Cynulliad Cenedlaethol Cymru

Bore da. Sarah Simmonds. I'm the executive director of workforce and organisational development at Aneurin Bevan University Health Board.

Bore da. My name's Ali Abdi. I'm the partnership manager at the Grange Pavilion for Community Gateway with Cardiff University.

Thank you for those introductions. Perhaps I can kick off this session with a few questions. Can you briefly outline the role your organisation plays in the foundational economy within your local area? Perhaps I can start with Sarah Simmonds. 

Thank you. As the largest employer in the Gwent region, as many of the health boards and NHS organisations are, and public sector organisations, we have an absolutely committed role in providing our local economy with social value. With that, it's about all the decisions that we make having to consider the population, place and sustainability moving forward. There are two particular ways that we consider that: firstly, within my area of work, which is around creating opportunities for fair work and prosperity within our communities, so making sure that we have innovative pathways to training and meaningful employment, and secondly through our procurement procedures, making sure that we do all that we can to invest in our local economies. Essentially, it's important for us as an anchor institution, not only because of our particular obligations that we face in terms of the Well-being of Future Generations (Wales) Act 2015 and the social partnership duty, for example, but also understanding the complete connection between community resilience and sustainability and reducing health inequalities and putting the interests of our population and our patients first.

The space in the community, in terms of the Grange Pavilion, is located in the heart of Grangetown. The space was once a disused old bowls pavilion and was transformed into a thriving space for local residents. The project is a shining example of how co-production can drive real meaningful change and it reflects the power of partnerships in addressing community needs. At the Grange Pavilion, my broader work in the community and my role has been deeply rooted in the principles of the foundational economy. The concept focuses on essential services, and our mission locally is to create those sustainable community-led initiatives that support economic resilience and social well-being. Through partnerships with the civic mission project, with Community Gateway, Cardiff University and local stakeholders in the community, we've been able to integrate the foundational economy approach into everything we do. This includes engaging with Grangetown's multicultural community. We have people supporting local businesses and enhancing that local cohesion. And Grange Pavilion actually serves as a hub, just a stone's throw from here, actually, where residents can access essential services, skills development and support, while fostering a sense of ownership and belonging.

Ali Abdi, can you outline the principles behind the approach to community development that Cardiff University has taken in Grangetown over recent years? How did you develop this approach, and why did you take this approach?

Absolutely. I came from a community perspective. I was a local resident at the time that the university came into Grangetown. It's actually a decade since I started. It was 10 years ago when Cardiff University decided that they were going to explore the community of Grangetown. And they came with a blank piece of paper—no preconceived ideas, they just wanted to engage with the community and see how they could develop relationships. And I was fascinated by that. I came from the community organiser perspective, community development, working with lots of young people. I live in Grangetown, so I'm really proud to work in that same community.

The transformation of the Grange Pavilion itself from an old, disused bowls pavilion is testament, if you like, to the power of the community-led activities and the projects that have taken place since then. And in fact, just in the last two years, we've had some Master's students; a big part of the project is getting university students live teaching, volunteering opportunities. In the last two years, we've generated over £25 million in social value savings for the public purse through a project that students have been involved with. We've got initiatives like the Grange Pavilion youth forum, which engages young people in the process. We have a big population from the Somali community; we have a Somali needs project. We have play lanes with the local Shree temple. We have the Serenity Cohousing example, where we harness, again, community strengths to deliver impact and outcomes. But, essentially, if you like, the effectiveness of these projects can be seen in tangible benefits to the community. Another really good example is the PACE project, which is around promoting academic excellence. That programme has been piloted and has now expanded. So, lots of projects have grown, if you like, from an idea into standing alone by themselves. 

We've facilitated pathways into higher education, particularly Cardiff University, and careers in medicine. And even our shop local initiative is being relaunched with Cardiff Business School to support local enterprises in fostering that economic stability and driving growth in the local area and in the local economy. One of the flagship events, which I'm really proud of, given my youth work and community background, working with young people, is our careers and role models week. This annual event connects with academics and professionals, offering tailored advice and educational services, career pathways. So, local role models from the community share their expertise and inspire young people into careers and opportunities in a range of subjects at the university. This initiative has had a real ripple effect in terms of the project, the Community Gateway, and the pavilion. We've had interest from cities like Stuttgart, universities in England, UCL, and community groups across Wales, all looking to replicate our model of engagement. 

To both of you, how well understood, do you think, is the concept of the foundational economy across your organisation and, indeed, your key stakeholders? How do you think that could be improved? Sarah.

I think it's very well understood across our organisation. It's very well understood across our stakeholders and our partners, specifically within the formal arenas, I would say. We work incredibly well with our local authorities. We work closely with them through our regional partnership structures, through the Gwent workforce board, and we've developed a career consortium with Coleg Gwent and the University of South Wales. And that also extends to other areas, and we've been able to launch some really innovative practices in terms of access to education and training through that forum. 

I think where it's probably not so well understood is amongst the general population, and what that means. So, when we're going in to schools or colleges—. For example, we do an integrated schools programme with our local authority partners. We go in as a united health and social care opportunity to demonstrate the wide range of roles available through health and social care. We don't get much feedback that there's that education at the coalface, really, in terms of what the foundational economy means. And I think that doing more around public communications and education could support us to make that connection. And I was just speaking to Ali before we came into committee today about that really being able to support us uplifting opportunities to co-produce some of these schemes that we put in place, and that might help us embed them, make them more sustainable and be able to scale up some of our various and multiple pilots that we run.

Thank you. Ali Abdi, do you have anything to add?

To touch on the collaboration and co-production that Sarah mentioned, it definitely is at the heart of our work and is a perfect example of bringing together different organisations. The wider partnership also includes Cardiff and Vale College and the Rotary; we have housing associations, the RSPB. And in Grangetown, we’re blessed to have lots of faith institutions as well. This transformative community project has really made a difference, with our partnership based on mutual respect, shared goals and working really closely together to align our initiatives with broader policy objectives as well. We have a local councillor as well on our board and we work closely with elected representatives too in terms of keeping up with what’s taking place.

Thank you. I'll now bring in Luke Fletcher. 

Diolch, Cadeirydd. I want to stick with Ali for the moment. I suppose this is linked to the previous question, but just thinking about your experience in developing and then supporting some of those projects, particularly the foundational economy aspects of it, what's worked well? And I suppose on the flip side as well, what hasn't worked well?

I think 10 years is a really good time to really explore how things have worked with our project. And I think what we've managed to accomplish is that I think we really do have a unique ability to keep our finger on the pulse, particularly on things that are happening in our local community. We have a regular presence at the Grange Pavilion; we have an annual Love Grangetown event, and consistently, we have a listening exercise as well, we're speaking to our community to try and understand what challenges they face, and we're responding to those opportunities by sharing that with academics at the university.

We have various advisory panels, if you like, and conversations with local schools, and I mentioned the faith communities. So, we’re able to really respond quickly to the needs that arise. And these efforts have allowed us to build a space for the community. They also feel that they're listened to, because we regularly go back. I think, often, what they share with us is that they get information extracted from them, whether it’s for research or engagement, and often those institutions are not returning to share the impact of those conversations. And so, we’re regularly there, we’re able to share that information so that the community feels heard, valued and supported. And I think that’s particularly important in communities like Grangetown, where there’s been a history, if you like, of feelings of neglect.

I think that’s where the work around the foundational economy has become really commendable in terms of the work that we do around the social enterprises and working with local communities to work on projects that have then turned into social enterprises in their own right, which then employ local residents and local young people and go on to pay the real living wage and become accredited too.

I think that really summed up the work that supports the foundational economy aspect of the Grange Pavilion, but going back to when you were initially setting it up, what worked well in that process and what didn't work well? What were the potential barriers that were in place when first actually trying to pursue this?

I think the biggest barrier was probably convincing the community to engage with a big institution like Cardiff University. So, you've got to imagine, I wasn't employed by the university when the university first came in 10 years ago. It was only after about a year and a half to two years when an opportunity came up and I said, 'Actually, I'm really interested in this post', and that I'd apply for it. And there was a lot of scepticism, a lot of people who had a lot more advancement in the game, if you like, or in the community space who, often, would share with me, 'You're wasting your time going down this route. We've been burnt by other institutions that have come to our community and extracted from us and we're tired of that now. But if you want to go down there, Ali, feel free.'

But I think there was definitely something in those conversations with the university team that first came in initially, who have sustained and who are still there today, which is proof of the pudding, if you like, of that sustainability—the regular faces of the people who have come in 10 years ago are still part of the project today and are leading the project too. So, I think it's that longevity, it's the trust, it's the getting people involved as much as possible, and managing any concerns, and that probably was the biggest concern.

And then when the opportunity came up to work on this disused old bowls pavilion, that helped cement the relationship between the university and the community even more, because they had that presence and that regular presence, so, when I then came on board, and we helped spruce up the old building, it was—. Part of my role was to just be present and have conversations with the community, put on the kettle. There wasn't a cafe in the Grange Pavilion or in the gardens, and the idea was for us to talk to local residents to see if we did transform the space, what would it look like, what would they like to see happen here, and, yes, it's just grown from there.

So, within the overall project, then, how do you evaluate the effectiveness of that project and the things you've done over the years?

Yes, I think there are a lot of tools that the university team are involved with regularly, using tools and a whole host of different methods to satisfy the university, in fact, and you've got to see that the university have—. One part of the submission project, and actually—. So, my role is as a partnerships manager; there's also a project manager who does a lot of evaluations and having to put that on the agenda, if you like, or highlight the work we're doing in the community to the university board and getting them to commit to the fact that this is working, and inviting them in, letting them see the work happening itself, and regularly collecting and sharing what we're doing in the community to our project manager, if you like, and the wider team who then put it on the radar to those meetings they have with senior people at the university, who are then, like, 'Okay, fab. Carry on,' basically, you know.

So, are they hard to convince of the positives, or are they generally on board?

Oh, they're very much on board, yes. But I think, yes, absolutely, in the initial stages, it was probably a little bit touch and go, but I think they were very convinced through the work; particularly, you've got to imagine if there are different schools and colleges and universities who want to conduct research in the community, it probably takes them quite a while to find the right people to be able to get that project off the ground, but with us now in the community, when there's interest from, say, a particular school to want to come and do research, we can find that partner, that individual, that school, that faith institution pretty much straight away.

Okay, thank you. Thank you, Ali. Sarah, the same set of questions for you: in your experience within the health board, how have you been able to support and develop those foundational economy initiatives?

I think some have been more successful than others. So, for example, three years ago, we started our apprenticeship scheme, and, over the last three years, we've been able to support 75 apprenticeships through our system across various work and job roles, mainly healthcare support workers. That has really been part of an overarching strategy to support us to reduce our vacancies, which has been really important. But also I think it's been really well received by the people who have been through that process. We evaluate it on a regular basis. Some have had really positive experiences, would have never have thought that they were eligible to apply for a role in the health board previously, many of whom who have gone on now to start flexible routes to nurse training, which is really positive.

It was extremely difficult to get off the ground. There was a lot of scepticism, some resistance from trade union colleagues that we were replacing jobs with apprenticeship roles initially. I'm really pleased to say we've overcome those issues now. There are some concerns around our capacity to enable and make sure we give all of our apprenticeships a really positive experience, because of some of the service pressures that we face, but, generally, that's gone really well.

And there are other schemes that have gone particularly well. We've held for a long period of time an education charity and a scheme called MediPrep, which is very much led by one of our consultant surgeons who's from our local area and his own experience was around maybe not attaining entry grades to medical school, and he leads a programme of work where we support local students through to medical school. Particularly good examples of that have been stories of people who have been supported by the charity to enable them to not have to work three jobs to find their way through medical school; a specific example of an individual who was a young carer, who would never have probably made it through—in her own words—medical school without the charity. Some things that I think, maybe, we could do better at, looking at our evaluation data, is how we reach out into some of our more deprived areas. Whilst our roots really do come from, in the main, Blaenau Gwent, Caerphilly and some more of the deprived areas of Newport, what we're not doing so well at is engaging with our black, Asian or ethnic minority groups. So, that's something that we're really focusing on in the next cohort, whether it be access to apprenticeships, medical careers or the various schemes that we enable.

So, similar challenges, then, to what was experienced in Cardiff University. If I can just ask one more question, and it is specifically for you, Sarah, because I read with interest some of the things you had submitted around good practice and how we ensure that there's good practice shared amongst all the different health boards and different organisations within Wales. That's something we've picked up in our inquiry in a number of other evidence sessions we've had. I suppose the question is, then: how do we facilitate that good practice sharing?

I'll be able to share with you examples of what we're doing. Cardiff and Vale health board, Hywel Dda, they're all probably doing the same things, as well as our local authority partners who we have an interest with in terms of health and social care. I think enabling a central, co-ordinated approach to, maybe, an apprenticeship scheme would be really helpful. How could we use our infrastructure to do that in a bit more of a co-ordinated way? I think there's something, really, about how we can be supported to collect the data and the impact that these schemes have across our communities, because, whilst we might do evaluation, we sometimes struggle with the 'So what?' element of it. So, what do our apprenticeship schemes, or what do our procurement initiatives, actually mean for the pound in the pocket of our local communities, and then how does that go on to support their health and well-being in the future? That's a huge piece of work, isn't it? But, ultimately, I suppose, that's what we're trying to achieve and trying to test. So, it may be that a co-ordinated approach to that would be helpful.

Going back to my earlier point, I really think that there's an opportunity for more public engagement, public communications, and how we all help to empower our local populations to think, 'Well, this is what the foundational economy means, this is how I can support, this is how I can create a social enterprise or create a community group that would link in with it, or use what's already there and make links with one another.' Without a doubt, I know we've got fantastic people. With some of the work that health boards do with voluntary organisations, we've got a lot of creativity and innovation in our communities. I think how we might co-ordinate and then embrace and enhance that is really important.

Diolch. Diolch, Cadeirydd.

Diolch, Luke. I'll now bring in Jenny Rathbone. Jenny.

Thank you very much, and thanks very much for your evidence so far. I want to understand how your organisation collaborates with other organisations to work towards achieving your aims in relation to the foundational economy, because, for example, Aneurin Bevan must be a member of the public services board for Gwent. How successful have you been in infiltrating your ways of working into a lot of other organisations who are also in the room?

Yes, okay. So, as part of that programme of work, we have a Gwent workforce board, which is where partners from the health board and the local authorities come together to really consider new pathways to training and education. As a sub-group of that board, we have what we call a career or college consortium, and that links us in with partners in University of South Wales, Coleg Gwent and other higher education and further education providers. And through that, we've been able—. Over, I would say the last 18 to 24 months, we've really accelerated some of the work that we've been able to do to enable pathways to education and training. And we've done that very much through an approach that really looks at what our difficulties are for providing a workforce for our services now and in the future, thinking about the foundational economy principles—that's at the heart of the group—really looking at local roles and local development for our population, and thinking about the broad range of skills. And that's why we're beginning to have conversations more around diversity.

So, some of the schemes of work that have come from that group in particular are social care and healthcare placements for learners with Coleg Gwent. So, we've been able to facilitate around 30 learners for social care placements. We're a little way further with our healthcare placements; we've had around about 20 to 30 places over the last couple of years, and that gives 100 hours of experience for health and a similar proportion for experience of these learners. And what we're really aiming to do is get on board our education providers, so those learners can use those hours as what we deem to be 'care for currency'. So, that is very much around, if you haven't quite met or attained your qualifications, you can convert those hours to be able to be accepted on training courses. So, it's trying to think about innovative routes. And I'll give you some examples. So, of the 22 students who went through year 1 for the healthcare hours in terms of the work placement, 16 went on to university, four went on to employment and the others are still working through their outcomes. So, hopefully, we can replicate that success and get people onto pathways they may not have attained the grades to be on.

We also work together with that group in terms of intern placements for people who have specific special needs and need to be supported to live independently. That's worked really well and has been well received by those learners, who have grown in confidence. What we really need to push at now is how do we turn those placements into employment. That's something I'm really keen to do; it shouldn't just be about an experience, we need to make sure that we give them a longer term pathway.

And we've also been working together on an integrated schools programme and we've hired buses and gone into deprived areas, as a joint recruitment exercise. That wasn't—

Joint with who?

Joint with our local authority partners for social care.

Okay.

That wasn't so successful, but we're always willing to enable and try different ways to reach into our communities. 

Okay.

And there are other schemes—. Sorry. There are other schemes through that group, which are in their infancy, but having all those people together around the table is really beneficial.

Okay. You mentioned resistance from trade unions. Is this about—? I know that the RCN is very keen on the numbers involved in any particular team. Multidisciplinary teams are not well established in Wales, and there seems to be huge resistance to this and yet we can't recruit, we have difficulties recruiting, both nurses and doctors, so how did you overcome that resistance?

So, the specific resistance I mentioned was about our apprenticeship schemes, and it was more so from other unions aside of the RCN; it was—

Okay. 

—other professional unions. But I think, in terms of the question you ask, there's a really positive focus from our chief nursing officer around the multidisciplinary approach and what's been referred to as the team around the patient, so how we're designing our workforce for the needs of that patient and how we get skills from other development routes in other professions, as you mentioned.

Yes. I didn't want to be too prescriptive about which union; I've just had experience of that there. But you're saying that all the other professional unions were also looking at it through the lens of maintaining their professional status initially, were they?

There is an element of that, and there's also an element of—. I think, more so, though, it was a fear that we would be paying people less to do an apprenticeship role when actually we might be taking advantage of those individuals. I think that was the fear. But three years into the programme, I’m pleased to say that we’ve overcome that.

Okay. So, turning to you, Ali, I don't know whether in your role you're involved in the public services board for Cardiff, but, if not, how are the organisations you're working with supporting the development of this way of working in Grangetown?

Thank you. You’re absolutely correct, we aren’t actually currently working directly closely with them, although I think we should definitely be facilitating better connections. There are some fantastic activities taking place in that space. It’s open seven days a week, the Grange Pavilion, from 9 a.m. to 9 p.m.—

I've been there. What I want to know, really, is—I know there's excellent practice going on in Grangetown—was it pump primed by particular funding? Why did they choose Grangetown? Why did Cardiff University go to Grangetown, rather than one of the other deprived communities in Cardiff?

Yes, absolutely. That was decided upon by some academics who were doing a piece of work. It was just a project idea, if you like, and they chose Grangetown as an example to start, and that particular project then grew from there, if you like. Since then, obviously some great things have happened.

Okay. So, you haven’t got Grangetown in your job title, so what is your role, if you like, in spreading good practice to the other areas of Cardiff that would benefit from this approach?

I do wear lots of hats, but I obviously have a particular focus on my role with the university and Community Gateway, but also this work has started to get interest across the board, from areas like Butetown and Riverside too, but as—

I'm obviously more interested in the areas of deprivation in my constituency, because at the moment we have an integrated hub where the three different organisations work separately. Two of them work for the same health board.

Yes, I think there are definitely opportunities where we can share the expertise and things that have happened in our project across the city, if you like, and there are some really great examples of the work we’re doing. One of the things particularly we’re really proud of at the moment, which we’re among the founding members of, is working with the Cardiff Third Sector Council. We’re creating some anchor organisations who are coming together across Cardiff, particularly across those deprived communities, still led by C3SC, with Sheila Hendrickson and her team, bringing those organisations together, looking at shared practice, what we can do together, looking at our buying power as well in terms of a lot of us. All of these different anchor organisations have their own separate accounts or different frameworks for working, so it's about how we can collectively work on that and what are the great things that each of us are doing so that we share those great examples. So, the likes of Butetown Community Centre, ACE, South Riverside Community Development Centre are members of that, and Llanrumney community hall. The idea is that there are about 10 founding members, but this will grow once those founding members have created that framework for other anchor institutions to get involved.

Okay, thank you very much. So, just going back to earlier witnesses who cited Aneurin Bevan health board for the different approach it took to your job descriptions and person specs in order to attract people for their values rather than their paper qualifications: I just wondered if you can tell us why did the light go on on this in terms of wanting to recruit people locally.

I think we’ve been heavily reliant on overseas recruitment for a significant period of time. Also, for a significant period of time, we’ve had high numbers of vacancies, particularly in registered nursing. As we came out of the COVID pandemic, because we made some changes to how we engaged people to come into our system to work, mainly through agency and variable pay at the time, as we came out of the pandemic, we suddenly found we had hundreds of healthcare support worker vacancies, which was a position we had never been in before. But because we were operating very differently through the pandemic, we found ourselves in a completely new space.

So, we know we can recruit skilled people as healthcare support workers from our local population, and we were in extreme competition at the time, as you know—retail, hospitality sectors, they had to change their rates of pay et cetera, and other terms and conditions. So, we were no longer a leader in terms of terms and conditions post pandemic, either, so we had to do something differently. And we very much looked at how we recruit for people's values, their care ethics, their personal kind of ambitions and goals over and above if they hold a piece of paper that says they have a level 2 in health and social care, for example. And we did it not by only changing our entry requirements, but by wrapping around it a different model of selection. So, we're still very much wedded to traditional recruitment, interviews, application processes. We held open days; some people were very shocked that they came for a little bit of a look around and suddenly we were offering them a job before they left. So, a very different model in our approach, but wrapping around that when they came in, which has been important, and some of our evaluation has been a robust induction programme.

Okay. I can see we're running out of time. I can feel the Chair on my back. So, how did you manage this good practice, which obviously you could demonstrate works? How successful have you been in getting other levels of government that you're collaborating with, either within Gwent or outside it, to adopt similar strategies?

I think that's probably work we need to do, in all honesty, yes. 

Okay, fine. Excellent. We’ll come back to you, then. So, Abdi, it’s clearly very important, what you were summing up earlier, in your conversations with the earlier two Members. Actually, I think you probably answered this in relation to the role that C3SC is playing. I just want to ask you both about your attitude towards employing people with disabilities. From memory, I think you are disability aware level 3, is that right?

Level 2, working towards level 3.

Why are you not level 3?

It's as simple as we've had some significant gaps in our workforce team to be able to take that forward, but I'm confident that we'll be able to take it forward in the next six months. 

Okay. Because in another committee, I'm doing some work on this, and it's not a particularly good story to tell in the public sector. So, it's clearly something we need to work on. So, Abdi Ali, in your experience, how well are you embracing people who have disabilities? Twenty-five per cent of the population have disabilities. So, how have we shifted the dial in your discourse with your communities to ensure that everybody has value and we have roles, so long as we give reasonable adjustments in the way we ask them to carry it out?

Yes, absolutely. And we do, we create a lot of opportunities. Obviously, we don't discriminate against anybody whatsoever. I think there are definitely opportunities and we have seen members of our communities in Grangetown, diverse communities particularly, participate, engage, get involved in paid and unpaid opportunities.

Okay. I want to just challenge you a little bit. I'm sure that you are not involved in discrimination, but it's how you get the organisations you're working with within the foundational economy area of Grangetown to adopt similar attitudes. How successful have you been on that?

I don't think we've particularly focused, if I'm honest, on that either. But I think we are listening to our community, and I think what's coming up particularly in terms of some of the challenges faced by members of our communities, issues around SEN, special educational needs, attention deficit hyperactivity disorder, is that there are issues, particularly when it comes to young people as well, presenting themselves. And so we're doing quite a bit, if you like, in our space, but I think there's definitely an opportunity to go out to the wider Grangetown community and others to support them with that as well.

We have a regular engagement with the local authority in our space in terms of jobs, training, volunteering opportunities. So, anyone who presents themselves or wants support into education, employment, training, every Wednesday on a weekly basis, there's a team from the council based in our space. And obviously there's a nearby hub. But, actually, we're finding that in our building, in Grangetown pavilion, people are finding a more friendly, welcoming environment to come and talk about jobs, opportunities and training. And then we can signpost them into either volunteering with us, and if opportunities come up, support them into those opportunities. But definitely, I think the businesses in Grangetown and the wider area could definitely benefit from that wider engagement around disabilities, but we are creating that. I mentioned earlier the work we're doing around our local business network, and I think that could definitely form part of those conversations.

Thank you.

Okay, thank you, Jenny. I'll now bring in Samuel Kurtz. Sam. 

Diolch, Cadeirydd. Good morning, both. Thank you very much for joining us. Taking a step back from what you're both doing and your organisations are doing, I'm just wondering if you could give us your assessment on the effectiveness of the Welsh Government's overall approach to the foundational economy, and some thoughts on why. Ali, we'll start with you.

Yes, I think, for me, when I was looking at this, and to go back to Jenny's question earlier as well, we definitely need to explore how the foundational economy in Grangetown, particularly, can get more connected to being part of the larger initiatives around the public sector frameworks, how we can use some of the great examples in Grangetown to really share with the PSB boards, how we can benefit from some of their initiatives that are taking place, and how we can be partners in that change, if you like, tackling issues around health, social care. I think there's definitely some real opportunities that we can realise there. There are some really good social enterprises in our community that will employ local people who are not part of the procurement process, so it's how we can make that procurement process more ethical and support those local enterprises to be a part of that process, if you like. That enhances, then, the opportunity for them to be part of that economic growth, both locally, sustainably and creating opportunities for more jobs in the community of Grangetown, and also wider. 

So, on your evidence that you've given there and your thoughts, in terms of the Welsh Government's role, then, previous evidence that we've had is that Welsh Government should be more of a facilitator rather than being interventionist, as such. Is that what you would find as your feedback from being in Grangetown and running the projects that you do? 

Yes, I think so, in terms of matchmaking, having trust in those community-led projects that we know work, that we know have traction. There are some real examples of some initiatives that are making a difference. And so it's also providing that funding and support but continue to hand-hold them as well through that process. So, it's capacity building, so that institutions like the Grange Pavilion and those social enterprises can lead the way in terms of that tailored work.

Okay, that's really helpful what you said there around trust in the projects that are working. It's quite interesting; that resonates with some previous evidence that we've had. Sarah, your thoughts on the Welsh Government's approach to the foundational economy.

I think the approach is really helpful. It provides us with a really strong platform to work from, whether that's through funding programmes or whether it's through policy intervention. It really helps us to focus our mind around the principles of the foundational economy. I think, on some of that comment you've already made around trusting those programmes that are working, it's going a little further, maybe, when there might need to be some intervention to enable those programmes to reach the next step, or elevate those programmes, or break down the barriers of organisation working in silos. Sometimes that might be no fault of the structures that are there. It could even be down to capacity and time, which I think are enablers that could be supported, as well as, I think, something that is really difficult—and I don't really know if there's one answer; there's probably a multiple approach to this—but those programmes and projects that are working, how do we scale them up and spread them, and at pace? It probably comes back to capacity, resources, which are really important. And the point I made earlier that I think would be helpful is: how do we co-ordinate the data and maybe have some real intelligent focus on what impact this has made, and so is it worth scaling up and doing more of it?

So, listening to your comments there, it would feel that maybe you're more inclined towards an interventionist role for Welsh Government on the foundational economy, rather than a facilitating role, stepping back and just facilitating the discussion. Is that right? 

I think there are some co-ordinated efforts that could be made centrally to support some of these key programmes of work, which, from my perspective, have the absolute potential to make a really big difference for the future. So, maybe it would need to be focused on maybe sector organisation or scheme. But I think there's definitely some room for a specific centralised approach around enabling co-ordination and expertise as well.

That's really helpful. Thank you, Chair.

Thank you, Sam. Before I bring in Hannah Blythyn, I know Hefin David would like to come in on this. Hefin.

I have a question around the budget for Business Wales, and the fact that the 2024-25 budget for the foundational economy was more than halved by the Welsh Government, which had an impact on the local service fund. I just wonder if, Sarah, you've noticed anything. Have you noticed anything that has had an impact, and, if so, what has that impact been as a result of that budget change?

Probably—. Well, not directly related, but maybe indirectly. So, I mentioned our apprenticeship scheme earlier; we've been able to have 20 to 30 places a year. As we go in to our next planning stage, and budgets are more pressured, and there's less available resource for the supernumerary status of the apprenticeships in our workforce, services are less reluctant to have the numbers that they did last year, for example. So, probably an indirect consequence.

Thank you. I'll now bring in Hannah Blythyn. Hannah.

Thanks, Chair. You're both obviously here because you're considered local anchor institutions. I think, Sarah, in your opening remarks, you talked about being the largest employer in Gwent, and then we heard you talk about the role in the community and the role of the living wage. So, I just wanted to ask initially: how do both of your organisations deliver and set an example on fair work practices more broadly?

So, obviously, we start with our terms and conditions, which are all-Wales terms and conditions. I think there's a real commitment across organisations to be a real living wage employer. Some of the things that we consider more locally, if you like, are around more access to flexible working options. It's something that is very much at the forefront of our work programme at the moment, and making sure that there's more understanding and support for flexible working options, which we know will help support carers and those with childcare responsibilities into work. We're very much committed to working in social partnership with our trade union colleagues, and also making sure that we are enabling our staff networks around equality, diversity and inclusion. And I've recently reconfigured the governance around those and protected time for people to attend them, so that we can have a two-way conversation around work, Access to Work, and how it feels, specifically around issues and concerns that are not unique to us, such as bullying and harassment, for example.

Can I ask you something—it's a personal interest, actually—on the social partnership point? How do you find the understanding of what that is and how that works on the ground, or is it a work in progress?

Work in progress, I would say. We're very keen to ensure that we engage our partners in terms of long-term planning, in terms of our strategic approach, and the impact of that. And I think it's building on that that is the work in progress at the moment.

Thanks. Ali.

So, as you know, the university is a real living wage employer, but also the pavilion is a real living wage employer. I was actually part of the team that helped get the university over the line, many years ago. We very much support the real living wage and encourage local recruitment. We have a fair jobs campaign, actually, across Butetown and Grangetown, with Citizens Wales and community organisers, which has promoted ethical jobs, promoted opportunities for skill development and progression. And particularly, just in Living Wage Week, we launched Grangetown as a living wage ward. The idea is to create as many businesses as possible being part of the real living wage. So, it started in Grangetown. Councillor Sara Robinson launched that at the Tramshed just last week, and the idea is: how do we get as many businesses from the local community to be part of that process, but also, could other wards then follow in the same way? And by setting that example, we hope to inspire other community organisations as well, and local businesses, to follow suit, and also other neighbourhoods after that.

This is more specifically, sorry, to Sarah, but we've heard from other witnesses to this committee, those who've talked about Aneurin Bevan health board, about the grow its own workforce initiative as an example of good practice. So, I was wondering if you could set out what exactly that is and how that works in practice, and also how it not only benefits individuals, but the impact on the local area as well.

Yes. I think some of it I've already spoken about, so some of the routes that I've spoken about. But I think it's about identifying where our gaps are now, but likely to be in the next three to four years, and then identifying specific projects that we can work with to grow our own workforce. So, we very much launched a future nurse academy, making sure we can employ people who may not have the entry requirements for nursing, but we employ them as a healthcare support worker and take them through the route. We have a pathway mapped out, and people can jump on and jump off that pathway. Some of the work that's being done around—. We've an access to medicine course, so supporting people who may not have attained the grades for medical school, but may be able to attain the grades in the future, with some foundation help, and that's in partnership with the University of South Wales. And we're exploring an access to dentistry course as well, as well as further collaboration with the University of South Wales for local medical education.

But it's very much around expanding those pathways to our other service areas as well, which is important, and it's about tracking those pathways. And we've also got internal routes. So, we have lots of people who join us as facilities workers, but they want to progress to the healthcare support worker route, so we've enabled an internal route that allows people to pick up an apprenticeship as a healthcare support worker without any detriment to their current salary, which is really positive. There are other routes that I could talk about. I have to mention work we're doing with the Royal College of Nursing, which is around RCN Healthcare Connect, and that's allowing people to go on to nurse training through a different route, and I think we're the first health board in Wales to pick that up.

I think the impact is something that we really need to work on in terms of—. We know how many people go on to university, we know how many people go on to employment, but we need to do a little bit more work on what does that mean for them in the longer term, and what does that mean for our local community. We're collecting some data, but I think that's an area we really need to work on. Some of these schemes have only been going two to three years, so, I think, as we build on that, we need to understand that wider impact.

Thank you. And this is to both of you as well: just, more broadly, do you think there are any additional fair work measures that the Welsh Government and other public bodies should be working to implement within foundational economy sectors? I mean, we talked about things like the living wage, all the things around skills progression. Are there other areas that you think the Welsh Government could do more on, and support, within the foundational economy?

I think, probably, a lot of the roles and jobs that we talk about are low paid and generally regarded to be low-wage sectors. So, how we can lift that up, how we can maybe support or deny the myth or the reality of terms and conditions across health and social care. But, generally, more trust and engagement with some of our diverse population around inclusivity, I think that's a key area.

And do you think—? Because, obviously, notwithstanding the need to uplift when it comes to terms and conditions, do you think, sometimes, the language we use when we talk about some of these roles actually is unhelpful?

Yes. Yes, I would say that. I think there's an awful lot of discussion that goes on and terminology about 'qualified' and 'unqualified' still. Even now, I was in a meeting last week where those terminologies were used. We've, internally, done some mapping of salary rates across health and social care, and the disparity isn't as real as people may think, so there's a huge communication piece, I think.

Thanks. And Ali.

Yes, just to add, I think there are some really good things happening. I think it's also how do we promote that to our communities, how do we share that with them, but also do some capacity building to support them for those roles in the foundational economy, and prepare them for any future opportunities that are coming up as well. And just like I mentioned earlier, how can we use local partners and organisations who are trusted, who have an ear in the community and who can get people together quite easily to help with that process? Because they're available, they're there, and can really make a difference in getting people into these roles, in raising the profile of those opportunities, and facilitating potentially their sustainability in them, because they can just continue to come back to those people to help support them further in those roles.

Thank you, Hannah. I'll now bring in Hefin David. Hefin.

Diolch, Gadeirydd. I've heard a lot already, Sarah, from you about procurement, and I therefore don't want to go over ground you've already covered, but can you just give us any further insight you want to into how you've managed to increase the spend with Wales-based suppliers from 50 per cent to 56 per cent between April 2023 and 2024? Is there more that you want to say there, and also how you might then expand that in the years ahead?

From what I've been able to gather, looking at the information, it's really been through ensuring that the criteria for our procurement exercises are synonymous with local providers, so specifically looking at more weighting in terms of the agility of the supply chain, response times, flexibility and some broader sustainability values. I think that has enabled us to increase that position. Sorry, what was the second part of your question?

Going into the future, how would you increase that from the 56 per cent? How are you going to build that higher in the years ahead?

I think it's probably learning from what we've achieved over recent times, and also working with our colleagues in the NHS Wales Shared Services Partnership, really to look at what our procurement values look like. There's more we need to do as well, I think, in terms of how we build relationships with our local suppliers, how we look at what's out there now and what could be out there in the future—kind of do some horizon scanning of our needs—but also what that means for our local providers, because we need to engage with local providers, so that they have an idea of how they may expand or not expand in the future.

That's really helpful. Is there anything else you wanted to add around the area of procurement?

Not for me, unless there's any specific question.

No, I was just giving you the opportunity to say to us anything you think we should be recommending to the Government that you think we could help you with, which would enhance what you're doing.

No, nothing else, thank you.

Okay. Thank you, Hefin. I think Jenny would just like to come in on this.

Yes, if we have time. Obviously, I'm very focused on the procurement of good, fresh food and the elimination of ultra-processed food from public procurement, so is this something that you've looked at through the lens of what you've just been describing? Because, clearly, you can deliver 10 tonnes of carrots from one acre of field, but it takes you some months to be able to get up to speed on that. So, I wondered if this is something you've discussed, both in relation to the well-being of the whole community in your area, as well as specifically around improving the nourishment of both patients and staff.

Yes. So, the majority of those areas where the criteria has been applied will have been in the facilities area, which will deal with our supply of food and nutrition. In terms of how that's mapped out particularly, I'd have to go away and look at that in a bit more detail.

Fine. If there's anything you'd like to tell us, we're interested, because we've taken evidence earlier on the subject. Thank you.

Okay. I'll pick that up.

Thank you very much indeed. Our session has come to an end, so thank you both for being with us this morning. Your evidence will be very important for our inquiry. A copy of today's transcript will be sent to you in due course, so if there are any issues with that, then please let us know. But once again, thank you for being with us. We'll now take a break to prepare for the next session.

I’m Rebecca Evans, the Cabinet Secretary for Economy, Energy and Planning, and I will just ask my officials to introduce themselves.  

Bore da. Aine Gawthorpe, deputy director for industrial transformation and foundational economy. 

Bore da. My name's Stephen Layne and I'm deputy director for fair work. 

Bore da. Duncan Hamer, director of economy. 

Thank you very much for those introductions. Perhaps I can kick off this session with a few questions. What is the Welsh Government’s definition of the foundational economy, and to what extent is this definition shared by other Welsh public sector organisations?  

From the Welsh Government’s perspective, the foundational economy is the goods and services, together with the economic and social relationships that underpin them, that are essential to living a good life. It includes, for instance, food, energy, utilities, health, housing, transport and high-street retailers. But we are, at the moment, in the process of consulting stakeholders on this proposed definition. We’ve been paying close attention to the committee’s work, and we know that the definition is something that is of particular interest, but contested in many ways. People often use 'foundational economy' interchangeably with things such as 'well-being economy' and even 'circular economy'. So, it’s really important that we give some clarity, I think, to stakeholders and others.

In June, we commissioned Cynnal Cymru to engage with stakeholders, and to clarify understanding of FE approaches, but also definitions in that space as well. And, again, that included things such as community wealth building, which was brought into this kind of space as well. The stakeholders that Cynnal Cymru are engaging with on our behalf include academics working on the FE agenda, think tanks, campaigning organisations, people working closely with anchor organisations, and also public bodies and procurement professionals and others in this space as well. From this consultation, we do have that revised definition that I’ve described, but that will be subject, now, to consultation, because we know that people have very strong views about the definition of the foundational economy. The intention is to share that definition that we’re developing, and also accompany it with a mission statement, to seek feedback. We aim to finalise and publish in the new year when we’ve had the chance to consider all of the responses to the work that Cynnal Cymru is doing, but then, of course, the committee’s report as well.   

And how to you respond to Professor Karel Williams’s view that the Welsh Government’s foundational economy approach should focus more on liveability rather than on a narrow, descriptive definition of the foundational economy?   

I think, in many ways, it needs to do both. I think it is important to have that clear description, so that people are working to the same understanding, I suppose, of a foundational economy. But in terms of the FE objectives that we’re currently consulting on, I can confirm that one of those is around increasing household liveability, and that was very much part of our thinking around the impact of the cost-of-living crisis and so on. And also, just ensuring that universal access to all of the high-quality foundational goods and services that people need in order to live that good life that I referred to in the opening statement as well.

So, we understand that perspective completely, but, again, we do need a kind of holistic, broad approach as well. Beyond just liveability, we’re thinking about how the foundational economy can help us on that journey to net zero, how we can encourage collaboration and innovation within the FE sector, and also, of course, support more jobs and better jobs closer to home. So, those are some of the objectives that we're currently exploring as part of that revised definition.

And on this, Hannah Blythyn would like to come in. 

Thanks, Chair. It's linked to the definition, but not exactly about how we define it. It was off the back of the last session we had this morning. I think the way we talk about the foundational economy is important, because I've heard it referred to as the everyday, the mundane. You might not like your job, but you don't want it to be referred to as 'mundane', do you? So, I think in terms of those areas where we want to encourage people to work, I think if the Government is looking at reviewing this, then I think the language we use is really important, in terms of not just the value of those roles, but the value of it to our communities as well. Do you agree with that?

Definitely. Actually, just before we came into committee we were talking about some interesting work that's going on at the advanced manufacturing facility—so, cutting-edge, important things that are going on, which is actually part of the foundational economy and supports the foundational economy. I think the focus on ensuring that there is support for true innovation within the foundational economy is important as well. But yes, I absolutely take on board those points that this isn't a boring sector. It's an essential sector where there is innovation and lots of exciting work going on that needs to be celebrated.

Given the work you've just mentioned, you therefore perhaps don't think that the foundational economy is very much understood across the public sector. Is that why you're carrying out this piece of work?

I think it is understood, but it's not understood in a consistent way, so there are different understandings of what the foundational economy is, and I think that it is helpful if people are working to a single understanding, although I think there is merit in that understanding being broad and inclusive as well. But I'll just pause at this point, because as you know, I've been in this portfolio for just a couple of months, whereas officials have been working on this for some greater time than I have, so they might have some further reflections to share.

The feedback we get from stakeholders is very much that the understanding of the foundational economy varies across sectors and across institutions, as does the extent to which foundational economy approaches are adopted. So, as well as this revised definition and mission statement, we have been working over the past several years around how we can increase understanding of the foundational economy and the objectives—so, things like our online e-module and some of the learning that has been undertaken with some of our key stakeholders. And actually, we've had really good uptake. So, it is an improving picture, I think, but definitely still some way to go.

I was just going to add to your point. Whichever definition you take, at least half of all employees are employed within the foundational economy—probably something like 60 per cent of all businesses. And I think, picking up where the Cab Sec left off, there are broadly three categories in the way we try and define it. One thing is it makes a place a great place to live, so if you live in a nice town with shops and retailers and restaurants, but you've also got right the way through to those innovative companies—you know, the work in AMRC, for example, on food manufacturing and productivity and the work that those can do. And then of course they enable many of us to go out to work, be it childcare or social care or whatever else. So I think getting that language right is really important and we can build on the work that's been done to date to enable that.

We're also doing some work to ensure that the supply side understands the importance of the foundational economy and definitions as well. We've run an FE innovation network programme through Cardiff Metropolitan University, and that was aimed at Welsh businesses. There have been two cohorts so far, and 94 per cent of those who participated said that they had a much better understanding of the foundational economy and the opportunities that it provides to them as a result of that work. We're currently following up now with those businesses to see how they've actually applied those FE approaches and innovation in the work that they've done following those sessions.

Before I bring in Luke Fletcher, I know Jenny Rathbone would like to come in. 

Duncan, you used an acronym that I didn't understand—AMRC, doing work on food.

Sorry, the Advanced Manufacturing Research Centre. It's university led, and then the idea is to bring SMEs alongside large businesses and work for those. Apologies.

Fine, okay, I've got it now.

Thank you, Jenny. I'll now bring in Luke Fletcher. 

Diolch, Gadeirydd. Before I move on to my main line of questioning, I just want to push back a bit on what you said earlier, Cabinet Secretary, that people understand the foundational economy but that there are different understandings. Let's be fair here, people don't understand it if there are multiple interpretations of it. So, they don't understand the core objective of the Government, and that's why the work has to be undertaken for that single definition, isn't it?

I'm sure there are many people working in the foundational economy who don't even give it a second thought, because that's not something that's of particular importance to them in their day-to-day work in terms of understanding it. But what matters then is all of the stuff that we're trying to achieve around fair work, and so on. How the work feels to people, how they are rewarded for that work is absolutely essential as well. But it's really important that the public sector and business understand the foundational economy, which is why we're working towards that shared understanding of it. The work, I know, was commissioned back in June, and perhaps we can hear a bit more about what was behind the commissioning of the work, because I'm sure that was about that lack of understanding or different understanding.

Absolutely, yes. The reason we commissioned that work is because we are getting that feedback or have had that feedback over the years that there are slightly different interpretations. There's a very academic definition of 'foundational economy', but the way that we in the Welsh Government have articulated that in terms of the sectors is slightly different and slightly wider. So, we really wanted to clarify that. And that's why, alongside the piece of work that Cynnal Cymru are doing with stakeholders, we've also done work with knowledge and analytical services around specifically identifying the sectors by standard industrial classification code that we refer to when we're referring to the foundational economy, which means that we'll actually have a far better baseline of data that we can use, going forward, to understand the foundational economy and progress in that space. So, yes, it was commissioned as a result of an understanding that there are differing interpretations of the term. 

Thank you for that. In terms of the foundational economy more broadly, how much of a priority is it for you, Cabinet Secretary? Because again, to be fair, the foundational economy has been in existence under multiple Cabinet Secretaries, and conversations that we've had as a committee or as individuals with people in the sector definitely had an interpretation or a perception that, perhaps, former Cabinet Secretaries or Ministers within the economy department saw it as simply a legacy policy and had no interest in developing it. So, how much of a priority is it for you?

I think the foundational economy is absolutely critical, because, as Duncan was setting out, it forms such a huge part of our overall economy that it absolutely needs our keen attention. I think one of the challenges, though, is that this isn't just an economy Minister job, it's a job for every part of Government. So, when we think about the foundational economy, we're thinking about health, we're thinking about social care, housing, things that stretch across multiple portfolios. So, it's really important that actually this is understood by all of Government, rather than just being the responsibility of one Minister and the team of FE officials to be driving forward, although the FE officials do work right across Government with colleagues in health, social care, housing and beyond as well to try to ensure that the approaches are understood and embedded and that we take on board their feedback in terms of what the foundational economy means for them and their stakeholders as well. 

Have you been successful in mainstreaming a foundational economy approach across Government, in that case?

I think there are some really good examples of where we've been able to do that. One that resonates with me because of the interest in construction and so on is the work that we've been doing with registered social landlords. Again, this has been led through the housing department, but they were able to put registered social landlords—I think 28 of them—in touch with around 500 SMEs who had previously not had any opportunities to undertake work for registered social landlords. And that, obviously, has led to RSLs having a greater pool of talent and Welsh businesses to source from, but also provided new opportunities for those businesses. So, that's not something that was done directly in this department, but I think it's a really good example of other Ministers using their tools and influence to support this agenda. 

That's a specific example, but the question is are you confident that Ministers in their deliberations and decisions are seeing the foundational economy as a priority across all departments. 

I think that we have to, because as Duncan was setting out, it is such a large part of the economy, but also, in terms of public services, a large part of what we deliver. So, in health, when we think about the support that we provide through health, then, via the health boards and so on, social care particularly, those are absolutely critical to the foundational economy. There's no doubt more that we can do and when this committee reports, we'll be keenly looking at your report, but also the work that Cynnal Cymru has been doing in terms of the definition. Because it's probably not just a problem for the public sector in terms of having a coherent definition. We need to be ensuring that we adopt that across Government as well. But I think the work that the team does with teams right across Government tries to smooth that.

So, what sort of tools, and how do you ensure that the Ministers, then, are using the foundational economy approach in their deliberations? Because the perception is that that isn't happening.

So, what will be important is the advice, then, that comes to Ministers and that's obviously developed with the support of the FE team, so, perhaps you can say something about that.

Yes, absolutely. So, the FE team, the aim is very much that we work right across Government, working with other departments and divisions to understand how they're working, where they're really embedding FE approaches in the work that they do. And that's a mix of trying to identify best practice that we can then scale up across wider Government, but also looking at areas where we can provide further support.

So, in terms of tools—and I believe that this was mentioned during the evidence—we worked with Cwmpas to develop the FE-enablement reviews. So, effectively, I think they described it as an audit tool; I think we tried to look at it much more in the supportive space, working with departments and divisions to look at everything they do, identify how they're supporting the foundational economy, as we said, areas of best practice, but also areas where they could be doing more or require more support or where there are specific barriers that they're overcoming and then using that to develop delivery plans, in some cases, in order to take that forward.

So, we've done that with a range of departments so far. Social care is a big one, but also within food, housing and transport, and that's been part of how we came to some of the priority areas that we've focused on in the last 12 months, in particular around FE opportunities, from housing in the optimised retrofit space and transport in the decarbonisation of buses, for example. So, we're using that tool to really understand how it's been embedded. We need to look at how we take that further going forward—which other departments we may want to focus that work in, and update the tool to make sure it continues to be relevant, but that’s one of the key mechanisms that we have to undertake that.

It's really interesting to hear you say that, because I think the impression that we got from Cwmpas was that that tool that they developed with Welsh Government hasn't been used to date. So, it has been used is what you're saying.

It has been used. It's been used in a number of departments and divisions, as I say. It hasn't been used across every department, but—

Maybe if I could pick that up, we've used elements of the tool. So, I represent the service in the CabSec's, Business Wales, for example, where about half of all of its support goes to the foundational economy, and I think what the tool's helped us—. We did a self-assessment part of the tool, not the full review, because we were quite a long way down supporting the foundation. We very clearly realised that this is like a symbiotic relationship, if you think about what a service like that does: you've got the foundational economy, but you're also got then high tech, high growth, but, of course, to attract skills and people in the high growth, high tech, you've got to have a vibrant foundational economy, because (1) it supports your construction projects, or, indeed, people want to live in the areas with good services.

So, I think, for a service like Business Wales, we basically implemented it so that it's both elements. So, we recognise that there's a really symbiotic relationship between foundational and that growth economy, and that supporting both delivers better. So, we've tried to approach it from a slightly different direction. And the tool and the self-assessment really helped to firm that up in our minds. I think we were heading that way anyway, but it's really helped us understand that and develop it into the latest iteration of the Business Wales contract and delivery, which is live now.

Okay. So, the tool is used in some departments, but not all departments. So, does that undermine, then, what you said earlier, Cabinet Secretary, around this being a mainstream approach in Government, if only some departments are using a tool that has been provided around the foundational economy?

No, I don't think so. I mean, the tool helps, and it's certainly helped in terms of those delivery plans around the optimised retrofit programme, but also the decarbonisation of buses for those specific, quite large projects that have been undertaken. 

But I think some feedback has been that the enablement tool has been much more resource-intensive than originally envisaged. So, I think that it would be helpful perhaps for me, after this committee meeting, really, to explore further with colleagues about how we might be able to use the tool, but perhaps try and make it less resource-intensive and so on, perhaps, as Duncan suggested, using specific parts of the tool that are most relevant.

So, fine tuning it, essentially, yes.

It's worked well. At this point, it's a toolkit, is the way I view it, and so, depending on the maturity of your area, you use different elements of the toolkit to deploy. I think that's the bit we're trying to learn now, and—Aine will be able to say—we've done it with a number of departments and then we're going to use that as a bit of a learning experience as to then how do we use that going forward. Because, as ever with a new tool, you find out things about it as you develop it and work through.

Okay. If I could ask one final question, Chair. I think Professor Williams is probably going to come up quite a bit in this evidence session. He, in his evidence to us, suggested that perhaps Welsh Government should have a bit more of a hands-off approach when it comes to the foundational economy, to create these coalitions or alliances of the willing, and to do a number of projects via skunkworks. Is that a criticism you think is fair? Is that something that the Government might agree with, or do you think that the way in which the Government is approaching things now is the way to continue dealing with the foundational economy?

I think there's room for both, in the sense that, as you've I think alluded to in your questions, there is absolutely an important role for strong leadership in this space. But, equally, it is about creating those coalitions of the willing, having those communities of practice, which we've funded, so supporting those to become successful. So, I think that there's a balance that needs to be struck, really. But giving people the autonomy and empowering them to take decisions that are to benefit the foundational economy is absolutely, I think, the right thing to be doing. So, perhaps, again, officials could say a bit more about the communities of practice and how they can help support innovative approaches, and, I suppose, allow that freedom to do what works for them.

Yes, absolutely. So, we have commissioned partners to develop and to run communities of practice. It's something that we've continued to support over the years, and will continue to look to going forward. They're really critical at getting all of those wider stakeholders engaged and using them, as you say—to use Professor Williams's term—as coalitions of the willing, because that's where real progress can be made. So, that's an approach we will definitely continue to support. I think there is something that can be done to look at how we really continue to ensure that those communities of practice are thriving, but also how they may be able to support other innovative approaches, which are so key in the foundational economy, including skunkworks-types approaches. So, we will be working with the partners as we look at setting up or developing those communities of practice going forward to think how we could do them potentially on a sectoral basis, and then using those to develop some of those innovative tools.

And when we have funded research and other kind of activity, we do try and give the partners who are undertaking that the flexibility to work in innovative ways, such as skunkworks, but within the fact that it is public funding, so we need to make sure that it is being properly spent and that there is an effective return on investment. But innovation will be key going forward and using those communities of practice to support that, I think, is a suitable approach.

Great. Diolch.

Diolch, Luke. Before I bring in Hefin David, I know Samuel Kurtz would like to ask a very brief question on this.

Yes, diolch, Cadeirydd. Thank you. And just taking, Duncan, what you said there about the foundational economy being one of the largest parts of the economy, and its importance to our overall economy, given Wales's pretty dire economic statistics around the lowest take-home pay out of the four nations, and a high number in economic inactivity, doesn't that show that, actually, the foundational economy hasn't been a priority of the Government—not under your tenure as Cabinet Secretary, but prior to that—given that, actually, we're lagging behind. If this is such a big part of the economy and we've not been able to bring up some parity and economic fairness, isn't that just showing that it hasn't been, actually, at the forefront of predecessors of yours?

So, I would make the point about looking specifically at social care, for example, and our commitment to the real living wage. I think that really does give a really good example, actually, as to how we're trying to improve the experience of people who are working in that absolutely critical sector, but also trying to ensure that we recruit and retain staff to social care as well.

So, I think that, actually, is a really good example. We were able to deliver that in the first year of this Government. It had been originally an ambition that we'd had to deliver over the course of the Senedd term, but we were able to do it straight away, and I think that that really spoke to the kind of priority that we placed on that.

I suppose there are wider points to make, then, about the use of statistics in relation to some of the most recent labour force surveys data. So, I've got a written statement, I'm not sure if it's been put out already, but it'll be out in the next day or so, which just sets out some discussions that I had with the UK's national chief statistician to talk about the lack of reliability of that data from a Wales perspective and the importance of looking at a basket of data instead. I know we've had exchanges about this in the Senedd as well, but just to reassure colleagues that, after those concerns were raised, I did have that meeting, and I'm able to provide an update in a written statement on that.

That written statement would have been helpful prior to the general scrutiny session this afternoon so we could have looked at that in detail, but I'm grateful that it's coming out before the weekend.

It does only repeat things that were said in the Welsh chief statistician's blog post on this, which was shared with colleagues and which I talked about in the Chamber, which just sets out that those statistics referred to are no longer national statistics, they've been downgraded to statistics in development, for all the reasons I set out in the Chamber about lack of response to those requests for information. So, we are working, as I say, with the Office for National Statistics now to try and improve those statistics. But I just think that there is danger in quoting statistics that are no longer national statistics and are only now statistics in development, because they don't provide a robust picture.

I'll now bring in Hefin David. Hefin.

Diolch, Cadeirydd. Can I ask, first of all, about the Welsh Government reducing the funding allocated to the foundational economy in the Business Wales budget expenditure line from £3 million to £1.2 million, which then resulted in the Backing Local Firms fund being discontinued? Given that there is an allocation of extra money from the UK Government budget, has the Cabinet Secretary had any discussions in bilaterals with the finance Minister about reinstating that funding? If so, will it be, then, refocused again towards backing local firms?

We've only recently had the figures from the UK Treasury in relation to our budget for next year, so I'm still working through with the finance Minister and with colleagues across Government more widely what our final figure will be for the budget next year. When we have those, we'll move then to start making the detailed BEL line allocations. So, I can't make any commitments today, because I'm not in a position because I don't yet have the full picture of my resources for next year.

Would you like to see that Backing Local Firms fund return? [Laughter.]

I would always like to see further funding for all parts of my portfolio. But, genuinely, at the moment, I can't make any commitments, just because I don't have all of the information that I need to make choices.

Just to push it a little bit further, would it be reasonable to expect, in your bilaterals with the finance Minister, for you to be raising this?

I raise pressures from right across the portfolio, and, certainly, the pressures that I am keen to highlight in those discussions and also in the information that we provide in written form to the finance Minister details about those areas that we had to cut in previous budget exercises. So, I understand the cut here was made when we had to address that £900 million shortfall in the budget overall. So, it is those kinds of areas, as well, that I'm highlighting to the finance Minister, as we move forward with our discussions. But these are early days, as we move towards publishing the budget later on, so I'm afraid I can't really say any more, because I haven't had the chance to take choices.

Let's hope the finance Minister is watching. [Laughter.] I think I've got as far as I can with that one—

Duncan, did you want to—

I was just going to add that I think it's a really fair challenge. I think what Aine and the team have done is respond to that—you know, difficult budget decisions. So, we've used the balance of the funding to really focus on FE projects and look to mainstream those activities. I mentioned Business Wales earlier; 50 per cent of that activity goes on FE, which is roughly £10 million of activity. But also, at the other end, and Aine will correct me, I think it's close to £1 million has been allocated from the innovation budget for FE-specific projects, mostly related to the food sector. So, often, it's not just about that individual BEL. It kind of goes to your earlier points around mainstreaming and working in.

So, what it has allowed us to do is take a step back from managing the grants and really focus on how we develop those broader areas. In that case, this is, obviously, in the economy Secretary's space, but it's been a really active consideration that we've tried to take that disappointment into an opportunity through the year we're in at the moment.

Okay. So, let's turn to existing funding streams, such as the social housing grant. Are they going to be protected in a future budget? 

So, that, I'm afraid, would be a matter for the housing and local government Minister and I think that really speaks to the importance of the point being made right at the start of the session, that the foundational economy is a cross-government endeavour, rather than a particular individual department—you know, only an individual department. So, again, I'm sorry I'm not being very helpful on the budget questions, but that's not something I would be able to take a decision on.

I'm just trying to help you in your bilaterals, that's all. [Laughter.] So, the last question then, let's look at it more broadly, let's take a step back from the budget, in that case, and think about the broader lessons that we've learned. I was an early advocate for the foundational economy when I was first elected, now eight years ago, and I know it's a very difficult nut to crack, because most firms don't want to employ people, they rely on social capital. So, therefore, you're not necessarily working with an area of, in some cases—. And most firms don't employ many people, so it's not necessarily an area of fast employment growth. So, have you learnt anything, in those terms, about what works for that kind of business and what doesn't work? And would you be able to refocus and rationalise some of the programmes, so that you can make the most of what funding is available?

Can you pick this one up?

Yes, sure. Aine will probably—

So, with all of the projects that we've funded with foundational economy funding, or working with colleagues for wider funding, there is an evaluation that happens at the end of that, and we have got some really successful interventions that we know will work. So, a lot of the work that the NHS has done, for example, around increasing the amount of procurement that is going to firms in Wales has been significantly successful, and some of the health boards have been doing some really innovative work around their workforce and their home-grown workforce, as they're calling them. So, these kinds of projects that we're looking at are really key to us thinking about how we then support things going forward, or how these things can be scaled up and improved.

And then we do have projects that we know haven't been so successful. So, for example, we did a project last year with social care colleagues around trying to drive up recruitment in some areas, which was very, very challenging. A lot of that was simply around the availability of the workforce and the fact that there were other sectors that were also competing in that space at the time. So, it's taking the learning from that to think about how we best focus, particularly in a time of having limited budget, on the areas where we think we can have the most impact.

And that's been some of the reasoning behind some of the projects we've chosen to support this financial year, and it's part of the review that we'll be doing as we look to what we support next financial year. So, really looking at the areas where we think we can have the biggest impact with limited resources, which is why we focused in on areas such as the optimised retrofit programme and bus decarbonisation. They're areas where we know—to an earlier point—that we can tap into larger funding streams and quite large-scale investments that can benefit the foundational economy, if we support those businesses to access those opportunities. So, it's a constant learning process.

Yes. So, does that mean that it's harder to find long-term consistency, given the uncertainty that we've had with the budgets over the last few years? Do you expect better, longer term consistency with the longer term projects you want to run in the years ahead?

There is no doubt, and we have feedback from stakeholders all the time that longer term funding allows them to plan better going forward. It is challenging when that's not available, but that is why, as I said, we try and tap into some of those larger, more established, longer term funding streams, where we can then support those foundational economy businesses to access that work and really get skilled up and scaled up in order to be able to benefit from that, because we do understand that it is challenging when you're looking at short-term funding streams.

All I'd add is that, clearly, the loss of EU funding in this space has been challenging, because we'd traditionally have had a three-to-five-year offer around a European project, with a service like Business Wales, for example, a classic example. But we do try to work through. And I was going to pick up your—. I think the other point in your question was that one of the things with the foundational economy is that often the support we're providing is not always about job growth, it is about sustaining, and that's a really important part. There have been some pretty strong economic headwinds for the foundational economy, be it COVID or whatever else, so we have worked with them on projects like digital, for example, which allow them to sustain their position, which is equally as important as that jobs growth, often, to keep them in place in their communities.

Yes, I think it's about developing social capital as much as it is about developing employment figures, and I think if you focus on the small-firm sector to develop employment figures, I think that's probably not the right path to go down. What you're trying to do is develop networks and connections between firms.

And the other thing I would say is that I was at Cardiff Metropolitan University—. You've mentioned Cardiff Metropolitan University. I went there yesterday, and I saw some of the very good success stories that have come about as a result of the foundational economy work, particularly in the food sector. And they've been shortlisted for a Times Higher Education award for enterprise education, and I think that kind of university buy-in is massively significant to developing a foundational sector.

Agreed.

Okay, thank you, Hefin. I'll now bring in Jenny Rathbone.

Chair, just to say I need to leave at this point for another meeting, and I'll be back by 1 o'clock.

Yes. There we are. Thank you very much. I'll bring in Jenny now. Jenny.

Thank you very much. I just want to go back to health, starting with health. Aine mentioned the home-grown workforce work that's been done, and we've heard very much about the sector-leading approach being taken by Aneurin Bevan, in terms of recognising that we can't go on relying on people from overseas, and we've got job vacancies. So, we all know that good practice doesn't travel easily, but it's surprising, is it not, that other health boards haven't, in the main, adopted the practices of Aneurin Bevan? And I just wondered if I could challenge you on that, given that we spend half of our budget, of Welsh Government budget, on that. Surely this is an invest-to-save project. Rebecca.

Shall I start? And again, probably the health Minister would be better versed in this, but I do know that last year a stock take of activity across the NHS was undertaken, and that did give a really positive message, that actually in every NHS organisation they were undertaking some activity in the foundational economy space. But I think that it is fair to say that that work suggested, actually, that this isn't yet part of the core approach that they're undertaking. It's seen perhaps as an add-on, or a positive thing to be doing in addition to the core strategy and operations. So, there's some work, I think, for us to be doing—perhaps for Aine and the team to be doing—with health colleagues in that space.

But then also just to say that there is some work to improve sharing and learning across organisations. An arrangement has recently been organised with the health anchors learning network, and that is specifically looking at sharing, spreading and scaling up best practice. There has also been a foundational economy steering group established, which involves a cross-section of senior leaders from health, but also including social care, the third sector, Welsh Government and others, to try and drive things forward in this area. But I think you've given a really good example there, and I think that the work that Aneurin Bevan health board has been doing has been really aimed at targeting populations who are furthest from employment. I think that that is really positive, but as you say, it's about using these networks and so on now to try and spread good practice.

Okay. I really want to tie down whose job it is within Government to evaluate the progress we're making on this, because I appreciate that it's a whole-Government area of responsibility, but if it's everyone's responsibility, often it's nobody's. So, is this something that Aine's department is responsible for drilling down into the level of progress, or if not, where?

In terms of my responsibilities, it would be in relation to the work that Business Wales is doing to understand the impact that the foundational economy approach is having there. But then it would be for individual projects to be monitored and evaluated, and individual Ministers to be taking an interest in this, rather than for our team to be taking a view on what is absolutely a huge part of our economy. I don't know, Duncan, if you've got something else to add on how we could do it within our department in relation to Business Wales.

Certainly, from a Business Wales perspective, we would obviously report action and activity across, and I was quoting some of the numbers earlier. I think from Aine’s perspective, we keep an oversight of what other departments are doing to give the Cabinet Secretary and you a view, but as the Minister says, those responsibilities in health ultimately sit with the health Minister and health officials.

Okay. All right. I'm going to go with food, then, because food seems to be in everybody's and therefore in nobody's portfolio. You've given lots of excellent examples of things that are making progress on food, but I wondered how you are developing targets or indicators to measure your progress, because otherwise there are lots of interesting and excellent individual initiatives, but in the context of the public health emergency, that isn't going to be sufficient. So, where does this sit?

Again, it's an area that we are working cross-Government on, so my team work very closely with the food division in relation to the work that they are doing in relation to food, whether that is increasing import and export activity or whether it's looking at food and liveability. Because it is such a key part of the foundational economy, it has always been an area that we have been actively involved in, in terms of either directly funding projects or engaging right across, such as what we've done with the universal primary free school meals work, to really drive up foundational economy engagement in that space.

So, it is another area where my team are working right across Government to look at how we do that. And some of what we are doing as part of what we referred to right at the beginning, in terms of the development of the policy statement and the mission statement, is also looking at how we can develop real metrics to measure progress right across foundational economy activity. So, part of that piece of work is also about developing metrics in that space, so that we can properly measure progress. It's part of why we commissioned the work, as I referred to, through KAS, to get that proper baseline of where we are.

Sorry, KAS? 

KAS is knowledge and analytics service, sorry—acronyms everywhere. It's to really have that kind of robust baseline of data that we can then use to measure progress and to then work with departments and divisions to say, 'Okay, there's an area here that we might need to focus on more because, clearly, this isn't happening' or 'Actually, we can see really good progress here. How can we take that learning and widen it out?' 

Okay. But it's all a bit vague, given that we do have a public health emergency and it is the primary cause of early death after smoking, and it's rapidly going to overtake that in the not-too-distant future. And meanwhile, our food security problems, you know—. All these excellent initiatives are great, but they need to be ramped up massively. Kevin Morgan wrote the paper on the public sector's procurement of food back in 2015, and nearly 10 years later, we're some distance away from where we need to be. So, I need to have some sense of who's driving this progress and how do we really develop that pace of change, because some of this can't—. It's not a tap you can turn on overnight. 

There are almost two elements to it. So, I think in terms of economic development and the food sector, if you like, the producers, even though food technically sits in the Deputy First Minister's portfolio, in terms of the officials, we're working together on the ground jointly. So, our objective is to develop that sector, whatever size those companies are, so they're able to take advantage and bid for procurements that come up. So, as we're developing that sector, be it in innovation, grant work or whatever else, we then bring them together. For example, the Cabinet Secretary mentioned the expos we've done—I'm trying to think now, Aine, a month ago, was it? 

It was September/October.

It was 1,000 businesses. So, the whole principle of that is we bring those suppliers together with buyers, and there is a job of work to do, I agree, on procurement and how that then delivers, so when health go and buy those products that they require—. I forget which, but I think it was a health board, Aine, that had a 70:30 in favour of quality versus cost.  

It was Caerphilly County Borough Council—[Inaudible.] 

Caerphilly borough council—apologies. And the best way we're finding of influencing that is by giving confidence to buyers about the quality of the provision that's available, and that's delivered through both food and myself, with general economy, developing those companies. And sometimes, it's as simple as bringing multiple SMEs together to be able to collaboratively bid for the supply side. So, that whole collaboration piece we're finding really important, because they're not individually big enough to bid for what are often quite chunky supply contracts. 

So, to your point, I wouldn't underestimate that it is a challenge—I absolutely agree—but we are working really hard to work across Government to develop the supply side, which then makes it a much more attractive piece to the buyer, with success, I think. 

As a committee, though, what we want to know is how we're going to be able to track progress. How are you as a Government doing it, and how therefore are we going to be able to scrutinise the pace of the progress, given that it is very urgent?

Well, we have the data of supply and buy, and, again, I can't drag the figures out of my mind—

No, you don't need to.

—but I think they're somewhere in the eighties. Aine, perhaps you can come in. But, for example, public opportunities get advertised through Sell2Wales. We can then track those activities. I have a feeling—Aine will correct me—it's increased by a few percentage points from the number of Welsh small and medium-sized enterprises supplying those public procurements. So, we can track purchasing in the public sector, providing all public buyers advertise on Sell2Wales, put simply. So, we have the metrics; it isn't a perfect position yet, but we're certainly working on that objective.

Okay. All right. Well, just lastly, the communities of practice, as part of the foundational economy—you've said in your paper, Cabinet Secretary, that the food one is continuing to be very active. So, in terms of re-engaging with other sectors—. I went to the foundational economy conference in September and asked the participants what was the main cause of our lack of progress in developing our target of 20,000 social homes in this term, and they said the main reason was the lack of skills. So, this is obviously something where Government has a huge role in ensuring the right skills are there for building sustainable net-zero housing. So, how are you addressing that, given that this was said by Professor Joanne—I can't remember her second name, but I'm sure you know who I'm talking about? Patterson I think her name is, yes.

So, happily we've got the Minister who's responsible for skills in our next session, so perhaps that's something that we could—

Okay, I will ask him, then.

—explore with him.

Yes, okay.

Okay. Thank you, Jenny. Before I bring in Samuel Kurtz, you've mentioned that everyone in Government is responsible for the foundational economy, but isn't this the problem, that no-one is actually responsible for driving forward the foundational economy within Government?

So, we've got the team, Aine's team, and she's described how they work right across Government, so there is that central repository of advice and support. But it can't just be one individual's responsibility. So, we've talked about health, we've just had a question about housing and so on, so you would expect all colleagues to be driving this forward within their own departments, and in the choices that they make, and for officials to be focused in on this, in the advice that they provide Ministers when they're provided with choices to make as well.

But shouldn't one Cabinet Secretary be responsible for driving the foundational economy forward, in your view?

So, I have it within my portfolio, but I think that we will achieve a lot more if all Ministers with budgets and with responsibilities in the areas of health, housing, transport and so on are also actively engaged with this as well. It should be something that all of Government is driving forward.

Okay. Thanks. I'll now bring in Samuel Kurtz. Sam.

Thank you, Cadeirydd. Just building on Jenny Rathbone's points there, and you mentioned procurement—and thank you, Duncan, for explaining Sell2Wales et cetera, and supply and buy—I think the phrase you used is, 'There's a job to do on procurement.' So, I'm just wondering, from the data collected, is it possible to tell us what proportion of the Welsh Government's procurement spend goes to Welsh-based foundational economy suppliers, and where this has been on a graph—has it gone up or down?

Yes, I believe it is possible to tell you that. I can't get the figures in front of me at the moment, but—

Yes. I was looking for the figure after you asked the question. So, Welsh-based suppliers are now winning 55 per cent of contracts. That's up from 52 per cent in 2019.

And is there a dedicated strategy to try and grow that?

Yes. So, we've been working—. Actually, this was a piece of work that we were doing with Plaid Cymru, through the co-operation agreement, at the time, to look at how we drive up the amount of contracts and amount of spend that goes to Welsh-based businesses. Actually, as part of that work, one of the real challenges was identifying Welsh-based businesses and defining Welsh-based businesses. So, you could get businesses that have their operations in Wales but actually that are owned elsewhere, but nonetheless are critical employers in Wales, or you can have businesses that are owned and fully operated in Wales and only in Wales. But we know that other businesses have a post office box in Wales, for example, to suggest that they have a Welsh operation as well. So, it actually does become more complicated.

Part of the work that we were doing with Plaid Cymru was to identify and resolve some of those questions, and we’re making some progress on that. And that was then part of the work that we were doing to try and consider how—. We looked at the work that’s been done in Ireland in relation to a kind of mark that products could use to have that 'made in Wales' kind of accreditation as well. So, those, as I say, were early ideas that we were exploring, but I think work is still continuing on that.

I know exactly—. Sorry, go ahead. Sorry, Stephen. 

Just to add on that, that’s going to be a key part as well of the public procurement provisions in the Social Partnership and Public Procurement (Wales) Act 2023. So, spend with Welsh businesses is going to be a key metric within that, and, obviously, there’ll be a system of annual reporting as well. So, there will be greater transparency around those figures going forward.  

Fab. And the Irish 'made in Ireland' kitemark that you mentioned, I know it well, because I wrote a written question to your predecessor, Vaughan Gething, on it. 

Okay. [Laughter.]

So, I’m pleased to see a Conservative idea being talked about, or even a Conservative-leveraged idea from Ireland being discussed in Government. So, thank you for that.

But in terms of what you were discussing there around the co-operation agreement with Plaid Cymru, how does that tie in with the Procurement Act 2023 and the discussions around developing regulations under that?

So, that doesn’t tie in directly with it.

Okay.

But in terms of the Procurement Act—. You’ll recall that this comes about as a result of leaving the European Union, and, essentially, we were needing to introduce new legislation, major legislation, in the procurement space for the first time in 30 years. And we had discussions then with contracting authorities and with businesses right across Wales in terms of what the approach should be. And both of those were very clear that, actually, they would like to see consistency across England and Wales, which is why we worked with the UK Government of the time to agree that the UK Government would legislate in this space for Wales.

But we managed to secure a range of derogations for us to be making decisions, particularly on some elements of regulations, and other things as well. And to be fair, I think that that was one of the more positive relationships that we had with the UK Government at the time, because the work that we did jointly on the Procurement Act I think was very good and very collaborative. And I think that contracting authorities and businesses were satisfied with the outcome of that work. So, we’ve been working really hard now to try and offer training and other resources to businesses and contracting authorities, so that they can understand the Act and make it work for them.

There’s a huge opportunity there, but also, in conjunction with the social partnership Act, in order to try and drive forward improvements in terms of opening up opportunities, but also improving transparency for the foundational economy.

Okay. Discussions with the Federation of Small Businesses Wales have said that one of the easiest levers within public procurement that can help SMEs is the timely paying of contracts, or paying for services within public procurement. Does the Welsh Government have any ideas on whether it’s a necessity to shorten the period, allowing quicker cash injections into these businesses who’ve given services through public procurement?

Yes. So—

Services or goods, sorry—services or goods.

So, I believe the new UK Government has made some statements on actions that it would like to undertake in this space, and we would be very supportive of any actions that did improve things for small and medium-sized enterprises, particularly in terms of the speed of payment. We’re also particularly mindful of the importance of project bank accounts, in terms of being able to provide that level of security for businesses within the supply chain.

We’ve obviously had the recent issues around ISG, which have made us even more aware of the importance of project bank accounts, but, equally, how hard it can be for project bank accounts to be set up in the first place. So, my officials have been having some discussions with the major banks about the project bank accounts, how we make them easier to access, and whether we can put in place some kind of simple flow charts, so that people properly understand what’s involved. Because at the moment they’re not—beyond the projects that we mandate them for, which are Welsh Government projects over £2 million—used as much as we would want them to, so we are working to promote that.

Okay. And on procurement more generally, you've talked a lot about how working with the previous Government gave you space to do something ever so slightly differently in Wales on this. Why, then, given procurement in so much of this is Welsh Government, Sell2Wales et cetera, would you be looking to use UK Government legislation potentially on SMEs and the payment times? Why can't Welsh Government take a lead on that?

So, this is work that is very much in its infancy at the moment in terms of discussions with the UK Government. The UK Government is very new. It made some commitments around timely payments to businesses, so we're just having those early discussions at the moment. But in terms of the Procurement Act, that was a very deliberate decision to go in with the previous UK Government, because having talked to contracting authorities and businesses, it's what they strongly wanted, to have that certainty and consistency, because, of course, they operate across borders.

Okay, thank you. And then just a final—. I'm conscious of the Chair's face that he's just pulled at me. So, yes, I'm happy to end it there, Chair.

Some others want to come in, and I want to bring Hannah Blythyn in as well. So, Luke, you just wanted to come in on this very, very briefly—very, very briefly, please.

As briefly as I can be. The question I want to come back to is the question around Welsh-based business. I'm slightly confused now, so genuinely for clarity, does Welsh Government have a definition of what a Welsh business is or what the character of a Welsh business is?

That is something that we are now looking at in the procurement provisions, so we need to develop the regulations for those procurement provisions, and we're going to have to develop statutory guidance that sits alongside that. There will be a metric for annual reporting purposes on procurement spend with Welsh businesses. Clearly, part of that work will be defining what a Welsh business is, so that work is kind of ongoing at the moment, and obviously we'll be consulting on that in due course as well.

We did a lot of that preliminary work with Cefin Campbell in terms of the co-operation agreement, and it did throw up all of those questions as to what do you define, because you can define things differently if you're looking for a different answer, so we just need to make sure that what we have is clear and meets the needs of the Act.

Okay. I would be interested in exploring this further, but I know the Chair doesn't want me to go further, so I will hand back—

I'm afraid we are very pressed for time. Jenny, very briefly.

Okay. The 30-day supply chain prompt payment requirement—it's a no-brainer but is it an example of where you can command it but you simply can't control it? I'm thinking of all other public bodies, or anybody who wants to do business with the Welsh Government. We should be saying, 'And you must', but is it that you don't have the powers, because this is not a new issue, but for small businesses, it can put them out of business?

So, we can write with some more in-depth detail—

Yes, that would be very useful.

—but as it stands, Welsh Government mandates it for Welsh Government contracts over £2 million, and we recommend that the public sector more widely does it. It's not happening in every case. So, we can provide more detail on that, and more detail on the discussions we're having with the UK Government.

Yes, that will be very useful. Thank you very much indeed. I'll now bring in Hannah Blythyn. Hannah.

Thanks, Chair, and note to self: stop volunteering to pick up the last topic of questions. [Laughter.] Cabinet Secretary, you touched on Aneurin Bevan health board in one of your previous responses to Jenny Rathbone, and it's one of the organisations that's been referenced to the committee as an example of the positive work being done around grow-your-own-workforce initiatives. I just wondered how familiar is Welsh Government with this, and if there has been any consideration as to actually how that could be perhaps replicated and encouraged elsewhere across sectors.

Some of the work that's gone on—. I mean, Aneurin Bevan has been held up, but there's actually other work gone on within other health boards where they're working with housing associations, for example, to look at supporting their tenants into work in the health service. So, it is absolutely a kind of key area that we want to see scaled up, so we are working and will continue to work with the health boards, to understand how those kinds of initiatives are successful, what are the key points for those, so that we can work not just with the other health boards but with the other large anchor organisations to encourage the take-up of those kinds of approaches.

Just to add to that as well, I think our social partnership way of working provides some real solid avenues, actually, where some of this good practice can be surfaced and can be shared and organisations can learn from each other. So, you know, as you're aware, there are social partnership arrangements across health, so those health boards can come together and share some of that good practice. I think, sometimes, copy-and-paste solutions aren't always appropriate, because sometimes organisations develop approaches that are specific to their needs, their circumstances, and it's not always easy to, maybe, just lift and shift or copy and paste that into another environment. But, yes, I do think our social partnership arrangements provide a real opportunity for that learning to be spread and diffused. 

Thanks. And just very finally, Chair—I'll try to do it in minus one minute—Cynnal Cymru and other organisations have raised things like fair work and the real living wage, and I think traditionally there's been a tension, hasn't there, perhaps, between fair work and the foundational economy, but actually it's central to sustaining and growing the foundational economy. Essentially, sector wide, it's Welsh Government's soft power, isn't it? It's that convening power. But what consideration have you given as part of this to what other levers Welsh Government have, not just around the real living wage but that whole package of fair work measures, which, throughout the foundational economy, has been a central component in making it successful?

I'll start and then perhaps Stephen can come in after that as well. It just takes us back to the start of our discussion today, really, in terms of how we go about defining the foundational economy. So, one of the objectives that we're consulting on through the work that I described at the start is around supporting opportunities for more jobs, better jobs, greener jobs, but actually ones that promote fair work, including good pay, representation, security and the opportunity to progress. So, having that as one of the objectives of our foundational economy really does put it at the heart of it now. 

I'll try to be really quick. I think we've got five broad levers. The first one is around the social partnership relationships that we've got in devolved public services that allow those devolved public services to lead by example when it comes to fair work, as employers in their own right but then also in the relationships that they have with other organisations. I think our convening powers are really important, our ability to bring different partners together and advocate and champion fair work. I think that's really important. Clearly, we've got a powerful lever around our financial relationships with businesses and our procurement levers, and we're obviously keen to maximise the contribution that they make to fair work. Our skills interventions are really important, because they impact upon individuals and their ability to secure fair work and progress in work, but also they give us a really important touch point with employers, an ability to use that as well to influence employer behaviour. And then the final lever is that, clearly, we've got a UK Government now in Westminster who are very much committed to improving workers' rights, strengthening their enforcement. They've published their employment rights Bill. So, we're working very closely with the UK Government on that in terms of modernising employment rights across the UK and strengthening their enforcement as well. So, that will make a really big difference as well. 

Thank you, Hannah. I'm afraid that time has beaten us, so our session has come to an end. Your evidence, obviously, will be very important to us as a committee for our inquiry. A copy of today's transcript, as usual, will be sent to you in due course, so if there are any issues with that, then please let us know. But thank you for being with us today. We'll now take a very short break to prepare for the next session. 

Rebecca Evans, Cabinet Secretary for Economy, Energy and Planning.

Jack Sargeant, Minister for Culture, Skills and Social Partnership.

Jo Salway. I'm director of social partnership, employability and fair work.

Andrew Gwatkin, director of international relations and trade.

Duncan Hamer, director of economy.

Thank you for those introductions. Perhaps I can just kick off this session with a few questions. Can you tell us what are the top three outcomes that you are hoping to achieve in your new portfolio in the remaining 18 months of this Senedd, and on what basis will this committee be able to judge your performance?

Like the rest of the Cabinet, I’m really focused on the priorities that were outlined by the First Minister in her statement in September when she set out the direction for the Government for the next 18 months. Principally, it’s really about delivering jobs, delivering growth over the remaining 18 months of the Senedd term. But that has to be really aligned with our economic mission and, of course, with 'Wales Innovates', which is our innovation strategy, which is something I’m very passionate about driving forward. It does mean really continuing to grow, to stimulate and to enable investment into the economy to create growth but also safeguard jobs and, of course, fostering innovation and entrepreneurship. For me also, that includes a real focus on the renewable sector, so supporting Trydan Gwyrdd Cymru to become a success and accelerating those infrastructure planning decisions. You'll be aware of a number of announcements I made yesterday in relation to planning and speeding up the planning system, because again that’s one of the First Minister’s top priorities.

In supporting the Cabinet Secretary in all of the things that she will deliver on behalf of the Welsh Government, I think the point you'll be interested in, Chair, is around skills and social partnership. So, I think my role very much is in supporting the Cabinet Secretary in delivering those things to ensure that we have a skills system that creates that pipeline of skills and a skilled workforce in the future, particularly around renewables, with a view to the First Minister's green jobs and growth priority. And then when we look at social partnership, to promote that Welsh way of working on a wider scale, both in the public and private sectors, and working with the UK Government to deliver some of that. 

Cabinet Secretary, you've stated that the Welsh Government is now having early, credible and collaborative discussions with the UK Government that will shape how you deliver against your economic priorities. Can you set out some practical examples of where you expect to see improvements in delivery as a result of those discussions?

Yes, certainly. I think there are a range of areas that are critical to my portfolio. The first that comes to mind is Great British Energy. I’ve been having some very good discussions with Michael Shanks, who I shared a platform with at a renewables conference yesterday, Future Energy Wales, and we were able to talk in detail then afterwards about the way in which we can make Trydan Gwyrdd Cymru work with Great British Energy to ensure that we’re scaling up and speeding up the investment in renewables here in Wales. So, I think that that work is very positive and that’s ongoing at the moment.

And then, of course, there’s the industrial strategy on which our officials are in close conversation with the UK Government. We are going to be establishing an inter-ministerial group that will focus on economic growth, which hasn’t yet met, but when it does, I would be expecting to be involved in those discussions. But as I say, we’re having some really good conversations in relation to the UK industrial strategy, which is very exciting for us because it really does cover some of the sectors where we excel, where we’ve got an awful lot to offer, but also where we see potential for growth: our advanced manufacturing, creative industries, digital technologies, financial services, life sciences—all really important areas.

Just last week, I was in Düsseldorf at MEDICA, which is one of the largest life sciences and medical technology conferences and expos in the world, I think. There were thousands of people there, and it was a really good opportunity for Welsh businesses to showcase their innovations. So, that's another area where we're working closely.

Again, we're having really good discussions with the UK Government on free ports. This was something that, of course, was started under the previous Government, and the discussions on free ports there were positive as well. The new UK Government will, I think, be very interested in our particular approach around fair work, and also the environmental protections as well. So, we might see some potential adjustments in the UK Government's overall approach, but we expect to make some good and swift progress now on the free ports agenda.

There are things that I think are a little bit further down the line, so discussions that we need to have as we move forward to the UK Government's next phase of the spending review, particularly around post-EU funding. I know there's a lot of keenness for colleagues in local government, but then also in academia and third sector and elsewhere, to understand our approach to post-EU funding. So, those discussions will be ongoing, as will they be around the national wealth fund as well. So, I think the tenor and the frequency of conversations at ministerial level has been a real step change, but also, I just want to recognise the important work that goes on at official level as well.

You mentioned some of the areas you want to focus on. Your predecessor announced a series of turnaround reviews back in May. The turnaround reviews covered topics such as maximising growth opportunities in renewables, net-zero skills, AI and the economy, SME productivity and regional investment. Can you set out further detail on these five specific key areas the reviews are actually looking at, the method for undertaking them, and the timescale for publication?

I'll be taking forward three short-term reviews, which are looking at green jobs, AI and SME productivity. The intention is for those groups to meet before Christmas, and then to have a series of task-and-finish-based meetings. The groups have been developed by bringing together experts in the field, and the aim is for them to develop recommendations for the delivery landscape in each of those fields. My intention is to speak directly with the group members to help understand from their perspective some of the opportunities, but also the barriers that we can help to overcome.

I know that Jack then will be leading on the green skills review. That will have a longer timescale in the sense that we've already got our net-zero skills action plan, we've got the emission sector skills overview, so there's already recent work going on in that particular space. But they'll all help us focus then through the economic mission and the First Minister's priorities, and also I think will fit in really well with the industrial strategy as well. In terms of the timescales you've described, the first meetings are before Christmas, but the intention is that they will be rapid pieces of work that we can move on.

Okay, thank you. I'll now bring in Luke Fletcher. 

Diolch, Cadeirydd. I wanted to touch on Wales-Ireland trade, but before I do that, I just wanted to come back to free ports for the moment. We know that the challenges that are facing local authorities are quite significant, and I'm thinking in particular here of Neath Port Talbot, whose planning capacity has essentially been taken up in its entirety by the work that's needed to be done around the electric arc furnace. When we're talking about free ports and the delivery of free ports, what conversations are happening with local authorities around how involved they are and whether or not Government is able to potentially help with the capacity of local authorities to be able to deliver things like that?

One of the areas I'm particularly keen on is bolstering the resources of local authorities in respect of undertaking their planning functions. So, later this month, I will be consulting on some proposals, one of which was around delegating decisions to Planning and Environment Decisions Wales inspectors up to 50 MW for renewable projects. That should help reduce the time that some of these projects take to receive a decision by at least three months, so that's pretty significant. But I'll also be consulting on things such as bursaries, apprenticeships and other things that we can do in this space. I'm also really keen to understand how we can better get local authorities working on that regional footprint, which is there for them through CJCs, thinking about that regional planning approach that they have. But also, I do accept as well that we have to consider whether we need to bolster specific local authorities that do have significant planning responsibilities. What that bolstering looks like, I'm not entirely sure yet, but I just want to recognise that. Pembrokeshire would be another one of these, but Pembrokeshire and Neath Port Talbot, I think, have some pretty large amounts of work to do in the planning space.

I'm sure we could have an entire session just on that topic alone. If I could then move to Wales-Ireland trade, Ireland is one of the most important trading partners for Wales, but trade flows have been reducing since a peak in 2022. Why is that? Because I'm just thinking of the joint statement between the Welsh Government and the Irish Government and the joint action plan. Part of that action plan is about trade. So, just reading from it:

'Trade flows are central to the strong economic links between Ireland and Wales'.

Why are we seeing this reduction in trade flows?

I would also recognise the important nature of our relationship with Ireland, and I think that's one of the reasons why it was the first visit that the FM undertook in her new role; it was to really send that strong signal about how much we value those relationships and, of course, the trade between our nations. In terms of your specific question around the issues in relation to exports, my understanding is, and perhaps I'll bring Andrew in on this particular point, it relates in large part to the fall of value of petroleum and petroleum products and related materials. But perhaps Andrew can give us a bit more detail on this.

Certainly. Thank you, Cabinet Secretary. Yes, in general, looking at the figures, there's a fair chunk in there about petroleum products, and so that is dependent on both the value of petroleum and the price of petroleum in the market, but also the volume. So, if we see a change in that in any given year, then it does impact on the overall figures. But what we track is very much the work that we do with Welsh businesses exporting to Ireland, and the goods exports in general, where we're seeing very strong interest in Ireland. We've had a new exporter programme visit to Ireland during the cohorts, we've also had significant interest from businesses in terms of trading with Ireland, so we're seeing a lot of activity with Ireland, to very much build to the point within the shared statement and the joint action plan.

So, the shared statement there is fulfilling what it should be fulfilling on the aspects of trade.

The work that we're undertaking, yes.

Okay. Thinking about some of the challenges now that are facing the Welsh Government, with the alignment with European regulations, we have the UK-EU veterinary agreement coming through, which will reduce trade controls on goods arriving from Ireland into Wales within devolved responsibility. How do you see that impacting those—? How do you see that impacting the trade with Ireland?

So, only the UK Government can enter the whole of the UK into the trade deal, but, actually, we will have responsibilities in relation to any new agreements that relate to borders. What those might look like yet we don't know, because what trade controls are required after a deal will depend entirely on what deal is achieved. But it is the Deputy First Minister now who is responsible for borders, so, if there are specific questions on borders, I'd be happy to get him to write to you. But, on the point about trade, perhaps Andrew can give us a bit more detail.

Yes. Exactly that. Until we know the nature of the agreement, it will be very difficult to judge how that might impact, but, certainly, if there was an improvement in the way that we can trade, that would certainly help Welsh business, and so that would be very beneficial to us. The point about the SPS, the sanitary and phytosanitary, agreement, is timing as well. It may take some time to negotiate. It's impossible to say right now, but it might not be as quick as perhaps we would hope, so there could well be a period in which we would need border controls before that agreement was to come into place, which is, exactly as the Cabinet Secretary has said, perhaps for others to answer. But we still need to plan for the eventuality of having border controls, but, one day, hoping that there would be an agreement in place.

So, ending up in a situation where those border controls wouldn't be needed, essentially.

If the agreement fulfilled our expectations, potentially, in the future, that might not be required, but there could well be a period in the interim where it would be. But, as the Cabinet Secretary has said, it's absolutely an agreement that needs to be negotiated by UK Government with the EU, so, please, I would not be able to comment on whether that would happen or not or the nature of it, but, certainly, from a Welsh trade and business perspective, it would be very welcome to have an agreement and it would facilitate trade. 

So, how involved is the Welsh Government in these negotiations? And I'm not saying this from the perspective of Welsh Government being around the table making decisions, but involved in the sense of understanding the UK Government's approach and potentially being able to feed in, on the UK Government's side, to raise some of the concerns that we might have. Because, of course, there is a significant impact here, isn't there? 

Yes. So, there are a range of ways in which we engage with the UK Government on trade policy. So, at ministerial level, I would sit on both the Interministerial Group for Trade and the Interministerial Group on UK-EU Relations. Clearly, I haven't been in post very long, so I haven't attended either of those meetings yet, but I have had the opportunity to have bilateral meetings with both Nick Thomas-Symonds, who leads on the EU for the Cabinet Office, and then also with Douglas Alexander, who leads on trade policy for the Department for Business and Trade. An awful lot of discussion and so on goes through at official level—there are senior official level groups and engagement groups across UK Government departments—but they also meet regularly with individual policy teams within the UK Government as well, and also have discussions regularly with the negotiating teams too. Andrew, if there's anything else to add there—. 

I think that's an excellent summary of the context we have. It is positive. We have regular meetings, both with the negotiators of free trade agreements but also with the Department for Business and Trade in general and there is an exchange of information. We're able to formulate our views and feed in a Wales view into those conversations, and we anticipate that would be the case with the SPS or veterinary agreement in the future too. 

Okay. 

It's worth just adding as well that engagement generally on trade issues is positive, but one of the things that I did speak to Douglas Alexander about and ask that his officials and ours do some further work on would be to potentially develop a concordat for international trade policy that we could put in place between the Department for Business and Trade and the devolved Governments. So, it would then, essentially, ensure that both sides are clear on what the expectations are around engagement and also ensure that the processes are futureproofed against the potential change of officials in future, when you lose some of that knowledge, but then also potentially changing Ministers, if Ministers are not seeing eye to eye on issues. So, I think that a concordat would be useful and I have asked our officials to take those discussions forward.

You've beat me to my next question, which was around having some sort of concordat, because, if there's a change in Government and you have a less favourable Government in Westminster, then we don't want to be in a position where our concerns here in Wales aren't being taken seriously around the trade negotiations. If I could just end, then, on a final question, Chair. A summary of a meeting on 1 October of the trade policy advisory group stated that your

'attention is...increasingly focused on the trading relationship with the EU and the Welsh Government will need to work with UK government to understand where improvements in this trading relationship could be sought.'

Could you perhaps give an explanation around these comments? Maybe it's just my interpretation, but, to me, that sounds as if the Welsh Government hadn't been focusing enough on that relationship with the EU, when, of course, the EU is the biggest trading partner we have in Wales.

No, we have a really, really laser-like focus on trade with the EU, and perhaps, if we've got time, we'll have some examples of how that plays out in practice. But the comments that you've referred to there were really about the way in which we're refocusing things within the Welsh Government and specifically around the setting up of the trade policy advisory group, and that then provides the relevant Welsh Ministers with advice on trade policy matters. It does focus on the new agreements that are being negotiated by the UK Government. So, over the summer, the work relating to the EU and trade co-operation agreement was moved to sit within the international relations and trade directorate—they also run the trade policy group that I referred to—and, given its membership, the remit of the trade policy advisory group is now extending to focus on the EUTCA as well as other trade policy matters. So, it is more of a way in which we're pivoting operations within the Welsh Government and the advice that we get from experts outside towards the EUTCA.

Okay. Because you can understand, especially when you use the word 'refocus', that does suggest that potentially there wasn't enough focus being put on EU relations. So, it is a matter, then, of just my interpretation of these words, that Welsh Government is focused completely on those trading relationships.

Yes, we're very, very strongly focused on those. I don't know, Andrew, if you want to provide a bit more detail.

Great, thank you. I’m pleased to reassure the work is being done and has been done, and there has been a very strong focus to the European relationship all along. It's exactly as the Cabinet Secretary has said: there's been an internal move of that work to bring it all together within the trade policy team. It had previously been dealt with as part of the legacy of the transition team looking at the EU exit and the work there. So, the work had been ongoing, and, as a trade policy team, we had been inputting to that very regularly. So, we're absolutely up to speed. We've taken it fully into the team now, so that it's treated in exactly the same way as any trade agreement, particularly thinking to the review of the implementation of the trade and co-operation agreement that is upcoming, so that we're approaching that in a consistent way. But, absolutely, both in our policy, but most definitely in our delivery, we've had a very strong focus on Europe, including opening new offices within France and Germany, including turning our trade missions to focus on European activity as well as the rest of the world, so that we're supporting businesses and seeking to continue to encourage inward investment in from the EU countries, which have always been a very strong donor in terms of inward investment into Wales.

I was just going to add as an example that Andrew's team has enabled my group, which is the indigenous economic piece—we've joined the vanguard innovative regions network, so we are working at regional level as well as state level, so, with Baden-Württemberg, various different regions—east Netherlands—and that's absolutely about driving relationships in research and development, which then lead to opportunities of trade and the rest. So, through the team, it's really driving our ability to access lots of different ways of working with European partners, with really good outcomes coming through those types of areas.

Okay, diolch.

Diolch, Luke. Before I bring in Jenny Rathbone, Sam, you'd like to ask a question.

Yes, on Andrew's point around Irish trade and petroleum, is that the export of petroleum products from Wales into Ireland, or vice versa? So, I'm assuming that's linked to the—

Sending products out, yes.

So, I'm guessing that's Valero products from Carmarthen West and South Pembrokeshire.

Yes. Exactly, yes. That's correct.

Thank you. Thank you, Chair.

There is an import side; there is electricity as well, through the interconnector. But, absolutely, that's absolutely right.

Okay, thank you.

Thank you. I'll now bring in Jenny Rathbone. Jenny.

Thank you very much. In your paper, which was written before the end of October, you mentioned the approach to trade policy, which was launched in July 2024. Both of these things have occurred since the outcome of the US election and the election of an ‘America First’ President, and I just wondered, with lots of excellent things happening in your focus on Europe, what analysis you've done of the likely impact of the threat of tariffs. And, really, a tsunami in the way world trade is conducted is likely. So, early days, but, clearly, anybody who's doing business with the United States is going to be wondering whether they're going to continue to be able to do that work.

It is early days and we have yet to see what the Trump administration's actions will be. But I know it's very firmly on our minds in terms of being able to provide the right information, advice and support to our businesses, because America is a really important market for us as well. But, again, to Andrew to provide a bit more detail.

It's very much early days, but absolutely on our mind. The US, again, is a very important donor in terms of inward investment, but also a really important export destination. So, we will continue to work with businesses that export, help them understand what are the impacts for them, whatever may come with a new administration. It could be positive, it could be otherwise, whether that be tariff changes, for example, which were seen under the first administration with President Trump. Maybe that would be looked at, but that would be something that we would work with businesses on, most definitely, to understand, as part of our trade policy work.  

In terms of the work you've done to strengthen the relationship with Europe and being part of these innovative regions, how agile do you think you might be able to be if tariffs are imposed? Will you be able to redirect business to Europe if the pathways to the United States become very difficult?

We are agile, but, actually, I really believe that the business community is very agile. The trade flows change rapidly and businesses can refocus rapidly, depending on the product, depending on the service—not all businesses are like that. If they're heavily exposed to one market, then clearly that would be more of a dependency on what may happen there. But the majority of businesses we work with we encourage to look at different opportunities around the globe, not just to be fixated on one place or another, and that gives them a greater exposure to both the growth and the stagnations in various parts of the world. So, it's not for me to say—I think the businesses are the ones who speak for themselves—but we have some really amazing businesses in Wales who are genuinely agile and can turn their focus to wherever they see the opportunity. 

Obviously, there's a slightly unknown factor in all this. In terms of the landscape, the CPTPP—which I'm afraid I don't even know what it is—is coming into force in the middle of December. What are the implications of that in terms of things that we need to do?

Again, we're continuing to work with business-facing teams across Government to ensure that businesses are aware of the trade deals that they could use when exporting to certain markets. It's Andrew's point, really, about being able to support businesses with accurate, reliable information and advice that they can use to make their business decisions. 

Thank you very much. I'll now bring in Hefin David. 

Thank you, Cadeirydd. I'd like to direct my questions to Jack Sargeant, please. First of all, regarding the rail engineering degree apprenticeship run by the University of South Wales and Coleg y Cymoedd, can I ask what are the current recruitment figures for that and what are the projected recruitment figures in the years ahead?

[Inaudible.]—question to bring forward by Hefin David. I don't have the figure to mind now but I will happily provide the figure for you in writing. I should say, though, that the degree apprenticeship in rail engineering is an example of where policy from this Welsh Government has got things right. I'm very excited by what the rail engineering degree apprenticeship offers and where we can do more of that, meeting the programme for government commitments that we set out. I look forward to working with that. But on the specific figure, Hefin, I will be sure to bring it forward in writing. 

I was at the launch of the apprenticeship last year, and it's important because it is one of those few degree apprenticeships that has a very clear vertical integration with lower levels, and is a model for what might be provided by the public sector to give the private sector a demonstration of what is successful. So, would you be able to not only give us those figures, but also look at, possibly, upscaling that model, provided that those participation figures are high or effective to upscale that across other areas of the public sector in Wales? 

Thank you for that question. You're right—it is a model that is working and it's a really important issue, isn't it? I think, Hefin, I saw you on television last night talking around all of the rail infrastructure and the new trains. Well, the rail degree apprenticeship is very much linked to the outcome of some of that. On your broader point on degree apprenticeships in general, I think there's a space for degree apprenticeships and more of them in the right places, and we'll look to increase that alongside our programme for government commitment. But I'm also keen to see apprenticeships from craft level, as well, in the areas that we need. If you look to my background, Hefin, where I started as a craft apprentice engineer, in the factory on the shop floor, served my time as an apprentice in that route, but then went on to be supported by the employer to gain a part-time degree in industrial engineering—well, I think that is another example of where we could look to try and increase the skills of the workforce in the key priority sectors that we need, particularly around green growth and jobs, the priority of the First Minister, particularly in the area of renewables and green manufacturing. But I take your point on the public sector as well. I'm a big believer in what apprenticeships can offer, and the ambition or the opportunity for those who seek to do it. Why shouldn't it be the same opportunity as the one that I had?

I absolutely agree. I had a meeting yesterday at Cardiff Metropolitan University, and they are very keen to develop their degree apprenticeship provision. But I don't think it should be something that the Welsh Government continues to plough a great deal of money into, because there has to be a contribution from employers. One of the challenges, of course, is that vertical integration, and I'm wondering what you are doing to break down this silo mentality in the sector. You've got so many different bodies that have so many different interests that can be competing—you've got Qualifications Wales, WJEC, FE colleges, higher education institutions, schools—and all need to work together. I know Medr's job is to, at least above school level, ensure that, but how confident are you that that is starting to happen, and how will you turbo-boost that so that you can see those connections across the sector? And, of course, that was a key recommendation of my 'Transitions to Employment' report.

I'm grateful to the Member for the work he put in to that report and the conversations that I've had with him afterwards around some of the recommendations in the report. One of the things I'm really keen to do, Hefin, amongst all those providers who perhaps deliver skills for the people of Wales, is to have the conversations directly with employers as well, to see what they need. So, I've already asked my officials to start engaging with perhaps what the future apprenticeship offer looks like in Wales, directly with employers, directly with training providers and directly with learners themselves. Those conversations are taking place as we speak. I'll be hoping to meet with a range of stakeholders in January of next year to discuss some of this further, where, as you say, we can turbo-boost some of this to meet the priorities of the First Minister.

I think there's a certain offer that FE colleges can offer schools and schools can offer FE colleges—again, which I made clear in the report—that would smooth the pathway. And it's not a win that needs a great deal of funding; I think it's something that could be done at scale without actually putting a massive amount of money behind it, because there are things that are already happening that can link across. I will come back to that with you at some point in the future.

But, of course, all of this is constrained by the problem of the apprenticeship levy. The apprenticeship levy, as we've recognised from subsequent Ministers, is a tax on business in Wales, and it doesn't have an effective mechanism for returning money through the Barnett formula, either, to the extent that, when Jeremy Miles was Cabinet Secretary for Education, he told us that he didn't even accurately know how much money was coming back through the apprenticeship levy. The UK Government has said that they're going to introduce a new growth and skills levy. What dialogue have you had with the UK Government on that? Because the last thing we want is to have just an apprenticeship levy by another name. 

The growth and skills levy is the replacement of the existing apprenticeship levy, as we know now, and we know some of the challenges around that, which you've rehearsed today. My officials have engaged directly with their counterparts in the Department for Education, who will be in charge of the growth and skills levy, and their counterparts in Skills England, who will play an important role in this. I think it's very early days on what the detail of the growth and skills levy will be, and we're still having those discussions. But I want to see this as an opportunity where we can have an ask of the growth and skills levy. I'll be meeting the skills Minister in the near future, and what I'm particularly interested in is around my previous response to you, Hefin, around discussions with employers and training providers and learners themselves. I think a focus of that discussion will be on the growth and skills levy, and what it should perhaps mean for Wales, and I’ve had an interesting discussion with colleagues in the Confederation of British Industry on that. I’m very hopeful, Chair, that the chair of the cross-party group for apprenticeships will also look into what that might mean for Wales. So, we’ll been having those discussions. They are taking place now, but I’ll be having them at a ministerial level in due course, when some of the detail has been processed more, and we can get further into a conversation about what it means for Wales, because Welsh businesses need to have fair access to the growth and skills levy, it if is to be called that, or the apprenticeship levy, as it is now.

Wouldn’t you agree that the best solution would be for it to be fully devolved and you make your own decision on whether you want to apply the levy or not, and that if they want to apply a levy England, they can apply a levy, but that the more effective way to do it, given the difficulty with identifying the Barnett consequentials, would be simply to fully devolve it? Would you be pushing for that with the UK Government?

There’s a case for that argument to be made. What I’m not prepared to do today is make that commitment to this committee, because what I’m keen to have is those conversations with employers themselves, with the training providers themselves, and with learners themselves, and the trade unions who support all of this subject, to try and come up with a common solution, and a common ask, which we can take to the UK Government and have those conversations with the UK Government. So, I’m not prepared, today, to suggest that’s what I’m going to do. It might not be along those lines. It might be another area, but I think that decision, and that discussion that I will have, will be shaped by the voices of employers and learners and training providers, and we’ll have that ask together.  

Have you met any employers who have told you the apprenticeship levy is a good thing?  

I have met a range of employers who've stressed the challenges of the current apprenticeship levy. I won’t go into who they are, Chair; I don’t think that’s fair. But they have stressed the difficulties and perhaps the need to be more innovative in an approach from the growth and skills levy and the opportunities that brings. It is a tax, and I think businesses do recognise that, but it may be somewhere where, instead of that money being a full tax and not receiving it fully back to the business, there is an opportunity around how that money can find its way back into the supply chain, so that Welsh businesses in key supply chains can skill their workforce and make sure their workforce is competitive. So, I’ve had many conversations with people who have stressed the challenges of the levy.

That's very diplomatically put, Minister, and I appreciate that. I’ll be looking back through the transcript to try and read between the lines a little bit there. Diolch, Cadeirydd. 

Diolch, Hefin. I know that Jenny Rathbone would like to come in and ask a few questions on apprenticeships.

I just wanted to follow up on one of the things that Hefin was talking about, which is the responsibility of private businesses versus the responsibility of the Welsh Government, particularly around the decarbonisation of buildings, which is clearly something that we all need to be thinking about, as well as building net-zero buildings of the future.

In September, the foundational economy conference was held just as the statistics on the numbers of social homes that have been built by the Welsh Government had been published, which indicated that we were well behind where we needed to be to meet our commitment of 20,000 by the end of this Senedd term. And Professor Joanne Patterson said that, as far as she was concerned, as the head of the school of architecture, the main barrier to that was the inadequate supply of the right skills.

So, is that the fault of the construction industry, or is it the failure of our trainers in FE colleges and universities to deliver the pipeline of skills that we need for social homes, decarbonising all buildings, and building new types of buildings?

Thank you, Jenny. I’ll try my best to answer this within the responsibilities that I have, and try not to get into the responsibilities that perhaps other Ministers have, and how, perhaps, my portfolio around skills in particular can support the ambition of 20,000 homes. I think there's a task, isn't there, where there are the traditional methods of building homes that are required, so the brickies, the plasterers and all of those things that do happen. So, in the skills system and the way it operates in Wales, and traditional methods of construction, construction is the second highest proportion of apprenticeships within the Welsh skills system, so we are doing things to try and tackle some of that. There are also the construction degree apprenticeships. So, I'm conscious of not looking to the past, but looking to the future about where we can support this more. So, there are those traditional methods that we are supporting already. Where I'm keen to look where I can perhaps add value, in using Hefin's words, to turbocharge some of this to support the Minister for housing in her responsibilities, is around the modular method of construction for house building.

The Minister herself will have a view on that policy and what that looks like, but if we look again to perhaps timber-built houses in that modular way, just very recently we've announced an initiative where we support forestry skills and timber skills, so it's another area in which we are supporting the system there. Or if we look perhaps at the modular way that houses can be built using steel, which I think will be of interest to this committee, then those methods of perhaps traditional build, more engineering-type skills, we should be looking to see where we can build on the apprenticeships that we have in advanced manufacturing and engineering, particularly in the north-east of Wales area, and where they can perhaps go towards the building of decarbonised social homes.

So, it's a challenge, I think. I don't want to pin blame on anyone in particular as to why the comments have been made by the professor, but I think it's an important comment to reflect on, and it's important to have a plan in place to try and drive that change in the areas that we see, but it's very much on my agenda to try and help—

Okay. We changed the building regulations. We don't want the big six to be building the homes of the twentieth century; we need to be building the homes of the twenty-first century. So, these apprenticeships are surely crucial as a way of ensuring that people, who may not be 20, they may be 50, but they need to retrain to do the sort of construction of buildings that we need, rather than the ones we used to build.

Yes. Well, again, I don't mean to go into the policy of housing, but on the skills points you're right, aren't you? So, what are the skills that will be required? Are they the skills to perhaps design air-source heat pumps or all of those things, as we do have a record of training good engineers in Wales? I have worked with a lot of them. There is more to do in that particular area.

But when we look at upskilling, which I think the Member is getting to, perhaps, with the current workforce, if we look at the flexible skills programme, which we are proud to promote here in Wales, that has had a fantastic report into its matter of late, where we've created that specific element of the flexible skills programme around net-zero skills and green skills, which I think will help to deliver on the housing ambitions that we have. So, just to say, Chair, an evaluation of that programme has described it as an exemplar programme, and based on the information that was provided in the report on successful applications, over 8,000 training interventions have been actioned or planned, according to the latest figures, over a two-year period. I think we can very much use that programme in the space of housing, where if there are companies who have used traditional methods of building, but want to upskill their workforce, that is a programme they could engage with in the future, and to meet some of the challenges that Jenny described.

Okay, well, perhaps we could have a note afterwards, because we haven't got time to pursue it further, but it's a really significant issue. We're simply not going to build the buildings we need unless we've got the skills to go with it.

Yes, absolutely.

Well, I agree with that, and I think I'll try to support that all I can, but I'm very conscious of not delving into a responsibility that is the Minister for housing's.

Okay. Thank you, Jenny. I'll now bring in Hannah Blythyn. Hannah.

Diolch, Cadeirydd. We've talked today about a focus on trade, investment, export, skills, work with the UK Government, recognising the employment legislation that's going to come through, and obviously the recognition of needing to work across Government, between the two Governments, because many of those macro-economic levers actually lie with the UK Government. The levers here in Wales are largely around things like procurement and public funding. So, with that in mind, could you confirm whether the procurement aspect of the Social Partnership and Public Procurement (Wales) Act 2023 is on track in terms of its coming into force?

Thanks, Hannah, for the question, and can I thank the Member as well for her work on the particular Act and getting it through the Senedd and creating that landmark legislation here in Wales, something that I think we all can be proud of? With regard to the procurement duties coming into effect, I hope that it will be by the end of the year 2025, but no later than early 2026, that those will come into effect.

In an earlier session today, you’ll be pleased that a public sector organisation covered by the new social partnership duty did reference social partnership working, and I asked for their take on how that was working. I think that, as you’d expect, it’s a work in progress. So, I don’t know whether you’re able to share with the committee today examples of actually where you see it has started to bed in well and if that can be shared elsewhere as well.

Thank you, Hannah, again for the question. And it is a work in progress, isn’t it? I would, perhaps, describe it as a journey. So, if we think about where we were before the landmark legislation that Hannah led through the Senedd to where we are now, that is a positive journey that is making a real impact. But that journey will continue, Chair.

So, the social partnership council was established by the Act. That has met four times already and will be meeting again, for the fifth time, in a meeting in December. That council brings together the private, public and third sector and worker representatives, and we’ve had those discussions around substantive policy areas. So, the Ministers in the Welsh Government have already fulfilled their commitments to the Act and the duties under the Act to consult on the legislative programme, the annual review of the well-being objectives and, indeed, the annual budget. I think another area where the social partnership legislation will go on to have a positive impact is in the establishment of a working group around where the Welsh Government could use, perhaps, its financial levers to promote fair work more broadly across the country. And I think that’s an area in which the Member will be interested.

And I could give some other examples of where this has practically made a difference. So, I think that if you speak to Transport for Wales and colleagues at Transport for Wales, they have now embedded as an approach the social partnership way of working. When that was initially brought forward by those in Transport for Wales, there perhaps was some reluctance to have that way of working, but working in that way and going on that journey, they now have common solutions to joint problems.

The social care forum, where the discussion of how we could deliver the real living wage to the social care sector was done through social partnership. And, indeed, the retail forum that was being brought forward, where partners in retail come together in the spirit of social partnership because of the legislation, which doesn’t just work for those legislated for under that Act, but actually transcends those barriers. That forum has done some good work around retail crime. When I had responsibilities for retail in the Welsh Government over the summer—I think the Cabinet Secretary has them now—I saw that very much in action with the Police and Crime Commissioner for North Wales, Andy Dunbobbin, on a visit to Boots on the high street where, because of the way of working and because of the legislation and the Welsh approach, they were doing things that meant that they were tackling retail crime with their partners in the local authority, with their partners in the police and crime commissioner’s office and their partners within North Wales Police and their own workers alongside that. I think that’s something that can be built on. It’s a journey, but we’re having a positive journey, which we can be proud of.

You referenced Transport for Wales, which is one of the public bodies obviously covered by the social partnership duty. Can you confirm that all the trade unions and Transport for Wales are now signed up to that social partnership duty and way of working? And just more broadly across those other public bodies, are you confident that they’re going to be supported with facility time as well?

So, I can’t confirm that to you today. What I will look at coming back to the committee with is more of a substantive answer to the point. I’ve met with—. Just a point on the trade unions within Transport for Wales, I’ve met, as the Minister for social partnership, with some of the unions that aren't on the social partnership council per se, like the Transport Salaried Staffs Association within Transport for Wales. I've already met with them to discuss some of the issues that they wanted to raise with me, and I know that the Cabinet Secretary for transport would do the same. I can't confirm that today, but I'm happy to follow up with more of a substantive answer to the Member’s point.

I appreciate that, thank you. And I think you read my mind with my next question, talking more broadly about public funding, and I should probably say that it's probably because I raised it too with the Cabinet Secretary a couple of times, most recently in the Siambr as well, but it's about how we strengthen what we can do with that public money in Wales in terms of fair work, whether it's things like the real living wage or access to trade unions. Are you able to give an update in terms of the work that the Welsh Government is doing on that?