Y Pwyllgor Llywodraeth Leol a Thai

Local Government and Housing Committee


Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Carolyn Thomas
Jayne Bryant
Joel James
John Griffiths Cadeirydd y Pwyllgor
Committee Chair
Mabon ap Gwynfor
Sam Rowlands

Y rhai eraill a oedd yn bresennol

Others in Attendance

Dean Medcraft Llywodraeth Cymru
Welsh Government
Emma Williams Llywodraeth Cymru
Welsh Government
Julie James Y Gweinidog Newid Hinsawdd
Minister for Climate Change

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Catherine Hunt Ail Glerc
Second Clerk
Chloe Davies Dirprwy Glerc
Deputy Clerk
Manon George Clerc
Stephen Davies Cynghorydd Cyfreithiol
Legal Adviser

Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.

The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.

Cyfarfu’r pwyllgor yn y Senedd a thrwy gynhadledd fideo.

Dechreuodd y cyfarfod am 09:10.

The committee met in the Senedd and by video-conference.

The meeting began at 09:10.

1. Cyflwyniad, ymddiheuriadau, dirprwyon a datgan buddiannau
1. Introductions, apologies, substitutions and declarations of interest

Welcome, everyone, to this meeting of the Local Government and Housing Committee. It is being held in hybrid format. Public items of the meeting are being broadcast live on Senedd.tv and a Record of Proceedings will be published as usual. The meeting is bilingual and simultaneous translation is available. Are there any declarations of interest? No.

2. Craffu ar Gyllideb Ddrafft Llywodraeth Cymru ar gyfer 2023 - 24 - sesiwn dystiolaeth 3: Y Gweinidog Newid Hinsawdd
2. Scrutiny of the Welsh Government Draft Budget 2023 - 24 - evidence session 3: Minister for Climate Change

Then we will move on to item 2, which is scrutiny of the Welsh Government's draft budget for 2023-24, and our third evidence session, with the Minister for Climate Change, Julie James. Welcome, Minister, and welcome to your officials, Emma Williams, the director for housing and regeneration, and Dean Medcraft, director of finance and operations. Okay, Minister, we'd better move swiftly on. Let me begin, then, with a general question: to what extent has the Well-being of Future Generations (Wales) Act 2015 shaped the budget allocations within the climate change portfolio, and how has the Government's commitment to that Act been balanced with the need to address present-day cost-of-living and other pressures?

Thank you, Chair. There's no doubt at all that we're facing one of the most difficult and challenging budget settlements in Wales that we've ever faced as a result of choices made elsewhere. Inflation has also eroded our budget to worryingly low levels, and local authorities and NHS organisations are reporting significant shortfalls in funding as a result of the inflationary increases, the pay pressures, and, of course, the rising energy costs. So, there's no getting away from the fact that this has required us to make really, really difficult choices, and the UK Government has just failed to address the significant funding gap that should have uplifted our budgets in line with inflation in order to maintain the vital public services that we all rely on. So, the reality is that we could not meet all the pressures identified to support cost-of-living interventions within the funding available.

But, despite that, we always maintain our approach rooted in the well-being of future generations Act, so we've undertaken to maximise the impact of the available resources that we do have, balancing our short-term needs with the ongoing cost-of-living crisis and trying to make the longer term change and delivery that we want for our programme for government ambitions, including tackling poverty. This has resulted in the Government, across the Government, undertaking an exercise to review all of our budgets and prioritise our support where it was needed most, building on the actions that we already outlined as part of the spending review last year. I'm sure that the Chair is aware that the budget round this year has been supported by the work of the cost-of-living Cabinet sub-committee, which I'm a core member of.

The result of that was that we put additional allocations into the discretionary assistance fund, homelessness services and the pupil development grant—[Interruption.] Excuse me, Chair. The cost-of-living crisis and its impact on household budgets means that many people have been unable to pay their rent or other household bills, and, for my portfolio, the risk of them falling into rent arrears and subsequently facing eviction is a real, real concern. We do not want to push individuals towards seeking homelessness support from the local authority; we want them to go into homelessness prevention support, and we want to try to keep people in their homes where at all possible. I'm sure, Chair, that you'll remember from previous sessions with me, and I'm sure you've had evidence from elsewhere, that we continue to have very high levels of presentations for homelessness services right across Wales. So, I'm pleased to say that we have managed to find an additional allocation of £10 million to put into the homelessness budget and to maintain our 'no-one left out' approach to be sure that no-one is forced to sleep rough. The additional funding is going to go into homelessness prevention measures, including where it cannot be prevented to meet the costs of temporary accommodation.

I'm sure that the committee is also aware that we've had absolutely no funding commitment from the UK Government for the Homes for Ukraine scheme. We funded our supersponsor scheme, including accommodation and wraparound support using funding from Welsh Government reserves, and we continue to support people arriving from Ukraine. We've committed a further £40 million to ensure that people fleeing the war continue to have a place of safety and sanctuary in Wales. We've committed £20 million to supporting our Ukrainian humanitarian response as well, and that's to ensure that our really hard-pressed local authorities are able to continue offering the services that we've put in place.

And then, Chair, I think what I really want the committee to understand is that, obviously, the part that you're looking at from my budget is part of a much bigger MEG, as we call it—the main expenditure group. And so, we've had to look across right across the MEG to balance out how to get through the pain of this budget, and that's the word that has to be used. It's been a really, really, really difficult thing to do, and we've had to look at an enormous number of things that are essential to be able to push our progressive plans forward.

So, we continue to outline a vision and our short and medium-term plans, including preventative plans, to push forward the reform. So, we continue, for example, to resource putting our homelessness legislation onto the statute book; we continue to look at embedding the Well-being of Future Generations (Wales) Act 2015 ways of working across the piece, including transparency and impact reform; we also continue to try to maintain the longer term strategies that we have for things like decarbonisation, for retrofit, and so on, balanced with the real sharp-point crisis that we've been facing and trying to move the money around, so that we're both helping people in the here and now, but also not making it worse for people later on because we've moved that money around. There's no getting away from the fact that it's been a real, real challenge to do so, and, as I say, we've had to look right across the whole expenditure group to do that, and the money has been moved accordingly in an attempt to do that. I'll leave it there. I'm sure that you'll get into some of the specifics, but I want the committee to fully understand the sheer scale of the budget process that we've been going through in order to try and squeeze some of this cost-of-living money out of the budget.


Okay, Minister. Thank you very much for that overview and, as you say, we'll be coming on to many of those matters with subsequent questions. Firstly, Mabon ap Gwynfor. Mabon.

Diolch yn fawr iawn, Gadeirydd. Bore da, Weinidog ac aelodau o'ch swyddfa chi. Gaf fi ymddiheuro fy mod i'n methu bod yna mewn person efo chi? Mae amgylchiadau personol yn golygu fy mod i'n styc yma yn y gogledd ar hyn o bryd. Roeddech chi, Weinidog, yn sôn yn eich ateb agoriadol am ddigartrefedd. Jest yn gyffredinol ar hynny, ydych chi'n teimlo bod gwasanaethau digartrefedd a gwasanaethau cymorth i ddigartrefedd wedi cael eu blaenoriaethu gyda chi yn y setliad yma? 

Thank you, Chair. Good morning, Minister and members of your office. May I apologise that I can't be there in person? I have personal reasons that mean that I am stuck here in north Wales at the moment. Minister, you mentioned in your opening statement about homelessness. Just in general on that point, do you feel that homelessness services and support services for homelessness are being prioritised in this budget?

Diolch, Mabon. Yes, absolutely. So, the data shows clearly that demand is increasing. I've just said in my opening remarks that we know that the pressure on homelessness services across Wales hasn't abated and, in some places, has actually increased. We also know that the cost-of-living pressures that people are facing are adding to the drivers that drive people into home loss. We also know that prevention is the most effective and cost-effective way to address homelessness. So, we're not going to row back on our 'no-one left out' policy, despite the real serious pressures that we've facing. So, recognising those pressures, the prevention budget will increase by £50 million in 2023-24, an additional £10 million more than previously planned, and that takes our investment in homelessness and housing support to over £207 million next year. 

In recognition of the support services required to keep people in their homes as well, we increased the housing support grant budget by £40 million in 2021-22 to £166.763 million, which is a 30 per cent rise. And I'm pleased to say that, despite the incredibly difficult budget pressure that we've had this year—and it has been incredibly difficult—we have managed to maintain that substantial increase in this year's budget, and then going forward into the 2023-24 budget. So, the answer, I suppose, in a nutshell is that there is obviously more that we could do; there's always going to be more we can do in the face of the current cost-of-living pressure. But, I'm very pleased that we've managed to maintain services at the increased level that we were able to put them in, and we've just managed to get another £10 million into homelessness services themselves. We continue to scrutinise the budget every day, I assure you, looking for extra ways to increase money into this essential service. 

Diolch, Gweinidog, am yr ateb hwnnw. Os caf fi fynd at naratif y gyllideb drafft, fel roeddwn i wedi'i ddarllen a'i weld o nôl ym mis Rhagfyr, yn y naratif yna, mae'n sôn am effaith tâl isel a chostau byw ar staff rheng flaen y gweithlu digartrefedd. Maen nhw'n dweud, er enghraifft, bod 44 y cant o'r gweithlu methu talu biliau, bod 11 y cant ohonyn nhw'n methu talu rhent, ac yn y blaen. Ond, eto, mae hwn, eleni, yn setliad fflat, o'i gymharu—. Dwi'n derbyn eich bod chi'n dweud eich bod chi wedi ei gynyddu o mewn blynyddoedd blaenorol, ond yn y flwyddyn ddiwethaf, dŷn ni wedi gweld chwyddiant anferthol, ac, felly, mae'r setliad yma, sydd yn fflat, mewn gwirionedd yn doriad telerau go iawn i'r setliad, sydd yn golygu y byddwn ni wedyn yn gweld mwy o'r gweithlu rheng flaen yna'n gadael eu gwaith, a mwy o bwysau, felly, ar y gwasanaethau yna. Felly, wrth ystyried y targedau sydd gennym ni—dŷch chi wedi sôn amdanyn nhw—ac wrth ystyried y ffaith ein bod ni'n debygol o weld mwy o'r gweithlu yna'n gadael ac yn methu gwneud eu gwaith, a mwy o bwysau, ydych chi yn meddwl bod hyn, y setliad yma, yn deg i'r sector honno'n benodol? Ac a ydych chi yn meddwl bod y £10 miliwn ychwanegol yma rydych chi'n rhoi yn medru mynd tuag at y gwasanaethau yma sy'n cael eu darparu gan y rheng flaen? 

Thank you, Minister, for that response. If I may go to the narrative of the draft budget as I read it and as we saw it back in December, in that narrative, it mentions the effect of low pay and cost of living on the front-line staff of homelessness services. There was an example that 44 per cent of the workforce were unable to pay bills, that 11 per cent of them were unable to pay rent, et cetera. But, this, again, this year, is a flat settlement, compared to—. I accept that you say that you've increased it in previous years, but in the last year, we've seen huge inflation, so this settlement, which is flat, is a real-terms cut in the settlement, which means that we will then see more of the front-line workforce leaving their jobs, and then more pressure on services. So, in considering the targets that we have—you've mentioned some of them—and the fact that we're likely to see more of that workforce leave and unable to do their work, and additional pressure, do you feel that this settlement is fair for that sector in particular? And do you believe that the £10 million additional funding that you’re putting towards these services that are provided is enough? [Translation should read: And do you believe that the £10 million additional funding that you're providing is able to go towards these services that are provided by front-line staff?] 


So, the short answer to that is, no, of course, it's not enough. As I said, we could put a lot more in, if we had it, but the trouble is that we don't have it. Our own budget is eroded by inflation as well. It was an enormous struggle to maintain the increase in those budgets; those budgets were not what they call 'baselined' in the first place and we have managed to do that. And I know that that, on the outside, looks like a real-terms cut, because, of course, we're in an inflationary spiral and inflation erodes all of the money that we all have. But, I can assure you that I am acutely aware of the problems in housing support and my heart absolutely goes out to people on the front line. I pay tribute to them every single day; they do the most incredible job, particularly the housing outreach workers, who are amazing human beings. And, as soon as there is any available money, we will be putting more into this area.

But just to give an example, what we've been doing with the £10 million is we've been trying to help our local authorities prevent people from becoming homeless in the first place by, for example, making sure that, in certain circumstances, rent arrears are cleared. So, a very small investment of £1,300, for example, can prevent a family from being homeless. Thirteen hundred pounds doesn't even cover the first week of a family being homeless, so it's clearly a good financial investment, as well as a hugely good humanitarian investment, because the trauma of homelessness is something that children do not overcome easily. So, we have been working with the local authorities to try and be as creative as possible to keep people in their own homes, and to make sure that the homelessness prevention services are as creative as is humanly possible for them to be. And we've got to put more into prevention, because, frankly, if we can't turn off the tide of people coming to homelessness services, there is no way that we could fund the kind of service that we would then have to do. And so, we have made the best of what is, as I said at the beginning, the most difficult budget I have ever faced in my time as a Welsh Government Minister. I do not say that lightly.

So, we have managed to balance the books this year—that has not been easy—and we have tried very hard to prioritise all of the services across my entire portfolio that really matter to people. We are not doing any 'nice to haves' here; every single service we provide is an essential service. And, if I was to put more money into the housing support grant, which I dearly wish I could, then I would be taking it off somewhere else and you would be having the same conversation with me about wherever else that it had come from. And that is the stark reality of where we are. So, we have squeezed the cost-of-living support out as much as we can. With the co-operation agreement's help, we have put £10 million out to the local authorities for homelessness services. We continue to scrutinise the budget, penny by penny. Dean and I have spent so much time together going through each line of the budget, trying to squeeze every single penny out, and Emma's team are very hard-pressed in trying to make sure that the money that we do have gives us the best bang for our buck. But I'm not hiding from it, Mabon, if I could put more money into it, I would.  

Diolch. A gaf i felly ofyn, jest i fynd yn ôl un cam, roeddech chi'n sôn eich bod chi eisiau buddsoddi mewn gwasanaethau ataliol a sicrhau bod awdurdodau lleol yn medru darparu'r gwasanaethau ataliol hynny, er mwyn atal pobl rhag cyrraedd y lefel yna o fod yn ddigartref a mynd i mewn i lety dros dro i gychwyn. Wrth gwrs, mae hynny'n gwneud synnwyr, a does yna ddim anghytuno yn y fan yna. Ond, y gwir anffodus yw bod awdurdodau lleol yn methu â darparu'r gwasanaethau yna yn llawn oherwydd eu bod yn methu â chael y gweithlu, oherwydd eu bod nhw hefyd yn dioddef toriadau anferthol. Felly, a ydych chi'n meddwl bod y setliad i'r awdurdodau lleol yn un teg er mwyn eu galluogi nhw i fedru gwneud y gwaith ataliol hwnnw yr ydych chi mor awyddus i'w gweld yn cyflawni?

Thank you. Just to go back one step, you mentioned that you want to invest in preventative services and ensure that local authorities can provide those preventative services, to prevent people from getting to that level of becoming homeless and going into temporary accommodations to start with. That makes sense, of course, and I don't disagree with that. But, the unfortunate truth is that local authorities can't provide those services fully because they don't have the workforce, because they also are suffering from huge cuts. So, do you think that the settlement for local authorities is a fair one, to enable them to do this kind of preventative work that you are so keen to see them undertaking?


Again, it’s a similar answer, I’m afraid. We have protected all of the programmes and put money back into people’s pockets to every extent that we can. So, there’s an extra £18.8 million in the discretionary assistance fund, for example, to continue to provide emergency financial support to people facing immediate financial distress. We have had to make those difficult choices.

It is absolutely the case that, by providing that immediate cash support into people’s pockets, we hope that that will make them more resilient, and enable them to stay in their homes and to pay their bills, and not to get into the financial spiral of debt that it is inevitable when you can’t pay even small sums of money out. We are talking about hard-working people who have got jobs and are trying to keep them, but who cannot pay their bills.

The spiralling cost of energy alone has been absolutely horrendous, and might I just also say, Chair, that the spiralling cost of energy, of course, is hitting our public services as well? They also have to pay it, so their budgets are not going as far. There’s no getting away from that, and there are no easy answers here.

We have worked with our local authority partners. I meet very regularly with the leaders and housing cabinet members, for example, to try to make the best of the money that we have got and to try and understand where the worst pressure is, and to try and cover, between us, the worst pressure in the system. But every part of the system is under pressure, because we have a cost-of-living crisis, and spiralling inflation, and a stagnant economy—the worst of all possible worlds.

So, I’m afraid that there are no easy answers here. I absolutely understand what you are asking me, and if I could have given more money to local authorities for the services that I support—not just in housing, but in a number of other areas—I would have. I know that my colleague the Minister for Finance and Local Government has tried very hard indeed to protect front-line public services in the settlement. We had an order of priority, as we always do, and front-line services are absolutely front and centre of what we are trying to do.

We have a very close working relationship with our local authorities. We have this discussion with them very, very regularly. Emma’s team has relationship managers in every local authority, working with them to understand what the individual pressures in each local authority are, and to try and help them through it.

This is very much a collaborative piece of working, in line with the future generations Act. We are absolutely doing this on a collaborative basis, and I think that the local authorities will say the same to you. Of course, they could do with more money, but they are very appreciative of the amount of support that we are giving them from inside the Government as well.

Diolch. Ar yr un trywydd, felly, rŷch chi’n sôn am gydweithio a’r angen i sicrhau ei bod yn bosibl uchafu’r cymorth tuag at wasanaethau digartrefedd. Wrth gwrs, mae’n bolisi gan y Llywodraeth i gael gwared ar ddigartrefedd, gan sicrhau bod cyn lleied o bobl â phosibl yn dioddef o ddigartrefedd. Felly, i’r perwyl hwnnw, a ydych chi’n credu ac yn hyderus, ar draws y portffolios, fod Gweinidogion eraill wedi blaenoriaethu digartrefedd a’r angen i fynd i’r afael â hyn yn eu portffolios nhw? Pa fath o gydweithio sydd gennych chi er mwyn sicrhau eich bod chi’n cael y gorau allan o bob punt o bres cyhoeddus er mwyn cyrraedd y targedau hynny, sef sicrhau bod neb yn ddigartref yng Nghymru?  

Thank you. To go down that same route, you talked about collaboration and the need to ensure that you could uprate the support for homeless services. Of course, it's a policy for the Government to eliminate homelessness, by ensuring that the fewest number of people possible suffer from homelessness. So, to that end, do you think and are you confident that, across the portfolios, other Ministers have prioritised homelessness and the need to tackle this in their portfolios? What kind of collaboration do you have so that you can get the best out of every pound of public spending that goes into achieving those targets of ensuring that no-one is homeless in Wales? 

I think that the answer to that is 'yes'. We work very closely across the Government to do this. Obviously, the biggest lever for us is the association that we have with the local government Minister, with that particular hat on. So, we worked very closely with her to make sure that the settlement reflected what we want. We have also worked very closely with local authorities across a range of services, so that we don't have a kind of smoke-and-mirrors effect, if I can put it that way. There are lots of very specific grants in my portfolio. We have very specific transport and waste grants, for example. We have very specific grants in a number of areas. What we didn't want to do was make it look like we put the RSG up while taking the grants down.

We have had conversations with local authority leaders across the piece—one of whom is in the room, actually, with a different hat on—about making sure that what we do is transparent. So, if the transport grant is going down, we make it clear to people what's happening and where that is with the revenue support grant. So, we’ve worked really hard to do that, Mabon, across the piece. And then just to underline the difficulty we have here, while we’re dealing with homelessness prevention, putting more money into the discretionary assistance fund, we’re also trying to build the houses that mean that people don’t stay in temporary accommodation and can get social housing as fast as possible. We have to balance those budgets out. In some ways, you would say, ‘Well, don’t deal with homelessness; build the houses as fast as possible’. That’s clearly not a humane solution, is it? So it’s all about trying to get the balance of keeping the services running and also trying to fix the problem at the other end. As I say, this has not been easy to do, to try and balance out the budget so that we’ve got enough money in each of these budget heads to keep that service running.

What we obviously want to do is get the prevention services ramped up so that we can take money out of the sharp end, where it hopefully will no longer be needed once we’ve done that, and put it back into the programmes and build the houses that keep people safe and secure in the first place. That is easy for me to say sitting here, but it is a very, very difficult balance to come to in a difficult and complex budget, but we have done that right across the Government, and as I say, there is a Cabinet sub-committee on cost of living that scrutinises this to the nth degree. [Interruption.] Please do, Emma.


I thought it might be helpful to add an example where we work with other departments. For example, in youth homelessness, the prevention angle is all-important, engaging with young people when they’re starting to hit difficulties, and often school is the first place that can see those difficulties occurring. We direct funds through our colleagues in education and the youth support system in order to be able to try and identify and link up those young people who are starting to face the kind of difficulties that we know often lead to youth homelessness situations. I just thought it might be helpful to give an example of where funding from the housing portfolio is going via a different portfolio, joining forces with education funding in order to have the most preventative impact.

Thank you very much, Emma. It’s always instructive to have examples. Diolch yn fawr, Mabon. Sam Rowlands.

Thank you, Chair, and thank you, Minister and your officials, for joining us this morning. We always appreciate your time. You touched at the end there, Minister, on getting that balance right between preventative investment and homelessness, and then also building houses. I want to focus a bit of time on that housing supply. Of course, we’ve got the commitment from Government to build 20,000 low-carbon social homes for rent. I wonder how you see next year’s budget helping to support that commitment to those 20,000 homes, and your initial assessment in terms of the impact of rising costs on that ability to deliver those 20,000 homes.

Quite clearly, the impact of rising costs is having an impact on our ability to do that. We’re having to intervene in the builds at much higher rates of grant than we otherwise would. Fortunately, fortuitously—or with great foresight, depending on your point of view—we managed to move the way that we put the grant aid out. We used to have a flat rate of grant aid, but actually, before this latest crisis hit, we managed to change the way that we did the grant, so now we’re able to calibrate the grant that’s required, depending on the site that we’re trying to build at. It’ll be no surprise to you at all that land values vary right across Wales, and that we need to put rather more intervention in terms of grant support to some of the developments where land values are low in Wales, and much less into some of the developments where land values are high. That’s been really helpful in being able to bring the number of houses forward. Just at the moment, we’ve got a number of sites at different stages across Wales that will deliver 1,148 homes and around 680 of those are affordable for social rent. That’s about the normal balance, so just slightly more than half available for social rent. We’re very pleased with that. That means that the industry is holding up, although we would like it to be higher numbers than that, obviously.

We’ve also, as you know, Chair, got a whole series of issues with sites held up behind the issue with phosphates in our rivers. The First Minister held a summit last July, and we set up a whole series of work streams running with various sectors of our population. The onus was very much on each sector looking to its own problems and coming back with solutions for that rather than pointing the finger across at everybody else. Rather than the farmers blaming the house builders and the house builders blaming the water companies and all the rest of it, we were very firm and said, ‘Nobody cares about any of that; you come back and tell us what your sector is going to do to put its house in order’. We've had a series of meetings. There's one this month now that's being chaired by the chair of Natural Resources Wales, and then there's another summit chaired by the First Minister on 6 February. We have a whole series of work streams going there, so I'm very hopeful indeed that we'll be able to action some of the solutions that are coming forward. I attended a number of the meetings myself, and I'm very, very hopeful that we will have an agreed action plan across the piece for that summit in February. 

That will unlock a number of housing sites across Wales, which we'll then be able to accelerate, and we stand ready to do that. We also have a series of programmes across Wales where we're using our own land to build exemplar sites, and they have more than 50 per cent of affordable housing on them. And then, because the housing market is such a volatile thing, last time I spoke to this committee we were in a rising market with accelerating prices. Now, we're in a falling market with declining prices. How fast has that been? And actually, one of the interesting effects of a falling market is that our SME builders are very keen to sell to us off plan, and in an odd twist of fate, that means we can actually acquire more houses, and it also means that we can drive standards through, because, of course, unless they build them to the standard we require, we can't buy them off plan. So, in an odd twist of fate, a falling market drives the standards of housing up. I'm sure there is a PhD in that somewhere.

We are hopeful that we will be able to adjust the market. We have a whole series of other interventions, Chair, which would probably take me an hour to go through, which are designed to get more housing into the market. And then, the 20,000 homes for social rent overall, some of those will also come through our Leasing Scheme Wales and through our empty homes programme. So, we've been able to put more money out into the local authorities to assist them with the empty homes programme. It seems an absolute travesty to me that we have empty homes in Wales and people in temporary accommodation. So, we have ramped up the empty homes programme, and, again, I'm hoping for an announcement as part of the collaboration agreement shortly on what we'll be doing on some of the future empty homes schemes.

On the 20,000 homes new build, I will be absolutely honest with you and say we are really struggling to get to 20,000 new builds. What we will be able to do is ensure that we have 20,000 additional social homes for rent as a result of a number of other programmes that are also running, and because of the volatility of the housing market. We'll keep a close eye on that, obviously. 


Thanks. A couple of points I'll come back to in a moment, particularly around phosphates. I appreciated your initial update on progress there. But just going back to the 20,000 target, you mentioned right at the end there that that being delivered purely through new builds is not realistic and that there's other ways in which that will be achieved. Do you think that will still be achieved within the initial time frame that you hoped to be achieving in? 

The truth about that, Sam, is that I don't know. We are still putting the interventions in, we're able to adjust the grant, the housing market is extremely volatile, as I've just said, so it may well be that we're able to put other leverage in that we wouldn't have been able to this time last year. And, obviously, we are still hoping and working towards the 20,000 new build. However, when we started I thought we would get to the 20,000 new builds no problem, and I would be happily telling the committee that we'd also got a number of empty homes and lease schemes and all the rest of it, and that is not the case now. The world has very much shifted and the inflationary spiral has made a huge, huge dent in that, there's no doubt. 

There have been other volatilities in this market. I'm sure the committee knows that the price of timber has accelerated over the last two years very much. It's now dropping. So, again, depending on the supply chains, depending on the availability of materials, the situation will change. We continue to calibrate the grant accordingly, and to try and get as many of the developments up and running as we possibly can, given the intervention levels that we've got. We have a construction forum that I chair with my colleague Vaughan Gething in the economy department, and we talk to our SMEs about what they need to make sure that they can keep going with their small building programmes across Wales. And, as I say, it's part of the co-operation agreement, and I'm sure we'll be able to get some announcements out of that before the end of this financial year as well. 

So, it's a complex picture. We absolutely will deliver 20,000 additional social homes for rent. I can no longer be absolutely certain that all of those will be new build. We will still push towards that as fast as we can, but given the current volatility, nobody would be able to sit here and tell you they could definitely do that.


Okay, thanks. And just going back to some points you mentioned there around phosphates—and I appreciate the progress that you're making so far within that and, as you said, you've got the further summit at the beginning of February, where, hopefully, there'll be more progress again. I think it was Community Housing Cymru that showed that, last year, there were over 1,000 social homes at the moment that are being held up because of that. So, from a budget context, which is where we are today, have you allocated, or will you be allocating, specific funding to help unblock and support those various sectors that you mentioned earlier? In them, as you describe, 'putting their house in order', is there going to be particular funding that's going to enable that to happen as quickly as possible?

So, the answer to that is that I don't know yet, because, until we've signed off the action plan, we don't know what that entails. So, the point of the summit on 6 February is to have, we hope, a signed-off action plan. Each sector has been working on its bit, there have been sub-summits, boards meeting—the nutrient management boards, the better river taskforce, there's SOCROG or whatever it's called—so, there are a whole series of these meetings across Wales. Each of them has been asked to sign off their parts of the action plan, to agree it, to agree it with their sector, and bring it up. When we see that, we will be able to have a look to see what is required by way of finance or otherwise—I honestly don't know yet—and then we'll be able to come back to you and tell you. So, the absolute answer is, 'I don't yet know.' It's hard to imagine that there won't be an investment programme needed for some areas, but we'll have to have a look at what those areas are and how they're currently supported by Welsh Government funding, and then we'll have to have a look at what that funding is able to morph into in order to support the programme. So, to just give an example of that, we obviously have the sustainable farming scheme coming on stream. Well, if the agriculture sector comes up with a range of interventions that can be funded through the sustainable farming scheme, then there won't be an additional programme. If they couldn't be, then we'll have to look to see if there is, and I don't know the answer to that yet.

Sam, just before you—[Inaudible.]—Carolyn Thomas wanted to come in on these points. Carolyn.

Yes. It was just to pursue the phosphates issue. So, I met with NRW, myself, planning officers and a housing association, trying to drill down what the issue was, and the registered social landlords said, 'If money was needed, even towards extending a waste-treatment facility for Welsh Water, or if it was a drainage solution, then ask developers for that—towards that contribution, like through the 106.' Or the landlord. ClwydAlyn was one I spoke with. And I think the issue was that NRW and Welsh Water didn't really have, couldn't give them, a plan of what was needed and the time frame as well, because they needed to work that into their plan as well. But I was able to tell them that the meetings were going ahead, so they were really pleased about that. So, I think planners as well weren't really coming forward with the right information for them, so I'm really pleased to hear that something's happening with those. I see in north Wales that a lot of investment's been able to happen in north-west Wales; the money's just going straight into that, which is great—really needed. But then, north-east Wales, nothing is able to happen because of that issue, so that's why I wanted to unlock it. Thank you.

No, absolutely, Carolyn. And that's a very good example. So, for house building, there are a range of solutions available, some of which will be the sustainable drainage systems programme, for example, some of which will be different drainage solutions for new housing, some of which will be new drainage solutions for an area, some of which will be infrastructure investment for the water companies, some of them will be—. Well, there's a whole range of things for the housing sector that we've asked them to look at. And just to reassure, there are social landlord umbrella groups on the boards meeting with us for that. And Emma, I'm sure, can tell you all about the value-for-money programmes that we have for interventions for private finance.

But social landlords have access to a huge range of finance that they can bring to bear on that. Pension fund providers often invest in social housing, we've got M&G Investments, which have been brought to Wales through the Welsh Government housing finance grant, we've got loan books for registered social landlords, we've got local authority borrowing. There are a whole range of financial instruments that we can bring to bear, once we have a plan. And then—. As I say in answer to Sam, until we understand what the plan looks like and what the other sources of funding are, then we don't know what the ask on us will be. So, we need to work through that. But, clearly, what we want to do is unlock all of those sites. That's the aim of this; that was the purpose of the summit in the first place.

Could you just extend that a bit further? You mentioned about perhaps talking about the ability of social landlords to access their private finance. Are you able to describe what that looks like in terms of what Government is doing to support those social landlords to access that private finance, with its pension pots or whatever it might be?


So, I'm going to get Emma to do the detail of that, I'm afraid. So, what we do is we ask the social landlords to—. As part of their financial health assessment, they have to look at their asset books and they have to look at their loan-to-asset ratio, as you'd expect, and then they have to provide us with assurance that the amount of money that they're able to borrow or raise on private finance markets doesn't affect their liquidity or their stability, because, actually, their primary purpose is to provide social housing. But you'll be aware that some of the larger ones develop a whole series of different property types, and they use that to increase their asset base in order to get their loan ratio up. But I am now at the absolute limit of the detail that I know, and I'll happily hand over to Emma to give you a bit more.

Thanks very much. I think that reflects the complexity in the market, in that each different social landlord will be in a slightly different position, with different covenants and different finance arrangements in place that come to renewal at different points in time. In the past, we have done things like provide finance more directly, or partner with commercial finance, and we regularly have discussions with different bodies that will come forward with suggestions of ways that finance can be leveraged. They are all treated uniquely and investigated—due diligence is very intensive on those kinds of products—to see whether it is a cost effective way to finance and whether it meets the standards required for Green Book, for our engagement and investment. That could be loan funding, it could be guarantees, it could be a combination of the two, but it is more often, with RSLs in particular, about their ability to go to the market and use their rent book in order to be able to secure good-quality investments.

We've done promotions et cetera in the past in order to highlight the benefits of investing in the sector in Wales that have generated some very good products in the past. As the Minister says, we constantly monitor where our RSLs are in terms of their covenant cover, in terms of their financial cover, and where they are, actually, in renewing. And particularly at the moment, with interest rates as they are, actually monitoring who is going to be in the market to renew funding very soon has been a key indicator. I'm very relieved to say that, actually, we don't have very many that are needing to refinance very quickly, because that would be a concern, given where interest rates are.

Yes, and, sorry, to go on a bit further on this point, I guess there were concerns from some social landlords with the potential rent caps, because that would have, perhaps, hamstrung some of those investments from outside finance, if there would have been rent caps in place, wouldn't it? So, I understand that.

Okay. You mentioned earlier, Minister, as well, the empty homes initiative, to bring them back into use as quickly and efficiently as possible. I wonder if you'd be able to talk about any particular—. Again, with the lens of next year's budget, are there any particular budget lines that you're allocating to accelerate that piece of work, and working with local authorities, I guess, to bring those back into use as quickly as possible?

Yes. So, you can probably see Dean and I looking to see which budget expenditure line it is, actually. I don't know if you know off the top of your head, Emma, do you? So, we've got different BEL lines for the housing programme revenue funding, for market housing, which is the empty homes fund, effectively, so that's 0987 for the policy wonks in the room. We've got financial transaction capital in that as well, because that's one of the biggest levers that we have for that. So, what we do there is we use, as creatively as possible, a mix of normal and financial transactions capital with help from the local authorities—and I know you're familiar with this from your previous role, Sam—with help from local authority grants as well, to bring as many empty homes as possible back into use. There's a series of different grants available, depending on what happens to the empty home. So, if you want to live in it yourself, you have to live in it for at least five years or you have to repay the grant. You can also hand it to Leasing Scheme Wales—we're very keen for people to do that—and then Leasing Scheme Wales will allow you to access a different set of grants that will allow the property to be brought to standard so that it can be let out. And that's a minimum of five years and a maximum of 20, and we encourage people to do that for as long as possible, and then the grant varies depending on what the use is and how long we have the home for. So, the answer is 'yes', there is a specific budget line for it, but it's a mix of things. 


And can I just say that the financial transactions is the only flexible thing we've got in this year's budget? There was no increase in capital across Welsh Government, and financial transactions is where there is a possibility that we could do work with landlords and also local authorities. 

If I can just expand, in effect, we've got four areas of work around empties, because it is such a key focus for us—as the Minister says, the empty homes grant, but there are also loans. The advantage of being able to take a loan is that you can access loan funding before you've actually moved into the property, and take advantage of that. So, you can combine loan and grant. The new empty homes grant has a budget of £50 million over the next two years. That will provide specific grants—a small contribution being asked from local authorities to support that. We're just working through the final details of that, ready for launch. But that will be quite a generous scheme—it's up to £25,000 per home that can be invested, and, as the Minister says, you need to then live in it for a period of time. 

We also have work around enforcement, because, where there are properties where perhaps the owners are not overly proactive, shall we say, in coming forward and accessing these things, actually, enforcement action from the local authority is a real key way to leverage that action. And so we've trained, I think, about 850 members across local government—and officers—to help them to be able to use the enforcement action that is available to them to push those properties back into use.

As the Minister said, we've also got Leasing Scheme Wales, but also the transitional accommodation programme has looked at long-term voids, particularly those expensive to bring back into play voids that social landlords have, and how those could be brought back in. So, activity right across, and right across all sectors—so, social, private, and the private rental sector, in effect. 

And just to say, for completeness, that the financial part of this BEL line also supports the Help to Buy schemes that we still run in Wales. 

Okay, thank you. I'll just ask some questions regarding decarbonisation. I saw that some wonderful zero-carbon houses are being built in Ruthin and Anglesey—really well-insulated homes, triple-glazed, air source heat pumps. Really wonderful, and battery storage as well, which is great. So, I was just wondering—. It's really good that investing now is going to help future generations, and putting the money in. Do you think you might have to, though, lower the standard of the build going forward—that's the first question—because, of course, you could build more houses, couldn't you, if you lowered the standard, but the quality is fantastic and really appreciated? And to what extent do you think the budget allocation to prioritise decarbonisation—and your aspirations for Wales—to what extent do you think you'll be able to achieve the 2050 net zero aspiration going forward?

So, we absolutely are not rowing back on the standard. There's absolutely no question of that whatsoever. All you do there is drive up the bill for future generations, and, although we're in a cost-of-living crisis, we're also in a climate emergency; it hasn't gone away. You only have to look out the window to see what's going on with the climate. So, it's absolutely essential that we do not row back on that, nor will we.

You only have to look at the bill for decarbonising the other stock. Houses that were built 10 years ago require retrofit; it's really awful. So, there's absolutely no way we're doing that. It would be a very foolish short-term measure that would bring a large bill in all of our lifetimes. It's just not something we're going to do. 

What we're not able to do is make sure that—. If we do bring houses in by other routes—so, by the empty homes scheme or that kind of thing—we won't necessarily be able to bring them to the same standard, although we do bring them to the highest possible standard for the fabric of that building. And I don't want to not have people housed in those houses because we can't get them to passive house standard or whatever. So, just to be really clear. But they are still brought to the right standard. 

We've also got the development quality requirements, as they're called, and we've got the new iteration of the Welsh housing quality standard as well. We're in the last throes of negotiating the next iteration of the Welsh housing quality standard, and that's in agreement with our local authority and social landlord partners for what the next stage of retrofit will look like for social homes. We've got, obviously, the optimised retrofit programme still running, so that we can make sure that, when we do advise people, and we do advise people across all sectors of the housing market, that we know what tech we're advising them to put in, and learning the lessons from the previous iteration of WHQS. Because we know that, for the vast majority of the homes in the first iteration, it was a really good thing, but for a small minority of homes, it has caused problems, because it's had condensation or damp, because the particular form of retrofit was not suitable for that kind of house. So, we're learning that lesson and making sure that we don't have a one-size-fits-all programme, and the current conversation with the WHQS is: to what standard do we expect the houses to be brought for the next iteration? We're at EPC D at the moment, so, where are we going up that scale for the next iteration, and also over what timescale?

We're always bearing in mind that we have statutory targets for net zero. These are not something that we can just lightly say, 'Oh, do you know what—'. We have a statutory target for that, and we have a net zero plan across the Government, and I can assure you that I have intensive discussions with my colleagues about how their net zero plan is coming along, even in the teeth of this cost-of-living crisis, because, Chair, it is essential for us to remember that the biggest crisis of all is actually the climate crisis. We need to do something about it.


Absolutely. I also visited some homes that had been retrofitted with insulation, air-source heat pumps and windows. One lady, she was blind and had mobility issues, and the difference it made to her was unbelievable. She was so pleased.

It's fantastic. So, that's helping social landlords. Is there any funding to help private landlords as well to retrofit?

We're very keen to work with private sector landlords to make sure that they are able to bring their housing to standard, and, of course, because we've just implemented the Renting Homes (Wales) Act 2016—hallelujah; can I put that in brackets? It's been a long time coming. Emma has promised me a commemorative mug—but it means, of course, that it will drive standards in the sector. That's the whole point. The houses have to be fit for human habitation; they have to be brought to particular levels. And we will have a scheme for—. I'm going to hand over to you, Emma, so don't bother writing me a note, I'm going to ask you to do it. So, we have a number of schemes to encourage private sector landlords to bring their homes to standard. What we don't want to have is a situation where a private sector landlord basically decides that it's not worth investing in the house for the return that they have, and then comes out of the market, because we rely on the public sector to house a significant proportion of the population. So, we need to work with our private sector landlords, the vast majority of whom are excellent landlords, to make sure that they are able to access finance to bring the houses up to standard. I'm going to hand over to you at that point, Emma.

Thank you, Minister. So, a few things that I would mention here. Firstly, leasing scheme Wales already offers incentives linked to the ORP scheme for decarbonisation and funding to go with that, so trying to combine our desire to bring more homes into social management, if you like, with that offer of being able to improve the fabric of the building with a focus on decarbonisation. That's been quite successful. It's very, very new out, but we're hoping that it will be a real incentive for landlords to join the leasing scheme and to actually retrofit their homes.

Of course, the MEES standards, the minimum energy efficiency standards—I think I've got the words in the right order there—are actually a UK Government-led set of regulations. We're waiting for a very long time for the outcome of a consultation on where those MEES regulations go next, but I think the common understanding is that it will probably be aiming for an EPC C. So, in terms of our engagement with the sector through Rent Smart Wales, et cetera, we're focusing on, and landlords should be focused on—at some point, there is going to be a regulatory requirement that is going to push towards a C, so they may as well look to get on with it where they can at the moment.

We've just gone out to contract for a provider for our hub, which would provide advice and guidance to all sectors, including the private rented sector, on where they can go for good-quality advice and products around retrofit. So, that will be a good source of additional information. And the other thing I would add in is that we've got a couple of early pilot projects that the development bank are running, looking at finance models and support in the private sector. So, whilst the majority of our funding and our effort is focusing on the social sector and bringing that up to standard, the learning that we’re taking from that we are starting to apply in a measured way in other sectors as well.


And then, just to add to that, the last piece of that is elsewhere in the portfolio. We also have Nest and Arbed. Arbed has finished as a scheme now, but we’re working on the replacement programme for that, and, of course, that’s wholly directed at privately owned properties. We’re also looking at working with our local authorities for community action there. So, worst first, basically. But, what we’re looking to do is improve entire communities, rather than one home in each street. So, we’ve been running an audit with our local authorities across all homes in Wales, and then we’re looking to see where the least well insulated, the hardest to heat, the hardest to maintain homes are, and then looking for community initiatives as part of our energy programme to bring those homes up to standard as well. So, there are other non-housing interventions in the energy field that have the same effect.

Great. And regarding housing adaptations, the importance of those and how they relieve the NHS, basically, don’t they, as well, and we’ve been talking about the pressures on that and getting people back into their homes, so, just regarding budget allocations for those, how has that been prioritised?

Yes. On that one, we run Care and Repair from this portfolio, obviously. We’ve made a number of adaptations to that—no pun intended—over the last year or so, the best of which is that we’ve stopped the means testing for the small and medium adaptations. So, working with the local authorities. And I’ll just, actually, Chair, use the committee, if you don’t mind, as publicity to say that we really hope that all local authorities will come on board with this. The local authorities administer this for us, and so, we’ve put the funding in place to allow small and medium adaptations to be done without a means test. That increases the rapidity of the response and, of course, it keeps people in their own homes longer, relieves the pressure on the NHS—it absolutely does—and also, actually, of course, it’s part of the whole push to keep people in their own homes for a variety of reasons, not least their mental health. We know that people are better off in their own homes.

We also have some funding available—which escapes me, so I’m just looking to see if either of them can remember and, if not, Chair, we’ll write to you—for larger adaptations, so that you can access funding for larger adaptations, where they’re necessary. Forgive me, the name of it has totally escaped me for a moment.

That’s right, yes. Sorry, I had an absolutely blank moment about that, then. Yes, so those are for much larger adaptations. So, as you know, Care and Repair does everything from putting a handrail in for you, ramps and adaptations to whole kitchen adaptations for wheelchair users, and so on. So, we’ve been really pleased with that and we’ve been able to, after much work by myself and Dean, keep the budget in place for that, because obviously, it’s a preventative programme.

And not being means tested, the difference it’s made—I know, I’ve been to help people with blue badge applications when they’ve not been able to do it themselves, and they’ve actually said that they’ve been able to get these adaptations put in very quickly, handrails and so on. So, that’s been really good. And, do you think that Welsh Government has sufficient data on home adaptations to allow it to focus resources on households, areas and tenures where the need is greatest to do it best, or is it done through the local authority?

Yes, so, we’ve increased the final budgets for all of these schemes. They’re up 83 per cent, from £1.641 million to £3 million, and the ENABLE grants are up by 20 per cent as well—I’ve just finally found my piece of paper. And we’ve reflected in that the real need to keep people in their own homes, for a variety of reasons, as I said, and actually, this is an invest-to-save programme, really. So, this is exactly the kind of balance that I was talking to Mabon about at the beginning of the committee session, where we’ve had some really searching conversations about is it better to put things into these preventative programmes, or is it better to help the people who already find themselves at the sharp end. So, I’m delighted that we have been able to do this and to keep it up.

And we’ve put in an additional—I can’t even say that aloud; my glasses have gone—£3 million, is it, into the disabled facilities grant. So, that’s an additional £3 million into the disabled facilities grant funding, and the housing care fund as well. We've also managed to put £1.426 million, through unallocated funding, to supplement the physical adaptations grant scheme for housing associations, as well, to assist them.

And just to say, Chair—and we say this all the time—the regional partnership boards have flexibility to supplement the cost of disabled facilities grants, and the limit that they can do that to is more generous in England and Northern Ireland. So, they do use that flexibility, but it's very hard for us to say, other than retrospectively, how that's worked out. So, I won't be able to tell you how that's going until after the budget year and we know what the spend looked like, but just to remember that the regional partnership boards also have funding available in this space.


Can I clarify on the figures that the Minister—?

The figures, Minister, are totally correct, but if you remember, we were trying to do a three-year budget last year, so, what we did was increase the capital budget in this area by 38 per cent. What we've actually been able to do, because we had no more capital for this year, is maintain it at that level. So, there has been an increase and then we're maintaining it as best we can. So, that's the priority that the Minister put on it.

Diolch, Gadeirydd, and morning, Minister. Just some questions on building safety, we know that the Welsh building safety fund and the revenue funding support in the digital and physical fire safety surveys are here. I'm just wondering whether surveys of medium and high-rise buildings have allowed estimates of the total cost of building remediation works to be made.

So, the short answer to that is 'no'. Each building is absolutely unique and so, there's no way to project the cost as a result of some surveys being done. We obviously have the results of the surveys for the buildings that have been surveyed, but there's absolutely no way to extrapolate across the other buildings. They are so different—each building has such a unique set of difficulties that it just hasn't been possible to do that. So, we've got an envelope for it that we expect to be enough for that and we've obviously worked with the developers to make sure that they step up to the mark. We're having a conversation with the developers at the moment; we're at the signing of the legal documents stage.

Some of the buildings, I'm delighted to say, are now in remediation and most, if not all, of the surveys are there or thereabouts. I very recently—this week, in fact—had a meeting with one of the big managing agents to just put a bit of impetus into their working with us to make sure that we do have access to all the buildings. And we've been assured by that managing agent that we will now have access to the buildings that we were struggling with for the surveyors to go in and do it. As I say, some of the buildings have now gone into the remediation phase, I'm delighted to say. We continue to have a conversation with the developers about the best way to use our funding, including whether it will be necessary, for cash flow purposes, to have an arrangement where we pay upfront and we get the money back from the developers. I just want to be clear with the committee that none of this is settled yet. Everything is on the table. We want to get these buildings into remediation as soon as possible.

What we also need to do though, Chair, is make sure that we aren't all fishing in the same pool and pushing the prices up. So, this is a programme that we have; we're using reputable firms—we've employed them. We don't want people to have to go out into the market and compete with each other with sharpened elbows to get the workforce necessary or the supplies necessary. And so, it is important to understand that this is a programme of work—that it's going to take a while. I know it's very frustrating for the residents in homes, but the surveys have also enabled us to issue certificates where those are possible to issue so that people can get mortgages again, and they can get on with their lives and sell if they want to and so on. And, of course, we have the rescue scheme as well for people who haven't been able to do that. We always knew that this was going to be long programme, but it is on track. I can't remember for the life of me how many surveys we've got left to do, but it's not very many now. Do you know the number?

I don't know the exact number off the top of my head, but as you say, it's a small proportion and they are ones where there are a variety of challenges, sometimes with things like getting permits to put scaffolding onto public highways and things like that. So, there are processes to go through, but those are ongoing dialogues and those will happen over the coming weeks.

And then the other buildings—just for completeness, Jayne—there are a number of buildings that have managed to have the term 'orphan buildings' associated with them. What we mean by that is there's no developer to be traced; they've either gone out of business, the building was built more than 30 years ago, there's nobody—. There's one building in my own patch where absolutely everybody's gone bankrupt: the developer, the builder, two insurance firms, the managing agent—they've all gone bankrupt. So, those buildings, we are just in the process of developing a scheme to cope with those buildings, and I'm hoping to make an announcement on that in the very, very near future, so that we can start the work on these so-called 'orphan buildings' as well.


Okay, that's really helpful. Thank you, Minister. And just, you touched on it, about negotiations that you've had with the developers, and how that's going, and I realise some of this is still on the table and work in progress, but in what circumstances would Welsh Government funding be used to pay for that remediation cost?

So, where there's a developer, we expect the developer to pay. But we also don't want to have to wait for the developer's cash flow circumstances to be in a position where they can do it. So, as I said, we're in the position of having a discussion with them about whether it's possible to put our funding in upfront, but then to get the money back from the developer: why should the public purse pay for something the developer should be paying for?

What I'm very determined to do, though, is ensure that the leaseholders don't pay for it. And again, Chair, you will have seen that there are a large number of people who want us to do the same as has been done in England, but what happens there is that the leaseholders have to pay, they have to pay for their legal costs, and they have to do the legal action themselves. We have structured it so that the contract is with the Welsh Government, so that if their contractor doesn't do what they say, it's us; we are the ones who take the action. Now why on earth should the leaseholders have to do that?

So, I know that there is a minority of leaseholders who would prefer that route, but the majority of them, I'm absolutely certain, would rather be in a position where they just have their house put back in order, and they did not have to pursue expensive litigation in order to do it. So, I'm pretty confident that the way we're doing it will have the best long-term result. But your heart does absolutely go out to people who've been living with this for a very long time now.

Diolch, Gadeirydd. Jest yn sydyn iawn, tynnu sylw'r Gweinidog—hwyrach ei bod hi ddim yn ymwybodol, ond roedden ni'n sylwi bod rhent wedi cynyddu yn aruthrol yng Nghymru yn y flwyddyn ddiwethaf. Mae wedi cynyddu fwy yng Nghaerdydd. Rydyn ni wedi gweld cynnydd o tua 12 y cant, ond ym Mae Caerdydd, mae rhent wedi cynyddu 19 y cant blwyddyn ar flwyddyn, a'r tebygolrwydd ydy bod hynny oherwydd bod y gost yna wedi cael ei drosglwyddo i'r tenantiaid, oherwydd bod y gost ychwanegol sydd ynghlwm â gorfod trwsio ac atgyweirio gymaint yn fwy, mae e wedi cael ei basio ymlaen. Dwi ddim yn gwybod os yw'r Gweinidog yn ymwybodol o'r ystadegau hynny, ond mae'n werth eu tynnu i'w sylw.

Thank you, Chair. Just to quickly draw the Minister's attention—perhaps she's not aware, but we did notice that rent has increased hugely in Wales in the past year. It has increased more in Cardiff. We've seen an increase of about 12 per cent, but in Cardiff Bay, it's risen 19 per cent year on year, and the likelihood is that that's due to the cost being transferred to tenants, because the additional cost of fixing and repairs is so great, that's been passed on. I don't know if the Minister is aware of those figures, but it's important to note.

I absolutely am aware of them, yes. Private sector rent has been increasing faster than in any other housing tenure, particularly in some parts of Wales; actually, it's gone up in all parts of Wales, really. And again, that's an effect of a number of different levers in the housing market. What we need to do, of course, is just make sure that the housing supply is sufficient. That's effectively an effect of scarcity, so landlords basically are charging what they can get in the market, and what we need to make sure is that the market is fit for purpose and, therefore, the rents are at a decent level. Mabon, I'm sure, is aware that the co-operation agreement also has a commitment to look at whether there is a viability for rent control and a right to adequate housing, and, Chair, you'll be aware that we've made a commitment to work on a Green Paper to go out on that basis this year, so we'll be working on that as well. But again, the volatility in the housing market is also having its effect in the private rented sector.

The other thing to say there, of course, is that the freezing of the local housing allowance by the UK Government has been catastrophic in this area, so anyone who's on any kind of universal credit has had the housing part of their allowance frozen, and we know of people having to pay more than 50 per cent of their income on housing, and the housing allowance is actually paying for 3 per cent of it. It's just appalling, and I just do not understand the financial logic of that, because all that's doing is putting a further burden on the public purse. So, as always, we implore the UK Government to put the local housing allowances back, at least to the 30 per cent that they used to have it at. In actual fact, it ought to be at 50 per cent, so this is 50 per cent of the average rent of the area. But 30 per cent was at least manageable. At the moment, it's at 3 per cent in areas like Cardiff, and that clearly is not a manageable circumstance for anyone who has that element of universal credit. 


Going beyond the general factors that you've mentioned, Minister, as possibly being responsible for rent increases, would you be concerned with the particular aspects that Mabon has mentioned? So, is there something additional that's happening in terms of high-rise blocks, as a result of the landlords trying to offset the costs that they face, may face or have faced in terms of building safety?

It's certainly possible that that's happening, isn't it, but private rents stay at the level that the market will tolerate, so if the people in the high-rise blocks who are tenants are being charged extra and they could move somewhere else in the market, I'm sure they would. The point is they can't, because the rents are increasing all over the place, and that's the problem with that sort of market. So, landlords increase the rents to the level that the market will sustain, and, at the moment, private sector rented accommodation right across Wales has been increasing. Now, it will be really interesting to see what happens as the market changes and goes in the opposite direction, because we know that a number of private sector landlords sold because they could realise the capital at the height of the market. Well, that's not going to be the case anymore, as the market falls, so it will really be interesting, but anyone who's been a student of the history of these things will know, they absolutely track each other. So, if you look at the previous housing dip, the rents absolutely tracked the dip, and you can see why, because this is all about scarcity.

I go back to my original point: until we can build enough housing supply, which we are trying to do to the best of our ability, then we will continue to have this volatility. But, yes, I am sure Mabon is right; if you're a landlord and your costs are increasing, then you will try to pass them on to your tenant where it's possible to do so and where the tenant can sustain that without you losing the income altogether, which obviously would happen if the tenant couldn't sustain it. So, absolutely, I'm sure that's happening. It's one of the issues that happened with the announcement by the UK Government of the uprating to EPC E in the private sector in the first place, as people decided that they didn't want to invest that much in their property. So, these things have got to be carefully calibrated to make sure that you understand all of the complex effects of the various interventions.

Just to add on that point, what we are seeing generally in the rental market is, because so many of our landlords in Wales are small-scale landlords—70ish per cent of our landlords only own one property—and they're being hit by the same economic pressures as everybody else, so interest rates, and there's some evidence that was out quite recently on the number of buy-to-let mortgage products that will come to the end of their initial fixed interest deals over the next 12 to 18 months. That combined with tax changes that mean there is less tax relief is really squeezing those margins for some landlords. So, in some respects, there is the type of issue that Mabon describes right across the sector, that landlords don't have the headroom to absorb the additional costs that they're facing one way or another.

—ask how Rent Smart Wales is then supporting those landlords in that situation and how they have a reasonable expectation in terms of requirements of those landlords—as you say, very little headroom, very small margins, with 70 per cent owners of one property—versus large landlords who have that capacity? How are Rent Smart Wales managing that balance between the two very different types of landlords?

We aren't asking them. It is not their role to balance that kind of—that's not what we ask them to do. They provide us with the data for what's happening, and, obviously, we make all the landlords go through all of the professional development courses and so on. What we also do—

So, all landlords, whether they have one or 1,000 houses have the same requirements.

In terms of registration and knowledge, yes, because that's what we ask Rent Smart Wales to do. We ask them to do the same thing in terms of keeping their properties up to scratch and so on. Rent Smart Wales does not collect rent data, for example. We haven't asked them to do so.

One of the things that we are really interested in doing though is making sure that all of our landlords understand the various things that are available to them where they do have a tenant who isn't able to pay. So, for example, we have enabled our local authorities and our RSLs to buy properties that are tenanted. Again, one of the things we do, whether you are a large landlord or a little landlord, is, if you have a tenant who isn't able to pay and, actually, you want to get rid of that property anyway for various reasons, please, please make sure that you've approached the local authority, or your local registered landlord, to see whether that property could be bought with a tenant in place, and we've been able to do that. I've had some success with that in my own patch. That is a huge relief to the tenant, it helps the landlord out and, obviously, it increases the social housing stock. So, it's a win-win, as far as we're concerned. We have enabled our social landlords to do that. I wanted to bring that to people's attention.

We're going to do a review of Rent Smart Wales later this year. One of the things we will be looking at is whether we want them to do more things for us, and whether the data we currently get from them enables us to do a number of other things with it. So, we will be looking at it, Sam, but, at the moment, we haven’t asked them to do that.


Thank you, Chair, and thanks, everyone, for coming today. I only really just have the one question, I'm afraid. It's just about the ongoing legislative programme. You mentioned the current constraints that you're under in terms of budget, and I know, with your programme, you've mentioned you want to look at leaseholder reform, building safety. I just wanted to know how your budgeting allocation is going to make sure that that happens within this Senedd term and, ultimately, whether or not you've got the time to do that within this Senedd term as well.

So, the way that that works is that we have, again, a legislative sub-committee of the Cabinet. The legislative sub-committee is chaired by the Counsel General, and each of us that has legislation coming forward over the whole of this Senedd term is expected to give an account of ourselves at that committee. The account that we're expected to give includes whether we're on target for the year that we expect the legislation to arrive in, and whether we have the resources in place—budgetary resources, where those are the resources that are needed—but, more specifically, Bill team resources—so, staffing resources, and that's the biggest issue. The biggest issue is trying to make sure that we’ve calibrated the staff resource.

So, for example, while we were working on the Renting Homes (Wales) Act 2016, we were tying up an enormous amount of staff resource and legal services resource, and Office of the Legislative Counsel resource. So, all of those regulations that, happily, the Senedd passed, had to go through the Bill team, the legal services team and the Office of the Legislative Counsel's team, and I had to give an account of why I was taking up quite so much resource in the Government to get the thing implemented. Those teams, obviously, couldn't be moved to work on other housing legislation until they had the capacity to do so.

So, we calibrate that, and we're asked to look at that. Much of Emma's task is to make sure that she's able to tell me that the Bill teams will or will not be in place at various points in time in order to do the enormous amount of preparatory work, which perhaps is a little bit invisible if you're not inside the Government—the classic swan, you know. So, by the time it gets anywhere near the Senedd, years of work have gone into the policy instruction. The policy has to be set out in instructions to legal services, legal services have to interpret that and then instruct the Office of the Legislative Counsel, and they have to draft the legislation. So, the calibration of all of that is a big task inside the Government.

I am currently being informed that all of the legislation across my portfolio is on track, but I'm very aware that that is reliant on legislation that is currently in train and coming to the Senedd passing, so that the Bill teams can be moved from there onto the next piece of work. And we have some people who are specialists in putting a Bill through the Senedd, and we have other people who are specialist policy advisors for that particular type of policy. We have legislative counsel who are generalists, we have some who are specialists, and the same for legal services. It's like a massive mosaic that you're trying to move around as it travels through. But at the moment, I would tell you that I am being informed that all of the legislation that this committee will be interested in is still on track for the year that it's scheduled for.


Yes. So, again, as you take legislation through the committees and towards the stage where it's introduced to the Senedd, more and more work is done, so then you start to have the work done on the regulatory impact assessment, the financial impact assessments, the explanatory memorandum, and, as that is refined, we're then expected to do the budget work to make sure that it lines up for implementation.

We're also doing a lessons-learned exercise from the Renting Homes (Wales) Act 2016, which everyone here will be aware took us a very long time to get implemented from its passage. So, a large amount of lessons learned need to be looked at as well. It's tempting, isn't it, for any government to put legislation on the statute book and think 'job done', but what is the point of it, if you can't implement it? So, having that implementation plan in place is now very much part of what we're asked to report on, and then, when it comes in front of you, and you're able to look at the various impact assessments and the explanatory memorandum, that ought to have enough clarity in it to reassure you that we have the budgetary arrangements in place to allow the passage of the Act and then its implementation. So, absolutely, that's part of the responsibility. And, as I say, at the moment, I am being told that everything in my portfolio is on track to deliver in the year that it's currently scheduled for.

I was just going to say to the committee that the Minister meets me, the director-general, Emma, and other directors, every month to go through the programme for government, where we are with the legislative programme, and really calls us to task, if we're not on schedule.

I think the biggest issue is the skilled resource that is needed to do this as well. The Government's got a significant legislative programme, which they want us to get through, which is quite right, but it's getting the resources in the right place at the right time as well, and, sometimes, people want to be on a legislative—take something through. They want to do it once; they don't want to do it again. So, I think that's an issue for us. And, also, the central services main expenditure group, which a lot of this is paid from, has had a reduction, like everywhere else within Government. We haven't been protected from that. So, again, it's getting the balance and the optimisation so that we can take some of this through, but, as the Minister said, everything is on track in her area at the moment.

I do want the committee to understand quite how cross-Government this is. I cannot deliver this legislation from inside my own resource in my portfolio. I am utterly dependent on the central MEG, legal services, OLC, but also on resource from elsewhere in the Government. So, the cross-cutting Cabinet committees that look at this are looking right across the Government at where all of these various jigsaw pieces or mosaic pieces, depending on your simile of choice, are coming from, and it's no small feat to get these things to fruition. And, as I say, we are doing a lessons learned on the renting homes Act, because none of us enjoyed the experience of quite how long that took to implement. I am looking forward to my commemorative mug, however. [Laughter.]

Okay, Minister. Just one final question from me. There's significant work going on with regard to second homes and the second homes issues, Minister. Could you tell the committee whether you consider the budget allocation sufficient to support that work, and also how those allocations align with the 'Welsh Language Communities Housing Plan'?

Yes. The pilot is going well. We've been very pleased, indeed, with some of the accelerated things that have happened in the pilot. So, some of the Rent to Own things, for example, have been successful and other interventions have been successful. Some are still to happen, so we're in the process of the planning changes, for example, and the changes to the amount of weeks you have to rent your home out in order to pay business rates and so on—all of those are in train for implementation. So, there are number of changes to come as well.

We're going to be doing a lot of analysis coming out of the pilot work, and we've been doing a piece of work with Gwynedd Council about how much money they need to implement an article 4 direction, if that is what they decide to do. They have to do the evidential piece of work first, so we've been working with them to understand what the resource to put the evidence together looks like. Whether they then have the evidence or not, of course, will—. Whether they do the direction, will depend on what the evidence shows them. So, we're still in the process of working with the council to understand what that looks like. We made a commitment to Gwynedd Council that we would help them fund that, because that's the point of the pilot, and then we'll have to look at what would happen if we rolled that out across Wales. So, it's very much in train.

At the moment, I would say that the pilot is sufficiently well funded. I'm not able to tell you until after we get the results of the analysis whether we will be able to roll it out as fast as we would want to or not, because I obviously don’t have the analysis yet. But, I think that we are all pleased with the way that the pilot is going.

Certainly, community housing, while it’s not my—. It’s the Minister for education’s policy area, but he and I work very closely together, and it’s certainly RAG-rated green on the massive spreadsheet that we all have to look at all the time. So far, so good. I’m sure, Chair, that we’ll be able to come back to the committee when we are starting to get the analysis through from the pilots and give you more information, but we don’t have that yet.


No. Okay. Thank you very much, Minister, and thank you to your officials, Emma and Dean, as well. You will be sent a transcript to check for factual accuracy in the usual way. Diolch yn fawr.

3. Papurau i'w nodi
3. Papers to note

Okay, then, our next item is papers to note. We have paper 5, which is correspondence between the committee and the Business Committee in relation to LCMs—legislative consent memoranda. Paper 6 is an update from the Welsh Government in relation to implementing the recommendations of the Equality, Local Government and Communities Committee in its report on empty properties back in 2019. Paper 7 is a letter from Cymorth Cymru and Community Housing Cymru to the Minister for Finance and Local Government in relation to the Welsh Government's draft budget for 2023-24. Are Members content to note the papers? I see that you are. Thank you.

4. Cynnig o dan Reol Sefydlog 17.42(ix) i benderfynu gwahardd y cyhoedd o weddill y cyfarfod ac o gyfarfod nesaf y Pwyllgor
4. Motion under Standing Order 17.42(ix) to resolve to exclude the public from the remainder of the meeting and from the next Committee meeting


bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod ac o gyfarfod nesaf y pwyllgor o dan Reol Sefydlog 17.42(ix).


that the committee resolves to exclude the public from the remainder of the meeting and from the next committee meeting in accordance with Standing Order 17.42(ix).

Cynigiwyd y cynnig.

Motion moved.

Item 4 is a motion under Standing Order 17.42 to resolve to exclude the public from the remainder of the meeting and from the next meeting. Are Members content so to do? I see that you are. Thank you very much. We will move to private session.

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 10:32.

Motion agreed.

The public part of the meeting ended at 10:32.