Cynulliad Cenedlaethol Cymru

Good morning and welcome to this meeting of the Public Accounts and Public Administration Committee. Apologies for absence have been received from committee member Rhianon Passmore MS, but later in the meeting Huw Irranca-Davies MS will be deputising for her. Do Members have any declarations of registrable interests that they would like to declare? Rhys. 

I'd like to register that my wife is employed by the Senedd Commission, as per my written register of interest.

Thank you. No further declarations? No. Thank you very much indeed. Before we begin, can I just check that everyone understands how to indicate if they wish to speak i.e. please, by physically waving their hands rather than pressing the button? Thank you. 

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We have a small number of papers to note. Initially, a letter from the director general on the climate change and rural affairs group on Cardiff Airport. We've received a response from the director general to a number of queries that we raised following the evidence session with the Welsh Government and airport officials on 29 June. Do Members have any comments, or otherwise, can I invite Members to note the letter? Mike.

Yes, note the letter. Can we just hold the letter ready for the next time that we meet with Cardiff Airport?

I can see that Natasha is agreeing. I assume that other Members are content. Rhys? Yes, thank you. We shall do that very thing. 

We've had a letter from the director general of the economy, Treasury and constitution group on the Welsh Government's acquisition of Gilestone Farm. We've also received correspondence regarding Gilestone Farm, some of which has been circulated to Members, from the Usk Valley Conservation Group, including a video that they produced and a biodiversity report that they commissioned, and also a further letter—I think the initial letter I circulated to Members—from the group picking up further items of concern that they've highlighted, which I'm not sure has been circulated to Members, but can be. I'd be grateful, perhaps, if the clerking team could share that with Members. It raises, again, the issues around the lack of availability of reports to substantiate claims of economic and employment benefits, concerns around the set-up of the Green Man group of companies, and the extent and cost to the public purse of any enabling works that may be required in the medium to long term if festivals are to take place. So, that's something I don't think Members have seen. But, if I could please invite the auditor general to comment on the response that we've received and any further information or action he can share with us. 

Diolch, Chair. I'll ask Matt to come in shortly on any specific points relating to the response, but just to keep the committee appraised, we're doing some inquiries of our own, specifically looking at the process that led up to the acquisition, and we hope to be in a position to complete that and share our observations on it with you in November. Just to manage expectations, I would stress that, at this stage, we're not focused on the merits and the terms of any future commercial agreements relating to the use of the farm—that's something for the Welsh Government to reach its own decision upon. But, Matt, I don't know whether you have any observations on the detail of the response that you'd like to share.

Yes. We thought it might be helpful just to share a few reflections. First, picking up on what you said, Chair, a few moments ago, the response refers to a report from BOP Consulting. I think the Welsh Government has confirmed, in response to freedom of information requests, that it doesn't actually hold a copy of the full BOP Consulting report. We understand that it had been citing figures that were received in a presentation that it had received and that it has also released under FOI. As part of our work, we're looking at the sequence events around the due diligence prior to acquisition and picking up on the sporting rights issue as part of that. I'd just say that what the Welsh Government have said in its response on sporting rights seems consistent with our knowledge at the moment of the process to date.

And just to clarify, I think the Welsh Government again has confirmed, in response to a freedom of information request, that it doesn't hold formal documented records of the meetings that took place with representatives of Green Man over the last autumn and winter, but we understand that first contact with the Welsh Government about the prospect of Gilestone Farm being available was actually in late January 2022, albeit that the first formal meeting about that took place in early February. So, just to clarify that I think the letter refers to the meeting in early February, but we understand first contact about the potential availability with an official was a couple of weeks before that.

And we are looking at, just to confirm, some of the supporting documentation regarding the issue that was raised around previous particulars that had been issued for Gilestone Farm a couple of years ago. So, the Welsh Government's response refers to correspondence and documents around that. So, we're seeking just to clarify that as part of our work.

And I think I said this when we discussed this privately a couple of weeks ago, but, obviously, what you'll see from the letter outlines some of the next steps that the Welsh Government is planning to take around its decision making and community engagement and engagement with other stakeholders. Obviously, the short-term lease comes to an end at the end of October, so time is getting tight in terms of the decision-making timetable. We understand the Welsh Government is also considering any necessary contingency arrangements around that.

But I was just going to stress that I think our understanding is the director general for economy, treasury and constitution may well be attending PAPAC on 19 October as part of the scrutiny of accounts session. So, if there's time available during that session, and if the committee does have any further queries that it does want to raise about the status of decisions at that point in time, then there may be an opportunity to do that on the record alongside that session. So, I was going to leave it there, Chair.

Okay, thank you. Members, do you have any comments or questions, or otherwise can you indicate how you'd like to progress this issue in our future work? Natasha.

Can I suggest, based on what Matthew's just said, that if we wait until that October deadline has passed, we'll know where we are and what the Welsh Government has done at that point? I'm sure we'll be privy to that information at some point. If we can revisit this area then, and base everything we've got on the information that we've received, and work it from there, if that's okay. I hope the rest of the committee is okay with that.

Mike's agreeing. Rhys, are you happy with that? Okay, and as I requested earlier, if the clerking team could share the correspondence we've received with all committee members. Whether Members feel it would be appropriate to share that with Audit Wales as well for their information. Yes. Okay, thank you.

Moving on from that, are Members then content to note the letter on the basis we've just discussed? Thank you.

Our next item—I can see our guests happily sitting on the screens waiting to join us—is scrutiny of the accounts of the Senedd Commission for 2020-21. Can I welcome our witnesses and ask them to state their names and roles for the record? Perhaps starting with Manon Antoniazzi.

Thank you, Mark. My name is Manon Antoniazzi. I'm clerk and chief executive of the Senedd Commission.

Nia Morgan.

Good morning, Chair. I'm Nia Morgan, and I'm the director of finance at the Senedd Commission.

And Ken Skates, please.

Good morning, Chair. I'm Ken Skates, Member of the Senedd for Clwyd South. I'm a Commissioner and I'm the Commissioner with responsibility for finance matters.

Okay, thank you. I think you're all familiar with the format. We'll move now into questions. All Members will be, hopefully, asking questions of you within the time allocated. I'll begin, as Chair, with the initial questions. So, if I can start: why did you change the way you present your annual report and accounts on your website? And how do you ensure you reflect best practice in preparing and presenting the accounts each year?

Shall I begin on that, Chair, and then maybe hand over to Nia on some of the more technical aspects of good practice? It's been our ambition for a number of years to present the annual reporting accounts in a more interactive and accessible way in order to reach new audiences. And the beginning of the sixth Senedd seemed like an appropriate time to do that. It enables us to showcase our achievements in a more interactive way. It's convenient to be able to include links to a suite of other documents, the other annual reports that we produce, as well as videos, short films that illustrate some of the events that have taken place, and the points that we're making, our work particularly with committees.

We were encouraged in doing this by the Senedd Commission Audit and Risk Assurance Committee, and I should add that we do still produce a PDF version of the annual report for legal purposes, and for anybody who wishes to print that off, and that is prominently signposted on the website.

So, does that answer your question, Chair?

It does. Ken Skates, yes, please.

Thanks, Chair. Just to add, I'm a member of ARAC as well, the audit and risk assurance committee, and there are experts, independent advisers on there, and we've discussed the presentation of the accounts on a number of occasions. And I think it's agreed that the way that they're now presented is far more interactive and consumable.

But we'd welcome feedback from Members. We'd welcome any observations that you may have as to whether you think that there have been improvements in terms of accessing and consuming the annual reports. We also have data now regarding website visits, which is pretty interesting: more than 240 in English, 17 in Welsh, with pretty decent dwell time in both English and Welsh—more in Welsh, dwell time, but that might be because there are proportionately fewer so it's been skewed in that way. But we can provide those details if you wish, Chair. 

Diolch, thank you. Do any Members have any questions on this item? No. I'll move on to question 2 then. Although your letter to this committee explained the £958,000 underspend on staff salaries and related costs, stating this had reflected £250,000 for the accrual for unused staff leave, it didn't indicate, as far as we were aware, what the rest of the balance relates to. Can you please detail, therefore, what the rest of the balance relates to?

Could I bring Nia in on this, because this relates to our management of vacancies?

Diolch, Manon. Yes, as you've correctly mentioned, £958,000 was the underspend on staffing, and £250,000 of that related to the annual leave accrual. The remaining balance was due to vacancies in staffing. So, when a post is vacant, that releases funds then that are not used. It was considerably higher than we'd anticipated. Members of the Finance Committee will know that we budget for around £1 million of vacancies, and this was significantly in excess of that during the pandemic. And we did touch on this at Finance Committee yesterday.

The vacancies: it was partly due to unexpected vacancies and the difference in patterns of staffing during the pandemic that we experienced. But, also, a portion of that was due to the active management of capacity and vacancies by the executive board in order to assess the future budgets and demand on the overall extent of the budget. As we got through the financial year, it became evident to us that, in future years, the budget might come under pressure from things like Senedd reform, so we did slow down the recruitment of vacancies at certain points during the year. So, this was to ensure that we were in a position to understand the pressures in future years, and not staffing up in posts where maybe the finance would need to be prioritised in other areas. 

So, there were a number of factors contributing to this underspend in staffing. I've touched on one or two of them there. But there were also, for example, a shortage of applicants in some areas, which again slowed down recruitment. At certain points, there was a small delay in vetting, for example. So, it wasn't just one issue; it was a collection of issues.

Okay. Thank you. Does anyone else wish to speak?

I was going to just add, Chair, in the context, that it has been quite a challenging time in terms of recruiting. I think this is an experience shared by other public sector organisations, and as Nia said, we were keen, at this point, with a lot of challenges to plan for in the next few years, that we did keep some flexibility and assess what the baseline was for our staffing before we prepare for the challenge of Senedd reform ahead.

Okay. You touched on this, but specifically, why is the level of unused leave at the end of 2021-22 higher than pre-pandemic levels, and what action are you, or will you be taking to ensure staff are taking the leave they're entitled to?

I'll speak to that, Nia. We did have a very busy year, the year in question, with the preparation for the new Senedd term, and we found that staff were in some cases unable to take leave. There was also an element of staff preferring not to take leave when the coronavirus restrictions were at their height. Obviously, we have been working closely with colleagues to encourage people to take leave for well-being purposes. It's just as important to take time away from the desk when you're at home as when you're in the office. We introduced some initiatives such as having a designated leave week around Christmas, when we could all take leave together with minimal impact on services to Members, and that has helped to bring things back into a more normal pattern. We're seeing things already returning to a more normal pattern, and in this current year we're on track to bring the leave levels down to a pre-pandemic level, even though we have allowed staff slightly longer to catch up with the untaken leave from the previous year.

Thank you. Just a brief supplementary to that, given the comment at the end. I know, from my previous working experience, that many organisations don't permit a carry-forward of unused leave. Does the Senedd Commission permit a carry-forward, or if it's not used within a specified period, is that forfeited?

It permits a limited, capped carry-forward of 12 days from one year to the next, but there's a limit to how long that can be carried forward. What we did during the restrictions, in common with many other public sector organisations, was make that more flexible so that people had an extra year to take any leave they carried forward, so that staff were taking leave for well-being purposes within a sensible amount of time, but weren't put under the usual time constraint, just temporarily.

Okay, thanks for clarifying that. A number of common themes have emerged from the two years' information you provided to us, showing the costs and savings achieved because of the pandemic, what, if any, conclusions have you drawn from these that you will consider as recurrent for future use?

Well, you'll have seen, from the correspondence that we sent you, our breakdown of additional costs and savings over the last two years, and we have, as you'd expect, analysed these and developed an understanding of the emerging patterns of spending and of savings, to build into the budget that we discussed just yesterday with the Finance Committee.

Obviously, there are differing patterns. Utility costs and staff travel costs came down a lot. Utility costs are now returning to pre-pandemic levels, with obviously a lot of inflation built in there as well, because of the wider situation. Staff travel costs have decreased, and we're hoping that we will be able to keep those decreased, as we explore new agile ways of working. 

In terms of our engagement budgets, there was a moderate increase in the year in question because it was a year of elections to the Welsh Youth Parliament, even though we weren't able to do much face-to-face engagement. That is now, in the current year, returning more to normal, and we're investing in online tools. So, we're trying to keep sight of the benefits that we realised during the pandemic years of being able to reach harder-to-reach audiences by online means. I think the other decrease that we noted was in printing, stationery and postage, and that, I hope, again, will be something that we can keep at a lower level as people get used to corresponding in different ways and we learn those lessons from the time of the restrictions. 

Thank you. Mike Hedges. 

One thing I find, I don't know whether you do, is that there are certain people who I always correspond in writing with so there can be no ambiguity as to what I've said and there can be no e-mails that can be edited. I don't know whether you deal with any people like that, but I think that sometimes—I'm sure other politicians have people in the same group—you want everything in writing so that it's uneditable by them because you know they're going to come back further in the future. Do you deal with people like that?

We do have some pretty consequential correspondence sometimes to do with the legal duties of the Senedd. I have to say, once I put something into a PDF, I'm fairly confident it isn't going to be changed. So, whether it's actually printed out on paper isn't something that's a massive concern to me. But we do look at our paper archives and our electronic archives very closely. The time of a transition to a new Senedd is an interesting time for me, having worked a lot in libraries in my life. It's a time when we send another tranche of historic documents off to the National Library of Wales to maintain in perpetuity, and so it's a time when we're thinking a lot about paper records versus electronic records. And, of course, this is an interesting archiving question generally, how we make sure the archives from the past are maintained into the future for future historians to look at. Sorry, that's a bit of a tangent to your question, Mike, but we're developing fairly reliable electronic archives as well as paper archives. But it is great to see the odd paper letter now and again. 

Can I just advise you, or ask you, to talk to your ICT people about how PDFs can be edited? Because people have come to the conclusion that PDFs are a safe way of sending anything, but if you get a reader then you can edit it. Even if you only edit it slightly, you can change the whole meaning of it. So, I just urge you to go to speak to your ICT people about that. But, again, that's just me proffering my professional advice, rather than asking you any questions. 

I'm grateful for that advice, Mike, and I will definitely follow it up. 

Thank you. Moving on, when will the formal review reflecting on the effectiveness of the Commission's response to the pandemic mentioned in the internal audit plan take place and when will the findings from that be reported?

That review is active at the moment and we're hoping that it'll be finished by the end of this term. We'll obviously be happy to share the conclusions of that with you, if that would be helpful. 

Thank you. By this term, I presume you mean the autumn term, rather than the Senedd term. 

The autumn term, yes. Exactly so. This calendar year. 

Thank you. Can I bring in Natasha Asghar to take up the questions, please?

Thank you, Chair, and good morning, everybody. Can you please just summarise how in-year underspends were managed and prioritised to various projects, and what impact bringing forward this investment has had on projects in 2022-23 so far?

To give you all a break from my voice, can I bring in Nia on that point? I'll supplement at the end.

Diolch, Manon. This is one area where we have some discretion on spend. We start with a project fund at the start of the year and, during the year, we look at underspends in other areas then to see if they can supplement the project fund. They are identified by closely monitored forecasts, and they're reported monthly to the executive board, who then look at the entirety of the project fund and consider whether the underspends can be used to look at reprioritising those funds. It very much depends on the outcome of a project prioritisation process that occurs every year and whether there are sufficient priority projects that we can utilise this larger project fund for. If there aren't, then we would look to produce a supplementary budget reducing our overall budget and returning those funds to the Welsh consolidated fund.

In 2021-22, the year in question, there was a vastly reduced project fund, which was part of the budgeting process. The majority of the underspends that we saw in this financial year, because of the depleted original project fund, were put to use on additional priority projects identified during the year. It's a very closely managed process. We look at it every month and if we do find there aren't sufficient priority projects to allocate those funds to, we would then look to return them to the Welsh consolidated fund. 

Could I add something, Chair, just to supplement that? Where possible, part of the calculation about bringing projects forward has been mindful of the advice of the Finance Committee, which asked us to look at prioritising projects to do with sustainability if at all possible. So, some of the projects that have been accelerated are those that increase our efficiency in using energy. And obviously, we've been looking at physical enhancements as well, including ICT enhancements, speaking to Mike's earlier point.

Thank you so much for your answer. Sorry, Chair, if you don't mind, if I can ask a supplementary question. You mentioned the projects, and, Manon, I appreciate some of your answers, but can you—just for my benefit and I'm sure the committee would love to know—outline some of the other examples of projects that you're actually embarking upon with this in a bit more depth and detail please?

In the current year or in the year in question, 2021-22?

In the year in question—that would be great.

Manon mentioned quite a number of the sustainability projects. One of the ones that we did identify at the start of the year in the budgeting process was the Legislative Workbench, for example, which is the piece of software to manage the legislation. There was also an upgrade to the finance system during the year. That wasn't budgeted for, so the underspend was used for the required upgrade to the finance system—more around the security of that system. 

And then also on the engagement side—I'm sure the committee is always interested in our activities in engagement—there's been investment in online engagement tools, for example. It's not just estates and facilities management and ICT projects, where we have defined forward-work programmes—there are priorities that occur during the year, so it's very important to us that that project fund is as flexible as possible. So, it's not set at the start of the year; it is very much responsive to the challenges that we face during the year.

Okay, and what about the current year—? Sorry, Ken, you want to say something.

Sorry, Chair; sorry, Natasha. I was just going to add that there are some enhancements that you will have noticed as well during that time, including the physical security enhancements and the various phases of LED lighting installation.

Thank you. And what about the current year? Thank you, Nia, for providing information on the accounts in question. I understand that there may be some element of confidentiality with certain applications that are still in progress, but is there any enlightening information you can give us as to what's being spent in this current year?

Yes. I've got the full list of the projects here in front of me that have been prioritised for the current year. Our prioritisation process is based on a MoSCoW analysis—the 'must', the 'should', the 'could', for example—and they're prioritised in that way; also to ensure that they're aligned with our corporate delivery plan and the strategic objectives. So, that's how we do the prioritisation. 

Top of the list, as we've mentioned, are some of the items to do with sustainability, for example. So, it's the LED office lighting—it's phase 5 we're in at the moment, looking at floor 4 of Tŷ Hywel. That's one of the main ones. Other ones are fire door replacements. These, again, are to ensure the security and safety of Members and staff within the building. Some other items are relating to cyber security. If you don't mind, I won't go into too much detail on our activities in that area. And Senedd.tv replacement is scheduled for this year as well. So, that gives you a taste. I'm not sure how much more detail you'd like. But a lot of them are to ensure safety, security, the upkeep of the building, and software enhancements.

Thank you so much. Thank you, Chair.

Thank you very much indeed. Rhys ab Owen, could you take up the questions please?

Ken, do you have your hand up?

Diolch, Rhys. Yes, just to add again that the audit and risk assurance committee undertakes a deep-dive into specific risks four times a year. In the past year, most recently in September, we had a deep-dive into sustainability and also then in June, Senedd reform. Next month, we're going to be conducting a deep-dive into corporate capacity and capability that will then assist in steering the Commission in a certain direction insofar as staffing and resources are concerned.

Could I just ask a very quick related question? Clearly, the Commission has to operate within the budget it's given to carry out the functions it's currently responsible for. What mechanism exists for engagement with the people who make those funding decisions in relation to additional functions that could be imposed upon you in consequence of decisions that you have no say over?

I wonder whether Ken would like to speak eventually on this in terms of the closeness of our relationship with the Commission. Obviously, my daily work is undertaken under the direction of the Commission, and so we work very closely with that. I attend the Business Committee, along with colleagues, and so I have some first-hand experience of the decisions that are being taken there. And, obviously, teams of my colleagues provide papers to the Business Committee to inform their decisions—the same is true of the chairs' committee, which you are on, Mark. We also provide the secretariat for the remuneration committee, and I meet fairly regularly with the chair of the—sorry, the remuneration board, the independent remuneration board, because that is, obviously, another extremely important body, which is completely independent from us, but whose decisions we are bound by law to fund. So, I think it is a matter of—. Our working practices are very much interleaved; we work very closely together and there is a lot of internal communication.

I'm referring more to the budget that the Commission is given overall to operate within. So, if it's asked to do more in the future because the Senedd grows in size, or there are more devolved functions, or what have you, those decisions are taken outside the Commission. So, what mechanism exists there, not to, obviously, discuss the merits or otherwise of the decisions taken by the politicians, but the budgetary implications for the Commission as a body?

Yes, I understand. The mechanism would then be supplementary budgets. We've had an example this year where the remuneration board asked for more resources, and that was part of the supplementary budget that was presented to ask for those additional resources. 

The budgets—[Interruption.] Yes, sorry, Chair. I was just going to add that the budget is normally an item that we discuss at every Commission meeting, and we meet very regularly, so there is an opportunity for us to scrutinise where we are with in-year spending and also with future budgets as well. 

Okay, thank you. Could I bring Mike Hedges in, please?

Diolch, Cadeirydd. Can I start off by congratulating the Commission on what they've achieved in exceeding their target on the level of spending with Welsh suppliers? I think that's something we've nagged you about over several years, and now you've achieved it. Congratulations.

Two questions on that, and I don't expect you to give me this information now, but can you send us a note, breaking it down by size of contract—that's splitting them up into under £10,000, £10,000 to £50,000, £50,000 to £100,000, over £100,000, or whatever way you think is most suitable—and by geographical area? We've got four regions in Wales; how has it been spent across the four regions? I don't expect you to be able to answer that now, it's too in-depth, but if you could send us a note on that for the future, I'd be very happy.

Of course, Chair. I think a bit of that information was shared with you in correspondence this year, but certainly there are elements of what Mike asked for there where we're very pleased to have been able to deliver this increase, and I'm grateful to Mike for his comments. It's something we're very mindful of, the benefits of keeping this spend within Wales and trying to get as many Welsh companies to benefit from it as possible.

We do have some legal constraints, which Mike will be all too familiar with, and we have been trying to work within these by, as you know, breaking down the contracts, by doing market research, encouraging people to apply, and so on. And, also, once we do let contracts, the bigger contracts, like broadcasting and catering, and facilities management, which is our biggest one, we try and encourage those larger contractors to use Welsh supply chains as far as possible within that. 

Thank you very much. Can you pass on your good practice to other parts of the Welsh public sector, including the Welsh Government? [Laughter.]

I think you may be able to ask them about that later, Mike, as I understand. 

But everybody should be able to—. Sorry, I'm going to be boring on this, Mark's heard me say it with health, et cetera. Everybody should be able to perform at the level of the best, and far too often in Wales we accept mediocrity when some are performing very well, and I'm a great believer that everybody should perform at the level of the best. I don't expect you to comment on that unless you want to.

Well, only to the extent that we've got a lot to learn from other parts of the public sector, and I'm very keen to maintain very real networks with my peers in other organisations so that we can learn from one another. We do quite a bit of inter-parliamentary learning as well, particularly from the Scottish Parliament, which is a sort of more comparable size to us than Westminster, and those links have been very valuable. We have a splendid constructive rivalry set up at an official level.

Thank you. The previous auditor general, in pre-COVID days, arranged a number of—I don't know whether you'd want to call them seminars or workshops for different parts of the public sector, where they could share good practice. I don't know whether that's happening now, but if it does come back, which I really hope it will, and I will put that to the auditor general when I'm talking to him next, would you be interested in taking part?

Certainly.

Okay. Thank you, Chair.

Thank you, Mike. When can we buy your first book of '100 Mike Hedges Quotations', because there was a very nice quote at the beginning of your question there? Nice stocking filler for Christmas in the future for you. [Laughter.] Natasha, could I bring you back in, please?

Thank you so much. I think I'll be signing up for that book when it does come out on Amazon. However, I'm going to be asking the panel these questions about the increase in mental health absences that we've seen in the Senedd so far. So I'd like to ask that, given the range of initiatives that you've set out to support Commission staff well-being, what, in your view, would be some of the key drivers for an almost 75 per cent increase in the days lost to mental health and well-being from 2021-22?

Yes. I would like to bring Ken in on this as well, because I know he feels strongly—. But it is a worry. That 75 per cent spike is in the context of a smaller overall absence figure, so it's more stark, but that isn't to minimise at all the extent of the problem. I think it is something that we have seen as the pandemic goes on. The first year was very hard, but I think the second year has been exhausting and our reserves are depleted. We have been keeping regular—. Every few months, we have a pulse survey and, as you'll see, we've described it in the annual report. That is a way of us trying, without surveying our staff to fatigue, to keep an eye on people's physical and mental well-being and then to supplement that, where we can, with a suite of support that's available, either collectively for teams or anonymously, as people wish. We're now seeing a bit of an improvement recently, so that's encouraging, that over the last few months we have seen a bit of an uptick. We've just finished the most recent pulse survey, and we'll be analysing those results very carefully.

But, I think that as well as the general point about the difficulty of the lockdown restrictions for everybody, and the worries that are being caused at the moment by the general uncertainty in the financial climate that's prevalent at the moment, I think what we can do as a Commission is make sure that we give people as much certainty as we can about their work, about their responsibilities and about the scope of their jobs. That's what the ways of working strategy is about: it's to plan ahead as responsibly, as thoroughly and as comprehensively as we can, so that people have a good idea of where we're heading as a Commission and have faith that we are planning and will have the right capacity in place so that they're not overworked. Can I hand over to Ken at that point?

Yes; thanks, Manon. As you say, the latest pulse survey, I believe, shows that we are very much in line with what businesses are reporting. What I would say is that, first and foremost, it's absolutely vital that people feel that they're able to talk about their mental health and mental ill health and that they are able to take time out if they feel it necessary, and that when they return to work they feel that they are then treated with dignity and respect. As part of that, the Commission undertakes return-to-work interviews to better understand the causes of mental ill health.

A lot of information and data are being gathered, which is going to prove very helpful in the long run, I think, regarding the causes of mental ill health—the causes of mental ill health by age group, by grade as well, by gender—which is going to be able to inform us in terms of the support that can be offered. There is a suite of resources available to employees, which I'm sure some of you may have seen online.

I think, fundamentally, the problem is not unfamiliar to other organisations, that people feel that they're exhausted and, as a result of the ways of working during the pandemic, people feel a little less connected to their peers, which can impact on mental health. All of these factors are being fed into how we respond to the mental health and well-being of staff.

But, I have to say that I'm chair of the mental health cross-party group, and I've been deeply impressed by the way that the Commission has responded to the mental health challenge that the pandemic has presented, and, also, in the way that it is preparing for the challenge we'll face this winter and onward, in terms of the cost-of-living crisis and the impact that that will have on mental health and well-being. A number of initiatives have begun, including hardship intervention that will enable employees to draw down a salary advance. That demonstrates how the Commission is being proactive in trying to prevent mental ill health. But, as I say, and I'd like to stress it again, I think the most important thing is that staff feel that they are able to talk about their conditions and their challenges.

Thank you, Ken. I completely agree with you: I think mental health is really, really important for everybody across the board, whoever works in the Senedd and, in fact, out of it as well. I appreciate that we're waiting for the pulse survey findings to be published and shared amongst the group, but are there any particular groups—? I know that you've touched upon this—I believe it was you, Ken, in your response—that you're going to be looking at whether it's more men, women or people from ethnic minorities who are going to have experienced this. But, from what you've seen so far, do you think that there any particular groups who have been more vulnerable to this, particularly, such as new starters; or, like I said, the ethnic minorities; people of certain age groups or certain bands?

Yes, I can share with you some information that I have to hand. Women are more likely to report sick with mental ill health; the most likely age bracket is 40 to 49 years old; and the grade that’s most likely to be affected by mental ill health is our team support, but that’s closely followed by grade M2. And then there’s also noticeable the difference in terms of the length of service that applies to people who are most likely to be susceptible to mental ill health. So, the length of service where people are most likely to suffer from mental ill health having served in the Commission is between five and 10 years of service. So, we are drawing down quite a bit of data, and that, as I say, will help shape further interventions.

Thank you so much for that. I’m aware that the Senedd does provide a number of facilities to staff for various issues that may be occurring, but moving forward, and as you mentioned in your response, cost-of-living being an issue—and I can understand and accept it’s going to affect everyone across the spectrum—what particular additional support do you think the Senedd could be embarking upon, the Commission specifically, to make sure that the organisation is able to respond to these needs that are going to be coming up, particularly amongst staff? Such as, I don’t know, a confidential phone line where people can call and get support or advice for themselves, or perhaps a confidential counselling helpline, things like that. Are there any considerations that are being made going forward for these kinds of support that can be added to what we already have in place?

I’ll bring in Manon, if I may, but just to say that we discussed this yesterday at the Finance Committee. It might be helpful if we provide just a supplementary note to this committee, so that you’re fully aware of the assistance programmes that are offered to staff.

Yes, just to echo what Ken said, I’m very happy to provide a note on the provision that we make. It’s something that’s uppermost in our minds, and we’re conscious of the worries. We have a suite of information. We do have a confidential phone line that can be used to access counselling or practical advice, and I should add that that is available to Members and to Members’ staff as well as Commission staff, because although we don’t have direct responsibility for Members’ staff in the way that we have for Commission staff, and therefore we can’t analyse the data in quite the same way, we’re very concerned for the whole community that works here.

Thank you so much. Sorry—.

Sorry, Natasha. Just to add, reflecting on the statistics, I think you’re absolutely right in highlighting how dangerous the cost-of-living crisis could be for people right across society, but also within the Commission, given that in the age bracket of 20 to 29 the main cause of mental ill health is anxiety, and then in the age bracket 30 to 39 it’s split evenly across anxiety, stress and depression. Anxiety will be, no doubt, exacerbated or intensified as a result of increases in utility costs for households, rising mortgage rates, and so forth. So, in all likelihood, it’s going to be that lower age bracket that is going to be most affected by the cost-of-living crisis.

I couldn’t agree with you more. Thank you so much for your responses there.

I want to touch upon increasing diversity within the Commission’s workforce. I know that many of you are passionate about this, so I’d just like to follow up and ask: are you actually content with the progress in increasing the diversity of the Commission workforce, particularly in terms of representation of ethnic minority communities, people from various socioeconomic groups, and other under-represented groups at present? And also, a follow-up question I might as well throw in there now while I’m asking: what are some of the next steps that you either have in place or will be putting in place to make sure you achieve this increasing diversity that you want to see? Anyone can start.

I’ll start off on that one. Thank you for the question, Natasha. Whilst I think we still have a long way to go, I am content with our progression, to answer your question directly. The Commission has just agreed a new diversity and inclusion strategy, so that will be available shortly, and we have moved forward a bit even from the figure that was reported in the annual report and accounts, and now we have 5.2 per cent of our workforce identifying as being from an ethnic minority community, which is an improvement since the 4.2 per cent figures there. So, our stretch indicators are showing an upward trend. Obviously, we’d all like to get there faster, but we are taking a lot of advice on this, and I’m very grateful to you for being one of the people who’ve helped provide us with advice.

So, in terms of next steps, in terms of ethnic minority communities, we're piloting communications and job descriptions in community languages to try and reach more effectively into communities that don't maybe naturally think of the Senedd as somewhere to work. We're also harnessing the talent of our existing staff. We're trying to make sure that they can develop their pathways effectively and become more senior in the organisation, and arrange for coaching for them and so on.

We have had fantastic success with our graduate trainee cohort so far. We have four excellent interns who were recruited in partnership with the Windsor Leadership Trust, and they are doing fantastically well and contributing hugely to our work at the moment; the four are from ethnic minority communities. And so there are practical steps like that. We're updating our recruitment panel toolkit, and we're also using market intelligence, obviously, to keep abreast of the latest approach in this post-pandemic landscape to recruiting the best talent available. So, in terms of ethnic minority communities, we're very focused on that.

We know this committee has, in the past, also been interested in our socioeconomic diversity, and that is something where you'll have seen we have a year's data available now. Our initial analysis of that suggests that we're pretty consistent with national benchmarks, but that data will become richer as we accumulate more of it. And we're working with unions to look at people who are already here working in the Commission, as well as new joiners. So, we should be able to get some interesting learning from that in due course, and be able to target our recruitment better.  

Thank you so much. 

Sorry. Manon, did you mention the pilot of job descriptions in community languages, which is quite interesting? 

I think I skipped over it a bit, yes. Thank you, Ken.

We're very short on time, so I'd be grateful if people could be as succinct as possible. We have, I think, two or three more questions. Rhys, I think you have a question that I'd be grateful if you could ask. 

Okay. Thank you very much indeed. Mike, Mike Hedges, could you take up the final questions, please? You're on mute, Mike.

Sorry. During the pandemic, everything was done hybrid. There were a lot of organisations, especially in poorer communities, for whom engagement via Zoom or Teams, especially within schools, works a lot better. Are you going to keep that ability of schools, especially, to visit and engage with the Senedd via Teams/Zoom, because, in many of the poorer areas that I represent, getting the money to travel to the Senedd can be very difficult?

The short answer to that is 'yes'. Yes, we will. We've developed a hybrid offer now, and staff have been equipped to have a blend of in-person visits, face-to-face visits, and hybrid tours as well. There is a whole hybrid tour of the Senedd that you can access on the website at the moment, and I think that we've also developed the capability, when we have physical events, that people can take part virtually in those as well. So, it's definitely a good learning that we developed during the pandemic that we can carry forward.

Thank you very much. Mark's well aware of how using hybrid works so very well in cross-party groups, where people from areas who would never attend actually engage because they're doing it from their living room or from their office rather than after a four-hour journey south.

My final question is on sustainability. One of the great things that happened during the pandemic was that people started working from home. Have you any targets for numbers working from home? I know the Welsh Government have talked about 30 per cent. Is it working? This would obviously help against our target of sustainability if we have fewer people clogging up the A4232—as I look into Nia's living room. [Laughter.]

Just to finish off on your previous question, Mike, I should just add, for clarity, that I've just remembered we do pay schools' costs for attending school visits, in most cases. But turning to—

Not the full cost. You pay some money towards it, but not the full cost.

Well, your point is well made. In terms of the return to work, what we're doing at the moment is that we're prioritising staff attendance on site according to whether they need to be in the building to support business, but we also recognise that staff may wish to be using the building for other reasons. So, that is a strand of work that we're developing at the moment, working closely with team leaders, to make sure that people have days when they come into the office and they know that there are going to be other people from their teams in as well, because it can be quite dispiriting to make the effort to come into the office and then find that there's nobody else around. We're piloting new office layouts as well that we will be learning from, to see whether, in the longer run, we are able to accommodate more people within the same footprint by using space in a more creative way and not necessarily having one desk per person in a more traditional manner.

Okay, thank you very much.

Chair, would it help if you had a copy of our carbon neutral strategy, so you can drill into sustainability issues a little more? We can provide that to you, if you wish.

Yes, thank you. Okay. If no Members have any further questions, it falls to me to conclude this section of the meeting by thanking the witnesses, confirming that a record of today's meeting will be shared with them in draft form for checking for accuracy before we publish the final version. So, diolch yn fawr. Thanks, everybody. And we bring this section of the meeting to a short close, for a short break. Could we come back for 10:45, please, Members?

Okay. Croeso—welcome back to this meeting of the Public Accounts and Public Administration Committee for our session with the Welsh Government on the Welsh Government's accounts 2020-21. Can I welcome the witnesses who have joined us—Dr Andrew Goodall and his team—and ask them, for the record, to please state their names and roles, starting with Dr Goodall? 

Diolch. Mr Richards.

Bore da. David Richards, director of propriety and ethics for the Welsh Government. 

Gawain Evans. 

Bore da, pawb. I'm Gawain Evans. I'm director of finance. 

And Peter Kennedy, please.

Bore da, pawb. Peter Kennedy, human resources director, Welsh Government. 

Thank you again for attending committee today. Before we formally begin, can I just confirm that everyone understands how to indicate if they wish to speak? Just to remind attendees who weren't here at the beginning of the first session, could you raise your hand physically if you wish to speak, rather than press the hand button on your computer? Thank you. I also remind everyone, should they need it, that simultaneous interpretation is available from Welsh into English using the downloaded Zoom app only. Interpretation does not work when accessing the meeting through an internet browser. Those who want to hear the English interpretation when Welsh is spoken should ensure that 'English' is selected from the interpretation menu option at the bottom of the Zoom application window. Attendees who don't require interpretation should ensure that 'off' is selected from the interpretation menu.

As you might expect, we have a number of questions for the witnesses, and I'd be grateful if both Members and witnesses could be as succinct as possible in their questions and answers to enable us to cover the wide range of issues this topic has generated. I'll begin the questions, if I may, by asking when did you present an auditable set of accounts to the Auditor General for Wales for audit, and whether you met the timetable you'd agreed with the auditor general and the statutory deadline for doing so.

Diolch, Cadeirydd. Chair, with your permission and in answering your first question, if I could just make three points very quickly as context—only very quickly—and then I will just come to the question. I just wanted to remind ourselves, as we attend here to give evidence but also obviously to speak to the committee, just to comment that 2021 was the most exceptional year, a challenging period for Welsh Government in its delivery and its budget. It was impacted, of course, by generational and historical events, not least with the COVID-19 response and, of course, EU exit, which happened in December 2020.

I wanted to say to you, Chair, that I'm disappointed that we were unable to finally sign off the accounts until August this year. I apologised that this was the case to the committee and I hope that we'll be able to respond, obviously, to some of your concerns during this session. But we would have wished to have been able to have those accounts signed off. I'm sure that that will also be the wish of Audit Wales colleagues as well, and we will, I hope, during this morning's session, describe what we hope to do to make sure that that can be achieved. But I'd also want to say that, in many respects, I'm coming at this as the principal accounting officer, but for a period of time where I am commenting retrospectively, and I have wanted to make sure that, in any outstanding issues, I've ensured that we have been open and transparent and ensured that we have discharged that kind of process.

But on your specific request about the timetable for the audited set of accounts, we have a legal requirement placed on us by the Government of Wales Act 2006 that that should be submitted no later than 30 November in the financial year that follows. And our consolidated accounts for 2021—and that was with the detail of parts 1, 2 and 3 and including all of the supporting papers—were submitted at the time in accordance with the agreed timetable, and they were accepted for audit by Audit Wales back in August 2021—actually on 23 August. That was actually well in advance of the statutory deadline. There is provision for us to submit those accounts ready for audit as late as November. Again, that's set out within the Government of Wales Act provisions. But obviously, the process then comes down to the examination and certification of the annual accounts, and, as you may be aware, there are requirements that then move to Audit Wales and their processes, which, again, are set out within the Government of Wales Act.

So, we are unable to lay our accounts in front of the Senedd without certification by the Auditor General for Wales, and, of course, Audit Wales must determine when the audit work is completed. But your direct question was, 'when?'; we actually submitted them early in fact—back on 23 August 2021.

Thank you. Obviously, the committee wishes to examine and separate those items that are reflective of the exceptional year you describe and those items that would have been exceptional in any year, as highlighted by the auditor general and Audit Wales. Why were those matters not fully addressed in the accounts submitted to the auditor general? And, just to conclude, what was the position with the accounts and audit at the time the former Permanent Secretary left the organisation?

Well, again, looking backwards at the process that happened at that time, there were no particular disclosures at the time of the submission of the accounts back in August 2021, certainly on the date of 23 August, because the accounts had been prepared ahead of any of those departure arrangements. So, because there were no final arrangements or agreements in place, there wouldn't have been the provision to make sure that they were set out in that time.

The actual accounts, from a timetable perspective, were due to be signed prior to the departure date of the former Permanent Secretary at the end of October. But at that particular time—and I actually wrote to you, Chair, back in November—we commented on the delay in the planned signing of the accounts beyond the submission, because there was additional work that Audit Wales felt was necessary, specifically on the business grant support that had been provided to businesses in Wales during the pandemic. And we had hoped and anticipated that this further work would conclude to achieve, as an alternative, an end-of-November laying date. But because of those changes of dates actually for other matters—and that was associated with the business grants process—the departure of the former Permanent Secretary then fell within, technically, what is the post-balance sheet event period. And this is a time when we just need to pause and consider whether any events that have occurred after the year end, but before sign-off, need, in governance terms, to be reflected in the accounts.

And it was actually in the interests of transparency that we raised it ourselves with Audit Wales, and when we raised the matter, we wanted to discuss whether it was appropriate at that time for a note to the remuneration report for the 2021 accounts. Because whilst the values were not material, there is an aspect that the remuneration report items are material by nature. So, the timings themselves would not have allowed for the inclusions of those types of issues. And as I said, it was our own declaration to Audit Wales that we felt that this was something that we needed to consider about its status.

Thank you. Well, clearly, as we know, the findings of Audit Wales subsequent to the process you described are now a matter of public record. Towards the end of January this year, you told this committee that you hoped it would be possible to sign the accounts over the following two weeks. In fact, it took over a further five months for the accounts to be finalised. Why didn't this happen within the two weeks that you had indicated?

Chair, we had already been in liaison with Audit Wales on matters, including on the departure of the former Permanent Secretary. We were also in discussion and conversation on the business grants element as well, which, at that time, was ongoing. When I spoke to the committee back in January, I think that was my first attendance in front of you all, that was a genuine hope based on where we were at that time. We had highlighted areas, we had responded to some initial queries that had come through, and we had hoped, in a practical sense, that they would have been sufficient to deal with the issue and to move on with signing of the accounts in the normal way.

We control how we submit our accounts; what we are unable to control is if there are outstanding issues or if Audit Wales have further areas for exploration, and technically, we can't complete our accounts until the Auditor General for Wales has provided an audit opinion and report. So, even after that period of time, we were responding to outstanding queries, and it was on 13 January that we had responded to all of the queries put forward by Audit Wales before the Christmas period—it was actually on 15 December. And we had—I don't think unreasonably—anticipated that perhaps a conclusion could have been discharged by the middle of February at that time. We also then subsequently had further views from Audit Wales in March, which we responded to during March. We had a draft memorandum from Audit Wales, which we responded to later in June having received it in that month. And then, in July, we received the initial and the final audit opinion from Audit Wales. Within all of those intervening periods, there were a number of further queries. We also had to reach out to other organisations and colleagues, both in Cabinet Office and those who were associated with the civil service pension scheme, and we've spent considerable time wanting to respond to the areas that have been highlighted by Audit Wales along the way, but the Auditor General for Wales will need to obtain evidence and form those conclusions on the opinions.

So, I think on the back of our experience, certainly over previous years, it wasn't unreasonable to hope that that would have been signed off, and, of course, to allow the scrutiny that needed to happen on such an exceptional year at that time. And this is the first time that Welsh Government has not been able to sign off and have its accounts laid in the 22 years of devolved government. So, obviously, it's exceptional for those reasons.

Thank you. Although this committee was sufficiently concerned about this delay to request and obtain time in Plenary for a Senedd debate on this matter, concern has been raised about the lack of information in the public domain about the delay. How do you respond to concerns that this lacks openness and transparency?

First, on the way in which we've tried to respond along the way—and I said at the outset, my intention of looking backwards in my principal accounting officer role, to make sure that we, of course, respond to any queries and concerns that are happening and make sure that the appropriate documentation and information is provided—we did speak publicly; I was able to discharge that at the Public Accounts Committee in response to you, Chair. I tried to outline the reasons there. We have, of course, tried to keep the committee and yourself updated—that is both informal as much as through our formal mechanisms.

Our original intentions back in January would have been to have had the accounts signed off and to be moving ourselves towards a scrutiny process, and I do think, as part of looking back on this, where I would want and hope and expect that this has been just an exceptional time, given the track record of ensuring that our accounts are signed off, that we do need to find a mechanism for ensuring that any advice that is being provided to the committee, to the Chair, is something that can be discharged on an open, public and transparent basis as well. Obviously, it is absolutely appropriate, Chair, that you discharged that yourself on behalf of the committee in June, and we also needed to reflect on that at that time. And perhaps we can just commit to work that, should these circumstances occur again, that there is a clear process in place for how we can actually make sure that that is reported openly and transparently.

On the matter beyond business grants and clinicians' remuneration and pension arrangements, on the departure of the former Permanent Secretary, there were, however, matters that were more confidential and more of a personal nature, and that would have been a factor in our consideration on this at the time. But I hope, Chair, that, even through informal routes, we at least try to maintain the ongoing progress that was happening, and I chose to put some of that in correspondence to you as well.

Okay, thank you. I can't see anyone else indicating a request to speak, so could I please invite Mike Hedges to take up the questions?

Sorry, I was waiting to be unmuted. The Auditor General for Wales suggested that, in the event that legislative change is not possible to deal with what happens when accounts are approved late, a memorandum of understanding between the Welsh Government and the auditor general is produced. Are you happy to go along with that as a means of going forward, although we all hope that we don't get to this stage in the future?

As I've tried to outline, this is the only occasion that we've experienced where the Welsh Government signing of the accounts has not been able to happen to allow the appropriate scrutiny by the committee, and more broadly, on a public basis. I would hope, therefore, that this is an exceptional time, with the experience that I said at the outset that we would not wish to have happened, and I'm sorry that that will have affected the scrutiny process for the committee as well.

I think on the one hand, the legislation is actually really clear. It does actually set out a provision that, once we have submitted the accounts, there is a statutory four-month timetable that is in place. There isn't, in the  Government of Wales Act, any provision to carry on reviewing outstanding issues, which I think is problematic in terms of the experience that we've been through. But, I actually agree with the view that was put forward by the Auditor General for Wales. I think, in practical terms, with an absolute focus to make sure that we don't repeat these arrangements again, there has to be some level of understanding and turned into something with status, including a memorandum, that can actually clarify the expectations of both Welsh Government, but I think also of the Audit Wales process as well, just in case the statutory deadlines for the consolidated accounts aren't met in future. I would, however, say that, of course, we are all very much focused on ensuring that we do discharge it, because it was an exceptional year for a variety of different reasons. But, yes, there is probably some pragmatic way to steer that to the satisfaction of the committee.

I'll leave that with you and the auditor general to sort out and report back to the Welsh Government and us.

Thank you. Natasha Asghar.

Dr Goodall, thank you so much for your introduction that you provided to us before we started the questioning process. With the committee members, I completely agree with you, I understand that the country was going through COVID, so there were exceptional circumstances, and the committee has seen a number of different cases where we've taken consideration of the fact that COVID has played a factor in delays and issues within various areas. But I have to give Mike Hedges credit for this, because, week in, week out, we've sat on this committee and waited for these accounts to come out. I can appreciate the delays, but, quite frankly, having sat on this committee, there comes a point where we have found the time delay due to a payout unacceptable. And that's something that I would appreciate if you could convince us that this isn't going to happen again and, secondly is the fact that we as an institution, as the Welsh Parliament, have a responsibility; we're supposed to lead by example. And considering the public's lack of trust and faith in politicians and politics at large—it's pretty bare minimum at the moment—having seen this as a special consideration due to a payout is not something that we as politicians, we as people who are representative of the public, look fondly upon either.

So, moving forward, are you actually satisfied with this delay that's taken place? I take into consideration the COVID factor, and I take into consideration all of that, but, quite frankly, for someone like me sitting on this committee, and I'm sure many of my colleagues as well, who've sat, week in, week out, asking the auditor general, 'Has there been an update?' and in his defence, he said, 'No, I have nothing.' So, from our side, the delay and the blame cannot be placed on the auditor general at large on this one. We feel that it's because of the payout, so can you convince us and tell us otherwise, as to why it's taken so long just to sort out a payout?

First of all, I'm not satisfied at all with the time that it's taken to approve the accounts. I said that upfront, including my apologies that it hasn't allowed the committed to discharge its scrutiny process. I also come at this quite personally in respect of my experience. I've been an accounting officer for 17 or 18 years in different roles, of course, mainly as an NHS chief executive. All the accounts that I've overseen have always been submitted to time and they've been able to be consolidated into a national position. In coming into this role myself, as I said, Welsh Government has never had this particular issue. But again, I clarify my earlier comments: we can control submitting the accounts, but we can't control every aspect of what happens beyond there. If there are outstanding issues of concern that continue to be explored, that are rightly being investigated, that do need time and a response from the organisation, we can commit to respond to those openly and as quickly as possible. Certainly, a complexity on this area was our need to involve other agencies in a different way than would normally have been expected, but I'm not satisfied at all to approve the accounts. I think it is a reasonable timetable that is laid out in the legislation, and I and Welsh Government absolutely take seriously the need to provide good-quality timely accounts for the Senedd to scrutinise.

In referring back to my comments on the exceptional environment that 2021 represented, the focus on how we did spend £5.3 billion-worth of our funds and public money on a COVID response, from new funds that were given, as well as a reallocation, is a really important part of the scrutiny process that we discharge. So, what I would say is, in working through our responsibilities, alongside those that would be discharged by Audit Wales, if, for any reasons, we see the deadline is in danger of being exceeded, I would like to find a way of the audit being completed and the accounts being published, even if there is some of way of, through a memorandum of understanding, highlighting the unresolved matters. And I think that would actually allow the broader aspects about the accounts, if, exceptionally, this would occur again, to be available for scrutiny in the manner that you've actually expected.

On the departure arrangements for the former Permanent Secretary, from a timing perspective, we did discharge them; they had occurred. It's the investigation aspects of it, as a material-by-nature matter, that Audit Wales and colleagues there have been reviewing that has had the impact on the annual accounts. The process or the payments to the former Permanent Secretary actually were implemented by the organisation and, as I said earlier, it wasn't something that was come across or discovered; it was something that we actually highlighted actively because of that technical period where we had to move to closing down the signing of the accounts and felt that it was appropriate to highlight. I think all of us would have an experience from this year; even as we pursue the next financial year's issues, we are trying to make sure that they are resolved, and absolutely we need to make sure that this does not reoccur for subsequent years as well. I'm sure I can commit myself and my own colleagues, and I'm sure in the constructive conversations that I've been able to have with Audit Wales myself, that we will make sure that there is a way of working these issues through.

Natasha, do you have any follow-up questions?

I know you mentioned about the memorandum as a potential solution going forward, but unlike other public sector bodies, such as the citizen voice body for health and social care and local authorities, provisions are not built into the process should the Welsh Government and AGW miss the statutory deadlines going forward. Do you think provisions are needed, and if not, why? 

I'd already indicated my personal take on this, again, looking at all of these events. I think the legislation is clear, the provisions are there and there is a reasonable timetable to be established. Obviously, the Government of Wales Act predates the changes that have been introduced for other bodies, which is why there is a difference. And of course there is a way in which primary legislation can be revisited, but it would be a significant ask at this stage. I personally would advocate that, on the back of an exceptional experience—this is not routine practice to end up with these kinds of delays—I would argue that reverting to the legislation should not be the first approach. I think we should be giving assurances to ourselves, to Audit Wales and to you as a committee about our wish to avoid this in the future and make sure that we can deal with it in a timely manner. But, absolutely, there needs to be a clear agreement, including where the danger of not meeting the deadlines is highlighted, and including what the Chair was asking earlier about the public understanding of these delays as well. And whilst, as Mr Hedges was saying, we need to work that out between Audit Wales and Welsh Government in respect of our different legal responsibilities, I'm sure the committee will have, clearly, a clear close eye on that, on the back of your experiences.

It is really important that the significant expenditure of Welsh Government, and the way in which we operate as an organisation, can be scrutinised properly thorough the Public Accounts and Public Administration Committee. And I'm very used to discharging that responsibility, partly in my current role, but mainly because of my accounting officer role for other organisations as well, and, I will, of course, commit to making sure that that happens, including the reflections on whether a legislative approach is needed, but my current advice would be not to pursue that particular approach.

Thank you, Dr Goodall. Thank you, Chair.

Could I also clarify, and I apologise if I missed it, but how do you respond to the suggestion to the Finance Committee by the auditor general that, in the event that legislative change isn't possible or doesn't go ahead, a memorandum of understanding is developed to clarify expectations on both him and his office, and possibly the Welsh Government? 

So, my response would be, building on what I said to Mr Hedges earlier, that, yes, that is a practical and pragmatic option for us to pursue at this stage. It shouldn't remove the legislative expectation and requirements. It shouldn't remove us simply demonstrating how we will ensure that the legal responsibility to submit accounts and then the duties to make sure that we work that through within those timetables are achieved, but if it gives a confidence to us and the committee that we will find a way of dealing with those exceptional circumstances, then I would be supportive of the memorandum, in line with the Auditor General of Wales's views. 

Thank you very much. Can I, please, bring in Huw-Irranca Davies, who's deputising for Rhianon Passmore today?

Diolch, Cadeirydd. Thank you very much indeed. Good morning, Dr Goodall. I've got some very precise and very specific questions relating to the former Permanent Secretary's working arrangements and the reasons for her departure before the end of her contract. I'm going to try and keep them very focused and very precise, in order that we can get through them, and if you can give, similarly, as much as you can, very concise answers to it, because we're really going at specifics on that issue of transparency.

First of all, Dr Goodall, can you tell us what process was in place to agree the former Permanent Secretary's new working arrangements from 1 April 2018, when her salary was reduced, following her decision to benefit from her pension? What were those arrangements? Who approved them? How were they reported?

Thank you. Diolch. The former Permanent Secretary discussed, as I have reviewed and understood, her partial retirement intentions with the human resources director, and completed the partial retirement request form, which is a personal instruction to the organisation, MyCSP, that oversees the civil service pension arrangements, of her intention and that she would be reducing her salary by 20 per cent, and that was going to apply from the beginning of April 2018. The Welsh Government HR team completed the employer section of the relevant forms on behalf of WAG as the employer. In fact, that is the core approval aspect of what needs to happen in such arrangements for any member of staff.

Shan, at that time, confirmed to the HR director that she would continue to work full time on a standard weekly basis—that was partly reflecting the environment that she was working in at that time—but with one day per month just being taken initially to try to consolidate and basically work through the revised working arrangements. The HR director gave approval on behalf of the organisation, of course noting commentary that the Auditor General for Wales has made more generally, but that provided that employer approval. There was some of that documentation at the time, on some of the matters of detail, that weren't as precise as we would have wished or documented, but actually the Permanent Secretary's office did maintain a record of the days that she was taking off at that time.

I am aware that Shan had not made her line manager, the Cabinet Secretary, aware of the specific change in working arrangements back in 2018, but we were discharging those arrangements as Welsh Government, as her employer, which was the core principle for what the civil service pension arrangements required. I have to share with you though that, through our recent discussions with the Cabinet Office, it became clear that there was some lack of clarity and no agreed processes in place between devolved governments and the Cabinet Office concerning the notification of changes in the working arrangements of Permanent Secretaries, and perhaps the shared understanding wasn't as clear in respect of the different responsibilities of the UK civil service on the one hand and Welsh Government having to discharge not least its legal status as an employer. But that has also allowed us to try to help to clarify and confirm those intentions, because there is now a revised terms and conditions document that highlights the expected approvals and the practices that would surround individual Permanent Secretaries. So, we have tried to also use the experience to tighten up some of those governance expectations, even if those actions were still appropriate to have proceeded.

Thank you, Dr Goodall. I think that's quite frank and quite helpful, some of those points of clarification. But, could I move on to the issue of partial retirement in the role of the Permanent Secretary of the Welsh Government? The rules around partial retirement—the pension scheme rules—say that a member's job must be reshaped by either reducing the working hours or reducing the responsibilities, resulting in a pay cut of at least 20 per cent. My question is: how feasible is this for the role of Permanent Secretary of the Welsh Government?

Well, any member of staff is permitted to personally consider and apply, according to the civil service pension arrangements. It doesn't preclude senior colleagues from doing that, and that would include, albeit that it may be a more unique thing, Permanent Secretaries in that aspect. It's interesting, as I've looked at this in more general terms, of course through the civil service lens, but given that the majority of my public service experience is in the health service, the partial retirement and access-to-pension arrangements are a more familiar action that is taken within the NHS setting—I have to say, predominantly around clinicians and, notably, senior clinicians. So, whilst this may be less of a normal experience generally, we do have a number of staff in our organisation who are part time, accessing pension arrangements within the organisation.

I could talk to you in NHS terms and tell you that one in four physicians across the UK is actually working on not-full-time arrangements, and most of those are aged over 60 and aged over 65. So, I think we are going to see this develop more significantly, particularly with the change of pension ages and also with the impact of some of the arrangements on tax allowances. So, I do think that this is going to be a familiar aspect, as well as the fact that I think accessing partial retirement is something that is a flexible working option, which means that people don't simply just finish off their careers and go. There is an ability to graduate the way in which they leave, and we take advantage of that experience in whatever public service setting that's there.

There are clear rules that are set out by MyCSP under the civil service pension scheme rules. Everything that we have had back from MyCSP says that Shan was able to meet those and discharge them. That is also the view of our employment arrangements as well—that they were able to be met—and it is why, as I highlighted to you in responding to your first question, I was indicating that Shan, in practical terms, was needing to demonstrate that she was altering and accessing some leave aspects because of the way in which she had moved to a position where she was receiving 20 per cent less money and was discharging those part-time arrangements. That wasn't a one-off aspect; that was also revisited in the subsequent year.

You will understand, however, that pension arrangements always need to adapt to the changing times, and I think the run-in to European Union exit and the significance of all of that as a matter for the Welsh Government, as well, of course, ultimately, as leading into the pandemic response, meant that the working arrangements were, probably, thrown up in a way that had never been expected at the outset of the request.

The role of a Permanent Secretary, as I'm discovering myself, is a very demanding one, and, of course, in discharging any role, there will still be moments and times when you have to be exceptionally available, whatever arrangements you have around your employment. But, certainly, there shouldn't be any exclusion of individuals from that kind of consideration, and the request itself is a very personal one, albeit with the employer approval. Of course, in declaration approaches, the former Permanent Secretary did actually declare these issues in previous accounts as well, so that her decision to make these arrangements actually was a disclosure issue in both the accounts for 2018-19 and in the subsequent year as well.

Thank you. We've discussed the changes that were made to the former Permanent Secretary's working arrangements from 1 April 2018, but the Welsh Government agreed further changes to the former Permanent Secretary's working arrangements in 2019. Can I ask you specifically what prompted those changes and what was agreed? Again, who approved them and, again, how were they reported?

So, again, I'm aware that I'm commenting on this in retrospect, reflecting on the arrangements that were put in place at the time. But, my take on it is that, by 2019, it was really clear that whatever provisions or arrangements had been agreed and put in place, Shan was finding it difficult to just continue to take the day off per month that she had originally agreed because of the particular pressures around EU exit and the changing timetables that were happening. Whatever had been put in place as an appropriate and practical agreement needed to be altered. I know that Shan had engaged with her line manager at the time, who was the Cabinet Secretary, and also with the First Minister, just explaining about the mechanisms that were in place, and the office had been recording, of course, those particular days as well.

In March 2020 Shan really set out in greater detail to the HR director that she needed to reflect the reduction in salary more so in her working hours, and was looking to ensure that she was able to have that work-through so that the office was able to make the appropriate calculations. There was some HR advice that was given at that time, there was an explanation of some of the flexibility that could be in place as well. But as I indicated earlier, these were matters that were disclosed in previous accounts; it wasn’t that our accounts this year were the first time that the part-time arrangements had been made explicit in terms of the pension agreement that we put in place.

Thank you. I’m going to turn in a moment, Chair allowing, to some of the lessons that were learnt, and how you deal with this in the future. But could I just turn to a couple of other specifics? In the accounts, you say that the former Permanent Secretary came to an agreement with the Welsh Government about time off in lieu equivalent to one additional day worked per week, to take towards the end of her contract. How likely was it that, with such demands on the role, as you’ve just explained, it was going to be feasible for the former Permanent Secretary to take this time off prior to departure?

I think that it is always possible and feasible to do these things. I’m seeing a change around general roles at the moment with job-share arrangements and part-time working and all types of things that, perhaps a decade ago, wouldn’t have happened in this kind of way. I think the thing that really just changed the starkness of the environment was an assumption that we would have worked through some of the EU exit deadlines, but obviously with the extensions that were happening at that time, with the detailed work that we were needing to do, I think in practice it just became difficult. So, I think it was an honest assessment at the time. That would be my take on things looking back. It was intended to discharge those arrangements properly, but the reality and the challenges of the job would have stepped in in a very different way that was still unexpected. The EU exit intensity was unexpected, and leading into the pandemic—that would never have been planned for and expected in terms of needing hours absolutely over and above any agreed part-time pension arrangements.

That helpfully leads us on to another aspect. You explain in the accounts that it was

'in the interests of the organisation to avoid a protracted handover period'.

That’s put forward as one of the reasons by you for the former Permanent Secretary leaving before the end of the contract. Can you just expand on that at all?

In response to you, perhaps it just allows me to say something—that I am aware that I am sitting here under your scrutiny arrangements, but I am the trigger for the departure arrangements. I say that with some sensitivity about the mechanisms. I would also share that as a colleague who worked within Shan’s team and saw the effective leadership and management that she discharged for the organisation, and all of the advantages we had of all of her experience. But it was my arrival as an internal candidate who was successful through the Permanent Secretary process that actually triggered the departure arrangements. So, I was—rather than an external candidate, where there could have been a very different discussion about starting dates—available to start with more immediate effect. I think it was in the interests of the organisation to avoid a protracted handover period and to do so in a respectful and appropriate manner, recognising that Shan is a substantive civil servant of 40 years’ experience, that she had a substantive status within the civil service, irrespective of the fixed period of time that she would have had in a five-year contract with the Welsh Government. But I know and I would share that it was the First Minister’s preference that the long-term senior civil service leadership, not least for the programme for government, should be in place as soon as possible in the new Senedd term, noting the recruitment arrangements that had been put in place.

I know that Shan had made the HR director aware that she would be prepared to leave sooner than the end of her contract if that caused issues, and her departure was therefore agreed between the Welsh Government and Shan. There is a danger of the status of individuals getting in the way of the accountabilities for the organisation, about how would you handle an extant Permanent Secretary still being around to see out their contract at a time when I, or anyone else as a new individual, turns up into the organisation. If Shan hadn't been willing to accommodate those arrangements—and Shan simply agreed and accommodated those, as far as I've been able to see from my own assessment—then we would have had to have had further discussions on options to take that forward. Some of those could have been very difficult indeed, and some of those would have had an employment law context to them beyond any of our policies. Because in the middle of all of this, it's not just about the policies the Welsh Government has had, it's actually about how employment practice and employment law would apply as well, of course. But, I think this was the right decision, and certainly what I appreciate is that this allowed me to very quickly, and with momentum, come and start my role within the Welsh Government. I'm very grateful that Shan accommodated that, irrespective of the trigger that it created. 

Finally, then, Chair, if I could ask you to reflect on lessons learnt and looking forward, and in doing so, to reflect on the issues of line management, the guidance that may be available or not, or that wasn't available at the time in terms of Permanent Secretaries, particularly in the devolved context, the clarity on line management and any other matters. What has the Welsh Government learnt through this process? What have you learnt through this, and what may be different, what can you tell us of the work that's going on on processes now to clarify and improve the way this might happen in future? 

First of all, on any matters that we feel are relevant to raise, we would continue to raise them, as we did in that settling period in between submission and signing of accounts. I still believe the right issue is that if there are any areas that need to be highlighted in terms of taking advice for how it should be treated, we should still raise it. I do think it has demonstrated to us something that is perhaps more particular to devolved Governments. I say that more generally rather than just for Welsh Government itself, about the relationship that exists with a line management arrangement that is with a Cabinet Secretary within the UK civil service, but with employment that is overseen by Welsh Government as an employer. That would actually include my current NHS secondment arrangements as well. We have, I think, been able to at least clarify the respective roles and responsibilities on that, in respect of how that would apply to the Permanent Secretary role.

I'm also mindful that I'm the fifth Permanent Secretary in a 22 or 23-year period of time, so this is not a daily occurrence. But nevertheless, there really does need to be clarity on those respective responsibilities. The terms and conditions document that has been developed, which is signed off by Welsh Government, including through our remuneration committee, and which is also signed off by the Cabinet Office, has confirmed actions that we took through this process on the one hand, but has been really clear about when the further approval is required, and when it's led by Welsh Government and when it's led by the Cabinet Office as well. So, we've learnt that.   

But, I do think it means that we have to extend the experience more broadly as well. So, I take the learning from this to make sure that we reflect on those experiences around staff generally, and also the senior civil service. Our remuneration committee already has a really key governance role in overseeing those areas. We have introduced a whole series of areas on these actions. But I think also—and I think this is a matter for staff generally; I don't think it is specifically around the senior civil service—it's how you deal with probably what will be an increasing number of part-time pension requests in line with other sectors, because of the circumstances that I outlined earlier, and make sure that that is really clear and spelt out in our policies, both in terms of access but also about how we support people to do that.

I bumped into a member of staff the other day who part-time retired a number of years ago, and progressively reduced time. They were very positive about the way in which that had helped them land the transition of their life. So, irrespective of the particular technical detail that we've looked in on here, I would really hate if it removed what would seem to be good employment and flexible working practices that we should support as well. But, I absolutely, in finishing my comment, recognise the seriousness of these issues when they arise, the way in which they must be accommodated and dealt with in an appropriate manner and responded to. I don't think there were any intentions other than good faith to do the right thing, particularly with the circumstances of a departing individual who would have had employment rights to be discharged on the back of a very long and significant civil service career.

Thank you for your answers, Dr Goodall, and your frankness in them as well. Chair, thank you very much.

Thank you. Of course, the issue for us is the concerns highlighted about how all this was accommodated within the audit and accounts process, as evidenced by the findings of the auditor general.

If I can move now to the next set of questions and invite Natasha to take those up, please.

Thank you so much, Chair. I know my colleague Mike Hedges will be joining me on some of the questioning in this section as well. I'd like to ask you, please, how much in total did the Welsh Government actually pay the Permanent Secretary on her departure? And, just for the benefit of myself and my committee—I've got my pen and paper handy—could you please provide a breakdown of the total by financial year, please?

Thank you. The total amount that was provided in respect of the departure arrangements was £80,519. I'm aware that you'll be checking my workings on this as I go through, but please bear with me. I think it's an important point to distinguish the payment that was relevant for the current financial year that is under discussion here today—that was back in 2021. That was a figure of £30,289, which has been the matter for consideration directly associated with the financial year. The remaining £50,230 is included within the accounts expenditure on a draft provisional basis for the 2021-22 accounts, which, of course, we're currently working through in our timetable in line with all of the processes that I outlined earlier. So, very directly, in the process that we've been through, whilst it will relate to the overall number, it is a £30,000 sum that is relevant to the financial year 2021. Obviously, that's on the back of a £20 billion budget, of course.

At any point, did the Welsh Government obtain legal advice on whether it had any legal obligation, in fact, to make each element of the payment that it made to the former Permanent Secretary?

There is always legal advice [Correction: There is always legal advice available] on any matters that the Welsh Government is pursuing, whether that is as officials—. I should declare that I started in law myself, and know that there is always an opportunity to access that kind of advice. Actually, to state the position at the time, legal advice wasn't directly taken at the time about the offer of a payment, but it wasn't in isolation from HR understanding, HR experience, not least through the HR director, with a professional knowledge of employment law, the practice of that, the application of HR policies, and applying professional expertise. So, the director's role and responsibility does cover off the requirement for an understanding of these wide range of areas irrespective of legal advice.

What I can't do, coming in as the principal accounting officer, is to rewind and go back to the start point and to have a way of inventing that there was legal advice that was directly taken at that time, albeit that it would have had strong professional advice in the context of what the law and employment law would have expected. But, what I have, of course, been able to do is to actually take advice retrospectively on the application of that payment, and I've been able to do so both while we were responding to Audit Wales's concerns, and then I've also been able to take that advice after the issuing of the memorandum. That legal advice tells me that there is an entitlement, in employment law terms, on the three areas, even if we change the labels around, that were highlighted as part of Shan's departure arrangements. That would be in respect of any time left on the former Permanent Secretary's contract, and indeed on any aspects around annual leave that hadn't been taken, or, indeed, some of the implications that we had originally described as extra-contractual payments as well.

None of those mean that all of those may have completely worked through, but certainly they were expectations that would have needed to have been considered. As I said earlier, beyond the strictness of policies, policies themselves do not remove the employment law perspective. The fact that Welsh Government had discharged many of these areas as actions as the employer gave a status to them as well. So, obviously, legal advice is privileged on the one hand, but I just think it's helpful for the committee to understand that even as we look back on the arrangements and the memorandum, there is legal advice that is still saying that these were all appropriate matters that would have needed consideration and resolution.

Okay. Dr Goodall, you mentioned extra-contractual payments, and I'm glad you touched upon it, because it's something that's caused me a little bit of concern. The Auditor General for Wales says that the calculation of what you mentioned as the extra-contractual payment for partial retirement days was 'arbitrary and without proper basis'. How would you respond to that now, and under what grounds was it actually considered value for money in accordance with 'Managing Welsh Public Money' at large?

Again, absolutely respecting the declaration of the issue as a material by nature issue, which would be associated with a remuneration report, the one thing that I would want to guide, as I've been looking back on the arrangements that took place, was that I do think that value for money was a key consideration. I think the intention was to make sure that there was acknowledgement of the circumstances, but that an appropriate agreement was put in place that would allow us to ensure that we were discharging that 'Managing Welsh Public Money' requirement for value for money. I would like to state that very actively here today, because I think that was the intention. It's why there were negotiations. It was why there was an offer. And if I could say that the offer that was made to Shan was simply accepted. It wasn't a protracted negotiation. It was simply that she accepted what the organisation had stated they felt was an appropriate area.

In value-for-money terms, I've also looked at this more broadly, and there are two contexts for me about trying to get a sense of how value for money would work around exit and departure payments. Firstly, when I look at departure arrangements around other Permanent Secretaries, which is in the public domain over recent years, I have to say that Shan's departure arrangement, her exit arrangement, is the lowest of those, mostly significantly so, and I just think that has helped me as a context for understanding some of the choices that the organisation made, looking at it in retrospect. At the same time, when we look in general terms at departure arrangements and exit packages for public services in Wales, the general analysis that we've done is that Shan is at the lower end and amongst the lowest of those departure arrangements for other public service organisations in Wales as well. I think that helps to show that this wasn't just trying to find ways of giving the maximum available; it was actually about trying to mitigate it to something that felt acceptable in the context that I described earlier about allowing that seamless transition between colleagues as well.

On the areas that were highlighted in order to come to judgments on the extra-contractual payments, they were in part driven by the revised working arrangements, the intention to work through how leave would be accessed if hours had reduced on a part-time basis as well. They were held by the office. It wasn't necessarily that they were calculated by Shan; they were done in an objective manner. But, actually, they ultimately became a guide for us in trying to discharge the value for money of all of this, because an offer wasn't made that was allowing for all of the potential days that had been calculated, whether that would allow for some potential error or concerns along the way. An offer was made well within those arrangements, again to try and construct something.

Again, to say that, as we look at the different labels that have been applied, as you'll have seen we've accommodated in our response that we have switched some of the assessment on the areas that were highlighted to be moved to special severance payments, and that was under the office of the Cabinet Office payment. Even at this stage, when we look at the departure package that was sought, the potential calculation that we might now do, with everything that we've learnt through this process, may actually end up being not even just at the same level but actually higher than Shan received. So, the Cabinet Office advice describes that maybe there should have been a direction to Shan to access the civil service compensation scheme. That would have provided up to six months' remuneration, particularly with her being over the retirement age, and that would have been a really key matter for consideration, but also there would have still been an acceptance of the notice period to be paid as well. So, again, if I look backwards, retrospectively, at the calculations that we made, it could mean that we would have ended up actually with a higher calculation, even before we allowed for any of the annual leave as well. So, I think the annual leave calculation, as an issue, was intended to be used as a practical guide, and why that lower offer was made in the spirit of resolving the situation and with value for money in mind as well.

Thank you, Dr Goodall. I appreciate everything that you've said and I take it on board. I know that with civil servants, Members, and Members' staff, there is a slightly different system that happens within the Welsh Parliament at large. But, having helped and supported and represented and defended Members as well as staff when it comes to their issues, to an outsider it does feel like there is a certain level of double standards here, that there's one system for Members and staff and there's another system for civil servants, as in this case. And I appreciate that you've had to inherit this issue; it's not something that you created yourself. But I do know that my colleague, Mike Hedges, also wanted to jump into this particular area of questioning with me, so, Chair, if you don't mind, I would like, if that's okay, just for Mike to ask his questions for this particular area as well, and I know Rhys might have certain issues and Huw may as well too, if that's okay. Sorry to take over there, Chair, but I know everyone wanted to contribute on this particular area, so I'm happy to share the space now with everybody else on the committee. 

Thank you. I want to make three statements, Dr Goodall, and you can tell me if they're correct or not. The Permanent Secretary is part of the UK civil service. Secondly, the line management for operational decisions is the First Minister, but the line manager in terms of conditions et cetera is the Cabinet Office. And on appointment, you're appointed—you've gone through this, but my understanding is that you have the Cabinet Office present and the First Minister present, but the decision is that, finally, of the Cabinet Office, although I assume they would listen to the views of the First Minister before they made that decision. If what I've said is true, and please tell me if it isn't, why weren't the Cabinet Office involved from the very beginning of this process of the former Permanent Secretary leaving? And just a comment: I don't think it's good practice to have somebody lower down the organisation than the person who is going to be the recipient actually making decisions on somebody who is, effectively, their line manager or their line manager's line manager. 

So, just to clarify on your description, I wouldn't quite agree with how you've set it, but I'll give my attempt to do this, to work it through. So, yes, the Permanent Secretary, as all civil servants in Wales, is a member of the UK civil service, however the employer is Welsh Government, and I think that's an important distinction. So, if I could put it this way, through the legal lens—and I've just clarified legal advice that would apply—the Cabinet Secretary, the Cabinet Office, would not for any member of staff be where any potential claim, for example, would be pursued. That would be a matter for an employment response from Welsh Government. So, there is a distinction between Welsh Government in that sense, not least with the budget for the Welsh civil service being set by Welsh Government in its own budget arrangements. 

I, of course, act as adviser to the First Minister, I lead the Welsh Government and I support Ministers in their expectations, and that is with very close liaison, as you would expect, but my line manager is the Cabinet Secretary and my performance reviews, albeit informed by the First Minister in the way that you've described, are something that will work through those UK civil service arrangements. There are in some of the requirements that are in place, depending on which category of departure is declared—and we made a particular technical judgment ourselves and we've subsequently revised it because of the Audit Wales advice—that will draw in the First Minister to indicate his principled agreement on areas and to be aware of the circumstances. I believe, in retrospect, Cabinet Office, albeit that we discharged the employer approval aspect, should have had that oversight and involvement. I believe that we may not have ended up in a different place necessarily, because I'm not aware of any case where it would necessarily be declined on these kinds of areas, but the employment approval does come from Welsh Government itself. And certainly, to reassure you, in terms of my own arrangements, they will be things that are advice to my line manager. I've also tried to ensure that the remuneration committee has a really close oversight of those arrangements as well. 

Who decided not to involve the Cabinet Office at the first stage of this desire for phased retirement, early retirement, and the payments accordingly? Was that decided by the Permanent Secretary, by one of the staff junior to the Permanent Secretary, or by you?

So, I don't—. Well, it was not by me because, of course, I wasn't in the current role I am and, in many respects, I'm discharging my principal accounting officer—. I don't think it was actively deciding not to engage in that sense, it was about trying to support through appropriate local advice. As I said earlier, the HR director was able to give that as appropriate advice and, actually, the custom and practice for this organisation—although we have now clarified that with the terms and conditions and confirmed some of those aspects as well—is that that would be discharged by that professional director, who would give appropriate advice, including for the Permanent Secretary. You did comment on how we deal with the arrangements whereby subordinates are reporting in to colleagues; I think the revised terms and conditions framework at least deals with that very visibly and explicitly, should there be any concerns, although I don’t feel anything untoward has occurred in that matter.

My NHS experience, to share it over the time that I’ve been overseeing NHS chief executive arrangements in Wales, both when individuals depart, but also when they’re recruited—the director of workforce for the local organisations acts as the key contact and adviser on those arrangements in a very similar and consistent way as well. So, my own experience is that the subordination aspect doesn’t remove the responsibility for advice within the organisation, but Cabinet Office have a role to play, absolutely, as you say.

When in, I hope, a long time in the future, you decide you're going to leave, will you involve the Cabinet Office, or ask the civil servants working for you to involve the Cabinet Office, from the very beginning?

Well, I personally, of course, would do that and allow for that, not at least reflecting, I have to tell you, that the framework is very explicit that that would happen anyway. And that should be the assurance about how we have moved our system and our monitoring on.

Thank you very much, but just to labour the point—I don't expect you to answer this—it wasn't done. If it had been done at the very beginning, you wouldn't be sitting here answering these questions now.

I think, if we could go back to just make sure that everything was tightened up along the way, we may have ended up having a very similar discussion but for different reasons. And I think that, in retrospect, even with many of the things that we've checked along the way, it doesn't mean that people have actually changed necessarily the outcomes of what happened. But I do agree that we—. And we have said that in our response to Audit Wales: we have accepted that we have needed to tighten up the governance arrangements and the clarity that was needed.

Thank you. 

Thank you. Does anybody else wish to comment on this section before we move on? No. Thank you very much indeed. In that case, could I please invite Rhys ab Owen to take up the questions?

My question probably bridges both sections, Dr Goodall. You mentioned Cabinet Office involvement from the outset. You've justified the figure given to Dame Shan Morgan, and it's obvious that transparency is the crux of the issue here, or the perceived lack of transparency. Except for involvement of the Cabinet Office from the outset, what other things would you change in retrospect?

Well, it's important to make sure that this isn't only about Permanent Secretary arrangements. I do think that this is a general principle that we just need to ensure that we pause on for general HR practice for ourselves, and, in many respects, there are other controls and oversight mechanisms, I think, that help.

There is something unusual in just the balance between how the Cabinet Office and line management aspects work alongside the employment areas. There is also something in some of the advice that we have followed through on and why we technically categorised the departure arrangements in a certain way, because we were not aware at the time that the departure arrangements would be a special severance mechanism, mainly because 'Managing Welsh Public Money' would say something different. So, there's a potential conflict. So, another lesson to be learnt is—because of this usual bridging arrangement between the Cabinet Office mechanism reaching into how we run things within Welsh Government—just to make sure that any other potential conflicts of the technical advice from 'Managing Welsh Public Money' don't cause a further problem. 

As I said earlier, I think the learning for how the change of context for the way in which people are approaching what working life means and whether the tradition that you hit an age and you decide to go and it's a guillotine—. I think that's something that we need to reflect on very strongly for all members of staff, and about what is the status of part-time working, whether part-time associated with pension or more broadly as well. I personally feel we need to adopt being a flexible employer in our practice. In fact, I would hope that we would be able to lead some of those arrangements as well. And I think there will be other aspects that we've had to learn on here—whether there are complexities in our arrangements in the context of the UK civil service where individuals inevitably will move around the civil service, including into Welsh Government as well, and I do think that we can make some arrangements about that as well.

A particular area of interest I have that extends the learning on such arrangements beyond Welsh Government itself is whether there is anything in the experience that we've been through that would affect some of our broader attentions on bringing together the collective expertise across Wales—a one-Wales, public service-type approach: exchanges, secondments, interaction between those areas. And I would just want to make sure that our firm intentions to build on the pandemic experience and use expertise across the whole of Wales, again, aren't affected by too technical an interpretation of some of the issues that we've considered in here.

And then finally, to always make sure that, in wanting to do the right thing, we always make sure that we document doing the right thing as well. Irrespective of intentions, there were some examples in here where, for want of just the confirmation of the exchange in a different way, I think it would have just helped some of the investigation that took place.

I'm going to ask you about documentation in a bit, but I just wanted to question quickly about you being answerable to two masters—the Cabinet Office and First Minister. Does that create personal conflicts to you?

I think not, but you do need to consider and understand that. I probably feel like I've had pretty good experience over the last eight years when I was discharging the NHS Wales chief executive role, because, of course, I had to discharge that role alongside being the director general for health and social services, and that was, again, trying to balance two responsibilities, which I felt was really more of an advantage to me in discharging my role than a disadvantage. We have many benefits and advantages by being part of the UK civil service structure, and it's really important that we take advantage of and lean into those arrangements in order to help us discharge our effective role.

But this is probably the most visible example where that interaction happens, but I'm pleased to report that, in my conversations that take place with my line manager, who is the Cabinet Secretary, there is an understanding of the Welsh context. My advice is taken about the way in which I want to deal with things that the Welsh Government—and, of course, the First Minister, as you would expect, is involved in those arrangements, and absolutely had a fundamental role in the recruitment, of course, because ultimately, it was a decision in that final recruitment to choose me in this instance as well, and that was something where, of course, the First Minister's perspectives were really key and critical at the final stage. But I feel that irrespective of it, there are other opportunities that allow us, in the UK civil service aspect, to make sure that the Welsh Government experience, including in a devolved context, is very visible, that we can describe those experiences, and that the advantages and benefits of the way in which we work in Wales in a much more intimate system can be conveyed to a way of working that I hope is an advantage to the civil service. And when Civil Service Live was in Cardiff a number of months ago, we were able to give many examples to the broader civil service about how these things are very effective.

But 'I have to be aware of it' would be my answer. But I think I'm able to take advantage of the opportunity around it in working on there as well. What I absolutely do understand, though, is that there is a difference in the advice and support that I give to the First Minister, and of course, the way in which I would engage with the Cabinet Secretary, as my line manager.

Thank you very much, Dr Goodall. I just want to deal with transparency very quickly. I agree with you and I was glad to hear you saying that, maybe if things had been done slightly differently, we'd be here maybe still discussing the payment but in a very different way. Considering lessons to be learnt, why weren't the details of the payment to the former Permanent Secretary included in the draft accounts to the auditor general?

As I was explaining earlier, back in August 2021, we were in line with, arguably ahead of, our normal timescales to submit the budget, the submission for the annual accounts from Welsh Government, despite all of the exceptionalities of EU exit and of the pandemic experience. I mean, in some respects, we would have expected to be negotiating for an extension to the end of November. I'm trying to recall myself, it's quite possible that, when we submitted them on 23 August, I didn't even know that I'd been appointed—I'm trying to just recall the precise date that I may have known or not known, but it just clarifies to you that the departure arrangements hadn't been put in train; it would have depended on who the individual was. And if I give you an alternative scenario, an external individual could well have been appointed with a contractual notice period in there. That could have meant that Shan would have continued with her contractual arrangements right up until the end of the contract in February, and it wouldn't be beyond having an arrangement whereby she might even have been asked to extend arrangements. It could have been even later that an individual was going to arrive. So, you'll appreciate that the technical detail and the practical offer and negotiation just wouldn't have been factors at that stage. Of course, they would have been recognised as something to work through, but you needed the individual who was appointed and who said, 'yes', which happened to be myself, to actually have worked their way through the system at that time.

I've just Googled quickly as I was—I was multitasking, Dr Goodall—listening to your answer. So, the announcement of your appointment was on 9 September, so, obviously, you knew in advance of that announcement, but it wasn't brought to the attention of the auditor general until a governance statement in November. Why the delay?

I really don't think that is part of a delay. Once we have submitted the annual accounts, we work our way through a range of areas. Audit Wales will be exploring a whole range of areas, if you think about the breadth of activities that take place in Welsh Government and the £20 billion-plus spend that was, of course, the case in 2021, and the capital money. So, there are many aspects of detail and there is a timetable and a programme for working them through.

We were just needing to consider whether this was something that was relevant to 2021, because, actually, the payment itself was made in a different financial year. So, whilst it applied retrospectively as a calculation, probably our original instincts would have been to have it noted in the remuneration report to the accounts and we would handle it as a subsequent financial year, for the financial year 2021-22. I think that was probably what guided it at that time. But having an exit discussion with an individual is not of itself controversial, it's something that you would expect to happen, because there would be employment rights and everything, and I think we did declare it appropriately at the time. I'm sorry that, as a result of it, of course, there was a knock-on effect and, therefore, there was a need for more investigation and for it to be worked through and that we have the statutory timetables in place. But I don't think that was us holding back an issue. I didn't start in post until 1 November, so, actually, there were still workings that were going on, conversations and an offer being made. So, technically, I didn't start in post until 1 November, even if my appointment had been announced on 9 September, as you say.

Yes, I thought that it was important that—I know, while we're focusing on the concerns and the response and we have tried to answer those along the way with Audit Wales and, I hope, in a very open manner today, but, of course, if all of the documentation had been available at all stages to a different level—. It doesn't mean that there wasn't governance in place and it doesn't mean that there weren't decisions that were being discharged by individuals along the way, but I think it would have helped absolutely the way in which we have responded to this at this stage. I tried to make the earlier point that there is a danger of linking all of the learning on this to individuals who turn up every five years in a role in Welsh Government. Of course, I think the professional thing to do is to stand back and think about the broader lessons learnt. Of course, it means that we need to take a general look at the organisation. I think there is a balance on our matters, we are an organisation that, alongside other public service organisations, will have a reputation and experience of bureaucracy. I think, for me, it is to make sure that we simply don't spend all of our time monitoring all of the things that we do and writing down all of the things that we do, otherwise we might have to double the size of our workforce, but, absolutely, on key areas, they should be documented for all the appropriate reasons.

I also think that there is something about what is the precision of using policies. In many respects, policies and frameworks are there not just for compliance; they are there to try to steer into consideration, in sometimes quite personal and individual circumstances as well. And I think there has to be some ability to ensure that there is still a level of interpretation. Even with all of the technical advice that is available for the annual accounts, there is still a subjective and an interpretation aspect about where choices can be made, about how you allocate and align things as well. So, I think we also need to allow that to happen as well. But, absolutely, we need to make sure that we're able to find that balance between the bureaucracy of what you monitor, as well as ensuring that we still remain a delivery focused organisation, to improve services and outcomes for the people of Wales. 

Diolch. Thank you.

Mike Hedges to ask the next questions.

Diolch, Cadeirydd. Moving on to something slightly different: the senior clinicians' pension tax. The Welsh Government and the Auditor General for Wales disagree—I think that's not too strong a word—over whether they should or should not be in a set of accounts. What has been done in England and Scotland?

I'm really mindful, as I speak to you on this particular issue, that I've also been in front of your predecessor committee arrangements as well, responding to questions on the technicalities of this ministerial direction that took place at the time. It has a status, because it was the first time that a ministerial direction had been sought and, of course, we have tried to make sure that we've had an appropriate approach to this. There are lots of technical things on it. There are different views and perspectives. The pension arrangements actually, in this respect, apply to England and Wales, and we are part of that same scheme. If I can just say, Mr Hedges, that our intention, in needing the ministerial direction, was simply to make sure that we absolutely followed the English system and make sure that senior clinicians in Wales wouldn't be disadvantaged by different arrangements as well.

We think there are timing issues about how some things are included. We think there are some technical areas. The scheme and the ability to apply against it actually applied beyond 2021, so you could still access it and apply even up to April 2022, so we didn't feel that clinicians had finished off. We had clinicians who were accessing it in April 2021 and technically, that was after the end of the financial year, and therefore—I may need some support on this from Gawain—we had made statements of contingent liability, so it wasn't to preclude the issue that was there.

And if I could finally say that we don't feel that it's a material manner. There is a £21.5 million-sum that's been aligned to it, but that is proportionately well short of certainly what was being experienced in the English system. But, to your point, there is no qualification in the English system, either on English NHS organisations, on NHS England or on the Department of Health and Social Care. So, where we've ended up in Wales—. Again, I said earlier that there can always be different technical interpretations of issues, but the English system that we followed, by making the same arrangements in place, hasn't got the same qualification associated with it.

Would it help if the auditor general spoke to the auditors in England on why they came to a different decision?

I think there are so many complex and technical areas in our annual accounts process that there's always going to be a need for interpretation and to set it in the context. I know that the ministerial direction itself was very visible, because it was the first time that it had happened. I think at least an understanding of why the Comptroller and Auditor General in England had a different view on what was basically the profile and the predominant use of the scheme would help us to have an understanding, at least, of the situation. But I know, speaking on behalf of my former NHS colleagues, the general view of the NHS is that this is not something that they would have expected to have been qualified in the way that has been done. But I would say that respectfully, because the auditor general's statutory responsibility is to apply his view and Audit Wales's view to the accounts in Wales and, obviously, we can give our views and opinions, but he and the organisation must decide their own view.

Do you think it's helpful that you have different views in England and Wales?

I think it causes a difficulty for NHS organisations in Wales to understand why, and the broader stakeholders and even clinicians to understand why it would be different. Yes, I do think it causes a difficulty, because, if I look at my Perm Sec colleague going under scrutiny processes elsewhere, you could end up with the two of us facing very different levels of scrutiny on the same issue, and that could become confusing. But I don't think any of that removes where the statutory responsibilities lie and how the Auditor General for Wales absolutely must make his own opinion on these matters. We can only give our perspective and views. Ultimately on this one, I think, it's an example where, for technical reasons of interpretation, we've moved the accounts on by agreeing to disagree.

I think one of my underlying worries for this area, and this wouldn't be happening in England in the same way, as I understand it, is that potentially, because of the way this is applying, it's a matter for annual review, but this could be a qualification issue until the very last clinician who accessed the scheme finishes their career and accesses their pension, and for some of the individuals that could be in 25 years' time, and it would feel a bit strange on a perspective to carry it on. That doesn't mean that is Audit Wales's opinion, but certainly it feels as though I will also be expecting it to be a qualification issue for the next financial year to come, and it will just have to be one of those ongoing matters under consideration. But, from a value perspective, the £21.5 million, we don't feel it's material by value, but the reason it's in the accounts and qualified is because it's material by nature. I recognise that it's unprecedented and hasn't happened before, although the advice I gave was just that we were just trying to follow what the English system was offering.

Have you finished, Mike? Yes, thank you. Natasha Asghar, could you round up the questions for us, please?

Yes, thank you so much, Chair. I'd just like to ask what timetable has now been agreed with the Auditor General for Wales for the preparation and audit of the Welsh Government consolidated accounts for 2021-22? And if you can include any key milestones that you've discussed that would be really appreciated.

Well, there is a danger that, because we were so late in signing off our current accounts, some of the lessons that we're learning can't apply to the 2021-22 accounts retrospectively, because obviously we would already have been submitting those areas, but, as much as possible, we've tried to draw out some of the key issues. But we have got a provisional timetable. I've been really grateful for the way in which the chair of our audit and risk committee has been very clear on his expectations for us to ensure that these timetables are met, not least in the context that has been part of this scrutiny session this morning, and we are looking to ensure, with a knock-on effect of last year's accounts, that they will still be submitted by Welsh Government by the end of November 2022. So, that is still in line with the statutory responsibility that is laid on Welsh Government at this stage. Obviously that still opens up then a further four months where any outstanding questions or investigations or reviews can kind of happen in line with those statutory areas, but we have already delivered some key areas within that. So, the remuneration report was submitted back in the middle of August, we've submitted the Welsh Government core accounts also in August, we submitted the Welsh Government consolidated accounts on 26 September, including having had special sessions with our risk committees, and they were all supported by the appropriate working papers and agreed deliverables on the audit as well. Our commitment is to make sure all of that happens, but we have already demonstrated that we are hitting some of those earlier areas, and, in the future even, we would hope to improve that. I'm not saying the end of November is acceptable, but it's inevitable that there has been a knock-on effect from the 2020-21 annual accounts on the financial year as well.

So, Dr Goodall, from what I've taken from what you've just said, I was going to ask you whether you are on track to meeting this timetable that you have in place. And, if not, what are the main risks for you not achieving it, if you're unable to make the timetable deadlines?

Well, I think, it's really important, reflecting on your concerns expressed today, as committee members, that we make sure that worries about whether deadlines will be met or not are highlighted and handled appropriately. But, yes, I am hopeful and I expect that we will be able to submit those accounts by the end of November.

But the bit that is outside my control, and it has to absolutely lie there to allow Audit Wales to discharge their own statutory responsibilities, is that they may well find issues where they need further information, where they need to clarify, where they need to follow through, et cetera, and all I can commit to is that we will openly respond to all of those areas and do them as quickly as possible, and respond, however technical. But I must defend that the Auditor General for Wales must be able to continue to pursue those areas, even with some of the timetables as well. We've tried to locate it beyond just contact between officials within our audit and risk committee, and just to reassure you that beyond your own expectations, which you've set very clearly here for me today, which I take very seriously, our risk committee chair has been really clear about that timetable.

Of course, even as we look at this year, I said earlier that there is an amount of money associated with the departure of the former Permanent Secretary that will be applied in 2021-22, but what we would expect is, given the technical memorandum that came out, actually, hopefully, that that is something that can just simply be translated across to the 2021-22 accounts as well. That would make that, at least, more straightforward in this respect because all of the work has been done already.

I will be positive here today, but I'll also be very serious in knowing that that is an expectation from you as committee members too. I will liaise and work with Audit Wales on how we can both make that happen.

Thank you so much, Dr Goodall. I know we're short of time, but there is a question and a sub-question I just want to try to squeeze in, if that's okay with you. Can you please provide an update to me and the committee on the progress you've made with the alignment project? Are there any issues yet to resolve with the individual bodies, and when do you expect to include the remaining central Government bodies, such as the Welsh Government sponsored bodies, within the accounting boundary?

Well, we are looking to accommodate the nine last remaining bodies at this stage. To some extent, probably, without the pandemic experience, we probably would have made more technical progress on this as well. Gawain may want to comment on this, but we've been able at least to accommodate 25 bodies and groups that are aligned, which I do think represents progress as well. But, there are, actually, some concerns; technically, it may just seem, 'Get on with it and do it overnight', but, inevitably, with these organisations, it's really important to make sure that the understanding is there in terms of how it works with the public expenditure framework.

I think the other approach, on consolidating the accounts as a learning experience, is that this is extraordinarily technical and complex, not least the sheer numbers of organisations that have to discharge their own accounts in order to allow the Welsh Government to do its own. What we wouldn't want to do is to suddenly cause lots of problems that mean that we start shifting from some of those statutory deadlines that we had in place. So, we need the confidence of making it happen, but of then not making it happen and suddenly it in itself leading to further delays, because it just gets very, very complicated.

Gawain, you might just want to, finally, comment on this—on the technicalities—because this is slightly beyond my own personal experience, but I'm really pleased with the way the team has been talking me through this over recent months.

Thank you, Permanent Secretary. Yes, it's 25 organisations and groups to date. So, for example, all of the health bodies that we've consolidated actually count as one within that total; four more organisations in 2022-23, and now we're working with the remaining nine organisations, as the Permanent Secretary said.

One of the reasons we are wanting to do this with organisations as we move along is there are a number of things that organisations do need to think about as they are aligned—so, they need to take on board things like the consolidated budgeting rules that the Welsh Government and wider government works to. We also need to look at some organisations in terms of that they might have to change accounting standards, they might have to change the timing of their accounts and when they need to submit information to us, and, obviously, we then need to look at the audit periods for these organisations.

So, on the face of it, alignment as a principle is relatively straightforward; it's all of the other complications, as the Permanent Secretary was explaining, that we just want to work through with all of these organisations to make sure that everyone is comfortable and everyone is happy when we finally consolidate them all.

Okay, thank you so much for that. I know you mentioned 'technical' and you mentioned that you're working with a lot of organisations, which I can totally appreciate, but is the Welsh Government still reliant on complex spreadsheets in its preparation of the consolidated accounts or have you introduced any changes that you can perhaps summarise and, perhaps, even any improvements that you've already made or plan to make, going forward?

Well, just to share, it felt technical when I was just submitting the NHS annual accounts for the number of organisations that were associated, again, and then it absolutely is ever more enhanced because of the broader responsibilities within the Welsh Government.

I know this may sound strange, but we're still really reliant on having to link together spreadsheets around all of these submissions, et cetera. What we are very focused on to try to improve these issues, and it's partly associated with some of the change approach that I've been trying to introduce in the organisation, is to look at a replacement for our finance and HR systems. There are some limitations on how those work, and I think that would absolutely allow that to be a more streamlined process, as a minimum, in terms of how we do it.

I think that, irrespective of any statutory duty and timetables for submission, there is a danger that just because we must do it by 30 November, we will submit on the thirtieth. What we're actually going to try to do is, as much as possible, continue to bring that forward. Even in my time in the NHS, we were, despite very complex accounts, able to, actually, improve the submission dates, despite the fact that we were having to go into many areas of technical detail as well. But I think if we can just land that information system replacement, even if we can rely robustly on some of the original approaches, that would, I think, be a bit of a change for us, and hopefully relieve some of the resource pressures in the organisations as well.

Thank you so much, Dr Goodall. Thank you, Chair. That's my bit complete. 

Okay, thank you very much indeed. Well, that brings our questions to an end for this formal session. I thank the witnesses for attending and answering our questions. As you'll be aware, a transcript of today's meeting will be published in draft form and sent to you to check for accuracy before the final version is published. So, thanks once again, and we look forward to working with you further in the future.

Members, I propose that, under Standing Order 17.42, committee resolves to exclude the public from the remainder of the meeting. Are Members content? Thank you. I'd be grateful, Clerk, if you could action that accordingly.