Cynulliad Cenedlaethol Cymru

Bore da a chroeso. Good morning and welcome to this meeting of the Public Accounts and Public Administration Committee in the Senedd. No apologies for absence have been received—. Although I do believe we have one apology from Rhianon Passmore. Do Members have any declarations of registrable interests they wish to share with us?

Thank you for disclosing that. Your absence will be noted accordingly.

We can move to papers to note. The first item is a letter from Tracey Burke, director general for the climate change and rural affairs group, on Cardiff Airport. The Welsh Government has responded to the committee's letter of 3 August dealing with points arising from our evidence session on 22 June this year. We considered Cardiff Airport's response to our letter of the same date at our meeting on 14 September, and there are a number of points to note.

In relation to the rescue and restructuring plan and related targets, the letter states that any amendment or variations to the targets set out for the rescue and restructuring plan can be raised at any time, but must be done in writing, and that, at this stage, no revisions or new measures for climate change have been agreed by the airport and the Welsh Government. The airport did not meet its target to commit by 31 March 2023 to become carbon neutral, and, while earlier correspondence to us set out the measures the airport has taken towards its sustainability, no new targets have been set. So, we may wish, as a committee, to explore this with officials at a future evidence session, and to seek an update about the publication of the new version of the airport's environment flight path, which, in May, we heard the airport was due to update.

I'm conscious that there may be technical aspects to that with the developmental path that some Members will be aware of in relation to alternative fuel for the future. The letter suggests that rather than undertake specific reviews, the assessment of the impact of the withdrawal of Wizz Air has been picked up through the standard monitoring arrangements. The letter says these show the withdrawal has not had any immediate impact on the airport's recovery and that its finances since have been offset by decisions by other airlines. Again, this may be an area for the committee's future consideration.

We sought information about the Welsh Government's decision report in June of this year, which stated that it had approved additional working capital of £15,000 for Holdco for 2023-24. The letter explains that Ministers agree annually the funding for Holdco so that it can meet its obligations, such as its accounting and audit requirements. This is based on Holdco's outturn for the previous year, adjusted for inflation and other cost increases. The letter does not clearly explain the decision, and while noting that this was nothing novel, regarding the transfer of funds into Holdco's bank account, we, again, might want to pursue this at a future evidence session.

Our letter also sought updates about two specific issues once officials had given advice to Ministers and decisions had been made. Since the decisions had not been made at the time of the letter, we've been given a commitment that this information will be provided to the committee in due course. These issues relate, firstly, to 3D baggage scanners. Officials are preparing advice to Ministers about the additional cost pressures relating to the installation by 2024 of the new-generation security 3D scanners. The letter says that we will receive an update once Ministers have received advice and taken any consequential decisions, as part of the Welsh Government's next scheduled update to this committee about the airport.

The second issue related to the WGC chair and non-executive directors. Despite officials previously stating that they did not envisage any further delay, the Welsh Government has not yet completed the appointment processes for the WGC chair and non-executive directors. The decision about the chair was expected by summer recess, according to the Welsh Government's six-monthly report in March of this year, and the appointment of non-executive directors by the end of June, according to correspondence received on 9 May this year.

So, I invite Members to note the letter and seek your agreement to follow up any outstanding matters at our next evidence session with the Welsh Government and airport officials in due course. Do Members have any comments or are you content?

Content to note, yes.

Great, thank you. The next paper to note is a letter from the Chair of the Finance Committee to the Minister for Finance and Local Government. This committee has been copied into this letter on evidence papers supporting the 2024-25 draft budget sent to the Minister for Finance and Local Government. The letter relates to the timetable for the 2024-25 draft budget and the development of a template for ministerial evidence papers. The matters raised in the letter will be discussed at the next meeting of the Chairs' forum, taking place later this month on 23 October. So, again, unless Members have any comments, can I invite you just to note the letter?

Happy to note.

Thank you very much. The next paper to note is a letter from Andrew Slade, the director general for economy, Treasury and constitution group, on Gilestone Farm. The director general has written to us following our letter of 18 July, which sought additional information following his attendance at the committee on 5 July. The letter considers the administration of the acquisition process, the costs associated with the ongoing management of the farm and its current valuation, final decisions and contingency plans, as well as a number of other issues. The committee, again, is invited to note the letter, with further consideration of our work in this area to follow in due course. If I remember correctly, and essentially, the letter explains that the Welsh Government has not yet reached a final decision. It is undertaking—. Well, it describes a consultation process with local stakeholders, and once we're aware of what that decision is we can then move forward. So, any comments or are you content to note?

Content to note. Oh, Chair, Mike has something—

Oh, sorry, Mike, yes, please. Mike Hedges.

I'm content to note. It's just that, for the record, on page 13, 'Other issues', the

'£7 higher than the median gross weekly earnings in all industries in Wales'

is really not a very big difference. And the term, 'really good, high-paid jobs' in the area, when you're going £7 higher than the median wage, is just one person's view, and it would not be my view of what constitutes 'really good, high-paid jobs'. That's just a comment I wanted to make for the record.

Thank you. Yes, that could be a matter that we pick up when we do revisit and take evidence on this, in the manner that we previously agreed. If I recall, we received a number of items of correspondence relating to claims made in relation to local employment and well-paid jobs, so, no doubt, that will be one of the matters we may wish to explore further.

I certainly will.

Yes. [Laughter.] I'm sure you will. Any further comments, or are Members otherwise content to note? Thank you.

The next paper to note is a letter from the Chief Executive and Clerk of the Senedd Commission, who wrote to us following our scrutiny of their accounts for 2021-22 to provide additional information relating to our recommendations. The letter provides additional information about the work of the risk assurance committee, as per recommendation 2, and the Commission's review of their response to the COVID-19 pandemic, as per our recommendation 3, including their review report. The letter also includes further information on the contracts awarded to Welsh suppliers by the Commission, as per recommendation 4, and on the Commission's efforts to increase the diversity of the organisation, as per our recommendation 6. The committee, as you are aware, will be scrutinising the Commission's annual report and accounts for 2022-23 at item 3 of today's meeting, with the opportunity then to reflect on a number of these issues during our scrutiny. So, on that basis, are Members content to note the letter? Thank you very much indeed. 

In that case, can we have a short, five-minute break? Thank you.

Croeso. Welcome back to today's meeting of the Public Accounts and Public Administration Committee, and we have a number of witnesses who have joined us. So, welcome to you to this meeting and thank you for attending. Could I start, please, by asking you to state your names and roles for the record?

I'm Manon Antoniazzi—

Ken Skates, Member of the Senedd for Clwyd South, and I'm the Commissioner responsible for financial matters.

I'm Manon Antoniazzi, I'm Chief Executive and Clerk of the Senedd Commission.

I'm Ed Williams, I'm director of resources for the Senedd Commission.

And I'm Kate Innes. I'm the chief finance officer for the Senedd Commission.

Thank you, all. As I said, thanks for attending. As you'll expect, we have a number of questions for you, and I'd be grateful if both Members and witnesses could be as succinct as possible so that we can cover as wide a range of the issues this topic has generated as possible. As normal protocol dictates, I'll start the questions as Chair, seeking to explore your learning from the COVID effectiveness review. So, what were your main findings from that review of your response to the COVID-19 pandemic and how have the lessons learned been incorporated into ways of working and service delivery in relation to making efficiencies and savings recurrent?

Thank you, Chair. I believe you've seen a copy of the report. It was prepared by our head of governance and assurance in his role as head of internal audit and was completed in April of this year.

The key findings, I think, were that the Commission was able to make an investment in technology to adapt quickly and effectively to new ways of working, which enabled the Senedd to continue its work. I think there was an internal focus, then, on timely and effective decision making, clear communication, use of digital capabilities, and health and safety and well-being. And the well-being, I think, is the third area that I dwell on, because this was at the core of our approach to the pandemic, whether people were working on the premises or remotely. We continue to take a measured approach to keep all users of the estate safe, whilst adapting, of course, to Government legislation and public health messages as they came through.

So, I think the second part of your question was about how we have incorporated these lessons into our working methods going forward. I think the ability to make temporary changes to rules of procedure that showed that we could be agile and adaptable in a crisis is something that we have been able to incorporate in this work. We've been able to rely on that learning to have virtual and hybrid committees as part of the repertoire that we're now able to call upon. Committees have also drawn on that learning in terms of being able to access a richer variety and diversity of witnesses, including from more far-flung geographical places, and that has added value, obviously, to our scrutiny and inquiry work.

The investment in information and communications technology and software, I think we recognise now as a key component in the Senedd's resilience and its business continuity, and it's also fed into our thinking about estate strategies; we think about our estate differently now. Parliaments may no longer need ever-expanding estates to accommodate legislators, and all of that thinking is being incorporated into our ways of working strategy, which Ed will be able to elaborate on later on, I'm sure, in questioning.

I'd just finish on the note of well-being, because there were lessons learned there as well about timely and effective communication, about making sure we're well informed of the staff's state of mind in terms of pulse surveys, providing suites of tools to support well-being, and encourage virtual team meetings, so that we are strengthening morale and a sense of common purpose, and I think that that is something that we will certainly try and keep on indefinitely.

Thank you. We're grateful that you're here in person today, because I think we hold the view that many of the interventions you've described and new ways of working described have added great value and made working life easier—or more productive, I should say—even though more work is actually generated from it than previously, when you're travelling between things, but, at the same time, the immediacy—particularly in an environment or situation like this—I think does enhance the positivity or the learning from the process, because we all read so much of communication subconsciously from people's postures and expressions and movements and so on. So, I'm sure that's a consideration, but, in terms of planning for the future, the unexpected has become the new norm, so how and to what extent have you in-built contingency planning for the black swans—which are now grey swans—swimming our way?

Yes. Could I turn to Ed on that one, because refining our planning for the medium term has been very much a feature of the period that we're looking at today?

Yes, happy to amplify on that. So, the ways of working programme—and it may be something that you come to, Chair—at a strategic level, and summary level, is looking to fuse together our workforce planning and our estate strategy going forward. There are a number of excellent robust strategies in place already. We have a people strategy, a diversity and inclusion strategy, a sustainability strategy and an estate strategy that have a three-year time horizon. We've come out of a period of significant change and we're going through another period of change. What we want to do is fuse those individual strategies together into a coherent whole for the 10-year period. That, in short, is the ways of working strategy, and that very much includes looking at how we're going to work and where we're going to work, maximising the efficiencies and the benefits that have just been referred to and minimising some of the disbenefits, if you like.

Other examples of that in terms of efficiencies that we've been able to drive out is that the way the estate is being used now has allowed us to bring in zonal heating systems, for example, that mean that we are much more energy efficient and has allowed us to deal with some of the energy price shocks that we've seen in the last year as well. So, we can go into more detail, but it's very much part of our live activities and there's some business continuity and resilience activity and audits have been going on as well and are very much being built into our future planning.

Thank you. As you say, questioning later in this session will probably drill down a bit on future estate strategy, given the changes we know are coming in the ways of working and the size of this establishment, and also the impact of decisions you've had to take on funding for services for members and staff. So, I'll leave that for later. But, moving on, how much did the Commission—[Interruption.] Sorry. Who raised, sorry? I couldn't hear.

Sorry, Chair—

Ken, sorry, yes.

—I was just going to add, actually, another important lesson learned and a lesson on which action is being taken forward is cyber security. You mentioned black swans, grey swans—the issue of cyber security really is very serious. And Rhun ap Iorwerth is the Commissioner responsible for this particular area of work, but what was learnt from the pandemic is that we have been on top of all risks associated with working remotely with ICT, and a business continuity audit focused on the organisation's approach to ICT business continuity, and also disaster recovery; that's planned and that will be taking place. And I think that's going to be vitally important as we consider how we can protect the ways of working in the future.

Okay, thank you for that. Moving on, how much did the Commission include in its original budget for the project fund and capital expenditure for 2022-23 and how did this change during the year?

I'll hand over to Kate presently to talk through that in detail. In the world where we are now, where resources are scarce and we're facing high levels of change, we do over-programme the programme budget each year, so, there is a system of prioritisation that we undertake to make sure that we are on top of the work that needs to be done. But, Kate, can I ask you to come in on the details of that?

Yes, of course. So, at the start of the year, we had a budget of £1.5 million and that's a mix of capital and revenue. We also started the year with 33 projects on our forecast portfolio list. We carried a number of projects—so, we had a number of projects that were in flight—and those projects were completed in 2022-23 and that's at a cost of £214,000. And we then had three projects that specifically rolled across from 2021-22. Those hadn't started and those were completed in 2022-23 at a cost of £183,000. 

So, in the year, we started to complete specific 2022-23 projects, which were items such as the meeting and desk-booking system, reconfiguration of Commission space, fire door replacements, some sustainability projects around light-emitting diode within Tŷ Hywel and within the Siambr, a building management system feasibility study and ultraviolet water treatment systems. So, those were amongst 14 projects that we started and completed within that period and that was at a cost of £750,000.

We had, as you would be aware, some budgetary pressures during that. Those included the cost-of-living payment, which was made in the fourth quarter of 2022-23 and that was—. Some of the project fund was reallocated to ensure that that payment was made, along with some ICT non-project costs, such as additional kit for new roles, which hadn't been budgeted for. So, in all, we delivered 17 full projects within the period, and we rolled into 2023-24 a list of potential projects of 26.

Okay. Thank you. Just for the record, LED—I'm presuming you're referring to the lighting. Yes. Thank you. Can you summarise, or how would you summarise, the management of in-year underspends and how these were prioritised to projects, and what impact bringing forward this investment had on projects for this financial year, 2023-24?

Okay. So, overall, there was no underspend within the project fund; as I explained in my previous answer, some of the funding was reallocated for other revenue budgetary pressures. But there were underspends within some of the projects that were delivered themselves. So, they came in under our budget-anticipated costs. So, in the first instance, what we do is we will reallocate that to any projects that we may have that the cost has increased on, and then, once we have covered that, we will look at new potential projects to use any underspend. And that's prioritised based on, effectively, benefit versus deliverability. And we have criteria; we have criteria that we prioritise those projects against in setting and deciding which project we'll move forward with and will receive funding. I think it's worth just noting that, amongst that, we do also have consideration for regulatory and time-criticalness of the projects. So, we might have some projects that will come forward, such as what we had this year with the payroll system, which has a time limit within which it needs to be delivered. So, those are the sorts of things that we will look at within the criteria. But, in 2022-23, our criteria were based on strategic fit, organisational impact and deliverability, and, within that, we would have various scoring mechanisms; in 2023-24, we have actually revised that and reviewed it, so it's much more, at this stage, on value, our value-added drivers.

Thank you. Thanks very much. Can I deduce from all that—I think you alluded to it—that part of that decision-making process is the 'must dos', but there's also invest to save in future financial years at the centre of your decision making?

Absolutely, yes. Ensuring that we are adding value constantly through our expenditure is a key part and a key criterion, but also ensuring that we are delivering Senedd and Commission priorities is also extremely important in setting and deciding which projects will receive the funding.

Thank you. Natasha Asghar.

Thank you, Chair. I'd just like to know how did you go about reviewing your key performance indicators, and how did you obtain assurances that the revised measures are appropriate to assess the Commission's performance and delivery of your objectives, going forward.

Yes. We had a review of our KPIs, and that starts with a service-level review of what is useful for us to measure. There was a particular change in the communications and engagement KPIs, because of the adoption of a new communications strategy, and so targets were set, with, as a default, that the target was improving the previous year's baseline, and that was—. We did some consultation with the independent advisers on that, and then finally the KPIs were signed off by the Commission.

Great. Thank you so much. You actually met the target to reduce the carbon footprint—which is fantastic news for everyone—which you'd set out in your carbon-neutral strategy, despite not completing half of the projects—two out of four, as you mentioned—identified in 2021 to 2023. So, how was this actually achieved?

Ed, can I ask you to address that one?

Yes. So, a significant part of that was the energy-saving measures that we brought in. So, lowering the heating set point across the estate made a significant difference. And again, as I say, we took other measures during the year—again, a lot to do with heating as a major part of the emissions across the estate. So, the control of the heating that I alluded to in my previous answer, for example using the zonal system on Fridays on the estate, and other days, to make sure that we're as energy efficient as possible, in addition to the life-cycle projects that you can see in the list, helped us deliver that target.

Does this have any delay on your ability to hit the medium-term targets?

No, we're on track with our carbon neutral strategy.

Excellent, okay. How does the actual investment incurred from 2021-23 in the carbon neutral strategy compare with the estimates? Have you reassessed the investment needed through to 2030 at all, and its affordability, given the impact of inflation and other issues that you may be encountering?

So, as I say, we're broadly in line—. Well, we are in line with our strategy and our estimated cost. There's a project review process, project by project, and we are on track with each of those projects with no significant underspending and no significant overspending.

Okay, great. In June 2022 the Commission told the audit and assurance committee it would discuss how it would incorporate the Welsh economic impact of suppliers, as opposed to their presence in Wales, in its assessments. How has the Commission taken this forward? And what changes are proposed to its KPIs or the measures for them all as a result?

We do look at the—. We take a more sophisticated approach to looking at the supply chain than just the headquartered premises of the contractor. Ed, would you like to talk a bit more about that?

Indeed, so some organisations in the public sector do take that simple measure of the postcode of the head office. We require, through our main contracts, that the contractors use Welsh suppliers and the supply chain as much as possible, within the law, I hasten to add, but we emphasise that through our contractual requirements and we monitor that. We monitor the subcontractors and the whole supply chain actively; we encourage that and we engage with suppliers to make sure they understand our procurement process, and we look to use not only the UK-wide procurement services, but a particular emphasis on the Welsh Government's National Procurement Service and the Sell2Wales site as well. That is all part of our monitoring and reporting, and you can see the success we've had in the last couple of years. It's challenging going forward, but at the moment we're pleased with our progress.

You'll have seen that we're at 47 per cent now, and we have a stretch target of 50 per cent. It is going to be more difficult as we get closer to contracts like software licensing and so on, where it is more challenging for us to source the services from within Wales, but I'm sure we'll be reporting back to you regularly on how that's going.

Okay, all right. I will continue with my questioning, if that's okay, because I do have a series to get through, but there is one question for which I'm going to go slightly rogue, as I like to do in this committee occasionally and ask you—. You mentioned cost of living. I know the Senedd has provided cost-of-living payments to staff. It's something that I know the UK Government has provided. Welsh Government has also done the same for civil servants et cetera and our staff as well. UK Government has also approved cost-of-living payments again for their staff in Westminster. Does that cost-of-living payment have any detrimental effect on the budget of the Commission going forward, in relation to the workings? Will it affect those targets that you just mentioned, Manon, or any other areas, for example? Because, naturally, if money is going out, other areas often do suffer, so are there any areas you can see that are going to be impacted by future cost-of-living payments that potentially could go out?

Well, we are looking at this year, which obviously, this time next year, I'll be reporting back to you on. We have found money within the budget to cover a cost-of-living payment in 2023-24. We talked when we were in front of the Finance Committee last week about the challenges of doing that without supplementary funding. It does inevitably mean—. Because we budget tightly and we have no reserves and we cannot have a contingency, it inevitably means that other projects have to be delayed to some extent, but we have done our best to look at options that mean that capital investment is not delayed, that we are taking the bulk of the cuts to our own staff resources by delaying recruitment into jobs that become vacant. It's not ideal. We hope to be able to plan ahead and make cuts more strategically, but, as you say, we were responding to an urgent situation that arose in-year, and we hope—. If that happens again next year, we are likely to need to look to supplementary budget funding for that, because it's not—. We haven't had that negotiation and conversation about the next financial year yet, but the Finance Committee was questioning us about that, of course. 

Okay, fantastic. Right. What informed decision for the remuneration committee to replace the remuneration, engagement and workforce advisory committee—? Sorry, my apologies. I'll repeat again. My apologies. The question was: what informed the decision for the remuneration committee to replace the remuneration, engagement and workforce advisory committee? 

Thank you. As the Commission's needs and priorities develop and vary over time, obviously, the nature of the contribution it requires from its independent advisers needs to adapt as well. In that particular case, the remuneration committee has a core brief of providing advice to the Commission on the salaries of senior staff and the performance of senior staff. We had expanded that to include other workforce-related issues as well. We now feel that asking the remuneration committee to concentrate on discrete areas makes sure that those discrete areas are covered in the depth that the Commission need them to be covered. So, we have established separate diversity and workforce engagement steering groups, which are going to be respectively chaired by two very well-qualified independent advisers, and they then continue to do the core work of reporting on senior remuneration whilst adding value to the Commission by doing these closer investigations into subjects that are of importance to us.  

And just for my knowledge, the independent advisers, were they hired by yourself, by the Commission, by the—? Where did they come from? 

They are advertised openly. So, we invite applications and there is a robust recruitment process for that. We're fortunate enough to have been able to count on the advice of some excellent, very expert specialists in various fields. We've had a turnover of advisers recently. We have said goodbye to Ceri Hughes, Sarah Pinch and Ann Beynon, who came to the end of their terms, and we have welcomed Mark Egan, who is a parliamentary specialist, and Uzo Iwobi, whose work in race and ethnic relations is very well known, and Menai Owen-Jones, who is a very experienced non-executive manager. So, we are going to be calling on them quite heavily as we go forward. 

Okay, but who actually sat on the panel to hire them? 

It would have been—. I was there and our main independent adviser, Bob Evans, who chairs the audit and risk assurance committee. Forgive me. I'm going to have to come back to you with a note on that. I don't recall who all the panel members were. 

That's fine. No problem. How do the terms of reference for the remuneration committee compare with those for its predecessor, and why have they not been made available as required by the Commission’s governance principles and supporting provisions? 

They have been under review recently to make sure that they reflect the information that I've—sorry, the scope of the work that I've just told you. So, if there's been a delay in publicising them, then I apologise for that, and we'll put that right as soon as possible.

Okay. And given the change to the remuneration committee, how will the independent advisers support the Commission on workforce issues other than just remuneration on its own? 

As I explained, we will benefit from their advice in the area of diversity, in the area of workforce engagement. I'm also hoping that the committee will help us keep an eye on the overall structure of the organisation, particularly at senior levels. There is work starting on that now, which we'll be able to report back to you on in due course. 

Okay. All right. What were the main findings of the internal audit review of the effectiveness of the independent remuneration board and executive board, and how will you take these forward, and what are the main implications on your future budgets?

The independent remuneration board—. So, yes, it carried out an effectiveness review; that's the board's report, as it were, to respond to, and I know that it has published a response to that and is carrying forward some recommendations. I think it did expose some important themes that needed to be addressed: a lack of shared understanding around the relationship between the Commission and the board, possibly a loss of confidence and trust in the board from some sections of the Members and support staff, and concerns about the complexity and difficulty of interpreting the determination. I mean, those are findings that were the board's findings, and in the first place for them to address, but those are issues that concern us too in the Commission and concern me as accounting officer. So, there is a structured dialogue under way now between the Commission and the independent remuneration board to address these issues and make sure that the relationship is reviewed and that these matters are addressed before the seventh Senedd, particularly bringing simplicity to the governance system so that it's more easily comprehensible by everybody involved.

So, the deadline is technically three years from now.

Well, it will—. It isn't a deadline in the sense that the work is ongoing, but it may be that the next elections, depending on the findings, will be the appropriate moment for bringing changes in.

And will those be accommodating to the potential expansion of the Senedd as well?

Well, it's certainly something—if that goes ahead, then we will be looking at a fairly radical change in the way that Members do their work. So, it does mean that a lot of changes will need to be in place by then to anticipate Members' needs beyond the next election.

Would that implicate any cost-cutting exercises on having more Members, then, in that regard, for example things such as shared offices et cetera—looking to cost cut in ways? Because, obviously, if you're dealing with the expansion, more Members obviously coming in, would that have an implication on the costings for new Members coming in, that the costings—? For example, the budgets that we currently have, would they be coming down to accommodate for new Members? Is that the way you're looking at things going forward?

Well, I think those are questions, really, for the independent remuneration board, because the questions on payments to Members and the running of their offices are necessarily independent from the Commission. But it's another reason why we need to keep a close dialogue with them, to understand their thinking. And, of course, they will be having conversations themselves with the Business Committee as well, because decisions made by the Business Committee about the shape of business is also influential and important.

Okay. Just a final question, if that's okay. I know we've got another question coming. How often do you meet with the remuneration committee—the independent members that have been hired?

The remuneration committee?

Yes.

Well, we meet as and when needed. There are two formal meetings a year, including one that undertakes this assessment of the salary of senior staff to provide assurance in a timely way to the Commission. But we will be meeting them increasingly in different combinations now, and the members of that committee also are either members of our audit and risk assurance committee or they attend it as observers. So, we have a lot of contact with them in the course of the year.

Okay, thanks. Thank you, Chair.

Thank you. Can I just slip in a supplementary at this point? You talked about, or you mentioned earlier in answers to Natasha Asghar, the recruitment freeze. Presumably, given all the other work that you've referred to, that will require increased productivity from the staff resources that the Commission currently has. Things like pay and conditions will determine whether an individual chooses to stay in a job, but they alone won't motivate them; that's down to things like recognition, responsibility, growth, development, and so on. So, alongside money and help with the cost of living and so on, what positive or actual action are you taking or planning to take, not only to manage change with staff but to motivate them during what's going to be a difficult time for them as well, given the recruitment freeze and the extra calls on them?

That's a very good point, and it brings me back to our well-being strategy. I think that creating the right culture is very important in an organisation, and we are lucky to have a very committed workforce—our staff surveys show this. As you say, there are a range of ways in which we look at benefits we can offer staff working here. It's a very competitive recruitment environment. We want and need to be good employers. We have won recognition in the wider world for being good employers, and we need to maintain that. I'm going to bring in Ed, because part of our forward planning is not just estate planning, it is workforce planning as well. Because our workforce is not just, obviously, core to how we deliver our tasks, but is also accounting for a large part of our budget.

Indeed. We've developed something called a medium-term resourcing framework, and we're having conversations with the Commission around that now. It's aligned to the ways of working programme—again, it's something that we can talk about. Part of that is a working assumption that we brought in about a year ago that our funding request and our full resourcing requirements may not be met, may come under pressure over time. I wouldn't claim too much credit; it didn't take too much intellect to see that challenging times were ahead. But the Commission, led by Manon, certainly got ahead of the curve in terms of planning for a future where we're under pressure.

The workforce plan is a key part of the resourcing framework, and, as I say, built on the assumption that our staffing capacity would come under pressure. A key part of that, in terms of the benefits that you asked about, Chair, was looking at pathways, so where we recruit people and how we develop them so we can build a career development opportunity pathway for people at a time where, as I say, we may not be recruiting to every single post. We're at the start of that, but that is detailed work that is now under way. We do have an outline workforce plan that sets out the framework within which measures such as that will be taken forward.

As well as the well-being plans, something I should emphasise is that this is subject to ongoing dialogue with our trade union colleagues as well. We have both formal and informal meetings with the trade union side on a regular basis, and workforce planning and well-being are at the top of the agenda at most of those meetings.

Do you have, within your human resource strategy, a change management strategy?

It is the ways of working programme—that is the change programme. Again, we can talk about that programme and how it's structured. But there is a people strategy within that, a diversity and inclusion strategy within that, and the workforce plan is part of that as well.

So, it's about involving the staff in collectively owning corporate goals and—. 

Yes. We've re-established a staff engagement network recently. There are other staff networks; there's the trade union networks. The staff themselves are giving us rich information, and we are in dialogue with staff, with managers, with Commissioners, with independent advisers and other stakeholders in building this framework.

Is that also personal to each individual for their own performance management, or your performance management processes, so an individual has an opportunity to discuss, on a personal basis, what's working well, what needs to be done differently, and how their actions can contribute to that?

Absolutely. We have an appraisal process twice yearly, with individual objectives, and that runs—I'm trying to avoid the term 'golden thread', but I've just said it—all the way from the Commission's strategic objectives down to individual objectives.

You say it's twice yearly; of course, an appraisal is meant to be a snapshot not an event, as part of a continuous dialogue in order to motivate people and ensure that everything is as it should be for them, as well as for the organisation. You're nodding your heads, so—.

Agreed.

Different words for the same thing, I hope. Okay. Thank you. So, you've concluded your questions. Mike Hedges, could I bring you in, please?

Diolch, Cadeirydd. I think the first thing to say is I would like to continue talking about ways of working. I want to talk about the governance structure for the ways of working strategy and programme. How effective has it been to date?

So—. Sorry, I dived in.

Do go ahead. 

There is a programme board established by the Commission. I am what's called the senior responsible officer, the SRO. Other organisations call it the programme director. There is a programme board with all the key service areas and functions across the Commission represented. That board gives valuable input and helps delivery. It also acts as a challenge board for me as the SRO, as I shape proposals to the executive board and chief executive. Those proposals go through our executive board to our Commission. As part of the governance framework as well, there is regular dialogue with our audit and risk assurance committee, which has undertaken a deep dive into the ways of working programme, and I give an update at every meeting on that programme as well. 

Underneath the board, then, we have three work streams. There are identified work stream leads, and there are five live projects, again with project leads and project groups. The ways of working programme is aligned—. In our governance structure, there is a Senedd reform programme with a programme board and a similar structure there—a senior responsible officer. We've also established, because we've got two change programmes running at the same time, a small unit called the strategic planning unit that helps the executive board manage those two change programme. There's a regular programme report that goes from the strategic planning unit to the executive board to report on the health of the programmes and to help us manage the governance. 

I won't repeat some of the things I said last time, you'll be pleased to hear, at the Finance Committee, but is there an opportunity to cut out some stages in the processing? A bit of paper goes from A to B to C to D. If the paper only went from A to D, you'd cut out two parts of the process.  

We're very happy to take some challenge, and certainly, as I indicated, the audit and risk assurance committee takes an active interest in the programme. On the structure, we've had a special session with our independent advisers about these governance issues and how we are structured, as well as operations and delivery. So, there is a rich seam of challenge and critiquing all of the time. I would say that the programme follows a traditional structure in terms of having the programme board, the senior responsible officer reporting to the executive board, and then taking proposals through to the Commission. For me, I have to say—I'm the SRO, so I might say this, mightn't I—I don't feel that it's overly bureaucratic or that I've had any difficulty in forming proposals and getting those proposals approved. I appreciate it may look a bit Heath Robinson—if I can use that terminology—on paper, but it is a big programme and it does need quite a bit of architecture to make sure that we deliver. 

Okay. Just a very simple thing. I get the water rates for the office I'm in. I then send them to Members' business support, who send them on to finance to pay them. Why can't I just send them straight to finance to pay it? Why does there have to be an intermediate part of this process? 

That is a fair question, and the chief finance officer has offered to answer. 

Within finance, we process the payment itself, but the business support team, as part of their role, have responsibility for the traditional accounts payable process, so they actually work, in effect, as part of the finance process. They process your expenses onto the finance system, and my team pick it up at that point and generate the payment. I have a very small accounts payable team, and their responsibility is to ensure that the payments happen for Members. They don't do the checks and balances. They process the invoices around the corporate side of the organisation—so that would be the rents, the rates, the utility bills, that sort of thing. That's what they process. So, it's just two different processing streams. 

Well, I think it's inefficient—you probably don't. Why do you need somebody to get my water rates, which come from Welsh Water, and I then send it to MBS, who then send it on? Exactly the same item will get to payments as would have got there if I'd sent it directly. Why do you need this intermediate stage? I don't see how that brings anything but inefficiency into the system.

Sorry, I'm perhaps just not explaining myself terribly well. MBS process it onto the accounting system, so they process that onto our accounts payable purchase ledger system, and my team pick it up, and they simply process the payment. So it's completely dove-tailed. There is no duplication of activity or tasks within it. We just perform different tasks, and you would always separate payment from processing of the invoice to ensure good governance. It's good financial control to have that in place. So it's simply that we're doing two different stages of the same process.

I think we'll have to agree to differ on whether that's an efficient way of doing it. You could have an audit system that went in to check that it had been dealt with effectively. But I'm just talking about paying a public body or a semi-public body, and you seem to think there needs to be something to make sure that there's not nothing in between. I'll leave it at that, but I do think that level of inefficiency exists because we do it as we've always done it. 

But moving on to the strategic planning unit, what resource would it require, and how would you ensure it has the right skills and experience to carry out its role?

I'll deal with that one as well, if that's okay. It's a small unit, as I say, so there are three roles within it—there's the head of unit, a programme manager and a programme co-ordinator. So I would say it's not a large unit. The functions are to assist the executive board with the corporate planning, so it leads on the corporate delivery plan for the organisation, it leads on programme co-ordination between the Senedd reform and the ways of working programmes, and under the corporate planning banner it leads on service planning and the development of the medium-term resourcing framework as well. So, it has a lot to do, and we are focused on having roles and the personnel within it that can meet those requirements, so the people in those positions are experienced project managers and programme managers and people who've got a background in corporate governance and corporate planning.

If I move on to risk profile, cyber security is a huge problem for everybody. I think somebody once said the only way you can make it absolutely safe is to come off the network, and that is actually true. It's got to be, possibly, the most significant risk. What additional resources have you allocated for this in 2022-23, and how are you mitigating the risk while still benefiting from developments?

I know that Mike knows a lot about this, and we're all grateful for his ongoing comments and interest in the subject, which, as Ken mentioned at the beginning, is very high on our agenda, and very high on the agenda of the audit and risk assurance committee as well. In the course of the year, we've established an additional ICT security and compliance officer within the cyber security team to help guide our response to cyber incidents and allow a greater focus on strategic planning activities. We've also completed another significant project to establish a security operations centre. That was completed late last year, and that is a centralised resource delivered through a third party to provide continuous assessment and analysis of the Senedd's cyber security. So that's a dedicated team of analysts monitoring networks and systems, and responding to security events in real time.

I think the question of being still able to respond to opportunities is a really good one, and that's a balance that we strive to hit. We've got two groups particularly looking at our approach to artificial intelligence. The first is looking at how we mitigate the risks to general data protection regulation, which is obviously a very serious consideration when it comes to an organisation of our kind, so that we're making use of AI in as safe a way as possible. And then the second group is looking more creatively at how we make the best and most innovative use of AI. And they are working with colleagues in other legislatures, they are keeping up with developments in that world, attending conferences. We're aware of the fact that generative AI has, of course, developed at pace over the past 12 months, and we're thinking of repurposing a vacant post as well to create a new role in this area, as well as working with an external company. And the external company is, interestingly, advising caution at the moment before putting too much investment into any particular part of what is a developing technology, and a technology that we need to understand before we get too far into it as well.

Can I say that I agree with your external company? I think it's very easy to spend lots of money early on in a process and then discover later on that we've moved further and further forward. I'm old enough to remember when pocket calculators were incredibly expensive and not very good, and within three years, they became very cheap and very good. So, getting in at the right time, I think, is important. The only other question I've got is: have you thought of making some systems only accessible from within the building?

That's an interesting question. I'll certainly make sure that—. I'm sure our teams have been considering it, and if the committee would like me to expand in a note on that, I'd be happy to do that.

Right. When people, you think, are trying to break into our system, some of them are just trying to show off, some are just trying to do damage, but most people who break into our system are trying to steal money, aren't they? And just to ensure that you control who gets access to it by where they are rather than by who they are—again, you can take that up with your cyber people and see what they've got to say.

Well, that certainly is ringing bells, Mike, and that is something that we're very concerned about and—. We are very aware that for all the cybersecurity we can put around our systems here, our information and communications technology team keep drilling into us that the most likely point of weakness is somebody making a mistake within the system and inadvertently, or advertently, allowing access to the outside, and that is something we keep an eye on in terms of maintaining education and guidance to colleagues, and regular drills.

And to Members.

And to Members. [Laughter.] Yes. Very busy people can often fall foul of these things.

Well, I'll stop here, but I've been in places where people have put their password attached to a Post-it note on their screen—I'm not saying I've seen that in the Senedd, but I've seen it in other places—so that they don't lose their password. It's silly things like that that leave us vulnerable—people doing things without actually thinking of the repercussions. And that's an issue that management, really, is all about, isn't it?

Indeed.

I'm going to go on to talk about staff now. In the 'Diversity and Inclusion: Workforce, Recruitment, Pay Gap Reporting and Equal Pay Audit Report', you analysed staff turnover by grade. Have you also analysed staff turnover by length of service, and if so, what does it tell you?

Well, we—. It tells us that over the last five years, the majority of leavers had less than three years' service, but retention rates beyond that were consistent. Most of our staff leave through resignations, or they transfer to other Government departments. And given the nature of the work we do and the pace, we do occasionally employ people on fixed-term contracts, and that will have contributed to those statistics.

I ask this all the time, and I'll keep on asking it: do you analyse your staff in turnover and recruitment by the first part of their postcode? I live in SA6, for example. So, not the full postcode, but it gives you an idea of the area where people are coming from. Do you analyse that by grade? Because my guess is that most of your staff come from an area between Monmouth and Bridgend, and most of your lower paid staff come from the areas around the centre of Cardiff, south Cardiff and the west of Cardiff. That's just what I know from talking to people. Do you analyse that?

I have to say, I don't have that information with me today, in terms of everyone who's applied for a job, as opposed to our current workforce. I would say that the ways of working offer us some opportunities to break out of a cycle of having to employ people who live within close proximity to the office in Cardiff. We do have one other office, as the committee will be aware, up in north Wales, so that is something—. We certainly want to take advantage of talented people who want to contribute to our work, wherever in Wales or, indeed, wherever, full stop, they live. 

That's a question that whatever answer you can give, in one respect is right and in one respect is wrong, because you want low staff turnover at executive level and senior level to have continuity, but when you have low turnover, it can have a huge effect on your ability to address under-representation from different areas and attract new talent. If you say, 'We have lots of change, lots of turnover', somebody's going to have to say back to you, 'Why don't people want to stay?' If you say you have very little turnover, it's, 'How do you address the under-represented groups?'

You're absolutely right, Mike, and, of course, with turnover, as with everything else, it's a matter of balance. Too much turnover and there is instability, and we're losing precious skills and corporate experience that is very valuable; too little and we can stagnate. In common with many other organisations, our turnover was a little volatile during the lockdown and the coronavirus period. To begin with, people didn't generally leave, and then slightly more people left. We're down at a level, for the year that we're looking at now and, indeed, this current year, that I'm comfortable with—that it provides that balance.

But you're right that in terms of under-representation of people with protected characteristics, then it certainly doesn't make our life any easier, and we do have fairly low turnover at senior and executive levels, so we bank the benefits of that, which I've just described. But we approach potential under-representation from two angles. As Ed mentioned earlier, as well as seeking new talent from a diverse field of candidates and trying to make sure that there are as few barriers as possible to people applying for jobs here, then we do try to develop the existing talent we already have within the Commission as well so that they proceed within the organisation and are promoted.

Finally from me, harassment or discrimination are noted as a reason for some staff leaving. Can you expand on this and what actions were taken to address the issue? I know that some people use the word 'discrimination' when they feel that they've been badly treated. The may have been badly treated, but if we did 'leavers of Senedd Members', I'm sure a number would say that they'd been discriminated against by the current or previous leader of their group, for example, where that may or may not be true. It's very difficult to actually get to the bottom of this, so what have you done to try and get to the bottom of it?

Yes, of course. I'm sure you'll understand that I can't be completely open about discussing this topic, because for privacy reasons we can't even confirm what the number of these cases is, but I can confirm that it's less than five. Obviously, we expect everybody who works with us and comes into contact with us, in terms of working on this estate in the Senedd, to be treated with dignity and respect. I can assure you that in response to that reason being cited in exit interviews, human resources and management took appropriate action in individual cases to identify and deal with any issues. 

Okay, thank you very much. Really, with a number of these things, all I've been trying to do is raise the issue with you so that you go back and talk to other people, rather than expecting an answer today.

Yes. Thank you.

That's me finished, Mark.

Okay. Thank you very much indeed. Natasha, yes.

Can I just ask a supplementary question following what Mike said? Obviously, you mentioned that there were five instances—I won't go into further detail about that—

Less than five.

Less than five. In relation to just trying to get a bit more clarity from the question that Mike asked, how much has the Commission had to pay out in legal cases against those people who claim they've been discriminated against in the past? 

I will have to come back to you on that after consulting with colleagues.

Please. That would be appreciated.

If that is the case.

Yes, if that's the case, of course. If it's not, happy days for everybody, but I'm just asking, if there is a figure, I would appreciate having that, please. Thank you, Chair. That's it.

Okay. Let's briefly go back to cyber, if I may. It's obviously an area with very specialist expertise involved and it's a rapidly changing environment, and I note your reference to using an external partner accordingly. Mike referred to motivation being financial, it's also intelligence, including personal intelligence—you mentioned GDPR—and also drawing attention to the issue of cyber warfare particularly aimed at governmental and parliamentary bodies. Are you able to say, or do you have the information to share with us, how many actual or attempted cyber attacks the institution has suffered?

I know that it is an eye-wateringly large number and that we have regular updates on this, which show that there are thousands of attempts to infiltrate the network all the time and we have to be very vigilant about that. I think, in order to make sure that you have the very latest information, possibly writing to you afterwards with more precise numbers would be appropriate. But just to give you a sense of the scale of it.

Okay. Thank you very much indeed. Moving on to the final section of questions, which are in relation to the staff survey. Your staff absence rate reduced in 2022-23 compared to 2021-22, but over half of staff, 51 per cent, stated in the latest well-being survey that they had worked while unwell over the previous 12 months—up from 43 per cent in March and September 2022. And I suspect and I think most Members could say the same—I, for example, continued working through COVID, but remotely. Have you explored why this is the case, and if so, what findings have you uncovered and how are you attempting to address this?

One of the benefits of having these surveys is that we can identify issues like this. And as you say, in some cases, there will be an increase in people working whilst unwell, because they are actually well enough to work, it's just that they're not well enough to come into the office, and that might be acceptable. But we've recognised the need for more guidance on this, because we certainly need people who are unwell to take time to become well again, because we want them back, resilient, as quickly as possible. So, it is a matter that we're going to be providing heads of service with refreshed guidance on.

Okay. Thank you. Again, referring to the latest well-being survey, responses showed that 40 per cent of staff stated that they'd experienced anxiety or stress, and of those, 59 per cent said it was due to workload. What is your take on that?

As I mentioned earlier, Chair, we do have a working environment here that can be demanding, and we're fortunate to have a committed workforce here. So, it is important that we have a well-being strategy in place—it's a three-year strategy—to underpin our corporate well-being activity. It covers four pillars: physical, mental, financial and social connectivity. You are aware of the pulse surveys. We also continue to raise awareness of mental health issues through promotion of initiatives such as the World Mental Health Day, which was just this week, and we have health and employee assistance programmes providing support and advice to employees and line managers to help those affected and impacted by mental health in the workplace.

I think, Chair, it's important for us to build a culture where we can all prioritise good mental health, whatever role we play in the organisation. I think it's important to show an example as a leader too. I had to deal with some difficult issues myself last summer, and I needed to step away for a time in order to regain my equilibrium and come back with refreshed energy. I'm really glad that I can work somewhere where it's possible to do that and rely on supportive colleagues.

Thank you. Linked to that again, I refer to my earlier comments about having a culture of managing change with individuals and teams, and a motivational culture that means making time to save time by personalising the development of each individual, so you know, hopefully, what's going on in their lives, looking out for signals that there may be wider problems, but also unlocking the strengths they have to contribute to growing the performance that they contribute through their roles. On well-being, you've got four pillars, but where that supportive, motivational performance management culture, systemic culture, fits into that is the essence of that core of questioning, but there isn't time to develop this particularly too deeply. But, again, given your earlier responses, can you assure us that that is in-built to the system? It's not more of—I'm trying to think—a traditional approach based on a top-down, 'We're looking at this, this and this, and we hope to help you,' rather than bottom-up, unlocking the strengths of the individuals and making them part of that improvement process. 

It's actually key to our concerns as an executive board, so I would say that I think it permeates all our decision making.

Okay. The latest people survey results were broadly the same as the previous one for most themes, excepting reward and recognition, which decreased by 3 per cent, and I suppose that ties in again, the reward, with the material aspects and conditions and so on, but the recognition is what makes people get out of bed in the morning and come into work with a smile. So, do you have any further information about this, and if so, what?

I think there's probably an element of a reflection of the cost-of-living crisis in there. I'll ask Ed to comment maybe a bit further on that. In terms of recognition, one initiative I'll mention is that we have now had staff recognition awards two years running, which are fabulous events where we encourage teams and individuals to nominate each other in various categories, and it's been absolutely wonderful to be able to do that and see various parts of the organisation paying heartfelt tributes to other parts of the organisation. It's that kind of way in which we try to take the time to recognise achievements, congratulate each other and involve everybody in the work as one big team. Ed, is there anything you want to add?

Just to say that, obviously, we've tried to recognise the inflationary pressures through a targeted cost-of-living payment and then a more general cost-of-living payment. As Manon said, we very much recognise, on the reward side, the pressures that are being felt, and just to add that, looking forward, we are literally just about to start the negotiations on the future pay deal for staff with our trade union side colleagues, so that is for the period from 1 April 2025. But, as I say, we're about to enter into those detailed negotiations.

Okay, thank you. On what basis did you decide to make the cost-of-living payment of £500 for all staff on team support and executive staff grades? And to what extent did you consider any alternative approach to ensure that you were providing support to staff on other, perhaps lower paid grades, who might be experiencing financial hardship?

We put various scenarios to the Commission when this was being discussed, but we were swayed ultimately by Office for National Statistics research at the time that demonstrated that cost-of-living pressures were greatest for those on or below the UK average full-time equivalent salary of £32,000, and that more or less equates to our team support and executive officer grades. Yes, there was consideration of paying other grades as well, but it wasn't affordable within our budget.

Okay, so just clarity for the record: it was only people on grades receiving pay at or below that level who received this.

That's right.

Thank you very much indeed.

Chair, maybe I could just add that that isn't the case for the cost-of-living payment that we're about to make in-year, in 2023-24. All grades up to director grade are being covered by that payment.

Do you want to comment on why that is?

Do you want to—?

That's a reflection of what has happened at UK Government and Welsh Government levels.

Reflective of—?

The span of the payment from the grades that are in receipt of the payment.

And has something equivalent happened in the other Parliaments as opposed to Governments?

I'd have to double-check.

We have benchmarked that, and can provide you with that information.

Yes, and also particularly thinking of Holyrood, the Westminster Parliament, reflecting the separation of power.

Yes.

And not just the lower grades, but in terms of the higher grades—many of whom, may I say for the record, receive higher pay than Members. [Laughter.] 

Nicely done.

We're certainly not getting it, for the record. [Laughter.]

Chair, can I just ask a supplementary question to what you've just asked?

Please do, yes.

These cost-of-living payments that will be coming, obviously, next year, are they mandatory for the Welsh Parliament to be making, or are they obligatory, or is it just a decision we've decided to just follow Westminster when they're doing theirs?

We respond to Commission decisions.

Okay.

Okay. That brings our formal questions to the end. We're a few minutes over time. Are there any points we haven't covered that you would like to raise? Or, Members, do you have any final questions that we haven't covered? In which case, once again, thank you very much for attending and contributing. A transcript of today's meeting, as you would expect, will be published in draft form and sent to you to check for accuracy before publication of the final version. So, thank you once again, and may the rest of your day go well.

I 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 all Members content? Thank you, I see that all Members are content, so I'd be grateful if we could go into private session.