group as well, and they will form their views about the programme, going forward, I think, in relation to the review process. Is that fair, Jason? You're a bit closer to this than I am.

No, I think you've covered everything, Andrew, just that, when you mentioned the broader thematic reviews that they've looked at, I think that's been looking at board remuneration. That's been the first of those thematic reviews that they've looked at, so that covers all the arm's-length bodies. But you've covered everything else.

I think, last December, the Permanent Secretary shared the draft tailored review programme with us. Based on what you've just said, and obviously the consultation concluded, you're undertaking reviews, but have any changes to the draft tailored programme been introduced so far in light of responses to the consultation, and, if so, can you share those with us?

We can certainly share the core findings, and I'm sure Tim will talk you through more of that in a week or two's time. The programme, as I understand it, is effectively on pause while we work through this risk assessment process for each of the bodies, and I think the plan now, but again Tim and colleagues can advise further, is that in each Senedd period there will be a risk assessment undertaken of each of the bodies, and then that will inform the tailored review programme—so, the extent to which you go forward into a more focused set of review arrangements for a particular body.

So, in other words, no changes have been made yet to the draft—.

That is effectively on pause in light of the consultation process and the work that we've been doing around how best to manage this review programme, with managing risks on the one hand but also available resource on the other.

So, no changes so far until that process is concluded.

Correct.

Right. In March, the Permanent Secretary noted that

'some public bodies are facing strategic and other reviews'—

so, that was March last year—'before December 2022.' What reviews of public bodies other than the tailored review of Amgueddfa Cymru were carried out, and how did they inform the tailored review programme?

I think, but again we would need to check with colleagues, that a number of the bodies will have done gateway type reviews. That's a process designed to look at various points in the lifecycle of an organisation or a project or a programme, to check that things are on track, and it may well be that that's what the Permanent Secretary was referring to. I imagine that would be some of the things that we've done in our area anyway.

Yes, certainly for the culture, sport and tourism areas, where we work with a number of arm's-length bodies. Clearly, you're aware of the two tailored reviews for the national museum and the national library, but, as Andew said, for those other arm's-length bodies—Sport Wales, the arts council, the royal commission—they may have undertaken a range of different reviews that look at their own organisations, but they wouldn't have met what I would consider to be the full scope of a tailored review. I think that's something we can certainly pick up with colleagues, as to the nature of those different types of reviews, but there have only been two tailored reviews thus far.

With a capital 'T' and a capital 'R'.

Right. Okay, thank you. Previously, you mentioned risk assessments. Just to go back on that momentarily, how does the programme reflect the Welsh Government assessment, not only of, obviously, risk to the Government itself, but of risk for the arm's-length bodies themselves?

I think colleagues have been working on a risk assessment tool that is called HART. I can't remember what the initials stand for.

The Handy assessment—

Reckoner tool, or something of that sort.

Yes, but that's been superseded now.

Yes. What's happened since is that the UK Cabinet Office have come out with something, which is a self-assessment model, and I think our conclusion was that with a little bit of tweaking that's a better and more consistent approach to adopt to the risk assessment process. So, that, as I understand it—but, as I say, Tim and colleagues can advise you further—is the approach that we're adopting now, going forward, with these risk assessments. As you've just said, Chair, there is clearly a link between the risks associated with a body and the work that they're doing, their financial situation and a range of other factors, and the bearing that that has then on the degree to which they need to be reviewed and how that review is conducted and what it looks at. I think one of the things that we found with the tailored review process—we might want to talk about that in a bit more detail—is that almost inevitably a review panel coming in wants to have a look at the whole thing in front of them, because that's how you get a sense of the organisation, that's how you work out what's best for its future, that's how you comment effectively on governance and so on. It's quite hard to get the terms of reference narrowed down to say, 'This team will go in and only look at these particular areas for the review to have most effect.' So, that's one of the things that we're trying to work out through this risk assessment process—can we do this better and in a more targeted, and, I guess, a kind of leaner and more flexible and agile way.

So, to put that in layperson's terms, then, you are looking at assessment of risk of the arm's-length bodies themselves. 

Yes. 

And, therefore, by definition, the impact that that would have on the arrangements they have with yourselves.

Yes. We want to know what they think about the risks that they're facing. We want to know, internally, looking out into those bodies, what we think the risks are, and that, then, informs a set of judgments about whether a review is needed, and, if it is needed, what kind of review, and then what would the terms of reference for that be, to focus on the thing that most needs addressing. 

Okay. Is the Welsh Government on course to deliver the proposed tailored review programme for 2023, including theme-based reviews of governance and board remuneration and other work relating to its tailored review programme? And, other than the comments that you've thus far shared with us, are there any other reasons why?

Well, obviously, we've done the first two organisation-specific reviews. There has, as Jason has reminded me, been work on the board appointments process, which spans all of the bodies—it isn't just about particular ones—so that's a wider thematic review of how we do our work on public appointments. My understanding is—but, again, Tim and colleagues will be able to tell you more about this—is that that will report at some point early next year, and you'll get a copy of that report, and we'll make it publicly available. 

Those are the two sort of substantive areas of work, alongside the development of these risk assessment models, and working up, then, the programme off the back of that to determine where further tailored reviews happen.

So, what I don't know, Chair, to be completely frank, is how that tallies with what you've just asked me in relation to the programme, because I'm not answerable for the whole programme; I just need to make sure that we're plugging into it from our group's perspective. But I think that's where the programme of work has got to thus far. Yes. Jason is nodding. 

Can you share any thoughts on when you would expect the programme to be delivered, and what the implications for the Welsh Government might be of not completing the programme this year?

I think if this, ultimately, is all about risk, or principally about risk, then we ought to be in a position where, in the not too distant future, we can say these are the areas that we most need to be looking at over the balance of this year. But, I think, in practice, given that we're well into the financial year of 2023-24, I doubt very many other reviews are going to be undertaken in the time available. 

No. I think, certainly, the way we see the way forward is for every arm's-length body covered by the Welsh Government to complete what's called a SAM—so, a self-assessment model. So, this is a model that's come out of the UK Government Cabinet Office, which is a model that we are looking to roll-out. It follows on from the Handy model that we were struggling to remember the name of the acronym for earlier. So, what we would expect to see would be every organisation complete that self-assessment within each Senedd term, and then the outputs of those self-assessments would then allow our public bodies reference group to come to a decision on which of those bodies most warrants having a fuller, tailored review in there. So, that's more work to be done on the back of the self-assessment model. 

I'll just bring in Rhianon Passmore.

Thank you so much. In terms of the new SAM model that you're going to tweak, when you say 'Senedd term', do you mean the whole of the Senedd term, and is that, then, the only internal assessment that will be required, because, obviously, in a sense, it's a bit like turkeys voting for Christmas? It would be very unusual if governance issues are self-assessed to be an issue of an organisation. 

I think, in terms of the timing, that's certainly something we'll pick up with colleagues, but I think there are other elements to this as well, which are, if you're looking at the overall risks and the risk profile of an arm's-length body—. We've talked in kind of broad, strategic terms here about tailored reviews, and we're now mentioning SAMs, but there's also a completely different angle to this as well, which is that day-to-day relationship with the arm's-length body. We have quarterly monitoring meetings that all come back to the remit letter that we set for the ALBs. There are processes in place to identify risk at an early stage, just in that day-to-day working relationship with them. And, as part of those quarterly monitoring meetings, each of the ALBs will provide their latest risk assessment in terms of the biggest risks that they're facing. 

The original plan, which I think you're probably referring to, was that we would do a tailored review of each body in a whole Senedd term. That's just proved not feasible. These things take five or six months to prepare. They then take eight to 10 months to deliver and get to a final report stage. It's not going to be doable. So, I think what we're coming to now is something that allows us to have a look at the body’s own assessment of risks, which, as Jason says, isn't our sole interaction with them; there's interaction all of the time. But you get to that point. You then overlay onto that our own assessment of risk as an organisation looking out to the arm's-length body, and that then informs the programme of further review work off the back of that.

Thank you.

My understanding is that the delivery of the tailored review programme would be an event, but you're describing processes and, clearly, good corporate governance requires those processes to be systemic, to be inbuilt into any organisational structure or management. But, on the event of delivery of the programme itself, any indication of when you might expect that to be?

As I say, the original plans are on pause. This risk-assessment process happens. That will then inform a refettled programme of activity, which, as you say, will have deliverables, which include actual reviews and reports at the end of those. But we haven't got that at the moment. This is what this public bodies review group, or reference group, is looking at at the moment.

Is it likely to be next year or before the end of this Senedd term, as Rhianon Passmore referred to? Or could it be in the next Senedd term? Any indicative timescale?

I don't know what the plan is from here to the end of this Parliament, except that we are hoping to move ahead with the self-assessment model tool for everybody reasonably swiftly. That's my understanding. I don't know if Jason—

It's my understanding too. I think that's the fundamental point. The tailored review programme itself is on pause. It's something you may wish, obviously, to pick up with Tim in the next session, but the programme is on pause. In the interim, we will be looking at the self-assessment model that I mentioned earlier.

Those are, obviously, the processes. But, anyhow, I'll move on. You've referred to the theme-based reviews. Do you plan to publish those reviews and, if so, when do you expect that to happen?

Yes. We've given a commitment to publish all final reports from tailored reviews. So, the one that is done on board appointments, which is the thematic one that's been worked on over the last few weeks and months, my understanding is it’ll be published early next year. But, again, I'm not the guardian of that process, if I can put it like that. That's my understanding.

Is it also your understanding that the others, when they are concluded, would also by published?

Yes.

Thank you. But you can't say when, for the reasons you've already described. 

Has the Welsh Government finalised its guidance for tailored reviews? If so, when did it do so, and is that guidance publicly available?

There was a draft guidance prepared, and I think it was during the pandemic. I can't remember whether or not it was published. I think it will have been discussed with arm's-length bodies and shared in draft, but I don't think it's ever been finalised or published. But we'd need to check that, Chair, and, again, it's something that we can mention to colleagues before they come and talk to you about this in a few weeks' time.

I think one of the learnings from the review process to date has been the more that you can standardise expectations about what will happen in the review process, the easier things will be. So, that will point to some revamped guidance being made available and published for bodies to have access to. And I guess that's part of the public bodies reference group's work.

We'd be grateful if you could let us know. Obviously, if you buy a new car, you expect to get a manual, even it it's online these days. So, having a guidebook to work to is always conducive to simplifying processes and ensuring people are focused on doing what's required, rather than unintentionally going down a different cul-de-sac.

The terms of reference for the two tailored reviews completed to date said due consideration should be given to the Cabinet Office guidance and methodology for tailored reviews. Why is that the case if the Welsh Government has its own guidance? And will the position change since the Cabinet Office withdrew its guidance in August 2023?

Thank you for mentioning that, because I'm pretty sure that the guidance has been withdrawn, because their programme of activity, at the Whitehall end of the M4, I think, has also changed. So, I don't know where the Cabinet Office, at UK level, have got to with their updated guidance. Clearly, the self-assessment model, the SAM risk assessment tool, is a Cabinet Office-designed product, and we are working with Cabinet Office colleagues to try and develop that for use, as Jason was describing, in the Welsh context. And I guess it's also back to your previous question about can we get to a point where we're publishing guidance for the benefit of all arm's-length bodies in Wales, saying, 'This is it, this is how we're going to go about these things, and this is the risk assessment process we'll use to arrive at decisions over timing of reviews and how they'll be undertaken'.

Are you obliged to give due consideration to Cabinet Office guidance, or can you opt to follow your own guidance, or, as you indicate, adapt one to suit the other?

We can definitely adapt. I think it would be pretty unusual for us to walk away from Cabinet Office guidance on treatment of public bodies completely, in much the same way as it would be pretty unusual for us to move away from Treasury principles, the Green Book, et cetera, in respect of management of public money. But we can tailor it for the Welsh context and for what we're particularly looking for from our arm's-length bodies.

Okay, thank you. Natasha Asghar.

Thank you very much, Chair. Gentleman, from my understanding—and I'm quite new to this committee; I've only been elected a couple of years—I understand that the previous committee, our predecessors here, actually had reservations and concerns, particularly in relation to the National Library of Wales. It's been over three years since the Welsh Government actually published the redacted final report, so, from your knowledge, have all recommendations been implemented? Was this completed by April 2021, as the chief executive of the National Library of Wales expected, and how have you assessed the results, going forward?

Well, I might turn to Jason in a moment. I was just going to say I wasn't sure about the April 2021 date, but you've just clarified that that was something that the chief executive himself had said. So, I think there were—I'm just going back over my notes—seven recommendations in relation to the library: the grant-in-aid work; the capital requirements; something around policy objectives from the Welsh Government; well-being of future generations. There was something about the library's relationship with the museum, and Jason might want to say a bit more about that. There was work to do with Historic Wales as a partnership and a collaboration, and then there was a recommendation around our digital collections work, and I think we're making good progress on most of those. But are you happy to—?

I think that's correct, Andrew. Thank you for the question. I think the simple answer is 'not all of the recommendations have been implemented yet—

Which ones haven't been?

—but the vast majority have'. Of the ones that haven't fully been implemented, I think there are two. The first one is around a strategy for digital collections. We feel—and I think the library share this as well—that that has been superseded slightly by the culture strategy commitment we've got in our programme for government. So, we're looking to see whether or not that can be interwoven with the work on the culture strategy. And then the second one that I know—we can provide more detail on this afterwards in writing—for sure hasn't been fully implemented yet is looking at shared collections between the national library and the national museum. I think that's for the executives of both of those organisations to answer to. But I know that hasn't been fully completed yet.

One thing that I've seen that I think might be helpful for the committee to see, as well, is a really helpful report that the chief executive of the library prepared recently, which looked at progress against all of those agreements, and that painted, I think, a really good picture of the progress that's been made across all of them. I think the big one, which is much more challenging—I know I'm phrasing it as the 'big one'; you obviously might take a different view—was about ensuring sufficient finance for the library to meet all of its commitments, capital and revenue, and that is, as I'm sure you'll appreciate, really challenging at the moment in the difficult financial times that we're in. So, I certainly couldn't sit here and say to you that that's been fully delivered in terms of where we are in terms of the financial position. I think that will always remain an ongoing issue. I don't think it would be right for me to be ever able to sit here and say that we've completely sorted the financial position. That would be an annual process linked to the budget.

Okay. So, what role does the public bodies unit play in monitoring actions taken, following the tailored review, and what difference do you find that that's made so far?

Well, the PBU, the public bodies unit, definitely have a role, to your first question, and we work closely with them. We've got a very useful set of working relationships within Welsh Government to allow us to address a number of issues, including on the governance and finance side. One of the things that the public bodies unit bring to the party is that overview across the whole of the public body network within the Welsh Government. And that's part of the reason why I'm responding to you today on behalf of the bits of the organisation that fall to me that have public bodies that we work with, but there are many others across the Welsh Government as a whole. So, you get that common view, you get the latest understanding in relation to what's happening on public bodies at the UK level, channelled through them. They do a huge amount of work on appointments and a range of other matters that are cross-cutting, and that's one of the reasons why we've done this recent thematic review on appointments. So, that's the value-add of having some kind of co-ordinating body centrally within the organisation.

On the specifics here, we've kept in touch with colleagues. As Jason says, a lot of this is for the library itself, in this context, and that's one of the reasons why I think Jason's suggestion of letting you have the head of the library's own assessment is quite helpful, and it would be a good thing to do.

Yes, and if I could add just one thing, I think what the public bodies unit bring as well is, almost, dispassion. They can look at the relationship between different bits of the Welsh Government and the arm's-length body from a truly objective, non-policy-background basis, and then they can provide advice on what would make for a better relationship. And we saw that that was really useful in both the tailored reviews that have been completed so far. If those reviews had been led from within my area, or from within the policy team, they might have been completely different tailored reviews. Because it was led from that more central position, I think it was, ultimately, a better review because of it.

Okay. I know you mentioned that you're going to be sharing the report with us on the committee, and for that we're thankful, when we do receive it. But does the Welsh Government—because, technically, you do have a level of ownership on this—plan on doing any follow-up work, and does it intend to publish anything, going forward, to show how the recommendations have been implemented that have been made?

I may be wrong, but I don't think, in the review process there's any expectation that that will happen formally—so, you've got to come back in x years' time and say how are things done. It's a regular feature of our discussions with the library, and, indeed, with the museum in that context—'How are you doing in following up those recommendations?' But that is certainly something that we can pick up with colleagues in the public bodies unit and that you may want to pick up with Tim in a few weeks' time. There's no secrecy about any of this. So, does there need to be some sort of mechanism to allow us, as you say, to come back and report on them on a regular basis? I think that is worth us considering. But it is a core feature of the discussions that we have with the bodies in the light of the review work that has been undertaken.

I understand. Just a subtle hint, I think, from myself, and I think the committee might agree, Mr Slade, that, when it comes to public money being spent on areas such as the National Library of Wales, I think the public and we also have an interest to know where that money's going.

Completely. But, I think, back to the point that Jason was making earlier, these reviews are hugely important, and they tell us things about the organisation, and they give recommendations, and we need to make sure that those are being properly followed up. So, that's just part of a suite of information that we'll have on the body, and it will be part of a suite of engagements that we'll have with the organisation in question. They will have annual reports, they will have their own reports on specific matters, and then you've got, in this case, collaborations across the historic-facing bits of our infrastructure. So, I think, in totality, you will get a very good picture of what's going on and how the money is being spent.

Okay. The tailored review report recommended, and I'm quoting now:

'urgent attention should be given to the Library's financial needs'.

Since the situation at that time was not sustainable, how has the Welsh Government and the National Library of Wales addressed this?

Jason might remind me of the detail. They had a one-off sum to help them with some of the recommendations, didn't they? But I think it's worth us just saying, and we've talked about this in committee before, inflation and the hangover from the pandemic is hugely eating into the public finances. Our room for manoeuvre as a Welsh Government is very, very restricted now. I think the First Minister was quoted on the floor of the Senedd yesterday saying, effectively, our budget is worth £1.3 billion a year less than it was when it was set. Effectively, the cash coming from Westminster is pretty much flat. The compounding effect of inflation, including on wage bills, is really having an impact on our ability to provide funding for anything—whether it's this or any other matter. And I wouldn't want the committee to be in any doubt about the extent of those challenges, because they affect everything that we do, particularly at the moment as we work towards budget setting for next year. But in relation to this particular tailored review, a sum of money was made available. 

That's correct, yes. Seven hundred and fifty thousand pounds was made available to go towards implementation of the tailored review. Certainly, from our perspective—I can't speak for the library, but I'm pretty sure they would say the same thing—that does not go all the way to implementing everything. That was a contribution we were able to make towards it, but I think Andrew's covered the financial climate that we're operating in at the moment; it is unbelievably challenging. Certainly, all the arm's-length bodies that I work with I think would say the same thing, that we're entering a really difficult budget round at the moment, and resources are particularly scarce. 

Mr Slade, Mr Thomas, I completely understand what you're talking about in relation to financial climate—I think we can all sympathise—but just playing devil's advocate here now, when you're writing off £42 million for an airport, buying farms for friends and spending money on traffic signs, for example, you do have to think of it from an outsider's perspective that that's a lot of money that's being spent on issues that could be going towards other measures. But I'm going to come back to the £750,000 that was allocated. How was this sum determined, what specifically was it allocated for, and what specific outcomes has that £750,000 delivered to date?

I think we might have to provide you with a note on more detail around this. So, my recollection of this—and I'll make sure I've got this right now—is that the library approached us with an ask around funding to support the implementation of the tailored review. So, my team would have looked at that ask. They would have reviewed it. That would have gone in, no doubt, to the mix with other requests that we would have had in year, because this wouldn't have been an allocation that we would have made at the start of that financial year.

So, just to talk about the sequencing: we would have set a budget, the budget would be there, and the library would be delivering against that budget. In year, the tailored review took place, came up with these recommendations and then, clearly, a number of those recommendations required financial support to implement them. The library then came to us and said, 'We need your help with this; we don't have all the funding in order to implement them', and we would have been considering that in the round with all the challenges on the public purse at the time, and settled on an amount that was the most we would have been able to have given them. 

I don't have more detail on that here today, but I would be happy to provide that. What I think I could say in the round is that, having seen the report from the library about progress against all the recommendations, it's been impressive, despite the challenging circumstances we talk about, and pressure on library staff as well to implement these things. There's been really, really good progress, and I'm sure that that £750,000 was massively helpful across the range of those objectives.

I'd really appreciate the breakdown, please, as well later on. Thank you, Chair. I'm done. 

Okay, yes. Thank you very much indeed. Can I bring in Rhianon Passmore? 

Diolch, Chair. So, referring to your quarterly interactions specifically around the museum and the references to your constant involvement in terms of it not just being left to tailored reviews when utilised, did the Welsh Government or Welsh Ministers, really, have any concerns about the way the museum was operating when it appointed the former president? And objectives or steers, were any given from the Welsh Government to the newly appointed president of the museum?

I don't think we had any specific concerns. I might come to Jason—Jason was a bit more closely involved with the recruitment process. The climate of public finance has been under stress, has not shifted for some time, and then it's got a lot worse with inflation. So, we're always working with our bodies in the heritage and cultural sector to think about income generation, what you might do around that, because of the pressure on public money. But I don't think—.

No, I think I share Andrew's recollections. So, looking back to 2019—. So, the question was about how was the museum really doing in 2019.

Was there any hint? Because you've spoken quite at length really in terms of that it's not just left to review. Obviously, we've got the self-assessment model that's coming in now that we're looking at, and obviously there are themes that are being rolled out now in terms of this particular line of inquiry, so surely this would have been picked up at an earlier stage.

I think in 2019, in terms of the relationship between Welsh Government and the national museum, the relationship was really strong. It was really good. The museum were leading on a number of different collaborative projects with Welsh Government. The exact timing of this, again, I’ll have to provide you with the detail on, but they led on the exceptional work with St Fagans, which led to them winning the museum of the year. The work of the museum was completely interwoven with where we were.

So, there was no hint of any governance issues in 2019, that's what I'm getting at.

No. When we appointed Roger, as Andrew said, I was on the panel that appointed Roger via a public appointments process, and the job ad, the way we went out to market, was, I guess, telling the story of an ambitious museum at the time.

Okay. So, that's very clear. So, when did the Welsh Government, then, first pick up any hints that there were concerns about governance?

I think it would have been the spring of 2021. Largely, I think, in that context linked to the annual review process for the president.

That's right.

Is that right, Jason?

That's right. Every chair of an arm's-length body is meant to have a performance review at the end of the year. I would have been involved in that performance review for Roger, with Nicky, who was my deputy director in the culture division. In that review, some concerns were raised from the senior executives there.

Can you articulate what those concerns were? Can you recall?

I'd need to go back and look into that review.

It would be interesting for this committee to test out how that process worked previously. So, that would be useful for us. 

So, I'm going to move on, then, in regard to, I suppose, the pace of intervention and communication between Welsh Government and arm's-length bodies, in particular to the museum. The Deputy Minister, I believe, wrote to the museum stating that mediation would 'expedite' the situation in February—forgive me for going back chronologically—2022. However, the chief operating officer and the director general submitted, I believe, formal complaints the previous summer of June 2021. You mentioned spring 2021 in terms of your conversation around performance review. This mediation, however, didn't occur for another eight months. So, surely that's elongated, rather unwieldy, and bearing in mind grievance situations, is not fair. So, how would you, in hindsight, look at that?

I'm responding the way I am because that was an incredibly busy and hectic period in terms of our—

I accept that. 

—engagement with the museum, irrespective of everything else that was going on, of which there was a lot. So, we had complaints into the system, we took legal advice, we had conversations with all parties, we talked about mediation at a very early stage, and we had engagement with the board and the trustees. We then clarified, I think, that not all parties were willing to engage in mediation, so we moved to the next step, which was to appoint an independent investigator. The auditor general in his report rightly records—and I think this was probably one of the first things that we encountered with all of this—that we don't have a ready process in place, or didn't at the time anyway, to allow us to deal with, effectively, a breakdown of relations between the senior executives and the non-executives.

And can I stop you there? My understanding from previous witnesses is that this precedent has now been thematically looked at in terms of how it is approached across our other arm's-length bodies. 

That's correct.

Because just because something hasn't happened yet, this is not uncommon; it might not have happened yet in our basket, but it does happen. So, just for reassurance, we have a process in place now, yes?

Yes, completely. What we've got now is something that we can use and deploy in these situations. We are actually out in the process of trying to formalise that into something that's recognised across the piece. I think the point to make here in the museum context is that it is quite a complicated arm's-length body in relation to its governance arrangements. So, you have a royal charter, it's a charity, it's also an arm's-length body of Welsh Government; we make some of the appointments to the board, but not all of them in the way that we would with a classic arm's-length body; there are different rules that apply in relation to what consideration trumps another consideration in terms of the treatment of the organisation and issues around governance. So, we had to tread very carefully through all of this.

We got to a point where the investigation was undertaken. That was reported back and shared with the parties, and it was off the back of that, in the early part of 2022, that the Deputy Minister wrote out and said, 'Look, we've now had this process, it clearly finds that there's been a breakdown of relations. It suggests that people could have come at this in a slightly different way, but, fundamentally, we need to resolve this breakdown in relations.' And that was when the Deputy Minister was saying, 'Please can all parties come together and try and get this sorted?' Somewhere along the line here—but I can't remember exactly when; we'll have to come back with the timeline—you start to get grievances into the mix, and then not that long after, I think, the move towards employment law and tribunals, questions that further complicate matters.

So, you would put that eight-month delay from that letter about expedition of the situation down to the submission of grievances, et cetera.

That's a factor, but I think the key thing is that that period between—basically from whenever it was—May 2021 all the way through to that early part of 2022, there was an awful lot of discussion going on between us and the museum and the parties. There were, I think, something like weekly discussions, or certainly every 10 days, with the key parties in terms of their well-being and checking in with them. There were attempts to try and mediate going on throughout that process.

The point I'm trying to make, I think, is: the framing of your question was slightly of the—felt like—'Nothing seems to have happened, effectively, between the spring and the early part of 2022', but the reverse is the case and there was an awful lot going on through this period.

Okay. So that’s what I’m trying to understand and unpick. So, in terms of this precedent that's happened, and in terms of rolling out new practice, what have you learned?

We've learned that you need to be clearer about the kinds of processes that you will deploy off the shelf for these kinds of situations. We've learned a bit more about how we tidy up our internal governance, and the auditor general makes a recommendation in his report about clarifying how the interplay between, for example, 'Managing Welsh Public Money' and our—what were then called—calling-in procedures in respect of arm's-length bodies, how those dovetail and work together, and what takes precedence, and I think that's entirely fair. That's a point that we need to get sorted out and colleagues are working on that.

We've got an interim arrangement that effectively allows us to get on and deploy a mechanism, so that immediate learning from this episode, but we are in the process of codifying that, not least off the back of the findings of the tailored review of the museum. That needs to be—you know, in terms of its wider application—bought into by other bits of the public service, not just for Welsh Government to say, 'We'll do it this way.' But that's a core component here. We've learned from the tailored review about terms and conditions for employees, and in relation to political discussions leading into what would now be a, sort of, ministerial appointment set of arrangements. We're trying to work out what we would do to make the appointments process better, and that’s part of the reason why we've had this tailored review of the appointments to boards, and we're also working with the museum on matters to do with their charter. And we're working with the Charity Commission to do with matters that affect their treatment of these issues, because, as I say, they were also involved, because it's a charity.

Okay. 

If I can just bring in a supplementary myself here and then come back to you, if I may, because public bodies, rather than arm's-length bodies, as you know, must have their own complaints processes. And when complaints are brought against those public bodies, they’re normally required to exhaust their internal complaints processes before they can be referred to an external body. And there are time limits that apply, certainly to the initial stage, and requirements or other stages throughout those processes if time is going to be exceeded because of investigations and so on. So, why, in this instance, did the complaints come to Welsh Government rather than internally, where in public bodies they still go ahead with a complaints process, even if the complaint relates to persons who may be party to the investigation of the internal complaint? And, for the future, in terms of similar complaints, will the new processes have timescales attached to them, at least for initial response and for triggering extensions of time?

That is an excellent question, Chair, because I think it is fair to say that the museum did have all these policies and procedures in place for internal complaints, and as far as I understand, they were appropriately followed. What you've got in this instance is a breakdown in relationships between an employee of the museum, who is subject to the museum's procedures, and a ministerial appointment, who also has powers vested in them in relation to the charter and also has responsibilities associated with being a trustee, as the head of a charity. And it's that kind of interplay that the processes didn't allow for—not readily, anyway—and that's the point that Ms Passmore has just made about, 'Have we got a better mechanism now for addressing those points?' I think we do.

My only caveat around all of this is that—and I think the plan is that we would have timescales and, as you say, thresholds built into the new guidance—you still need all parties to engage in those processes. So, I can't put my hand on my heart here today and say that this could never happen again, because it doesn't matter how many processes and procedures you have in place or revised policies, at some point, if you're seeking to mediate a situation, all parties have got to be willing to come to the table to mediate and be mediated, I guess—that's the point I'm making. So, there's a lot that we can do, there's an awful lot that we have learned from this process, which will, I hope, make things better if we encounter this kind of circumstance again, but that is not the same as saying that it could never happen again, for the reasons that I've just set out.

One would expect that it probably will. It's the nature of existence; it'll happen sometime, it's whether, as we've indicated, the processes are there with, hopefully, some element of timescale, albeit that that can trigger extensions for the reasons you describe. Rhianon Passmore—sorry, we can come back to you now.

Thank you, Chair. Do you think that bringing forward the tailored review was the correct response to the concerns raised around governance?

This goes back to my answer to the previous question, and Jason might want to come in. If we all just sort of stood back and said, 'Right, let's wait for the tailored review to happen', then definitely not, in answer to your question. But that's not what we were doing. We were trying to resolve all this. We wanted the tailored review to come in and to say, 'Look, this is a complicated organisation and a complicated set of things have happened here leading to a breakdown in relations; what more can you do, in the round, to help us understand all that and what recommendations can you make to us about the future?' And, indeed, it is some of those that I've just referred to around terms of appointment, the fact that you had a president and a director general. Even a name, something like that—. If you're the president of something, you could argue that that gives you some degree of executive authority over the organisation. I'm not saying that that's necessarily what happened here, but I think that could be a complicating factor. So, one of the things that the tailored review said was to call them a chair and a chief executive and that'll make things a bit clearer. So, it's points like that that we're trying to take on board in relation to this episode.

I think there's a simple answer to the question, which is 'yes', but the reason why is a bit more complicated, as Andrew alludes to. As soon as the governance issues were brought to our attention, our response as the Welsh Government was, 'We need to look into this. We need to investigate this. We need to look into the governance issues that are there in detail'. So, it started off with the principle of, 'This is a review into governance of the national museum'. But it became evident really quickly that that actually is a tailored review, because all tailored reviews are tailored to the individual organisations. So, the terminology of what we were doing shifted really quickly from, 'This is a governance review of the museum' into 'This is now the second tailored review'. So, I think the answer is that, yes, it was the right thing to do, because it was looking at the specific set of circumstances that had arisen, but then the terminology became 'the second tailored review'.

Okay. I'm going to move on. In terms of the role of the Welsh Government's director of human resources—who was one of the signatories, I believe, of the heads of terms and settlement agreement and was also involved in the mediation process, I understand, so, was party, then, to the settlement, committing it to the terms—under what delegated powers and authority was the director of human resources operating? And in regard to those parameters set for them negotiating the agreement and—why we're all here today—in terms of the commitment of public finances in this regard, can you shed some light on what occurred there and how?

I just need to say that the clock's running against us, so could you please be as succinct as possible?

The individual here, our former colleague Peter Kennedy, in this context, is the director answerable for human resources within the Welsh Government, but he's also the director leading on public bodies. He leads on public appointments, he leads on policy around public bodies and other corporate services matters, so he has a kind of dual role in this regard as part of the Permanent Secretary's group. He works very closely with the finance director, works closely with me and with Jason as the sponsoring—I think we now say 'partnering'—bits of the Welsh Government with a thematic interest in the body in question. He is drawing in advice from the corporate governance unit, he is drawing in advice from his own public bodies teams, he is drawing in advice from his pay teams. So, that's why Peter's at the heart of all this.

He's also working behind the scenes to try and mediate the situation. I believe it's fair to say that he had, and still has, the confidence of all of the parties, their trust. He's involved in the mediation process because of those things that I've just mentioned, but on behalf of Welsh Ministers in relation to the fact that Roger Lewis was a Welsh Government Minister appointee onto the board. So that's the component of Peter's involvement in that mediation process, the formal mediation process, which resulted in a settlement agreement, and that process was independently mediated. There was a third party involved there. So, Peter was there—

So, you don't see any need for a separation of roles there, or any potential conflict of interest, very briefly, before the Chair cuts me off.

A conflict in what sense?

I don't know, I'm asking you.

No, I don't think so. We've got in that individual somebody who is answerable for public appointments, public bodies policy, and then he's also answerable for our approach in relation to HR matters—a highly experienced negotiator, a highly experienced mediator. So, in terms of who you'd want in the mix, you would want that individual. 

Thank you. Shall I go on to my next question, Chair, or—?

If you're ready to.

I'm very ready to. The museum told the committee it was limited in the information it could share about the settlement agreement with the former director general, since, if reopened, it could expose it to unlimited financial liability. Why wasn't legal advice sought to ensure the settlement closed off liability, and is the Welsh Government satisfied with those terms and conditions within the settlement?

On the question of closing off liability, I think the point that colleagues from the museum were probably making was that if we do something that opens up the settlement agreement, all bets are off, because you're starting again with a number of processes. The settlement agreement capped off the exposure of the museum and the Welsh Government at that point in relation to the matters that would have gone to tribunal, and that was on the basis of pretty complicated and complex legal advice and legal judgments. Legal advice was sought by all parties, expert legal advice, so—

So, we're talking Queen's Counsel advice, yes?

We're talking experts in employment law with the appropriate level of seniority. The concern is that if we start to comment on things that are part of the settlement agreement, or divulge information that we don't have authority to divulge, because part of the settlement agreement says, 'You shall only divulge stuff with our agreement', you risk unpicking that settlement agreement, and then questions about liability can change, and that could lead to very significant additional costs. So, I think that was the point that the museum was trying to make, and indeed I was trying to make in the letter that I sent to you last week.

In terms of the outcome, we think it was a reasonable one. Would we have preferred not to be in this situation? Yes. But the counterfactual here is not should there not have been a dispute or a breakdown in relations; the counterfactual is what would have been the other way of resolving that breakdown in relations, and that's lots of time, lots of additional money, lots of additional legal fees. That's what's helped inform the view reached by all parties. At the end of the day, the former director general is an employee of the museum, not a Welsh Government employee. As I say, the Welsh Government's interest was there in relation to our ministerial appointment to the board.

I presume, then, that you are satisfied with the terms and conditions of the settlement. 

Yes. I'm not privy to all of the detail, because again, we don't have the permission of the relevant parties to be sharing sensitive personal information.

Could I just ask very briefly before you conclude—? We've received advice that settlements closing off liability are the norm and not to have a clause closing off liability is exceptional. We would not have expected to see this, so we think—

I think we're talking at cross purposes here. The settlement closes off liability up to the point that the settlement agreement is reached. So, for the things that have happened that got to that point, liability has been addressed. The concern is that if you do things that breach the settlement agreement and therefore open it up again, then those liabilities or further liabilities can ensue. That's the point that's being raised here, not did the settlement agreement not cap off what had happened up to that point—it did.

We'll seek further clarification, because our understanding was—

Please write to us further if you are looking for further clarification on that, but we're not talking here about something that says, 'Everything that's gone on in the past, you remain liable for that, drifting on into the future'. That was the whole point of the settlement agreement: that the concern is that, in some way, shape or form, we breached the terms of the settlement agreement, and that that risks reopening the thing, and then, as I say, who knows what happens off the back of that.

And finally, then, in terms of wider public interest and our involvement as a committee, does the Welsh Government think the settlement agreement for the former director general provides value for money for the public purse, particularly given that 'Managing Welsh Public Money' says legal advice may not be conclusive in this regard since such advice may not take account of the wider public interest? That's what we are interrogating today.

Legal advice is undoubtedly a key part of this, but it isn't the only factor in assessing whether or not this is a good use of public money. As I say, you have to look at the wider costs to the organisation, to the well-being of the individuals, to the public purse, to the time taken to address these points. Let's just imagine for a moment that we hadn't got to a settlement agreement and things were proceeding to employment tribunals. That process takes time. The individual concerned remains an employee of the museum throughout that process. That couldn't change during the process, so you're probably looking at another couple of years to get to a point of resolution. That assumes that the outcome of any tribunal hearing is not appealed. So, you have to factor all of those things in. As the auditor general says very fairly in his report, this is not just about the kind of narrow cost associated with the settlement and the legal fees; there's all the costs associated with bandwidth of time taken up talking to colleagues and managing this, all the uncertainty for the organisation; all of that needs to be factored into your assessment of whether or not the thing is a reasonable set of arrangements to arrive at. Whether it's value for money, without actually having a complete ability to say it would definitely have been this other thing, I guess that's hard to pitch. Our point is—

And we have been told that there was definitive advice that this could have cost two or three times more if it had gone to tribunal.

And that's the judgment. So, we think that these are reasonable costs in those circumstances and in terms of trying to get the least-worst outcome in terms of management of money in relation to the public purse.

Thank you, Chair.

I'll bring Natasha Asghar in. I'll just warn the other speakers: because of time pressures, I hope you don't mind but I'm going to jump to question 5 with Adam after this, and then come back to you, Mike. 

Thank you, gentlemen. Just talking about the legal connotations of what was just asked by my colleague Rhianon Passmore, obviously, I'm aware of certain court cases that have taken place in the past personally and professionally. Once a judgment is made, unless a non-disclosure agreement is signed, I can't see the reason not to disclose, particularly when you have a clause within the settlement saying permitting disclosure to a Senedd committee is there. I respect the fact that you've mentioned legal advice, legal advice, legal advice; can it not be permissible by you to get your legal adviser, whoever's advised you not to share anything with us, to actually write to this committee and disclose the answers to the questions that we're asking? Because ultimately, if it's there that we should as a committee be privy to this information, your legal adviser can actually list out all the points that we've been asking and trying to get answers on, which I can understand, whether your hands are tied or whatever the case may be, but at least we get the clarity we need.

That would require the suspension of Welsh Government's legal privilege. We only do that, I think, in very, very extreme circumstances or where there are very particular, extraordinary sets of circumstances. And in any event, that would need the agreement of the Counsel General and the head of our legal services, so I don't have authority to make that offer to you.

That's fine, but I'd appreciate it if you tried, purely for the fact that we, as a committee, have a responsibility to ensure that the money is being spent, being spent well, being spent adequately. And I think that every single one of us could probably say that we would be more than happy if you put that request in to the Counsel General, and suspend it if required, purely because, even if this is going to be a long-standing payment resolution that's going to go on for years, as you mentioned earlier, at least we've got some clarity on what's happening, because, right now, we're very much going in the dark here.

No party to the settlement agreement would have signed up to it if they thought that there was a better outcome elsewhere. Overall, that was deemed to be the best and most reasonable outcome for all parties. So, I would just give you that reassurance: nobody went in with a blank cheque.

No, I agree. That's lovely, but, as a committee, we don't know that that is the case. But also I just wanted to—. Final question, Chair; I know it's a sub-question and I know we're short on time. I just wanted to know: is there a particular reason why the Welsh Government, neither the museum nor the Welsh Government in fact, gave the auditor general any justification for the money that had been spent on this to date? I understand that the auditor general has had communications with you. He wrote to you on 24 August; he shared a draft that wasn't responded to. Again, he wrote on 2 October 2023 in relation to transparency, to wider governance around the whole process that's taken place. Is there a reason why he hasn't been responded to and not been made privy to this cost that's obviously been endured by the Welsh Government?

Well, I'm not quite sure that I recognise what you've just described. I wrote back to colleagues from Audit Wales at the end of October with our response on the draft report. So, we did respond, and I don't know what additional information it is that's being sought in relation to the cost involved. But I'm very happy to have further correspondence with Audit Wales colleagues and with the auditor general, if that would be helpful.

That's fine, thank you.

Thank you. Adam Price.

Thank you. Well, perhaps if we could just continue on that very point for a minute. I think what Natasha Asghar is referring to is this question of why the auditor general was not furnished, either by yourselves as Welsh Government or by the museum, with the written text of any legal advice that substantiates your assessment that the course of action that you took was the most prudent one in protecting the public purse.

Well, I can't answer that for the museum. All that I can say is that we've been told very clearly by our legal advisers that there's a limit to what we can share. If there are points that we can share with the auditor general off the back of today's discussion that we can, as I say, explore further, then I'm happy to look at that, but I'm not quite sure what it is that we haven't furnished.

The legal advice.

Well, as I say, unless colleagues have actively taken that position—. I don't know whether Jason knows any more on that.

No.

We will have to take that point away, I think, Mr Price, and look at that separately. 

Could I just—? My only comment to add to that is that I think every point of data that we could provide, we've provided. We've been very open and collaborative with the auditor general over all this. So, we've just tried to be as transparent as we possibly can be in order to ensure that the report is as accurate as it can be.

Yes, and I may be wrong, but I don't remember Audit Wales colleagues asking me in terms of, 'Can we see the legal advice, please? Can you seek advice on whether you could share that with us?', but I would need to go back and check.

Yes, we will consult with them afterwards and establish their position on this too.

Can I just ask as well, is it standard practice in a mediation of this nature for it to be accepted that one of the parties gets to nominate the mediator?

I don't know. I'm not an employment lawyer.

No, we'd have to take that one back. My understanding, although I will absolutely need to check this with colleagues, would be that the mediator was agreed by all parties; it wasn't selected by one and then that had to be the mediator. It was agreed by all parties. But, absolutely, that's a point of detail where I don't have the expertise. I'll double—triple—check that with colleagues and get back to you.

Sorry, I think, Chair, that it's not just about being accepted, it's whether it was part of a deal that you would nominate, or a party would nominate, the mediator. So, we're just seeking some clarity on that, that there was authority given—

Okay. That's a fair question to which I'm afraid that I don't think either of us know the answer. 

So, that would be useful to get some clarity on.

In your letter to the committee, you said that Welsh Government feels that Audit Wales 

'had not been able to provide any examples...where governance failures had occurred resulting in loss or damage to Amgueddfa Cymru.'

But doesn't this entire situation flow directly or indirectly from some governance failures?

No, not in my view. It flows from a breakdown in relationships. And I think the reason I made that point in my letter was that there's nothing inherently going on within the museum or how it's managing its finances or other points that is a particular problem; the problem is that the whole thing, in terms of the operation of the museum, is being affected by this breakdown in relations between the most senior executive and the most senior non-executive leaders within the organisation.

But the museum, in their evidence to the committee last week, referred to the legal advice that they had received pointing to what was termed 'technical governance failures', which then led their legal advisers to conclude that there was a possibility that a case could be successful. What they were referring to, among other matters, was the holding of closed meetings of the board and those meetings not being minuted. Aren't those governance failures?

They are departures from the established practice, so to that end to your question they are points that needed to be addressed. They don't have a bearing on the operation of the accounting officer, in this case the director general of the museum, I don't think, in the way that you've just described them. That's slightly different from saying that the organisation was failing to spend public money successfully or managing these other things correctly. And I don't know all of the circumstances, particularly in a situation where you've got a breakdown in relations, that led to those private meetings happening.

I want to turn briefly to the issue of the contradictions between the arrangements set out in 'Managing Welsh Public Money' and the calling-in arrangements, as they've been called. You've already covered much of this in your earlier remarks, but you said that you're working to revise 'Managing Welsh Public Money' to align these processes. When do you expect that work and a revised document to be finalised?

I don't know the answer to that question, because it's other colleagues within Welsh Government who are leading on that work. What I can say, just to repeat the point from earlier, is that we accept entirely the auditor general's recommendation that we should get this set of guidance tidied up and make sure it dovetails better—not, though, because I think there was any great problem of principle here in how things were managed internally. All of the relevant people were spoken to and all of the relevant advice was sought. But it would be good to clarify those points. So, we know that colleagues are working on the redeveloped, refettled version of 'Managing Welsh Public Money', and I will mention this to Tim Moss, who is the lead director general for that area, before he comes and talks to you in a couple of weeks' time, and you'll be able to pick that up with him then. 

Ok, Chair. I've no further questions. 

You've no further questions. Okay. In that case, could I bring Mike Hedges in on the questions that you seek to raise?

Diolch, Cadeirydd. The auditor general said the ministerial advice noted that the settlement

'raised novel and contentious issues'—

and those of us who used to watch Yes, Minister know exactly what those mean—and it would have been prudent for the Welsh Government to have considered the proposals under the requirements for special payments in 'Managing Welsh Public Money'. Why did the Welsh Government not do this?

Partly because I think—just back to that previous question from Mr Price, Mr Hedges—we got the sort of slight lack of clarity about which internal process trumped the other one. So, was it about the calling-in arrangements or was it around 'Managing Welsh Public Money'? The point I was just making to Mr Price was that all the things that we would expect to do within both those sets of procedures were effectively done. So, you'd talk to the finance leads within the organisation, corporate governance colleagues, public bodies colleagues, pay colleagues, et cetera; all of those colleagues were consulted, legal advice was sought, external legal advice was sought, so all of those things happened. I think, ultimately, all this comes down to was, I think, one set of arrangements says that the advice should go directly to the First Minister and the other says it should go to the lead Minister with the accounting officer, additional accounting officer—in this case, me—being sighted. In the end, the process that was followed was the second of those and the First Minister was copied into the advice. I have no reason to believe that the decision would have been any different had we followed that other route, but that is one of the things that we're seeking to clarify in this revised set of guidance around both 'Managing Welsh Public Money' and the arrangements that apply for disputes in public bodies.

Okay. The auditor general said the ministerial advice about the settlement agreement noted the amounts for injury to feelings and for loss of employment were reasonable. How was that calculated?

It was calculated on the basis of legal advice and our assessment of what was feasible in terms of bringing the parties to a settlement agreement and costs that Welsh Government thought it could bear and our understanding of what we thought the museum could bear from its reserves, effectively, to manage the process out.

Finally from me, or almost finally from me: the auditor general notes the ministerial advice did not include the total value of the settlement, nor did it set out the employment costs or explain the former director general's contractual notice period was 12 months. Does the Welsh Government accept the advice should have provided a fuller picture for the Deputy Minister?

I think it could have provided more advice, more detail, but there were limits on what could be provided. The main issue that we needed the Minister to be content with, or satisfied with, was that the process had been properly handled, that the outcome could be followed through on and that the components of Welsh Government money into that process could be met. And I think I'm right in saying that there were discussions—you and I had discussions at the time—as to whether we could meet the relatively small sums of money that fell to Welsh Government from our budgets within the group, and we concluded that we could do that. So, on the core of what the advice needed to provide, the Minister had what was needed to make a decision, but I think I would accept the auditor general's finding that we could have provided more information in that MA.

I've looked in great detail at the amounts of money being paid out by tribunals. You seem to be way above the amount that I've managed to find, except where it has been on sexual or racial discrimination. Can you direct me to where I can find sums of money given by a tribunal of the same size as you've given in a payment that were done that weren't sexual or racial discrimination?

I think I'll have to take that one away and write back to you on that. I don't have that information to hand, and, as I said earlier, I'm not an employment lawyer, so I would need advice.

I can understand you'd need the advice, but how don't you know that, because that was the big decision you made?

Well, as I said earlier, we were working on the best available legal advice, both internal and external, so too was the museum, which in this case was the employer—we weren't the employer—and it was on the basis of that advice and looking at the totality of the costs, which I was discussing with Ms Passmore a few minutes ago, that that decision was reached, and that was then an agreement with all parties.

I'll just say that I remain unsatisfied. Back to you, Chair.

Thank you. I think the point there is that if you receive legal advice, presumably that advice is related to what the law states in this respect, which Mr Hedges is referring to. Presumably you have that advice and would know whether it complied with the sections Mr Hedges refers to. Is that correct?

Our legal advice would have covered all aspects to do with the case. I'm not sure there's much else I can say, Chair, on that, really.

It goes back to the earlier discussion about legal advice, right. I think the committee may have a view on that. Could I also just ask, given that—and reference was made to this—the contractual notice period was 12 months, can you tell us why payments will continue to be made until next September?

I think I'm right in saying that the former director general remains on the museum's books until the end of that period, so he remains an employee.

Which is again quite an exceptional circumstance, is it not?

It was part of the settlement agreement.

Precisely. Thank you.

Sorry, Chair, can I just ask, just for clarity, is this a new role, or is this a continuing role?

No. He is no longer the director general of the museum. Obviously, you've met the new chief executive.

So, the current role that is being undertaken—

Is a different role.

—is a new and different role. Starting from when?

Presumably from the point at which he stepped down from it.

Okay, thank you.

Natasha, you've got three minutes.

I do. Okay, I'll be very swift. What actions did the Welsh Ministers and the Welsh Government take when, in November 2021, the independent investigator concluded that the former president,

'had not always reached the highest standards and that his actions had left him open to accusations that he had not always been as objective and open as he could have been'?

Well, that report also found that the former president had neither breached the terms of his appointment nor breached the Nolan principles, and I think I'm right in saying that the investigation report suggested that all parties could perhaps have approached things differently, so I would hesitate to say anything more on that, really. There's nothing there that would have triggered any particular action, other than for the Deputy Minister, off the back of comments received from the parties, to write to them in the early part of 2022, saying, 'Please can you all come together and try and get this mediated through?'

Okay. In December 2022, the Welsh Government announced that the former president would lead a governance review of the status of Cadw. Was this linked to the former president stepping down from his role at the museum?

We needed somebody to undertake the review of Cadw who had Roger's type of experience. It is certainly the case that he couldn't have done that while he was the chair of the museum, because there would have been a conflict, but I can't say anything more than that.

Okay. How appropriate was it for the Welsh Government, and Ministers as well, to appoint the former president to lead the governance review at Cadw, given the investigator's findings of November 2021 and the Welsh Government's knowledge of the events at the museum?

Again, back to my observation from a minute or two ago, nothing was found that said that the individual concerned had breached either Nolan, the principles of operating in public life, or breached the terms of his appointment. So, there is no reason why you wouldn't appoint, I think, on that basis.

Okay. Thanks, Chair.

We've only got two minutes of the scheduled time. Are you able to stay for a few minutes longer, or—?

About five minutes more, if that's all right.

Five minutes, okay. Thank you. And you've concluded your questions for now. In which case, Rhianon Passmore, can I give you three minutes of those five minutes?

This is around question 7, Chair. Briefly, before I do ask one of these questions to you, can I just seek further clarity in terms of the comments that there was, in your view, no governance issue? Have I understood that correctly? It was more around your view that this was a difference of perception or a breaking down of relationships. So, do you take it that there was no issue around governance, then, at the museum? I'm still struggling to understand how we can have a scenario of no minutes being taken et cetera, et cetera, and no process in place to deal with that breakdown of relationship. Is it your view that there weren't any governance issues?

No. I think you and Mr Price have both asked a fair question in this regard. The point I'm trying to make is that it's the breakdown of relationships that spans out across the whole thing, rather than any particular set of governance failures. My understanding is, but I don't know the detail, that the fact that some of those meetings were held in private was in itself a response to the fact that there was a breakdown or an increasing problem in terms of the relationship between the two parties.

But then surely appropriate governance arrangements would have negated that in the first place.

That's part of what then brings us back into this business about what happens, in process terms, to your earlier point, where you've got a breakdown in relations between the top executives and the top non-executives. We didn't have one of those in place. We put one in place, but it's the key learning—it was the day-one learning from all of this. That would undoubtedly have helped, but as I said earlier, it doesn't necessarily mean that you avoid all the things that we've ended up having to address, because all parties have got to want to come to mediation and engage in that process.

Okay, thank you. Finally, then, in its final report, the tailored review panel said,

'given the extent of the remit, it quickly became apparent'

that it was not achievable to conclude its work by the planned completion date of Christmas 2022. How do you respond to that?

I think the timetable was ambitious. We had a very high-powered panel come in to have a look at all this for us, Chair, by David Allen, and I think everybody concluded that the original timetable was just not achievable, that they needed time to prepare the ground properly, and then have time to do their work. I think it's fair to say that we had to negotiate all of that quite carefully because of the breakdown of relations. In a body where there is no breakdown of relationships between the non-execs and the executive, getting terms of reference for a review agreed is a relatively straightforward matter normally, but we weren't in that territory.

Finally, in regard to the tailored review reports to be published, to,

'ensure action is taken in response to recommendations, and to share good practice',

why was the tailored review panel's interim report around corporate governance at the museum not published or shared with the committee?

I think Jason wanted to come in on the other point, but, just to say, our commitment is to publish final reports, which we absolutely adhere to and have done, in this case. The interim report was basically for us and for the museum to understand early findings from the tailored review that might be of help and bearing on the process that we were all engaged with over here, trying to sort out the breakdown in relationships, if that makes sense. So, we are completely committed to publishing the final report from these tailored reviews. I cut you off; you were going to come in.

No, it was only a brief one to talk about that December deadline that you mentioned. We're keen to, obviously, show that, as a Government, we've learnt from these tailored reviews. In the first one with the national library, one thing we absolutely learnt was that in the interest of trying to get some pace into proceedings, the tailored review went too fast at the start, and the terms of reference weren't clearly set out. That then meant that, towards the back end, it took longer to complete because they weren't clear on exactly what they were setting out to achieve. So, when we went into the museum tailored review, as a consequence of the library, more time was then spent setting out and agreeing the terms of reference. That was done in a very thorough way. Andrew has mentioned the panel that were assembled to do that. But, as a consequence of then spending so much time on agreeing the terms of reference, it meant that the deadline to complete had to move, although the final report would have been better. So, the next lesson learnt here is that I think there's a sweet spot in all of this, where you spend the right amount of time on the terms of reference, but, ideally, I think you work within some fixed parameters to enable everything to move ahead. We've been learning as we go through all of this.

It's partly back to the Chair's point from earlier around, in developing the next suite of guidance, can we be a bit clearer, in a number of areas, around timescales and what will be achieved by when and so on, because I think that that's part of this.

Okay, thank you.

Thank you. Well, we have a number of questions we won't have time to cover with you now, and, if you don't mind, we'll write to you with those. There aren't many of them remaining. I'll conclude with one final question. What was the composition of the challenge panel for the tailored review of Amgueddfa Cymru? And in summary—a brief summary—what was the process and outcome of its work in respect of the final report?

That's a good question. Go on.

Do you mean the tailored review panel itself?

The challenge panel.

When the tailored review team had done their draft report, I think it was then subject to some internal challenge process.

There was. We'll have to look into that. I think I can rattle off the tailored review panel itself, but not that challenge panel. We'll have to come back to you on that.

But the point that you raise there, Chair, I think, is an important one in respect of what we do, going forward, because I don't think we need the challenge review panel, particularly, if, effectively, the sponsoring lead, or the partnership lead, and the head of corporate governance are effectively content with the contents of the review. I think we have built that step into the process, but, I think, one of our learnings for the refettled tailored review programme is that you probably wouldn't do that as a matter of rote; you would only do that in very specific circumstances. In this case, I'm pretty sure the challenge panel fed in some views that were then reflected in the final report by David Allen and colleagues. 

There were a number of officials on it. I remember being part of that myself, but we can provide more details on that. 

Okay, thank you. Well, even the extended clock has now overtaken us. A transcript of today's meeting will be published in draft form and shared with you to check for accuracy before the final version is published. So, I'll just conclude by thanking both witnesses, Mr Slade and Mr Thomas, for being with us today.

I now propose that, in accordance with Standing Order 17.42(ix), the committee resolves to meet in private for the remainder of today's meeting. Are Members content? Thank you. In which case, I'd be grateful if we could go into private session.