Cynulliad Cenedlaethol Cymru

Good morning. Can I welcome Members to today's meeting of the Llywydd's Committee, and the public? Just a few housekeeping issues: the meeting is bilingual and, therefore, if you require simultaneous translation from Welsh to English, if you're in the room then you have the headphones and it's on channel 1. If you require amplification, that's on channel 2 I believe, or it might be zero; choose whichever one, because it does vary. We have remote participants today, and we've already ensured that everyone is able to receive translation if required.

For those of us here, please make sure our mobile phones are on silent or off, or other devices that may interfere with broadcasting or interrupt our meeting. If there is a fire alarm in this building, please follow the directions of the ushers to ensure we go to a safe place. There's not one scheduled today. 

We go into business, and first of all there are no apologies that have been received today. Does any Member wish to declare an interest? I see none.

Then we move into item 2 on the agenda, which is the scrutiny of the Electoral Commission's financial estimate. Can I welcome our witnesses today? And perhaps you'd like to introduce yourselves for the record. We'll start with the Electoral Commissioner for Wales.

And chief executive.

And my name is Shaun McNally. I'm the chief executive of the Electoral Commission, and like Elan, I'm very pleased to be here today.

David.

Good morning. I am David Moran, and I am the interim finance director for the Electoral Commission.

And finally, Rhydian.

Good morning, bore da. I'm Rhydian Thomas. I'm the head of the Electoral Commission in Wales. 

Thank you all for that introduction. Could I put on record our thanks to the Electoral Commission for the submission of its financial estimate for 2024-25? That's why we're here, to look at it and to ask some questions in relation to it. But also, we welcome your request for a supplementary budget for 2023-24. That might be something we want to discuss towards the end of the meeting, but I want to focus on the estimate initially, if that's okay with you. Can I also put on record our thanks to the Counsel General and Minister for the Constitution for the advice we've received, which is in our papers today?

So, I'll move straight into questioning, if that's okay. No, I tell a lie, as apparently you've requested a short, brief—I use the word 'brief'—introduction from yourselves. So, Elan. Wait a minute—you're muted. You're not unmuted yet. So, unmute Elan Closs. 

We will provide advice on the draft conduct Order for the 2026 Senedd election and prepare new codes of practice for non-party campaigners, parties and candidates. We will also develop new guidance resources for electoral administrators and campaigners to support them to comply with any new requirements arising from the legislation. For example, we've designed a training programme for candidates, agents and non-party campaigners on the new digital imprint rules.

Our work in this area is supported by the significant evidence base we developed through our programme of work on electoral modernisation, including the research we continue to conduct with the public and with electoral administrators. Our ongoing research programme ensures that our advice is based on up-to-date understanding of public attitudes, so as to underpin the development of policy proposals.

And lastly, alongside our work on reform, we continue to undertake a very ambitious programme of work related to democratic education. This is something I personally have a passion for. We have recruited a new youth voice partner, trialled the referendum project and published updated guidance for teachers in line with the Curriculum for Wales. We've also strengthened our provision for other under-registered groups, not just young people. And next year we will make grant funding available for organisations supporting those who are disenfranchised.

So, I'll hand over now to Shaun with the final word that we stand here to support you and to support the oversight delivery and effective regulation of elections in Wales. Shaun.

Thank you, Elan. As you know, I will be stepping down from the role of chief executive at the end of this month. Rob Vincent, who is currently a member of the commission board will take on the role as interim chief executive, and David Moran will temporarily take on the role of accounting officer until such a time as a substantive appointment is made. 

Accompanying our financial estimate is our estimates memorandum. The memorandum details how we are delivering against our corporate plan objectives. It also illustrates the changes to our forecasted overall costs for 2024-25 since last year's main estimate. And this is due to several factors, some of which correct historical underinvestment in areas such as cyber security, financial governance and procurement, alongside implementation of the Elections Act 2022, and enhancing the renewed leases for our Cardiff and Belfast offices. 

Therefore, the Welsh funding share for 2024-25 will be £1.65 million, covering both direct and indirect costs. Direct costs will be largely focused on supporting Welsh electoral reform and education work alongside our ongoing work providing guidance and support to the wider electoral community. And, in addition, we've submitted a supplementary estimate to the committee totalling £53,900 due to salary increases and costs relating to the recent cyber attack on the commission. 

Our statutory responsibilities are integral to the electoral system, whether regulating political finance laws, providing oversight, guidance or support on the delivery of elections, supporting voters to engage with the democratic process with confidence, or providing evidence and insights to inform future improvement. Working with others, we constantly strive to improve the electoral system for the benefit of voters, campaigners and electoral administrators. 

I welcome the scrutiny of this committee and look forward to the session and questions. 

Thank you for your opening statements. Shaun, we wish you well for whatever you do beyond the Electoral Commission at the end of the month. But of course, you are still there, so you have some questions to answer in the meantime. [Laughter.]

Yes.

And I'll go straight into questions, and I'll start with Llyr Gruffydd.

We would be more than happy to provide the information that enables you to draw reference to and to scrutinise it. I value the scrutiny of this committee, and anything that we can do to help, I'm more than prepared to commit the organisation, after I have moved on, to doing that. 

So, in terms of the projected costs, I thought that we had, in submitting the further details on our budget line estimates, prepared that. The additional costs for this year have been set out within the supplementary estimate. Those are the only additions to the projections in the budget for the current financial year.

The commission's estimates memorandum notes how, obviously, there are huge inflationary pressures that are impacting on all sorts of sectors, but clearly, in your context, you reference public awareness campaigns, pay awards and some non-pay activities. We'll dig deeper into those, obviously, as this session develops, but I'm just looking really for an opportunity to hear you expand a little bit on those pressures that you predict you will face in 2024-25 and how they have impacted on the estimate as a whole, maybe, initially. Then, we can go after some of those individually later.

Okay. I think that I can bring David and Rhydian in, but what I should say is that there has been—certainly, from what I have witnessed in 20 months at the commission—underinvestment in certain areas across the commission. I think that I mentioned those in my opening address, in terms of cyber security, financial governance and procurement, alongside the implementation of the Elections Act. Of course, there will be other additional costs that are directly attributable in terms of the direct cost of the reform that is taking place within Wales. So, I wonder, in the first instance, if I could invite David to comment, and then perhaps Rhydian, to give some more detail.   

Thank you. Specifically regarding 2023-24, if that is the line of inquiry, there are considerable financial pressures, and there are wider issues that are being taken on outside of the Welsh supplementary estimate. But, as I think Shaun has said, we are only focusing on the additional costs of cyber and the additional pay award beyond that, which we've provided for.

Going into 2024-25, there are a number of areas that we have sought to enhance, as Shaun has said: cyber, procurement, finance. HR is due to cease to use the existing IT solution, and we will be spending more on those staff related to that cleansing and that transfer to an improved system. I'm just aware of the fact that I could go through all of the items, and I don't know how far you want me to go. Is there something specific that you want me to pick up on?

Well, no. What I was getting at, really, was obviously that the flipside of those increased costs is the necessity to find efficiencies to mitigate some of those budgetary cost pressures. So, I'm just asking, really, what you've done in that respect, because it's something, clearly, that the Counsel General has highlighted to us in his correspondence, and it's just looking for confidence, really, that you've turned every stone.

May I comment to the committee, please? I am confident that the estimate, as it's been constructed, produced and prepared, has had significant levels of scrutiny. What we're asking for is what we believe, or what I believe and the commission believes, to be the actual investment required for us to deliver against our regulatory responsibilities, but, more importantly, to deliver for Wales. There has been scrutiny at the board by the commissioners, and we have turned over every stone within the commission. What I don't want to do is possibly repeat mistakes of previous years by undercooking the request to the committee. And what I wouldn't do is present an estimate that didn't have the justification that's sat behind it. We haven't included anything by way of contingency and we haven't inflated the costs above that which we believe is necessary to deliver against our responsibilities within Wales.

So, give us a flavour, then, of what isn't happening or won't be happening that maybe would under different circumstances.

You could, if you so wished—. In terms of the support for the electoral reform, we will lean in as one commission to help to support the reform agenda. It's important and imperative that we have the legal team and legal input into that. We've learnt the lessons from the implementation of the Elections Act 2022 for the Westminster Parliament. What I wouldn't want to do is put any of the reform programme or any of the education programme at risk. I would also add that, actually, for us, we know that, as an organisation, we will be subject to perhaps threat actors trying to infiltrate and penetrate our cyber systems and we'll have to continue to invest in that area to make sure that we are ahead of those who seek to undermine the democratic process.

Okay. So, the commission undertakes UK-wide activities and obviously incurs UK-wide costs. I'm just wondering how much discretion the commission in Wales has when it comes to UK-wide spending. You mentioned cyber security, and I know that a colleague will want to come in in more detail on that, but that's going to happen anyway, is it? I mean, you don't have the option in Wales of opting out of that, doing differently or doing it another way.

No. The funding arrangements have been agreed by the respective Parliaments. They are set, in that the indirect costs are set as a proportion of the overall population by the Office for National Statistics, and I think that stands at 4.7 per cent.

I'll probably come back to that. Peredur.

If we chase after that rabbit, I suppose, a little bit, looking at the cyber security element—I think that's £73,000 additional this year—what does the £73,000 for cyber security in the estimate entail and why is it such an increase from last year, when we were looking at £15,400 in the supplementary estimate? So, why the difference between the two? What's going on, basically?

There has been, historically, underinvestment in terms of cyber security. We have been working with the National Cyber Security Centre and the security experts. We constantly are looking to improve our digital offer, and that additional cost is in line with what we're looking at in terms of our digital data strategy and technology strategy, moving forward.

So, is that a 4.7 per cent cut of whatever has been spent in the overall budget? Is that how it's been worked out?

Yes, it is. We are one commission. The commission leans in and delivers for and supports all of the Parliaments, and that is an indirect cost that is attributable to the Senedd and to Wales. I think Elan wants to come in, Chair. 

Elan.

I'd just like to underline how vital the cyber security work is. We all know that large and small organisations are constantly threatened on a daily basis, and I'm sure that you have a record of this in the Senedd itself. There are hostile actors out there, and the commission has had a very hostile occurrence recently. Protecting itself against this through the National Cyber Security Centre is vital, including the cost of monitoring and, shall we say, almost secret testing. There is nothing more precious, in my opinion, than keeping safe the democratic system, and we just have to spend on this. I can vouch, as somebody who's been on the commission and now in my second term, I think there's been significant underinvestment in the IT systems and a corresponding risk.

If I can also add to your point, Llyr, I think, about whether this is a proportionate portion for Wales, I don't think that the hostile actors distinguish between an office in Cardiff or an office in Edinburgh. It just gets into the system, and so we are taking what is a population share of this budget.

I understand that, and why I want to ask the question is, clearly, we've got reports that the attack was in October 2022, and you made it public in August this year, so that's about a 10-month period in which you would have been looking to address it, and you'll be addressing it this year, as well, to make sure that you are safe and secure. I just want to know what you are spending money on in the next financial year, because you should be secure by then. So, what is this additional money for, and is this going to be a recurring cost every year as a consequence of some agreement, some deal you've done for the security, whatever? I'd like to know where this extra cost is coming from and is it a recurring cost.

Chair, if I may help, of course, the threat actors managed to penetrate and gain access to the system in August 2021. It was as part of the improvements that we were implementing that we were able to identify unusual activity in October 2022. The cost for this year was the cost of containment, removal and then improving cyber security overall. However, there is still more work to be done to ensure we remain constantly ahead of any threats that may present themselves of people who want to seek to undermine the electoral and democratic process. I can say that this year represents a correction of underinvestment in previous years. Obviously, we'll need to come to the committee for 2025-26, probably at a point in time after there may have been a general election, and that will look to seek a new corporate plan and, possibly, a five-year funding settlement. But I do not anticipate that this cost will rise exponentially. However, we need to be alert and alive to information that the intelligence community is telling us, and they will be learning from other organisations that have been subject to attacks themselves, and we will need to be able to respond to that rapidly, agilely and effectively to ensure that our systems are secure.

Peredur.

So, following on from what the Chair said there, are we expecting this £74,000 to be baked into the baseline, going forward?

Yes.

Moving on, one of the key investment drivers you've got there is a skilled and diverse workforce, and you'll be seeking £65,000 in 2024-25. Can the commission provide a breakdown of the costs relating to building a skilled and diverse workforce, and set out its key investments drivers, to clarify what each investment area has been allocated? So, can you give us a breakdown of the £65,000?

I can ask David to come in at this point, please.

Thank you. Just to work through, we discussed the information technology staffing, and there are four additional staff coming through, and 0.2 full-time equivalents will be apportioned. That's about £18,000. In the HR staffing, there is a growth of two. One is to give more systems analysts work because of the changes in systems and to enhance the quality of the data—[Inaudible]—senior adviser. That's a total of £13,000 increase, which is 0.1 FTE.

Other changes include, within finance, enhancing the quality of the capability within finance. This will include additional resources in financial planning, in financial accounting and in procurement, and there are other roles as well. I'm just aware of the fact that I'm rattling through all the posts. There are additional staff in guidance, which are to do with the senior adviser and legislation guidance manager and a guidance officer. That's three FTEs, of which 0.2 FTE will be allocated to Wales. So, there are a lot of sections of a lot of areas that I think need to grow to keep pace with the wider requirements and strategic objectives that exist.

And are these roles you're talking about—0.1, 0.2 FTE in different places—a percentage of roles of full-time staff being employed?

Yes.

Are any of those going to be employed in Wales, or are they all going to be in other offices?

They are all apportioned. I think, to be fair to Rhydian, it’s probably easier if he comes in to discuss those roles that are in Wales versus those in other areas of the country.

In terms of our advertising, we advertise roles as being available to either work from home or in any of the commission’s offices, and that’s been more and more important in terms of flexibility, from the lessons learnt within the pandemic. So, it could well be that they’ll be based in Wales, but we won’t be stating that it is a Cardiff-based role. The roles, obviously, in terms of the reform area, will be working on areas that may be related to UK parliamentary reform, reform in Wales, reform in Scotland. It’s focusing on reform across the UK.

We know that there’ll be two or potentially three pieces of electoral reform nearing the end of the legislative process in Wales, coming into the next financial year, so what we’ve done, and detailed in the estimate, is established this team that supports every element of electoral reform across the UK, and that’s a lesson that we learnt from the implementation of the Elections Act, and indeed from previous Welsh and Scottish legislation, in terms of the resource that’s required. So, moving forward, that team will work more and more closely with the Wales team and with other relevant teams across the commission to deliver on the ambitious programme of reform that we’ve got ahead of us in Wales, and it’ll ensure that the commission is consistent in its response to reform work across the UK. And, as I mentioned, we'll continue to work on areas of work like the Elections Act, which was significant, and continues to be significant, and on Scottish legislation. So, it's not a resource that specifically supports Welsh reform, it's a share of a permanent resource that we're putting in place to support the co-ordination and implementation of reform across the UK. And I don't think—. It is going to be a rolling programme. I think managing electoral reform will be something that will be a challenge for us, as an electoral commission, and, indeed, other partners, for a number of years to come. Once we see a new Government in Westminster, of whatever colour, no doubt there will be reform there. In 2026 in Wales a new Government will come in, there will be more reform. So, it's going to be something that we need to really futureproof against, and that's what we've started doing now.

Can I ask you a question, just for my own clarity? Is the commission increasing its staffing complement, then, as a consequence of these reforms you're talking about? Is there any—? In other words, are you having more staff as a commission?

Maybe Shaun can add, as the lead director currently, but the staff, the team was put in place to support the—

Rhydian, I understand why the team was put in place, what I want to know is, are you employing more people, or are you transferring people from other roles within the commission?

The roles already exist.

Yes, the roles exist, but are you transferring people from their role to those roles, or are you employing more people?

We won't be employing more people currently, no.

So, the areas where we are and where we will be employing more people next year is to strengthen the team in the digital team in terms of cyber and digital. There is a need to strengthen the finance team, and we will be implementing a new human resources system, which will give us better data and information on equality, diversity and inclusion, but will also enable the commission to operate with an up-to-date HR system in the years ahead. But Rhydian is right, of course, what we're seeking to do is redeploy people on to particular programmes of work as the need arises. We have developed skills, capability and competence through what we have learnt in terms of implementing the Elections Act, and we've learnt some real lessons, and we're applying those lessons to help support the reform agenda within Wales.

Okay. So, just, again, for my purpose: you're redeploying some staff and you are looking at other areas to employ additional staff?

Yes.

Okay, thank you. Sorry, Peredur.

Moving on with some of the electoral reform stuff that you've been talking about here, there's a new allocation of spending of £44,000 for the electoral reform programme. What is the nature of the costs associated with that—and I think Rhydian's touched on some of that already—and how is the commission going to support the Senedd and Welsh Government on Senedd and electoral reforms? And during scrutiny last year, the committee recommended the commission sets out the intention for the post created for dealing with the electoral and Senedd reform agenda more clearly once the legislation has been completed. Given that the legislation is currently being passed through the Senedd, what are the timescales for setting that up? So, three separate parts to the question there.

Rhydian, are you happy to pick that up?

For the £44,000 cost, that is a percentage of staffing costs for the legislation, for the electoral reform team. So, that is just for staff. In terms of the individual role, there were two roles in the Wales team that were fully funded by the Senedd initially, and by the Llywydd's Committee; they've now been brought into the establishment. So, they're funded in the same way as every other role within the Wales team, and that is as a percentage of the costs. What we'll be looking to do—there'll be a project management structure set up to support the electoral reform programme in Wales, so we'll be looking at the legislative process, through to planning, through to implementation and bringing all of the teams from across the commission in, to tell them, to ensure that they understand what their role is and when they need to be doing it. And externally, of course, we'll be talking to all of the relevant partners out there that will be involved in managing reform, from local electoral practitioners through to political parties, non-party campaigners and other partner groups across the country that will need to be involved in this work from now until 2026 and then into 2027.

Thanks. Moving on from that, in the estimate again, you're allocating £102,000 for legal activities. This is a bit of an eye-watering 27 per cent increase compared to last year. What are the reasons for the 27 per cent increase in legal costs and how are these costs attributed to the commission's devolved activities in Wales?

Shall I come in?

Yes, please.

It is an increase, as you quite rightly pointed out. It's an increase due to the 12 per cent allocation of the following, which is a senior lawyer who is based in Wales to assist in legal matters. There is an equality, diversity and inclusion lead and adviser, and there is legal access to online legal cases and literature. This has increased due to not previously being properly identified, for the last one. But that is the rationale for the changes. So, in one case, it was missed previously. In one case, it's the EDI lead and adviser being apportioned. In one case, it's the senior lawyer based in Wales assisting with Welsh legal matters.

Is that borne purely by the Welsh team, then, because it's Welsh only, or is it a proportion?

It's an element of—. It is also a proportion, but the team will fully lean in and support the reform agenda within Wales and help support in terms of that policy development, and also help support in terms of producing any subsequent guidance that needs to flow from those reforms being implemented. So, it is a proportion, but also there will be elements of direct cost as a consequence of the reform agenda. But it will not just be the one lawyer who is currently based in Cardiff that's providing the support. The support will come from all of the team.

Okay, thank you very much. So, the final couple of questions from me, Chair, if I may. The commission's estimate includes £206,000 for regulation activities, and that's a 10 per cent increase on the funding for previous years. The commission's estimate includes increases in the budget allocations for registration and reporting, monitoring, enforcing and regulatory support. Can you expand on the reasons for these increases, please?

Shall I come in? The increase is another allocation of 12 per cent for two new roles. There's a regulatory intelligence officer and a senior regulatory support adviser that has been introduced. You are quite right with those figures; it has gone from £187,000 to £206,000—an increase of £19,000. That is principally the apportionment of those two additional posts, so they're the regulatory intelligence officer and the senior regulatory support adviser.

Okay, thank you. In our report about scrutiny of the estimate for 2023-24, this committee recommended that the commission develop a set of measurements to evaluate whether the increased investment in regulation offers value for money. What progress have you made?

If I can be candid, this has proven to be very difficult, to come up with a quantitative measure. A lot of the effort goes into the qualitative work and the advice, guidance and intelligence that helps to support compliance with electoral law and regulation. We will continue—and it is a commitment—to look at this, to see if we can find a way, to the satisfaction of this committee, to come up with a quantitative as well as a qualitative measure, so that you can track how the money is being invested.

I do have to say that, with the evidence about providing the advice, the support, and the further emergence of artificial intelligence and the threat that that may pose to campaigning and to the democratic process, I think it is important that that regulatory team are resourced at the appropriate level, and this is a reflection of that. 

So, I am, again, happy to commit the commission to continue to work and to identify a satisfactory quantitative measure to ensure that this committee is satisfied that that investment represents value for money. 

Thank you for that and your commitments there. As I sit on this committee as Chair of the Finance Committee, and have an overall view on the budgets of other directly funded bodies as well, obviously I make comparisons. And a 17 per cent increase, year on year, is huge compared to other directly funded bodies who give very similar arguments as to why their increases should be done, but we always push back on efficiencies. So, two parts to the question: why should we agree this, and, secondly, why are you different from the other directly funded bodies?

Who wants to take that one?

I don't want to get into a debate about other directly funded bodies. What I would say is that, actually, from my perspective, the budget is, by comparison to other organisations, relatively small within the Electoral Commission. My reflection on 20 months as the chief executive and the accounting officer is that there has been historic underinvestment, and I would be, more than anyone, committed to look for efficiencies, if I believed there were efficiencies there to be had. Given what I know from my experience over the last 20 months, actually, I think that the service that we have provided has come at a cost to individuals who have continued to work excessive hours. And at times we have failed in our duty of care to the staff to ensure that they have a proportionate workload and are able to have a proper balance between work and home. 

At the beginning, I mentioned that I think this year is a correction, and I stand by that assertion. 

Okay. Diolch yn fawr. 

Could I expand upon that, then, Shaun? You said about the efficiencies—have you done any work to ensure that there are no efficiency opportunities within the commission that you—? Basically you're saying you've down to the bare bones, effectively, so—

I would say we're at the bare bones, but there is investment. So, I would anticipate, as we continue with our digital data and technology strategy, that we will be able to realise benefits and move away from some of the fixed assets that we have in place across the commission, such as moving away from Webex and the costs thereby associated with it, and moving into using Teams and other technology that is readily available. We will be able to move away from the virtual platform. So, I do think there will be opportunities for improvement in the future. I also do believe that investment upfront to provide advice and compliance means that, actually, the end-to-end process is much more efficient and effective, because people, campaigners, political parties understand what they need to do to comply with the regulations rather than move to a point where we’re actually having to enforce for non compliance.

Okay, thank you for that. And on your point of you don't worry about other directly funded bodies, of course it is our role to ensure that consistency applies across Wales and to ensure also that, where one has a higher request, it does cover the cost of others. So, it is important we do that assessment.

And I appreciate that and, were I in a different seat, I'd be doing exactly the same.

Llyr.

Thank you, yes. I just want to pick up on some indirect costs and the pay awards allocated in your estimate for next year. The resource costs for next year have increased by 49 per cent when you compare them to the 2023-24 estimate. Now, you say these relate to back-office costs, which includes rent, rates, cleaning and utilities for the Cardiff office, ICT, finance, human resources and management costs. The memorandum also says, of course, the main resource changes across the UK are due to planning for a UK parliamentary general election. So, can you just tell us a little bit or clarify a little bit for us how you've allocated resource cost to Wales considering, obviously, that the UK parliamentary election is a part of that, but, obviously, there'll be other costs then that maybe you could tell us about?

So, I may bring in David in, but can I give the committee a reassurance that we have not attributed any cost to Wales that should be attributed across to the UK Parliament? Of course, we will have to, in terms of the estimate and the main estimate that goes to the speaker's committee in Westminster—. That will include the cost of a UK general election. But, Rhydian, do you want to come in and add anything?

Only to say that, in terms of the process of determining the estimate, what we did do was talk to each team across the organisation and try and ensure that they understood that the activity that would be included within this estimate was very specific to devolved elections. And so I think we can be pretty clear that what has been presented to you relates only to devolved activity in Wales.

So, could you tell us then what the resource and capital costs are associated with the Cardiff office? Because you mentioned earlier that people are working from home and there's an option to work from elsewhere et cetera.

David, do you want to come in?

I don't have the precise costs of the Cardiff office's accommodation cost, but we are in transition from one office to another currently, and there is therefore a capital cost. We can come back to the capital cost, because, to be fair, I was assuming we would stick to the revenue-related costs.

In terms of the resource costs that you refer to—the 49 per cent increase—it is because of those posts that we've already discussed. But, just for the sake of clarity, there were two HR posts, there were four IT posts, and there were four across—well, two in finance and two in procurement—that are all there to address underlying gaps that need to be addressed. Those in IT we've covered already as being in part due to the level of IT that's now required. The HR is an assistant and an additional adviser. And in finance it is, obviously, to address legacy issues and gaps in terms of procurement and to improve the level of resilience and capability in the finance team. They are all apportioned on the same basis, which is, because it an overhead, it is the standard 75 per cent allocation.

Did you want to also discuss the pay award basis?

A note about the Cardiff office costs would be useful, maybe, if that's something that could be provided. Thank you. Sorry, somebody else wanted to come in, I think.

Yes. I commit to—. We can provide a note to the committee that actually details the cost of the new accommodation in Cardiff. I have to say that the office accommodation that is currently being utilised is just not fit for purpose. It isn't conductive to a modern working environment and, given that we also have a commitment to advertise posts, I would like more posts to be appointed and taken up by the excellent people within Wales who can contribute to the overall work of the commission. So, I will commit to provide a note on the breakdown.

Just for clarity, I've no issue with, you know—

On that then, I'd be very pleased to have a note, but I would also like to have in that note an explanation of its usage in Cardiff—how often it's used, regularity. So, if we are talking about costs, we want to try and work out how those costs are being effective. So, its usage, because, no offence, everyone's working from home these days; a lot of people who are working from home understand that there will be times when we need to meet in Cardiff or we need to meet in person, so I'd like to know, if we're putting additional costs in, that it's actually value for money. It may be a qualitative rather than a quantitative measure, Shaun, but we need to have an understanding of its effectiveness.

I'm happy to provide that.

Yes. There's no issue with having an appropriate place of work, clearly—it's just so that we can see the costs, really.

Joyce, did you want to come in on this?

Just—. You've mentioned the diversity of the workforce, and, in terms of the new office, is it accessible to everybody, including those with disabilities?

Rhydian.

Yes, it is, and that's been something that we've been really careful about in terms of the planning process. We'll make sure to include some detail relating to that in the note that will be provided. We'll be moving in around February of next year, so there's quite a bit of detail to be sent over to you now.

Moving on to the allocation of £61,000, then, for the pay award in the 2024-25 estimate, that's based on the assumption of a 5 per cent increase being agreed. Maybe you could explain to us why you've assumed a 5 per cent increase being agreed for a pay award is what's needed.

If I may, we—. Last year, when I came to the committee, I thought that 4 per cent would have been more than sufficient to meet the costs of inflation and cost-of-living increases, and I didn't think for one second that the civil service pay remit would come out at 5 per cent overall, plus an additional one-off non-consolidated payment of £1,500. What we have attempted to do this year in terms of looking at 5 per cent is to have a weather eye on what is happening in terms of inflation, and to avoid a situation where we put in a prudent rather than a pragmatic assumption in relation to pay for next year.

I think, from the commission's perspective, we are losing staff to other organisations that are able to offer and to pay more, who, because of their funding arrangements, have been able to make larger pay increases. I think, if I look across, in terms of the last quarterly figures, the average pay increase across the public and private sector collectively is running at around about 7.8 per cent. So, it was an attempt—. I'm not trying to put contingency—[Inaudible.]—it's what I believe to be, and the commission believes to be, and the board believes to be, an accurate reflection of where the pay remit may land next year. Obviously, there is a difficulty and a challenge. We are trying to agree figures and make assumptions that are some many months out; the pay remit, generally, is not announced until the early part of the following financial year. But I hope that helps provide an explanation. I'd rather put in 5 per cent than put in 2 per cent and have to come to the committee and ask for more as part of a supplemental estimate next year.

Sure. Which is what has happened in the last two years, isn't it, really, so what I was looking for was confidence that we are doing as much as possible to avoid a similar situation in future. But I appreciate that—crystal balls and all that—it isn't easy, is it?

No.

Can I ask a question on that, then? Because one of the ways I would want to put an estimate in is to talk to the trade unions to see what their options are, to give me an idea of what they were seeking, and that might balance, might figure out, as to where we go. Have you had those discussions with the trade unions?

Yes. I have regular discussions. The representative body within the Electoral Commission is the Public and Commercial Services Union, and we know where their national executive has been in terms of their pay demands, which was for 10 per cent. So, we have got very constructive relationships with the local executive, but they will always seek for their members to try and strive to meet the costs of living and to ensure that a pay remit reflects the prevailing inflationary pressures that are seen at that time.

Okay. Well, it's important you have those discussions. Peredur.

Just picking up on what Llyr was saying with regards to the supplementary budgets that we've had with pay, but also going back to what we were talking about with the office move, other directly funded bodies are fully transparent about office moves and costs and making good where they've moved from and things like that. So, are you intending to bring forward a supplementary budget later on in the year, once the move has gone through, to highlight exactly what those costs have been and what's been borne during that, and whether or not you'll be keeping this committee informed of your decision-making process with regards to the move? Because, obviously, it is this committee's responsibility to scrutinise those decisions.

I welcome the committee's scrutiny and, although it'll not be me, I will commit the organisation to ensure that you are sighted in real time and apprised of the ongoing pay negotiations and also kept up to date with regards to the office move. And I'm sure that Rhydian would be more than happy to welcome any members of the committee into the new office, once the team and the staff move in, so that you can have a look around and satisfy yourselves as to what we've done with the accommodation.

It's the decision-making process—

Absolutely.

Yes, but it's the decision-making process as to where you've moved to, why you've moved, what the cost benefit is, what you've done with regards to making sure that you're getting value for money, and it's all those elements that I'd probably want to see, that I would expect from any other directly funded body.

We can absolutely commit to providing that information in the note that Shaun has committed to providing the committee with, whenever that may be. But we'll be absolutely transparent with that.

Okay, moving on, I'm conscious of the time, and I've got some things we need to discuss here—we haven't even discussed this supplementary budget yet—but, Joyce.

I want to move on to the electoral register and the fact that you said there are 400,000 people across Wales either missing or incorrectly registered, and there are groups that you've identified—private renters, young people and people who have recently moved. So, my first question is: how are you addressing that?

Yes, it's a massive and an ongoing challenge. I would add a positive note in that the report that we published showed that the local government and the parliamentary registers in Wales have both seen improvements, actually, in completeness since 2018 by around six percentage points each. So, the local government register's 87 per cent now, compared with 81 per cent in 2018, and the parliamentary register's 88 per cent, compared with 82 per cent in 2018. So, there are improvements, but there are significant challenges there.

The Welsh Government has already highlighted its intention to work with local authorities to pilot automatic voter registration, as part of the package of reform that we've seen in the second Bill, and we very much welcome these proposals. It's something that we've pushed for a number of years, and we're working with Welsh Government. We have been working with them and will continue to work with them, and the wider electoral community, to support these and further developments within the reform area. I think the key thing is reforming the system itself is probably not enough, and that includes any campaign work ahead of individual elections.

I think it's about education, it's about getting to people and to voters at an early age and talking to them about democracy, and then hoping that that message will stay with them as they get to a voting age. So, it's a long-term programme of work. Elan's already mentioned in her introduction the work that we're doing in terms of education and engagement, and extending that from young people, who we're working with at the moment, and have been working with for the last three years, to a wider group of individuals that aren't as engaged with our democratic process as they maybe could be, and that's included within the estimate.

You mention that you've worked with, particularly, young people, and of course, some of those had their first vote quite recently. But in terms of the reports that we've had, your accounts for 2022-23 have outlined ongoing and future work, including some for those newly enfranchised. How are you implementing any lessons that you've learnt so far?

We came to you last year and talked about our youth voice programme. That was about gathering insights from a diverse range of young people in Wales, to ensure that the resources that we were providing met their needs. We've now established that programme; we've appointed Children in Wales as our partner to run that programme. I was in a residency with them on Friday, with a group of young people, in north Wales, who had lots of really interesting ideas about things that could be done to improve the democratic process. So, that's starting now, and that's really important. We'll continue to work with the Democracy Box, who we've been working with for a number of years, and you'll know, to co-create content for young people, and they'll be working with Children in Wales as well.

And importantly, and this is something we've been really focusing on over the last year and a half, we're developing resources for teachers, providing training and guidance on how to effectively deliver democratic education, especially in relation to the new curriculum. It's a real challenge. We've got a board meeting in Cardiff at the end of this month, and one of the sessions on one of the days will be with young people, so that the board can hear from young people, but also educators, to hear from them about the challenges that there are in talking about democracy, talking about politics, with young people, and how they can engage more.

And we've also touched, very briefly, on the second programme of work that we'll be doing with this wider audience. We'll be launching a grant programme for organisations that support other under-registered groups—disabled people, people experiencing homelessness, et cetera. That will be a new area of work, but included—there's no additional cost for that—and the scheme will be administered in a very, very similar way to our youth voice work programme. So, we're doing more with young people, but we're also doing more with an additional community of people across Wales, and hopefully that will bear fruit, but it's a long-term project.

And could I add that it's absolutely vital? Because you're quite right that there is a yawning gap between the number of people who could be registered and those who are registered. And when you consider that, in many elections, there is a relatively low turnout, then that is a real deficit, because it's a low turnout on a registration that is not a complete picture of the population. And so, this area of work is absolutely important.

I know also that, within the teaching community, there is nervousness about teaching democracy, because they confuse it with teaching politics. And I think that the more we can do to actually make people less nervous, more confident about talking about democratic processes, about registration, about how to vote, why you vote, rather than thinking that it's about political parties. So, this is the work that Rhydian and his team, led by Ella Downing, whom you know, who's been our head of comms, have been doing, and we've been closely linked with the Welsh Government and the Minister who can help in this regard.

The only other question I really have is: we all know that young people don't get their information in the same way that others do, and that's increasing as well. So, are you working with other people who are in that space that you might not occupy—especially once you've got new IT systems, et cetera—to get greater reach into those communities, online communities, where young people do get their information?

We've been working with some of the social media companies in the past, but that's mainly been with a focus on election activity. I think what we will want to do in terms of working with the new youth voice group in Wales is to actually hear from them as to the mediums that they use, and where would it be most effective for us to focus our messaging, to focus our resources, so that it is useful for those groups and for the groups like teachers and educators who will be wanting to use that type of material as well. So, that's why this group I think is really, really important for us in determining the direction of travel that we'll be taking over the next few years, not just in the lead in to an electoral event, because that's when people will automatically get information in any case, but in those gaps during the summer, for example, and in those gaps between events where we'll really need to get the data out there.

On that issue, but I don't want to go to young people; I want to talk about the foreign nationals, because, clearly, we have policies in Wales for foreign nationals to be able to register and to vote. What work are you doing with foreign nationals to ensure they fully understand the system and their rights to be able to participate in our democracy? 

It's always been a trickier audience, as I think Welsh Government have recognised previously, but we'll continue to work with the Welsh Government. The tricky element is actually identifying the groups within our communities, and I know we've tried to work with Members, for example, because they will have the information relating to where these groups are, and with local authorities to identify the groups. It's been a trickier audience, but we'll continue to work with the Government and with local authorities to (a) identify them and (b) get the material out to them that they need in order to register and then to vote.

And is the material you require—? Obviously, it'll be in multiple languages as a consequence. Have you had sufficient resources to be able to provide that material in multiple languages?

Yes, yes. 

Okay. I'm sorry, I'm looking at the clock. I'm conscious of our time and we haven't discussed the supplementary budget, which I'll give Llyr a quick one on, because we might need to come back to the supplementary budget in a second meeting. As you know, we are required to lay a report on the estimate by a certain date, and the supplementary budget actually has a little bit longer than that to do, so we may want to come back to you to have a second meeting on the supplementary budget, simply because of the timescales we have left in this meeting. So, I'm making you aware of that possibility, okay?

Just before I go on, I want to talk about the measurement of performance that you provided us with, and it's been interesting. How do you evaluate whether that actually feeds into your estimate? Because there are some measures there where I see that you are close to or even spot on to your targets, but there are one or two measures where you're way off some of those targets. So, how is the measurement of performance feeding into your estimate for 2024-25? Who wants to handle that one? 

I'll pick it up and then perhaps others can come in. Some of the measures look right the way across the electoral system, and, as a consequence, we know what we can affect and impact, but there will be others that are directly attributable to us and the work that we do. We constantly keep this performance under review. We believe that the resources that we have asked for give us the best chance to succeed against all of those performance measures, but, as you know, we are a small organisation and can be, at times, so far due to high levels of turnover, if you've got sickness within a particular team. But I think the performance over the course of the last 12 months has been strong. Of course, yes, there are areas for improvement, but I am pleased with the work that's been done across the team.

And I accept you're pleased with the work. I just wanted to know how they feed into your estimates for this year. So, how do you use them to produce your figures, and do you look at where areas need to be strengthened, such as the future campaigns agenda you'll have?

Yes, so, the future campaigns, sometimes there is a bit of a lag. I think the work that the team did on voter ID was exceptional, and gave us some significant lessons going forward. If you look, we have reviewed, and continue to keep under review, the campaigns that we undertake across the commission, and we will take input and learn from others, and learn from the impact, the success or otherwise, that a campaign has had.

A question I often ask other directly funded bodies is what the impact would be on your key performance indicators if we were minded to say, 'Look again at your budget, because it's too much'. What would be the impact if we were to turn round and say that to you?

So, if I show an exact draw-across, if you look at the number of people in terms of registrations. In 2021-22, the spend for that campaign was reduced, and that directly resulted in the organisation missing the target and people not being aware that they could take part in the democratic process. All of this feeds into—. And we know we have a gap, because of the accuracy and completeness work. We know that there are people who are not registered to vote and are therefore not participating in the electoral process. Obviously, any reduction in spend in those areas will inevitably result in fewer people being aware and taking part in the democratic process. 

But wider than that, if we were minded to say, 'Well, it's too much', beyond these KPIs, what would be the impact of that decision, if we were to take that decision?

So, that would obviously have an impact on both our ability to discharge our regulatory functions, the ability to invest in the campaigns, and the ability to support overall reform within Wales.

Okay. Thank you.

Can I ask a question on this as well? On performance indicators, obviously one of the measures is actually how do we make—. Public awareness is an important area, and you've highlighted that, and it would be impacted upon. Last year, obviously, in the local government elections in England, they had ID requirements. The general election is likely to have the same requirements. We've never had that in Wales before. So, have you considered how that type of change is being addressed in your performance measures for 2024-25? Because we know there is going to be a general election that is going to come up in that period of time. They can't go beyond January 2025. So, have you put those types of considerations into your assessments?

We have considered that and, yes, we put that into the assessment, but that cost is attributable to the UK Parliament and a UK general election. Of course, part of the reason for the significant increase in cost for the UK Parliament for next year will be the need to ensure awareness in those communities and those areas that haven't been aware of the need to bring ID with them to a polling station. We are including that in the cost, but that's to the UK Parliament.

Llyr, do you want to ask that short question because we've got time?

Yes, just on the supplementary budget, supplementary estimate for this year, clearly we've touched on, I think, in relation to the estimate for next year, many of the principles that I was going to raise in terms of your estimate relative to the directly funded bodies, so unless there is anything you want to add, I think you made the point earlier around that. The IT security stuff as well, I think we've probably covered quite comprehensively. Also, the civil service pay award is another one that you touched on earlier and, obviously, not knowing what it is is challenging.

But I just wanted to ask specifically about the fixed non-consolidated payment of £1,500 per full-time employee for those who are eligible. With all of this, given that the UK Government has indicated that pay awards have to be managed within existing budgets for Government departments, and that, therefore, there is no consequential funding for devolved administrations, why do you think that we as a committee should agree to this additional funding for pay awards, because it isn't there, is it, really? 

If you look at the overall impact of that pay remit and the impact overall on the commission, and, of course, the cost to Wales, it would be virtually impossible to absorb that cost, given the fixed costs that we have as a relatively small regulator, by comparison to some of the larger organisations. I think the Treasury recognises that fact, that some organisations either, and we haven't—[Inaudible.]—contingency, and I don't think that necessarily is a prudent way forward, because it's saying the fund is in the event of something perhaps happening or not. But the Treasury will recognise that we cannot absorb the full cost of the overall pay award, given that when we submit our estimate it is many months in advance of that pay award being settled across the wider civil service. 

Which is no different to other organisations, of course. 

If you think about the impact, as I mentioned previously, about making sure that we remain competitive and we ensure that our staff receive remuneration that enables them to meet the cost of the inflationary pressures, then I come back to the fact that actually, I'll be making a case to the Treasury on the basis that—given when the award is made—trying to recoup that level of cost within the six months that are left within the financial year would have a significant detrimental impact on our ability to fulfill our regulatory functions and responsibilities. 

So, how have you calculated the Senedd's allocation of 8.3 per cent of the total cost of the pay award? 

That's based in terms of direct costs to the staff who are working and the costs for Wales. I think that's right, Rhydian. 

Yes, it's a percentage cost, as is the case across other areas of work, and there'll be similar discussions taking place with the UK Parliament and the Scottish Parliament as well, as far as I'm aware. 

So that 8.3 per cent is what? Those working for the commission in Wales, but also those working for the UK-wide commission—the share of their time—is it?

It's those directly working on and indirectly working on the Wales—

On Welsh devolved activity. 

Welsh devolved activity. 

Yes. Okay. 

Can I come back to that? Because I think you mentioned at one point it's a 4.7 per cent allocation of the UK proportion to Wales, and this is 8.3 per cent. So, are we treating the supplementary budget request in a slightly different manner to your estimate? 

No. It's both indirect and direct costs, whereas the 4.7 per cent is the indirect cost. 

Okay. And does your estimate therefore include both indirect and direct staffing costs?

Yes. 

This has obviously been asked in other places, but are you passing on the full £1,500 per person to us? Or are you finding any efficiencies within the year and only passing on what you have to, rather than just saying, 'This is how much it's going to cost us; this is what we are passing on to you'? 

There has been forensic scrutiny of all of the budget areas. There are significant pressures across the commission, which will form the basis of a supplemental estimate to the UK and Westminster Parliament. What we are passing on as part of this supplemental estimate are those costs that are directly attributable to Wales. We wouldn't be asking if we could have found it from elsewhere.  

So, for a decision made in London, we are having to bear the cost, rather than them picking up the bill, as they should. Anyway, sorry.

These are costs that are directly attributable to Wales. They represent the work that we do for the Senedd and this committee. There are other costs that will fall to the UK Parliament, and there will be other costs as part of a supplemental estimate that will fall to the Scottish Parliament. We have submitted formally our supplemental estimates to the Senedd and to this committee, and we have submitted them to the Scottish Parliament. There is a slightly different process for submitting the supplemental estimate to the Speaker's Committee.

We understand that, but to me, the question was more of has the commission looked at whether the supplementary budget includes the full £1,500 allocation or has the commission been able to identify savings elsewhere and you are therefore submitting a request for the gap that is still to be found. 

No. It's the additional cost and the deficit and the gap in the pay award. So, it's the difference between the 4 per cent, the 5 per cent and the 1.5—

Yes, so, it is the full £1,500 allocation, then, in that case.

Yes, it is. 

Llyr.

Has that £1,500 been paid?

Yes.

Yes. Thank you.

Okay. We have gone past our time, and we may still have some more questions. We will reconsider as to whether we need to go further on the supplementary budget questions, and we will probably now consider the considerations of this. The message I'm getting from you—and if you could just clarify this if I'm wrong, Shaun—is that we are now picking up previous underspends and underinvestment to be able to put things right, effectively. Therefore, I'm assuming that if this is approved, we are on the right track, and we won't be looking to put things right in the years to come.

I can give that absolute guarantee to this committee, and I'm not just saying that because I'm moving on at the end of November. The truth is that there has been significant underinvestment in certain areas across previous years, and this year seeks to take that corrective action. That's what I'm asking the committee to help us to do, and the commission to do. 

Okay. Therefore, we will, possibly, in 2025-26 be expecting a much lower percentage increase than we are seeing now. I'll leave that one with Elan to look at. [Laughter.]

Don't underestimate the inflationary pressure of staff. Actually, as staff costs rise, there are a number of fixed costs. For the commission, they break down fairly simply, in terms of staff, accommodation and other—[Inaudible.]

Elan.

Sorry, just at the end here, I'd just like to make a comment or two. I listened carefully to the way in which you compare us to other directly funded public bodies, and that our costs could impinge on other bodies. Of course, that's true for the additional work for the supplementary. But just to remind ourselves that the main estimate, of course, is a draw-down into the consolidated fund from our overall allocation, and therefore has no virement, really, between other public bodies in Wales. So, I think it's just important to remind ourselves of the source of some of the funding. Obviously, you have a duty to make certain that we are spending that in the best possible way, but part of the funding is drawn down.

Thank you for that clarification, Elan. And thank you very much, all four of you, for your time this morning. As you know, you will get a copy of the transcript for any factual inaccuracies you can identify. Please let the clerking team know as soon as possible if that's the case and we'll have them corrected. So, once again, thank you for your time. And Shaun, again, we wish you all the best in your new position, wherever you may be.

Thank you. Much appreciated.

In that case, now, it's item 3. I propose, in accordance with Standing Order 17.42, to resolve to exclude the public from the remainder of today's meeting. Are Members content to agree the motion? Therefore, we will now move into private session.