Cynulliad Cenedlaethol Cymru

Bore da, croeso. Good morning and welcome to this public session of the Public Accounts and Public Administration Committee. Welcome, all, to the meeting. Headsets are available in the room, for those who are here, for translation and sound amplification, with translation on channel 1 and amplification on channel 0. Please, Members and guests, ensure that any electronic devices are placed on silent. Note that, in the event of an emergency, an alarm will sound and ushers will direct everyone who's in the room to the nearest safe exit and assembly point. 

So, I'm pleased to welcome witnesses to the meeting. I'd be grateful if you could state your names and roles for the record, perhaps starting with Mr Slade. 

Bore da, Cadeirydd. Bore da i bawb. Morning, everyone. I'm Andrew Slade, director general for economy, Treasury and constitution within Welsh Government. And I invite my colleagues to introduce themselves—Jason, Tim and Gerwyn in turn. 

Bore da, good morning, everyone. I'm Gerwyn Evans, deputy director for Creative Wales. 

Bore da, bawb. Morning, everyone. My name is Tim Howard, I'm deputy director of property infrastructure. 

Bore da, bawb. My name is Jason Thomas, and I am director of culture, sport and tourism in the Welsh Government. 

Thank you, and, again, welcome to each of you. We have a series of questions for you. I'd be grateful if both Members and witnesses could be as succinct as possible because we have quite a bit we'd like to get through within the hour available. I'll start with the first questions and then invite colleagues to follow on.

Could I start by asking how discussions with Green Man arose regarding possible sites, and what action followed in response?

Thanks, Chair. I'll kick off. I just want to say before we begin, colleagues have spotted a small typo in our evidence paper, which relates to the valuation figure for the farm, and I just should get that set straight in the record right now. The independent valuation figure was £4.325 million rather than £4.35 million, as shown in the evidence paper; a '2' got missed off in the final edit of the paper. So, apologies for that, but just to be clear, the valuation was for £4.325 million for the farm. 

To your question, we've been in discussions with Green Man for many years about the festival and the Green Man brand. Green Man, as you'll be aware, is one of the five remaining large independent UK festivals that are left in the system, one of which, of course, is Glastonbury; others include WOMAD, Boomtown and the Notting Hill Carnival. It's very much a jewel in Wales's crown, and we have been talking with Green Man for a number of years about how to preserve both the potential for the festival here in Wales, but also the brand and associated work and activities. 

The festival attracts around 25,000 people a year. It generates around about £10 million, just over, annually, for the Welsh economy, and it has a social media reach getting on for 0.25 million people on a regular basis. So, it's a hugely important brand. We've worked closely with Green Man over the years, and we work with them in relation to their sponsorship agreements on a number of projects. 

Welsh Government has a range of powers at its disposal to deliver on the programme for government, which includes property purchases, and we've taken that option here to work with Green Man, potentially, subject to detailed business plan approval, on a programme that will effectively help keep Green Man as a brand and as a festival construct in Wales, and allow it to grow and develop. And that's why we have entered into the purchase of Gilestone Farm. We've been engaged in detailed discussions with Green Man since about 2019 on questions surrounding properties for a base for the Green Man brand. That's not the same as the festival itself, but for the company and associated activities. 

So, I think that's the context in which we need to set today's discussion. We don't enter into any property purchases lightly, and we only do so to deliver on policy delivery objectives for Welsh Government, and that's what we've done here.

Okay. Well, if discussions, as you indicated, with Green Man about possible sites, not for the festival itself but for the organisation to be based, began in 2019, can you confirm that this site is therefore earmarked for the purpose you state, or otherwise, and which party initiated discussions about the Gilestone Farm site specifically?

In relation to the 2019 date, we've been working with Green Man to identify sites. That began with a very extensive trawl and a continued process, working with colleagues across Welsh Government, to see if there was any land that Welsh Government owned that might be suitable. That drew a blank, and has continued to draw a blank. We've also worked with Green Man in respect of a number of possible other options, and they, I think, employed an agent to try and find a site, but no joy over the last few years. And then the possibility of the purchase of Gilestone Farm came up earlier this year. That was on the back of discussions with Green Man about an outline business case, off the back of the pandemic, for how they wanted to secure the brand and the festival, moving forward, and develop their operations. And in that context, I believe that Green Man, Fiona Stewart, contacted us about the potential purchase of the Gilestone Farm site.

Thank you. And just to clarify, given your opening comments, was that to purchase the site for use as their base, as you indicated earlier, rather than for some other purpose, or if not, what purpose were they engaging with you over this for their use?

The purpose was around creating a sustainable future for Green Man in Wales, and securing the brand in Wales, and for Wales plc. It wasn't about the main festival moving anywhere, it's about the company as a whole and Green Man as a whole. And I will, throughout this session, refer to Green Man in that context, I think, rather than referring to other bits of the company architecture, because I think that's the most straightforward for the purposes of today's session. And it was in that context that we had had discussions with Green Man, and it was in that context that Green Man contacted us about the possibility of buying Gilestone Farm, a property that, in principle, met the objectives set out in their outline business case.

Okay. Has the Welsh Government previously provided any support to the Green Man festival, or any companies related to it, and, if so, how much, when, and for what purposes?

So, I might bring Jason or Gerwyn in here on this one, Chair, in a moment. But I think, between 2010 and around 2019-20—so in the decade running up to the pandemic—we had provided funding for a range of activities and programmes and sponsorship, amounting to about £1 million in total. And then, during the pandemic, Green Man was awarded something just over the £0.5 million mark as part of the recovery fund associated with pandemic support. That was in round 1, but there was no support, I think, provided in round 2. But I might just ask if Jason or Gerwyn want to add anything on that point.

Happy to do that, Andrew. Thank you, Chair. Andrew, I think you got it spot on; that's roughly the funding amount—£1 million in funding over the last decade or so for various initiatives linked to policies at that particular time, and then just over £500,000 in regards to cultural recovery.

Can I just add to that quickly, Jason, as well? So, they did apply for money through the cultural recovery fund round 2, but they were declined that money because they actually ran the festival back last year, in 2021, so they were one of the first festivals back during the pandemic, and that was on the basis of supporting the local rural economy and all the freelancers and everyone associated with the festival. So, we didn't supply money through the cultural recovery fund round 2, which we did to the rest of the events sector.

Okay. Thank you. What, if any, discussions took place between the Welsh Government and the vendor, the seller, in relation to Gilestone Farm, before discussions with Green Man began? And if so, if there were discussions, what were these about? 

Again, I'll just check with Jason and Gerwyn, but I don't think we had any discussions with the seller of Gilestone Farm prior to Green Man coming to us and saying, 'Here is a property, which we think would be suitable for the delivery of the objectives set out in the outline business plan.'

That's correct, Andrew.

Okay. We have that on the record, thank you. Was the Gilestone Farm location integral to future growth intentions expressed in Green Man's outline business plan? And was Fiona Stewart's apparent intention to live on site included in that plan? 

Gilestone Farm wasn't specifically mentioned in the outline business plan, but I think the kinds of attributes—more than that, a sort of pretty detailed setting out of the kinds of things—that would be needed in the property was part of the outline business plan. I don't believe there was any reference to anybody living on site, although I think characterful accommodation, potentially for use as part of the business, was set out as one of the areas—either for guest purposes, I guess, apart from anything else—was in the outline business plan, but nothing of that sort set out in the terms that you've described and no direct reference to Gilestone Farm per se. 

Okay. What consideration was given by the Welsh Government to alternative land that's not currently being farmed, which potentially could have been equally or more suitable for Green Man's intended purposes? 

Well, I think that's a very fair question, Chair. We've been looking since 2019 with Green Man at possible options, and have come up with nothing to date. That includes everything on the Welsh Government estate, other properties that might come available out there in the private sector or through private sale, and we hadn't found anything, neither had Green Man. And there is something about the location, the character of the property, current uses, proximity to the main festival site and so on, which was also set out in principle in the outline business plan, which meant that, when the possibility of Gilestone Farm came up as a purchase option, that ticked many of the boxes, if not all of them, in the outline business plan. And that's why we moved at pace, working with Green Man, and then with the vendor, to try and secure the property, so that there was the option going forward for Green Man to put forward a detailed business case, which they've now done, for how they might use the site. 

Well, again, developing on that response, what consideration, prior to purchase, was given by the Welsh Government to any constraints upon potential use of the site, that could potentially limit its suitability to meet Green Man's business objectives, given that this is actually a very environmentally sensitive site? The farm is known to be home to protected wildlife, such as bats, to endangered species, such as curlews, and is adjacent to a special area of conservation. So, to what extent can you evidence that consideration was given to these matters? I'll refer to the proximity of the site to the River Usk. But what consideration was given to a flood risk, the presence of assets, such as sand or gravel, tourism capacity and its impact, and potentially the environmental impacts of people using the land, particularly if large numbers are involved, the suitability and adequacy of local infrastructure, potential local objections? And the committee has received extensive objections from, for example, Usk Valley Conservation Group, and questions from the local community council. And what consideration was made of any pre-existing or potential planning limitations, because we understand that previous proposed uses for this land have ultimately been rejected on appeal?

Well, there's an extensive range of points there. I think the best way to come at this, Chair, is to say that, to my mind, there are three levels of checking that need to go on here in relation to the sorts of points that you’ve just set out. The first is when, in this case, Green Man, come forward and say, ‘We think we’ve found somewhere that would meet the objectives set out in the outline business plan', which reflect the discussions we've been having for many years about the delivery of Welsh Government objectives, because, as I said at the outset, we don’t buy things other than for the pursuit of our policy delivery objectives within Welsh Government. So, the starting position is: is this a property that meets the spec set out in the outline business case and does it credibly have the possibility of delivering against them as we move forward? So, that’s the primary set of checks—tier 1. And our conclusion was that, yes, it did in principle, and that it definitely met the spec as set out in the outline business plan: what Green Man were looking for, working with us, to try and secure the long-term future of the festival and of the brand in Wales.

The second tier of checks comes in the form of the extensive due diligence process that we’re now embarked upon in relation to the full business plan. That will then start to test some of these issues, including in respect of environmental regulation, what’s likely to be possible in headline terms around transport, what are the constraints potentially in respect of flood risks—some of the other points that you’ve mentioned there—and engaging with the community on key aspects of what is proposed, because, as you say, that’s an important part of this. And that will then form a decision judgment on whether we proceed with signing off the business plan and entering into an agreement with Green Man or we don’t, if we don’t think that that’s a—if the case hasn’t been made or it’s not possible to deliver against those objectives.

If, at that point, the decision is to proceed, then there will then be a further round—a third set of checks and issues to address by Green Man, in this context, taking on a lease to make sure that anything that they are doing is consistent with planning requirements and to make any appropriate planning applications and so on. But at that point, that’s the responsibility of the future leaseholder. I think that’s probably the best way to describe the process. I might just see if Tim has anything that he wants to add with his extensive experience of property matters within Welsh Government, but I think that would be the best way to characterise these processes.

No, I think that's perfectly summed up, Andrew.

Well, given what you're saying, given that public money has already been expended, how would you respond to concerns raised with us by the local conservation group, who ask us why the Welsh Government has not consulted the local community on its plans? And more broadly you referred to Welsh Government policy agenda, which is driven by the Well-being of Future Generations (Wales) Act 2015, climate change considerations and nature recovery, and, in fact, there's a new fund for nature recovery just being, or imminently being, announced for bids, and yet, when I mentioned the curlew, for example, which is only an indicator species with multiple and multispecies benefits, but if it disappears—and it could be gone in eight more breeding seasons, as it's virtually extinct as a breeding population in Wales—that could ultimately harm over 70 species. That is meant to be central, we're told, to Welsh Government policy. What consideration was given to this, given that this is clearly a very environmentally sensitive site with particularly sensitive ecosystems within it?

Well, Chair, I think it's fair to say I am very content that what we have done is consistent with our policy objectives as a Government, whether that's around the environment and the sustainability of the rural economy, the well-being of future generations, making sure that there are opportunities for all across Wales, and whether it's in respect of what we're trying to do around climate change. One of the strong advantages of the Green Man brand is that it is very sustainable. Indeed, the future generations commissioner was only saying yesterday what an exemplar Green Man is in this context. And the work that Green Man want to do, as set out in the outline business plan, underpins those points.

But to your specific concern, this is back to my point about the second tier of checks. So, up to this point, we've bought a property. We've bought it on the basis that it has the potential to meet the objectives set out in the outline business plan. We're going now into a series of checks, detailed checks, through the due diligence process on the detailed business plan put forward by Green Man, and as part of that, that will involve consideration of environmental factors, what's going to happen in respect of the operation of the farm, what's going to happen in respect of impacts on the local community, and there will be engagement with the local community as part of that. We have been in touch with the local authority and a number of other parties, but that process is the rigorous process of engagement and checking that now goes on over the next few months to test those points. And if at the end of that Welsh Government is not satisfied that the case has been adequately made, and that the project as conceived can be delivered, then we won't enter into an agreement.

Thank you. Because, of course, it would be ironic if Green Man, of all things, was to damage sustainability. Rhianon, can I bring you in? I think you have a supplementary question.

Just to for clarification, Chair—[Inaudible.]

Sorry, we can't hear you. You're breaking up.

Can you hear me now?

That's better. Thank you.

Just a point of clarification, briefly. There's an environmental group that's been mentioned as opposing this. Is this the Usk Valley Conservation Group, which has been not operational, but has now come into operation purely to object to this, or is it another environmental organisation? Just a point of clarification.

I quoted from the letter circulated to Members—as I said, from the Usk Valley Conservation Group, who sent us a series of questions yesterday, which all of you received in your inbox—so I made reference to them by name, although Members will have also received representations from other bodies, including the community or town council—I can't remember it.

Town council.

The town council, yes. They're all asking questions at this stage, and obviously we're seeking to incorporate that into our scrutiny.

Sorry, Chair. I think it's entirely reasonable for local contacts and local interest groups to want to be engaged in the next stages of the process, and that's what we will pursue through the due diligence work. I did just wonder, since you rightly picked up on how this squares with our policy objectives, whether it's worth either Jason or Gerwyn just giving us a very quick overview of where we are, for example, on Creative Wales, or on the events strategy for Wales, because that's germane to this whole process.

Okay, thank you.

Do you want to go first, Gerwyn? And I'll come on to events then, if you go first.

Yes, thanks, Jase. So, Creative Wales was set up back in January 2020, and it's there to support the creative industries, with a focus on three priorities areas of film and tv, music and the digital sector. We're also supporting publishing as well. So, Green Man are obviously a very important business within the music infrastructure of Wales and it was on that basis that we saw it as a priority to look at how we can support—to Andrew's points—the continuation and growth of Green Man and the brand in Wales, because it aligns with those key priorities of Creative Wales.

Thanks, Gerwyn. And if I could briefly, Chair, just mention similarly, I guess, on the events side: yesterday, we were very pleased to launch our new events strategy for Wales. It's got three core objectives in there. One is about aligning the events industry. The second is about authenticity, having events that are uniquely Welsh, and then the third one is about having events that are in all of Wales. So, Green Man, as Andrew said right at the start, is a global brand, it does good things, it's completely aligned with policy on a number of different fronts. And in terms of supporting the events industry going forward, supporting the growth of Green Man we see as a really good thing, and we have supported it over the last 10 years. We mentioned that roughly £1 million-worth of funding has gone into that. That's been over a number of different strands and several of those have been from the events team to support its growth, so we see this as a potential next stage in the evolution of the company, actually, so that they can spin off and do other things that are entirely in keeping with their ethos, which is largely around sustainability and the environment.

Yes, hence the line of questioning where there seems to be potentially—and on the evidence uncovered—a conflict between their purpose, which we fully support, and the potential impact. Rhys ab Owen.

Thank you, Chair. I'm still unclear from your answers: how has buying Gilestone Farm made Green Man more sustainable? You're on mute.

I beg your pardon—schoolboy error. Green Man have been looking for a base for their operations to secure the company in Wales to operate with the local community, to develop their proposition to the local economy, and to pursue a number of sustainability projects. And that's the context in which we've been working with them. They've been looking for a property or a base that would meet those requirements. That was set out—the things that they were looking for—in headline terms back in 2019, when we started working with them on properties, and set out in much more detail last October in terms of their outline business case off the back of the pandemic. And it's in that context that we have bought the farm as a means of preserving the opportunity, with a site and a property that meets that spec, to allow the festival and its brand to develop and become sustainable in Wales for the longer term.

I hear a lot of buzz words, Mr Slade, but to do what? What's the intention of Green Man on Gilestone Farm? We don't even know. You haven't told us. Is Green Man going there? What's the purpose of buying Gilestone Farm?

The purpose is not to put the festival there. The Green Man owners of the brand have been very clear about that. They have an arrangement with Glanusk—a base there. This is about the wider business, and development of the wider Green Man business, and a set of ancillary activities that will include sustainable development work. It will include, I think, farming activities, based on the outline discussions we've had with them and some of the emerging detail from the business plan, the detailed business plan, and a range of other things that will allow them to keep the operation in Wales. Because Green Man have been subject to lots of proposed buyouts by multinational firms interested in the brand and in the business as a whole, and we're trying to keep it in Wales. I might just ask if Gerwyn wants to come in on any of the other points in the outline business plan that we can share with you today. The detail in the business plan submitted in June is commercial in confidence, as we work through the due diligence process. 

Yes, I think what I'd add to that and to the question is that Green Man have a history in other sectors. They do quite a lot in food and drink. And it's those kinds of businesses and opportunities that we're trying to work with Green Man to develop over the future. But there's a number of activities that we're looking through at the business-planning process, some of which were outlined, as Andrew said, within the outline business case. But it's not—. The festival is going to stay in Glanusk—the main festival—and there's a number of business propositions then that we're looking at, through the business plan, which will take place on Gilestone Farm, if the business plan stacks up.

But you can't give us any real detail, because of the commercially sensitive nature of the detailed business plan—is that what you're saying? Is it usual practice to spend over £4 million before having a detailed business plan?

You need to have an outline case before you proceed, and that's what we've got, but it is perfectly possible, feasible, legal, proper et cetera, for Government to engage in property purchases where we think that is going to deliver on Welsh Government's policy delivery objectives, and that's what we've done here. And we've done things of this sort in respect of other sectors, and working with other businesses in the past. It's not the first time we've done something of this sort. What is interesting about it is that it's a farm, and that's obviously attracted a lot more attention probably than if we had been purchasing a brownfield site on the edge of a business park somewhere. But the notion that Government can buy an asset, with a view to using it to deliver on its policy delivery objectives, is very clearly set out in the powers that Welsh Ministers have.

Thank you. But, of course, our interest as a committee is in the purchase of the land rather than some of the wider issues you highlight, and whether this was the best piece of land, particularly, as you indicate, because it's being currently farmed. If I can pass over to Rhianon Passmore.

Thank you very much, Chair. This is an interesting session, and I find myself, as a—[Inaudible.]—of the arts and the creative strategy and the recently launched events strategy, in principle very much in favour of investment and a risk appetite to be able to safeguard any 'national institution' to remain in Wales grow the economy of Wales. However, there are wider questions, quite rightly, that this committee is looking to drill down into. I suppose, in essence, there seems to be, from the notes of the community council on pack page 110, paragraph 11, a direct insinuation that this farm has been bought for dodgy purposes to house a certain individual. How do you comment on that, because that seems to be the elephant in the room, before I move on to the questions that I have around due diligence?

Well, I suppose all I can say is that Welsh Government is not in the habit of buying properties for people to live in. So, anything that happens on site as a result of us getting to a point of approval, if that's what happens—

Can you just underscore that for those who may be watching this session, that this is not a fait accompli, we are in the process now of we've done the outline business case and we're now in what's part of the sausage machine? Andrew, can you just clarify?

I'm very happy to confirm that, Ms Passmore, because that's exactly what's happening. What's happened here is that we have bought a property, which we're enabled to do and have the powers to do, and we followed the appropriate processes to buy it. We are now holding it and we are in discussions with Green Man on the basis of a detailed business plan that they have provided and now into an extensive process of due diligence. At the end of that process, we will work out whether we want to enter into an agreement with Green Man or not, and, if we decide not to, then we have the ability to put it back out onto the market, for example, and we would deal with it in respect of our asset disposal strategy. We don't hold anything other than for the purposes of Welsh Government's policy delivery objectives.

As to the detailed use of the property, all of that has to be consistent with the Welsh Government's objectives for the creative sector and for the arts sector, and the business plan has to stack up against that set of tests, along with all the financial ones and will it meet environmental standards and what about use of the site et cetera, et cetera.

And in regard to the risk appetite in terms of the cultural sector, one of my concerns has always been that it's more around economic development in terms of manufacturing and it's the cultural sector that's always left. In regard to inflationary rises, any purchase, I would presume, in this climate, would be beneficial to Government.

I will actually go on, then, to the real nitty-gritty of what I wanted to ask you, and you've referenced a number of times, many of you, that you feel that this is in line with Government objectives and all legal processes. So, how do you assure, then, this committee that the purchase meets all those necessary regulatory standards? Because that is the concern—that this is somehow external to ordinary governmental working.

So, as you know, because I've come before this committee many times in the past, Ms Passmore, we have a series of processes in place within Welsh Government and a set of frameworks. As accounting officer, I need to make sure that the frameworks are appropriate and operating to best effect. They empower deputy directors and directors to make decisions within certain delegated limits. I have a team of corporate governance experts and financial advisers within my group who assist, and we have colleagues at the centre of Welsh Government who look at all of these things. In addition, because it's property—and I've been before this committee talking about property matters before—our property leadership team has to assess any purchase of a property to make sure that all the key requirements have been met. And the legal advice to Ministers on all this about, 'Have you got the powers to do this?' is very clear, and, indeed, a submission was put to Ministers to get ministerial sign-off, again in line with our rules.

The Welsh Development Agency Act 1975, as amended by the Government of Wales Act 2006, confers on Welsh Ministers powers to acquire and dispose of land, manage land, develop and carry out works and make property available for use by others. And we further had external legal advice provided to make sure that we were doing things in the right way. We had an independent evaluation of the property before we entered into negotiations with the seller. And I think the other point to make here is your point about risk. Nothing we do is without risk, but there was a major risk that we would let what appeared on the face of it to be a very suitable property for the purposes of delivering on the policy objectives—. We took the opportunity to step into the market and take it to preserve the potential for Green Man to develop its operations, subject to a full business plan. It's an interesting test, isn't it, that, if we hadn't done that, would somebody be coming at us, saying, 'What are you doing letting a great opportunity to bring Green Man firmly into the area and ensure its sustainability, and you let it go? What were you playing at, Welsh Government?' So, there's always a balance of questions and risks of that sort.

What's happened—and we've seen that, and your correspondence suggests that, and the fact that I'm in front of you today—is that it is seen as a bit contentious. I think partly because it is a farm and it's in a very protected area within Wales, in the context of the environment, the operation of the planning system, and, as the Chair was saying, in relation to biodiversity and climate change and so on. And it is entirely understandable that people will have an interest in what's going on there and they may have concerns. And I think one of the things we would learn from this process is that we might have handled some of the comms and the engagement with parties and partners slightly differently in light of the interest that we now know is being shown.

But just to underscore the point that you were making a minute or two ago: we are now engaged in a detailed process of interrogation of the business plan. That will be an iterative process back and forth with Green Man. It will involve other parties so that we understand how the local community feels about things, how the local authority feels about things, how the planning authority is likely to feel about things, because they will only engage when formal applications are made by—if it comes to it—Green Man. And that's the next stage. And if, at the end of all of that process, we decide that this isn't a runner to move forward with—it doesn't meet the tests—then we won't proceed any further.

Okay. So, in regard, then, to your demonstration, because obviously there is a level of concern—this is why we are scrutinising this particular programme in regard to the purchase, because of the questions that you've already received—how do you then demonstrate that the decision falls within the framework of our governmental policies? We've touched upon this. You mentioned that you've had external legal advice, and that we're in this process, in the sausage machine of due diligence. How secure do you feel that those processes have been followed?

So, I think there are two things there, and we've talked quite a bit about the Welsh Government's policies, and Green Man is a key part of the music sector in Wales—the sustainability of the brand, the fact that the whole set-up of Green Man is around environmental sustainability and economic sustainability for future generations. As I say, the future generations commissioner was only making this point yesterday. So, that's a sort of policy set of tests and I could go into that in more detail, but I'm conscious of the time that we've got available.

I have a series of checks and balances that happen within the group. Bear in mind that my budget last year across the whole of the group was about £5 billion, so you have to have checks and delegation arrangements in place across the system. The issue is not about whether we have the powers, whether it was legal for us to do so, whether it was proper and regular, in my view, whether we got value for money, because we had an independent valuation—we had a third party come in and advise on all of that. It's more to do with the look and the feel of the thing and the fact that, maybe, as a team, we could have done some of the comms around that slightly differently, and that's one of the things that I'm looking at further. We always do a lessons-learned exercise after things of this sort, and I've got a colleague who's coming in to do that. And I think that there may be—[Inaudible.]—one of the things that we need to do in the context of the due diligence process, in light of some of the concerns that have been expressed and which you and the Chair have mentioned. That's part of this process moving forward. But that's it in a nutshell.

Okay, thank you. I'm just going to ask you briefly, and, if I don't get through the questions, I'm sure that we'll write to you: basically, in regard to the funding, then, for the purchase decision, because, obviously, in regard to where we sit in the current financial climate, it seems a lot of money that could have sponsored many other projects, however, I'm totally cognisant of how and why we need to maintain, sustain and nurture our festivals sector across Wales, and I'm fully supportive of those measures. So, was the money for this purchase—did it come from reserves, the general fund, or a fund intended for a specific purpose? Does that purchase then align with that purpose?

So, the money came—I will just check with Jason or Gerwyn in a moment—but it came from the economy main expenditure group budget for the year, so we didn't go to the reserve or go anywhere else for the money. As I think you know, clearly, from our evidence paper, we bought the property for £4.25 million and, as a matter of good order, I think we had a 15 per cent retention in escrow, as we were advised by our independent property advisers as part of that transaction. We drew on money from within the main expenditure group dealing with the development of the economy, including culture, sport, tourism and the media as part of that, so it came out of that bit of the Welsh Government's budgetary pot.

Okay. Thank you very much, Chair.

Thank you very much indeed. There are a couple more questions, but we'll come back to those if we need to in written questions subsequent to this meeting. So, can I invite Natasha Asghar to come in, please?

Thank you so much, Chair. I'd like to be so bold as to say that I think everyone on this committee—I can categorically say that I don't think any of us are against developing arts, culture and heritage across Wales for the people of Wales.

Andrew, just like you mentioned in your introduction, we've heard on many occasions that the Welsh Government has said that the purchase of the farm will support the growth and ambitions of the Green Man festival and retain the festival in Wales. However, the purchase was actually done before a full business plan was received from the festival and before its goals were actually clarified. So, I would like to know: will it now be common practice for the Welsh Government to spend taxpayers' money to support ventures without being in full receipt of the facts?

As you will gather from my earlier remarks, I don't accept the premise of that question. We had an outline business case from Green Man off the back of the pandemic, about how they were going to recover and take the festival, its brand and the businesses forward, including what they were looking for from a property and a base in Wales, to help secure the brand in Wales and make it in Wales and for Wales for the future. It was on the basis of that that we entered into the property transaction. We didn't just wake up one morning and decide we wanted to buy a farm. The discussion on the outline business case followed several years of active discussions with Green Man about a property and a base for the company for the future, and extensive trawls of potential sites where that could happen, and over a decade's worth of engagement with the company and the brand, as set out in my earlier answers, about helping Green Man prosper in Wales for the benefit of the sector, for the economy and in respect of our sustainability goals. So, that's the context in which this transaction has happened, and that's the basis on which we have entered into buying Gilestone Farm.

I'd like to just mention that in a letter shared with the committee, which was also sent to the First Minister, dated 8 July 2022, from a legal firm representing a gentleman, it states that he has ownership rights on sports and sporting on the land and the property itself. Were you aware of this when the purchase was made?

Yes. Rights of this sort apply on many properties, especially in rural areas and over large areas of land, and we are in discussions with the individual, and that was part of the process of purchasing the farm.

So, moving forward, then, if the brand was to be used for potential future sporting events, there is a premise that more money could be spent on the land itself to purchase sporting rights, if and when required.

That might be part of the proposition, but that is subject to negotiation, so you will understand that I don't want to say any more at this point.

I can understand that. I understand from the papers that we received as well that £24,000 was actually spent on the valuation, excluding value added tax, for the purchase of this property. I'm sure you can appreciate that, as a Member, if I want to buy a desk I have to get three quotations for it. I'm not an expert when it comes to valuations, but I'd just like to know for a knowledge purpose, and I'm sure the rest of the Members would as well, whether you obtained a variety of quotes to ensure that this £24,000 plus VAT, which will be declared, is actually worthy of taxpayers' money being spent.

The independent valuer will have been procured off our procurement contract frameworks. I might bring Tim in in a moment on how we get valuations done. The work included a valuation and a conditions survey, and is very much the money that we would expect to spend on something of that sort to underpin a purchase in this context of just over £4 million, from a highly respected and reputable firm capable of giving us the advice that we need. But I might just ask Tim if he wants to add anything to that.

Yes, that's right. I mean, for expert advice such as this, we have pre-procured panels of experts who have competed as part of a procurement process to become panel members, and there are procurement arrangements within those panels as to whether you need to go for a competition or not. I don't think it was above the threshold in this instance where we needed a further competition to that which had already been held as part of the establishment of the panel.

Gilestone Farm lies within the Brecon Beacons National Park, so how can the Welsh Government be certain that the goals of the festival, and perhaps the objectives that the Government has, will conform with national park regulations without knowing them? And, if you do know them, have you worked closely with the national park to ensure that you will be able to fulfil those objectives that you have?

Well, I think, Ms Asghar, we know the fundamental framework that the Brecon Beacons National Park operates within. They are the planning authority in this context. And, as I said earlier, in respect of the levels of checks, we will want to work with parties through the due diligence process to understand the key parameters that would affect Ministers' decisions ultimately on whether to proceed with entering into an agreement with Green Man. After that, detailed planning considerations would have to be picked up by the leaseholder, which, in this case, if we can follow this through, would be Green Man, with the planning authority. That wouldn't be for Welsh Government to do. But, clearly, we won't enter into an agreement with Green Man unless we think there is a reasonable prospect of the whole business plan coming off, because otherwise we would not be delivering on Welsh Government policy delivery objectives.

A sub question to the response that you just gave: are there any penalties for us pulling out, or the Welsh Government pulling out?

Pulling out of what in this context?

Of going forward—of the contract being signed and officially moving forward with the Green Man organisation.

I don't think there's any penalties. Again, I would just ask the team, but I don't think there are any penalties associated with us choosing at the end of the day not to enter into an agreement with Green Man. I don't know if Tim or Gerwyn want to add to that.

No, you're right, Andrew.

No. Okay, fine. The Welsh Government, as we all know, paid £4.25 million for the freehold of Gilestone Farm in March 2022. In February 2020, the property was valued and offered for sale at £3.25 million. Naturally, I accept and agree there will have been increases in property and land prices since the time, and we may understand there have been further development in the facilities on site since that period too. Given the rough £1 million difference in price, can I ask how much has the price of land increased per acre between 2020 and 2022?

Well, I don't know the detailed answer to that question, and that's certainly something that we can follow up to the best of our ability because land values can alter based on a lot of factors, and two fields alongside one another may have quite a different value if you choose to value them independently, but we'll do our best to come up with a figure for you, if that would be helpful.

I think you made the points that I would make in relation the valuations. Yes, I'm aware there was a valuation from a couple of years earlier, pre pandemic. Land values spiked very significantly. I mean, across the area as a whole I think they went up by a fifth in the succeeding 18 months or so, and, as you rightly say, there have been further developments on the site to develop the business at Gilestone Farm, which, on the basis of the valuation, make it more valuable.

We don't enter into negotiations based on, 'Well, on balance, we think probably the property is worth x or y'; we get independent valuers to come in who are experts in the field, know the patch, understand the operation of the farming sector, understand the constraints and the opportunities, and give us an independent valuation on the basis of their experience, and that's what happened here.

Okay. Now, from my understanding, the property has been leased back to the previous owner for peppercorn rent. This has been independently certified as reflecting value for money in these circumstances, in your opinion.

Yes, and that's a prudent thing to do, and it actually goes back to the Chair's point from earlier on about, 'What about risks on site and the associated environmental considerations?' Right now, the farm is carrying on being managed by the current owner on a rent agreed as a sensible way forward, again subject to an independent valuation, which means that effectively the business is carrying on, for now, as it is.

Okay. Thank you very much, Chair.

Okay. Thank you very much indeed. In that case, could I invite Mike Hedges, please, to pick up the questioning?

Diolch, Gadeirydd. The first question I've got is: if you do not proceed with the project, how confident are you that you could recoup all the costs associated with the purchase, not just the land, the amount you paid them, but the other costs you've incurred?

Well, that's a fair question that I'll invite other colleagues to come in on the back of, because I can give you my view of what's likely to happen if we end up having to sell the property: I'm confident we will get most of, if not all of, the value back on the purchase, and it may be more, depending on the state of the property market. That's a bit subject to what's going on out there in the wider economy. There are some costs associated with the purchase of the site, as you rightly set out, Mr Hedges. Our ability to recover those, I think, is a little bit dependent on what happens next with the sale, if we end up at that point—as in, not entering into an agreement with Green Man. But I'll just ask Tim if he's got any thoughts about some of the costs incurred and what we would do in those contexts.

Yes, sure. We always trade on the basis of market value. So, we buy at market values and we sell at market values, and sometimes that produces a positive return and sometimes it produces a negative return, but we can't control the market. We work within the confines that it's got, and I think as Andrew says, based on the valuation that we have now, we should get most if not all of our money back should we not proceed with Green Man. But it's a function as well of how long the due diligence processes will take, in terms of both stages, as Andrew's outlined—our own internal due diligence on the business plan, but also the due diligence that will come as part of the planning process, and how long that might take to unwind. And as you indicated, the indices on both agricultural land and house prices, property prices, in general over the last two years have shown not an insignificant uplift.

Talking about the lease, are you confident that it will be let at market value, and that the leaseholder has the ability to pay, particularly if it's a new company set up by Green Man or someone else whose finances depend solely on activities not currently undertaken on the site?

Those are good points, all of which are taken into account in the due diligence process that we're now engaged in, Mr Hedges. 

I'll probably finish with this: have you assessed the cost of holding the land with or without a tenant or for any expenditure necessary for an onward sale if it fails?

Yes, and we're involved in a number of discussions at the moment about how we move forward from where we are now and at the end of October, depending what happens with the discussions with Green Man. So, we are right in the middle of discussions around what happens next in that context and what our contingency arrangements are.

Why didn't Green Man just buy it itself? That would have cut out the middleman.

Insufficient funds to do that themselves, and the opportunity to do this over a longer term basis in the way that we've described. But again, before we enter into any agreement, detailed assessments will be made of Green Man's longer term financial position and its purchasing power as part of the due diligence process.

So, insufficient projected income to fund the purchase.

Yes, not enough money to go ahead, or the possibility of borrowing to go ahead, to get the property needed to develop the business.

Sorry, I'll try and be more specific. When you buy something, you can borrow to buy and interest rates are still, despite recent changes, at a very historically low level. Banks have high liquidity. And what you're saying is that the plans you've seen from Green Man would not allow them to borrow over 30 or 60 years to purchase the land.

It may well be, if we proceed, that Green Man lease and then exercise an option down the track to buy, but as things stand at the moment, as I understand it—and colleagues may wish to come in on this—they are not in a position, either with the funds necessary at their disposal or to borrow, to enter into the agreement directly. We wouldn't be involved and we certainly won't sign an agreement without being confident that the business proposition can only proceed with our support in the way that we've just described. If it can be done by them on their own, there's no need for Welsh Government to be involved.

And their business plan—I'll just try to put into words what you're saying—at the moment would not generate sufficient income for them to purchase it over 30 or 60 years.

I don't know. That's part of the due diligence process.

But you've just said that they're not in a position to purchase it themselves.

Well, they weren't in a position to do it earlier in the year when we bought the farm. 

What has happened during the year that would allow them to now?

Well, I don't think—again, colleagues may wish to come in on this—they're in a position to buy outright otherwise, as you say, why would we be involved in this process? That's not the nature of the arrangement that we're talking about entering into with Green Man or the basis on which we would do that. If our due diligence discovers that, unexpectedly, Green Man has the ability to fund all of this and do it off their own bat, then there's no need for Welsh Government to be involved. But that's not the basis on which we've had discussions over many years and worked very closely with Green Man. 

Could I just add—?

I think that's the best way I can describe—. Sorry, Jason. Come on in. 

Just to add briefly as well, if you look at the time around this, we've mentioned already the great relationship that we've had with Green Man over many years—their success when they've used Welsh Government funding to grow their business. It's been a real success story. The owner's an entrepreneur—a fantastic, leading Welsh businessperson doing incredible things. At the time, in February, when we were looking at all of this, for somebody running an incredibly large event, it's unbelievably challenging to raise funds on the private market. The event sector was absolutely decimated by COVID—the first hit, the last one to come out of all of this. Even raising things like commercial insurance to protect you for an event was unbelievably difficult. So, for the business effectively to raise that sort of money to grow and sustain the business at that time was unbelievably difficult, but we still felt that there was an overwhelming merit in doing everything that we could to retain them in Wales. So, that's why we felt that there was a need for us to step in. 

I'll stop there, Chair, but, just to comment, you mentioned Glastonbury and Notting Hill at the beginning of this: how much money do they get from the Westminster Government?

I don't know the answer to that question. I don't know whether Jason or Gerwyn do. That is something that we could try and find out, but it would be on the basis of publicly available information—we couldn't be divulging something that was subject to commercial confidence at the UK Government level. 

I can help you—a number not unadjacent to zero.  

Could I just come in, Chair, briefly? I do understand that Glastonbury were in receipt of COVID recovery funds as well, so I would take a slightly different view to that. But we need to follow that up to provide you with the detail of that, Mr Hedges.

Sorry, there's a difference between COVID recovery funds, which everybody was eligible for, and the funding of ongoing developments. You do realise that, don't you, Mr Thomas?

I do realise that, Mr Hedges, but what I would say is that we would need to check that, because I'm not aware if any of those festivals have had development grants over the years, but we could certainly check that. 

Please do and then tell us it's zero. Thank you. Thank you, Chair. 

Thank you. I have a couple of tail-end questions, but I'll come in after Rhys ab Owen. 

Thank you very much, Chair. I thought Mr Hedges would have had that answer before asking it. It's about further funding: what further funding commitments are you going to give to Gilestone Farm? You've been very ambiguous about what the plans are for Gilestone Farm, but presumably infrastructure will need to be improved there. What further funding are you going to commit to Gilestone Farm and Green Man?

I don't know at this stage, and I don't think colleagues will have anything different to say on that front. This is all part of the process that we've now entered into in developing our due diligence work around the business case and pushing down through the detail that has been provided in an iterative process with Green Man. That will, apart from anything else, drive out whether there is going to be a need for further funding and, if so, whether that stacks up in terms of meeting our policy delivery objectives. Any grant funding has to operate through mechanisms that are established and clear and where, in due course—sometimes there's a little bit of a lag, as there is, for example, with farm payment data—information is made publicly available a little bit down the track. But all of those things are ultimately transparent and would fit with our normal processes. But I might just ask if Gerwyn wants to add anything to that. 

Well, maybe we can add to that later on. But, if Green Man does go there, do you foresee further Welsh Government money being spent?

Sorry, Gerwyn, did you want to come in?

That would be a part of future application processes, so, we wouldn't be able to discuss that now, because the business plan is all around what is going to go on the site potentially with Green Man. So, all businesses are able to apply to our funding mechanisms at any time, so, those applications are undertaken with due diligence at that time when they came in. 

Now, if you're not happy with the detailed business plan, you've mentioned selling or renting the farm on a commercial level. What about planting trees? Has that been considered? 

At the moment, we're engaged in a process of due diligence around a business plan, detailed business plan, to deliver on the objective that underpinned our purchase of the farm back in March. 

Does planting trees play any part in that? 

It may as part of the detailed business plan. That's all being worked through at the moment. 

Have you bought other farms since Gilestone Farm? 

No, not to my knowledge.

Is there any intention to buy further farms, to your knowledge? 

Not as things stand today. 

Okay, thank you very much.

Thank you. Well, if I could just ask a couple of tail-end questions, following partially on from Rhys's question there about tree planting, other work—for instance, the report produced on curlew recovery by Gylfinir Cymru—has highlighted that one of the main threats to that species, and multiple other species, is predation from woodland that was planted in the wrong place at the wrong time under previous Government schemes for farmers and landowners. So, given that we've indicated that this is, to put it politely, an ecologically sensitive site, what assurance could you provide that, were tree planting to be considered within the business plan or in future development, that sort of sensitivity would be brought into the equation? 

And two final questions, if I may: when you were responding to Natasha Asghar who made reference to the property having been put on the market for sale in February 2020, were you aware that the farm had been marketed for sale in February 2020 at £3.25 million, and, if not, why this was missed?

And my final question relates to options appraisal: to what extent was a range of options considered and presented for decision as alternatives to Welsh Government purchasing this site, and, if so, what were the alternative options? Why did the Welsh Government consider that a straight purchase by itself was the best option, and whether Green Man had been seeking a different one? 

On the last point, if I may, I'll just put Ger on notice if he could be ready to say a few words about the options appraisal, because a number of options were pursued and the option that we recommended was on the basis of independent advice, including from the valuers. 

On the marketing point, I don't know whether we were aware, but I'm almost certain that we would have known because it was publicly available knowledge, but, more importantly, the external valuer would have been aware of the history of the property. 

Andrew, can I just come in there—

Yes, sorry. Tim.

—because my understanding is that the previous owner has confirmed to us that the site has never been placed on the open market? The particulars that were circulated to, I understand, one party in 2020 were actually particulars that were prepared in 2015-16, not as part of a marketing exercise, but as part of a potential response to a number of parties who had expressed an interest. So, as far as we understand it, the site has never been on the market. The particulars were circulated in 2020 in response to one particular enquiry. 

Chair, could I just briefly add as well that in terms of that date—early 2020, March 2020—I can say with assurance that none of the events organisers, companies that we were working with as a sector team, were really actively looking at growth, expansion plans? All that they cared about was survival at the outset of the pandemic—that was the primary consideration for everybody at that time. 

I think that's an important set of clarifications and confirmations, Chair.

On your first question about ecological requirements, again, a lot of this will be subject to the due diligence process. But also, I'm confident, on the basis of what I know about Green Man, that they would want to be operating the farm in an environmentally sensitive way and would be alert to the sort of points that you were describing there. And if any statutory conditions applied in respect of the management of the holding, then, of course, they would need to be observed as part of the or any lease agreement.

Thank you. I'd be grateful if you could to respond to my question on options appraisal.

Yes, sorry, Gerwyn will come in on that one.

And could I also just clarify the other point that you made about the property not being placed on the market—presumably, you mean the open market? Was it offered for sale in 2020, as we had understood, possibly without being placed on the open market?

My understanding, Chair, is that the particulars were circulated, or shared, with somebody who had expressed an interest in acquiring. The site was not put on the market.

So, there was, effectively, an offer for sale but not an open-market promotion of the property. 

Correct.

Thank you. Then, as I said, back to the options appraisal question, please; I'd be grateful if you could clarify—.

Yes, Chair. So, in terms of standard procedure, advice to Ministers sets out a number of options, and in the advice that we sent to Ministers on this purchase there were seven options set out, with a recommendation to go with the purchase that we undertook, but there would have been a series of other options set out within that advice that we would have considered.

What were they?

They would have been the Welsh Government acquiring the site; acquiring an alternative property; grant support; loan support; the local authority, potentially, acquiring the site—there would have been a number of options that we looked at that were set out and run through prior to providing a recommendation to the Minister.

Were there any specific other properties considered as an option or was it just—?

Well, as we've alluded to, we've been looking for a site since 2019. There were no other sites that had come to our attention that delivered against the ambitions that had been set out in the outline business case. So, this was the first site that provided us with that opportunity.

And, Chair, very briefly, just to say that one of the other options was, obviously, to do nothing—for us to not get involved with it at all. So, that was clearly part of the options appraisal as well.

Right, so just to finally clarify that: within the options appraisal, this was the only specific site being considered.

Yes.

Okay, thank you. Well, Members, unless you have any other questions—. Natasha Asghar.

Thank you so much, Chair. I just want to reiterate a question that was asked by the Chair a moment ago about the sale of the property. We have a document compiled for us from the estate agent, McCartneys; we have a paper document. Are you, basically, saying that McCartneys did not put this property up for sale on their website? Because, last time, I was under the impression that if something goes up on the internet, it's very much there in public and there for anyone bidding, if they wish for it.

Sorry, this is the particulars prepared for Mr Weston?

I'm not sure who it was prepared for, but I do have documentation with all of the property information: the size of every room, the length of the land, the breadth of—[Inaudible.]—the land could be used for—absolutely everything. It very much looks like a document I would get from the estate agent if I were to buy a property myself.

As I say, my understanding is that those particulars were prepared, initially, in 2015, not with the intention of placing the property on the open market but as a means of responding to enquiries that were just private treaty approaches. 

Okay.

Again, just to clarify that point: was the £3.25 million figure a 2015 figure or a 2020 figure based upon the work done in 2015?

I don't know the answer to that, I'm afraid, Chair.

Would you be able—?

It's not our figure, Chair, I think is the important point there.

One of the questions earlier was: were you aware of the apparent offer for sale of £3.25 million? And you referred instead to the work done in 2015. So, I'm just seeking to clarify whether you were aware that, in 2020, a figure of £3.25 million had been placed as the value of this property or whether that was a 2015 figure, which would, obviously, with a further five-year gap, put this in a slightly different context.

I'd need to defer to Gerwyn in terms of what was known when, but what I can say is that the relevant valuation question for us is what's the market value at the date that we're acquiring it. That's why we can't rely on valuations prepared for other people. We have to commission our own valuation from our own experienced external valuers to advise us on what the market value is, and that's what we did.

The answer there, just to come in, Chair, is that we weren't aware because it wasn't on the open market. It was for the previous owner, as Tim said, to share the potential interest, at his will, over that time, so we weren't aware of it because it wasn't in the public domain at that time.

Okay. Thank you. If Members have no further questions—I'm just looking at the screen, I can't see any further hands in the air—I can therefore bring this particular session to a conclusion and thank all the witnesses for attending and answering our questions. As you're probably aware from attending previous committees, a transcript of today's meeting will be published in draft form and sent to you for you to check for accuracy before it's published as its final version. So, again, thanks for being with us and I hope the rest of the day is a positive one for you. Thank you very much indeed.

That's fine, Chair, and to you as well and to committee members. Thank you.

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